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

                                   Form 10-KSB

                 ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

       [X] Annual report pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                     For the fiscal year ended July 31, 2004
                                       OR
     [ ] Transition report pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                        MOBILE REACH INTERNATIONAL, INC.
                        --------------------------------
                 (Name of small business issuer in its charter)

            DELAWARE                                            20-0121007
            --------                                            ----------
  (State or other jurisdiction                               (I.R.S. Employee
of incorporation or organization)                           Identification No.)

           2054 KILDAIRE FARM ROAD #353
               CARY, NORTH CAROLINA                                 27511
               --------------------                                 -----
     (Address of principal executive offices)                    (Zip Code)

                    Issuer's telephone number (919) 376-0231

         Securities registered under Section 12(b) of the Exchange Act:

 Title of each Class                   Name of each exchange on which registered
        None

         Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, par value $0.0001
                                (Title and Class)

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

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

     Documents incorporated by reference. There are no annual reports to
security holders, proxy information statements, or any prospectus filed pursuant
to Rule 424 of the Securities Act of 1933 incorporated herein by reference.

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     42,589,940 Shares Common Stock, par value $0.0001 were outstanding as of
July 31, 2004.

<PAGE>


                                     Part I


Item 1.  Description of Business


Company History


Mobile Reach International, Inc. (the "Company" or "Mobile Reach") was
incorporated in the State of Delaware in July 2003. At the time of
incorporation, the Company was 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 the incorporation of the Company, API merged into the
Company and the shareholders of API owned all the stock of the Company. As a
result of the merger, the Company was 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, the Company's shares became publicly
traded on the Over-the-Counter Bulletin Board, under the symbol MBRI.

Immediately after the merger with API, the Company acquired all the 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 the Company. 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 the
Company.

The Company conducts all its business through its subsidiaries, Mobile Reach
Technologies, Inc. ("MRT") and Mobile Reach Solutions, Inc. ("MRS"), formally
Waves Consulting Group, Inc. The Company, MRT and MRS are also hereafter
collectively referred to as the Company or Mobile Reach or the Registrant.

MRT was incorporated in North Carolina in July 2000, the Registrant continues to
conduct the business according to plan prior to the share exchange. MRT has
developed and sold mobile technology and services for information systems and
communications networks. In late 2000, MRT acquired its wholly-owned subsidiary,
Mobile Reach Technologies, GmbH ("MRT-Germany"), which is located in Germany, to
market the Company's products and services to the European market. The Company
will continue to conduct business through MRT, as of the fiscal year end, the
company suspended its operations in Germany to focus its efforts on the US
market.


General


The Company sells its software products and services to clients who desire to
increase the efficiency by which their employees access, utilize and exchange
data using mobile networks. Our solutions are not dependent upon any single
product or system. Currently, most mobile network hardware falls into one of two
categories. Some networks serve mobile devices that are always on and are always
connected to the network. Other networks serve mobile devices that are connected
to the network only when users desire to access or input information. Mobile
Reach believes that most companies would be best served by having networks that
serve both mobile users whose devices are always on and other devices that are
occasionally connected computers (OCC). Over time, the Company expects equipment
manufacturers will begin introducing networks that serve both types of users on
the same network. Mobile Reach anticipates the market will move toward
standardized networks. By being ahead of this trend, the Company believes its
platform and adaptable online-offline connection features will result in
increased sales.


The Company began selling products and services in mid 2000 as a mobile solution
provider under the name Mobile Reach Technologies, Inc. The Company's products
and services were based on one of the leading enterprise platforms, called
Remedy Action Request System, a Service Management solution. Since that time,
the Company has established offices in the United States and Germany. Today,
Mobile Reach has expanded its goals beyond Remedy-based enterprise platforms.
The Company's expanded business model is to deliver the products and services
customers require to deploy enterprise-wide solutions to its businesses.


<PAGE>


Needs and Solutions of the Client


The Company has continued to focus its efforts within the industries that are
likely to reap the highest returns on investment by deploying efficient mobile
solutions. That being the following industries: pharmaceutical and healthcare,
transportation and logistics, financial services, utilities and energy,
education and government.

Mobile Reach clients have invested substantial amounts of money in enterprise
application software, from providers such as Seibel, SAP, Oracle and Remedy.
Enterprise applications software usually resides on servers that are designed to
allow access to a network only from desktop computers, not from hand held mobile
units of employees, vendors and partners. The Company assists clients by
expanding access to existing and future enterprise applications software from
desktops to mobile devices, utilizing the Company's processes and technologies.

The Company's software tools allow it to efficiently solve many of the mobility
problems of its clients and constitute one of its primary competitive
advantages. The Mobile Reach client is no longer willing to buy cool technology.
Clients will invest in technology only if they believe the investment will help
them solve critical business processes. Consequently, the Company's strategy
combines its mobile technologies with consulting services that assist clients by
identifying their business inefficiencies, develop solutions and then deploy
mobile solutions that are integral parts of their everyday business process.
Mobile Reach continues to focus its products and services solely around
mobility, as the Company strives to become the mobile solutions leader.


Professional Services


A key component of the business strategy is to provide professional services
based on industry recognized best practices that enable Mobile Reach clients to
understand mobility solutions, define solutions that achieve specific goals that
will work with their business, as well as successfully develop[ and implement
solutions.

Mobile Reach combines a blend of strategy consulting, systems integration, and
application development, to produce best-of-breed applications in a mobile
environment. Mobile Reach's Professional Services Group facilitates proven
business processes, by leveraging both internal and external resources to
quickly develop technologies that demonstrate a strong ROI. The professional
services group at Mobile Reach facilitates learning for organizations in
mobility best practices including assessments, user interface design, workflow,
development, quality assurance and implementation. Our team will assist your
organization based on the scope of the project either individually, as a team or
a per-project arrangement.


Software Products


MRT offers a number of software products in two broad categories:

     o    Mobile Application Suites - are targeted to specific business
          processes for mobile workers who need immediate access to accurate
          data.

     o    Platform Software is a collection of software products that allow both
          mobile devices to reach existing enterprise applications and allow
          rapid development of mobile forms-based applications on mobile
          devices.


Mobile Application Suites


Mobile Application Suites extend entreprise applications to mobile devices.
Mobile applications enable improved efficiency, accuracy and access to critical
information at the point of action. Mobile applications are built on Splitware
(TM), the Mobile Reach middleware system that enables the mobile extension of
enterprise applications to mobile platforms.

At the current time, Mobile Reach provides two Mobile Application Suites:

     Mobile ITIL Suite - The Mobile ITIL Suite is an application suite of
     applications that enables the mobile extension of IT management
     applications such as help desk or call center, asset management and asset
     inventory.

<PAGE>


Mobile CARE Suite - The Mobile CARE Suite is an application suite that enables
the mobile extension of a healthcare patient tracking system.


Mobile ITIL Suite


The Mobile ITIL Suite is a suite a mobile applications that enables the mobile
extension of IT management applications such as help desk or call center, asset
management and asset inventory. The Mobile ITIL Suite enables improved
efficiency, accuracy and access to critical information at the point of action.

The Mobile ITIL Suite aligns with the industry standard ITIL (IT Infrastructure
Library) which is a widely accepted approach to IT Service Management (ITSM):

ITIL Process                            Mobile ITIL, Suite Product
------------                            --------------------------

Incident Management                     HelpReach (TM)
Configuration Management                AssetReach (TM)
Change Management                       ChangeReach (TM)
Custom                                  SplitForms (TM) Wizard

The benefits provided by the applications in the Mobile ITIL Suite are:

     With HelpReach (TM) on a mobile PDA or laptop, whether connected to the
     server application or not, your technicians can create, look-up, assign,
     modify and close tickets while at the location of the incident.

     With AssetReach (TM) on a mobile scanning device, whether connected to the
     server application or not, your technicians can create, look-up, audit and
     modify asset records while at the location of the asset.

     With ChangeReach (TM) on a mobile PDA or laptop, whether connected to the
     server application or not, your managers and technicians can coordinate
     Remedy Change request tasks from any location.


Mobile CARE Suite


The Mobile CARE Suite of mobile application software is designed to present
caregivers with the information necessary to deliver excellent care in each of
many patient encounters. Caregivers make decisions every hour about the
diagnosis, treatment and on-going therapy for the patient. At each decision
point, the quality and timeliness of the information about that patient
influences the quality of the patient care decisions, the success of treatment
and the efficiency of the physicians and other caregivers.

The Mobile CARE Suite has been deployed to enhance the timeliness and quality of
information available to caregivers at the point of care and thus to improve
patient care. It is guided by the following principles:

     On an institution wide basis, the institution provides the Mobile CARE Core
     - common services and the anchor application of the Mobile CARE Suite

     Departments within the institution are encouraged to deploy specialized
     applications - the Mobile CARE Suite makes this departmental deployment
     very simple

     3rd party vendors are encouraged to deploy specialized applications - the
     Mobile CARE Suite makes this 3rd party deployment very simple

     Long term success depends upon balance of 3 constituencies: Institution,
     Caregivers & Support Organizations



<PAGE>


Platform


Splitware(TM) - is a scaleable mobile middleware platform Mobile Reach is
developing that will reside within the enterprise networks of its clients. It
provides seamless connectivity from back office systems to simultaneous mobile
users and devices.

The Company has designed its Splitware(TM) software to be compatible with
legacy, CRM (Customer Relationship Management) and ERP (Enterprise Resource
Planning) systems. This allows Mobile Reach to partner, develop and integrate
its proprietary applications with leading enterprise systems, including Oracle,
SAP, PeopleSoft, Siebel and Remedy, as well as customer-built back-office
databases.

Splitware's modular design enables IT professionals to plug-in a stand-alone
application or several scalable applications all at once or over an extended
period of time. Its permission based access panel allows administrators to
increase access to any or all-mobile users within minutes.

Splitware(TM) is compatible with Microsoft's open COM+ architecture and has been
designed to leverage Microsoft's .NET initiative for providing secure mobile
data solutions to enterprises and is currently in use with high security
applications. Splitware(TM) consists of several component capabilities that
Mobile Reach packages for individual customer installations based on the
specific client requirements. The component capabilities are all branded with
the "Split" name and include the following:

     o    Server - allows the user to interface to a variety of data sources
          (for example, Oracle, Sybase, Remedy and SAP).

     o    Cache - provides data synchronization between mobile devices and
          network servers.

     o    Forms - is a tool that provides a simple way to build a mobile
          applications - this tool provides Mobile Reach with a great
          competitive advantage in delivery of production grade mobile
          applications.

     o    Alert - provides a mechanism for urgent notification of individuals in
          the mobile workforce.

     o    Scan - provides bar code scanner integration into mobile applications.

     o    Workflow - provides the capability to move information from individual
          to individual within the mobile workforce.

     o    Chart - provides the capability for data charts and data graphs to
          display complex information in an understandable format.

     o    Security - provides the capabilities for both user authentication (via
          advanced password functionality) and privacy of data (via advanced
          encryption functionality).

For each of the listed capabilities, Mobile Reach has enhanced each capability
based on market actual sales and customer requests. This allows Mobile Reach to
constantly keep its products relevant and competitive.

Currently, the Company has an agreement with Remedy Corporation to market and
integrate its mobile platforms with the Remedy Action Request System. The
Company's management team is beginning conversations with other enterprise
companies, such as SAP, Siebel and Oracle, but has no agreement with such
companies to date.



<PAGE>


Third Party Products


As part of its core value proposition, the Company intends to first utilize its
internal systems and technology. However, under certain circumstances, the
Company will seek third party solutions and or equipment manufactures to bundle
a complete solution. Third party solutions may include security applications, as
well as licenses for operating systems that enable the Company's offering to be
compatible and fully compliant with client systems.


Marketing


Mobile Reach has identified three separate approaches to reach its clients:

     Direct. Mobile Reach will use its own sales force to market and sell its
     products. Mobile Reach's Sales and Marketing teams are combined to respond
     rapidly to the market and client needs. Each niche market, such as
     healthcare (and within healthcare, markets such as hospitals and
     pharmacies), requires teams to fully assess and meet its unique needs. The
     Company believes having the most experienced sales reps and sales engineers
     entrenched in specific niche markets, rather than broader industries, will
     lead to sales successes.

     VAR. Mobile Reach will enter into agreements with `value added resellers'
     to market the Company's products as part of its own solutions packages.
     VARs will receive a discounted price from the Company for each license.

     OEM. ("Original Equipment Manufacturers") Mobile Reach will seek out
     established integrators to license one of the Company's products either on
     a limited basis or a full proprietary basis. The integrator will
     essentially "license" the particular technology from the Company on an
     exclusive basis for the purposes of integration. The Company will seek a
     volume based per user fee from OEMs.

The Company anticipates most of its revenue will initially be derived from
direct sales and sales through VARs. Mobile Reach does not expect OEM (Original
Equipment Manufacturers) sales until its products become wildly accepted and
established in the market. However, the Company will seek OEM opportunities as
they arise.

Initially, The Company will rely primarily on direct sales to sell both its
software and services. The Company intends to expand and recruit a sales force
that is segmented into product specialties and not generalists. Successfully
delivering Mobile Reach services will require experienced reps who understand
the client's industry and daily processes.


Competitive Factors


The Company competes in the Mobile Middleware Market. Middleware includes
software that enables back office systems and mobile devices to communicate with
one another. The Company believes that the following factors will be essential
to its competitive strength and success within this market:

Market Vision. There are several key sectors in which Mobile Middleware is
projected to grow exponentially. Consequently, the Company has already
identified, researched and tested these industry-specific applications. This
will assist Mobile Reach in achieving its long-term vision of becoming a mobile
delivery platform capable of being used across multiple products and systems.
The Company will attempt to protect specific mobility processes of its software
by filing process and delivery patents to maintain its position in the market.

Technology. The Company has developed extensive trade secret processes and
intellectual property. Mobile Reach will continue to develop new products and
improve existing products, such as its upcoming application compatibility and
intelligent tools-sets features. By developing new technologies and combining
technologies with the Company's unique customized approach to providing mobility
solutions, will be key features in competing in the emerging mobile middleware
sector.


Strategic Relationships. The Company has identified and secured numerous
relationships with channel, solution and technology companies. These
relationships will enable the Company's (i) branded software products to power
the products of other companies; (ii) product and services to be a part of
turn-key solutions; and (iii) technology to be ahead of the curve with regard to
enterprise-grade mobility products.

<PAGE>


Focus. Initially, the Company targeted one of the leading enterprise platforms,
known as Remedy. In the future, the Company will try to leverage its experience
with Remedy to work with several other industry platforms, such as; Oracle,
Siebel, SAP and PeopleSoft. By leveraging proven tool-sets from these larger
enterprise vendors, Mobile Reach will be able to rollout specific; much needed
mobile solutions to customer enterprises. The Mobile Reach client is ready to
accept a scaleable mobile solution that harnesses the power of existing back
office systems for which Mobile Reach's potential clients have already spent
millions of dollars.


Product Differentiation.


The competitive advantages that distinguish Mobile Reach products from other
vendors are as follows:

     Scalability. The Company's software works for clients of all sizes, whether
     small organizations with a limited number of users or large organizations
     with thousands of users in multiple locations.

     Compatibility. Clients can maintain control over their own proprietary
     information and/or applications during set-up. They have the option to
     include groups, back office functions, or time sensitive materials by the
     click of a mouse. Competing products often require clients to collect data
     offsite during development. Mobile Reach software allows clients to
     continually customize their own mobile suite, using the Company's powerful
     import tools.

     Customization. The Company's Mobile Enterprise Development Kit allows
     Mobile Reach and its partners to quickly respond to client demands
     necessary to move specific information of the client through its network to
     and from mobile devices.

     Precision. Mobile Reach's development emulator allows enterprises, partners
     and companies alike to test and introduce new mobile devices and changing
     wireless technologies into and within the mobile network.

Business Strategy


Clients seek solutions that can be used with multiple products and systems to
better meet their growing needs. However, there can be no assurance that the
larger Enterprise Resource Planning (ERP) and Custom Relationship Management
(CRM) companies will allow or support this much needed change. Proprietary based
technologies often try to hide, allude to or disassociate themselves from
standardization.

The Company strives to become one of the first mobility solutions companies with
a software platform that works with multiple products and systems.

Mobile Reach has based its strategy on the following assumptions in regards to
the mobile industry:

     (i)  Other e-business enterprise software vendors will adopt the same
          principals Siebel has adopted.

     (ii) Wireless networks will advance at the rates projected by industry
          analysts.

    (iii) Large clients will be inclined to select a platform that works with
          multiple products and systems, as research indicates from Gartner,
          Aberdeen and ITC.

     (iv) The Company will be able to gain sales by heavily marketing to
          specific niche markets, such as Healthcare.

Sales


Mobile Reach's mission is to become the dominant provider of products and
services that enable mobile workers to enter and have access to information when
they need it. To accomplish this mission, Mobile Reach will listen to prospects,
clients, applications software companies, hardware companies, and value added
resellers to identify their key needs, develop products and services to address
their needs and communicate the value proposition in which Mobile Reach products
and services offer.

<PAGE>


The Company will primarily focus its sales efforts on industries that have a
high number of mobile workers that need to enter and access information to
function effectively. Mobile Reach continues to focus its efforts on the
following industries of which it believes will benefit most from the Company's
products and services as it will receive a return on investment in the shortest
amount of time: Pharmaceutical and Healthcare, Transportation and Logistics,
Financial Services and Utility and Energy.

Mobile Reach is transitioning from a pure product sales structure to a sales
structure based on a complete offering of mobile products, solutions and
services. The core components of the structure will include the following:

     Business Development. The Company's business development organization will
     prospect, identify, qualify, and possibly close certain opportunities.

     Account Managers. Each territory-based account manager will primarily focus
     on new clients in the manager's regions.

     Strategic Account Managers. Each strategic account manager will proactively
     manage 10-15 specific strategic accounts.

     Channel Managers. Channel managers will be responsible for improving the
     Company's channel relationships and driving leads and revenue through its
     channel partners.


Intellectual Property


The Company has prepared two provisional patent applications for submittal,
encompassing the bulk of the Company's core technology processes. These
applications have not yet been filed. Mobile Reach expects to file these
applications soon and to file additional applications as the Company continues
to develop proprietary technologies and processes behind them. There can be no
assurance any patents will be granted as a result of the Company's applications,
or if granted that they will provide the Company with significant competitive
advantages.

Mobile Reach has not registered any trademarks used with its products nor any of
its copyrights. The Company relies on its common law rights to its trademarks
and on the laws relating to trade secrets and proprietary know-how for
protection of its copyrights. The Company practice is to require each of its
employees, consultants and advisors to execute a Non-Disclosure Agreement (NDA).
In general, the NDA states that the individuals must keep confidential and not
disclose to other parties any confidential information developed or learned by
the individuals during the course of their relationship with Mobile Reach except
in limited circumstances. Also, the NDA will state that Mobile Reach owns all
copyrights and inventions conceived or developed by the individuals during the
course of rendering services to the Company.


Employees


During the period ended July 31, 2004 the Company re-aligned its employees as
part of both a cost cutting measure and subsidiary restructuring. Mobile Reach
reduced its workforce from 32 employees down to 26 for the period ending April
31, 2004. The Company further downsized once again to 21 employees for the
period ending July 31, 2004.

The Company has broken down each employee under the following subsidiary below:

Eight work directly within Mobile Reach Technologies, Inc., as follows:

- One in Management & Administrative
- Two in Sales and Marketing
- Five in Development and Technology

<PAGE>


Eight work within the second subsidiary, Mobile Reach Solutions, Inc. formally
Waves Consulting Group, Inc., as follows:

- Two Management & administrative
- Four in Telecom Engineers and Support Staff.
- Two in Sales and Marketing

The balance of the Company's employees (eight), work for the parent company,
Mobile Reach International, Inc. as executive and administrative.

The Company owes its employees approximately $168,328.000 of accrued salary.
Raising capital and generating revenue to pay accrued salary and future salaries
of current and future employees will be necessary to retain and recruit the
personnel the Company requires to achieve its goals.

The Company Accounts Receivable for the period ended July 31, 2004, increased
$310,604.00 from $17,955.00 for the seven month period July 31, 2004 to
$328,559.000 The increase in the Companies receivables is a directly attributed
to the increase in new customers both subsidiaries garnered during the quarter.
See the Management Discussion and Analysis for additional notes.


Item 2. Description of Property.

The Company does not own any real estate or land. In connection with the
acquisition of Waves Consulting Group, Inc., The company has certain obligations
that are assets of the its wholly owned subsidiary and its President -
specifically vehicles that are primarily used for servicing the Company's
clients. See notes to financial statements and Management Discussion and
Analysis for additional information.

The Company has a long term lease for 12,000 Sq Feet of office space at Regency
Park in Cary North Carolina which it has occupied since November 1, 2003.
Subsequent to the Company's fiscal year end, July 31, 2004 the Company's
management began negotiations with its current landlord to vacate the premise
and satisfy the lease obligations as part of its overall company restructuring.
See note to financial statements and Management Discussions and Analysis for
additional information.


Item 3. Legal Proceedings.


On August 27, 2003, Aquent Partners, Inc. filed a complaint against the Company
seeking damages for payment for services in the amount of $115,412.75 pursuant
to a promissory note entered into by MRT. Aquent Partners, Inc was awarded a
judgment in the amount plus any applicable interest until paid in full. At the
time of the company's fiscal year end July 31, 2004 the judgment remained
enforce and outstanding, However, during this reported quarter ended October 31,
2004 the Company satisfied the claim for $121,664.29.00, including all interest
and court costs arising from this claim. The Companies balance sheet reflects
this for the period ending October 31, 2004.

The Company has received a demand letter from counsel for a former employee of
MRT requesting payment for services rendered by this former employee to MRT.
This matter is the subject of pending settlement negotiations and the amount of
liability has not been settled. As of May 2004 the company entered into an
agreement with the former employee to settle the claim arising from past
services. A discharge and satisfaction was signed by both parties and shares
were issued in connection with the satisfaction in the amount of 750,000 common
shares including all attorney fees.

In August 2003, the Company received a demand letter from the Administrative
Receivers for Advance Banking Solutions Limited, a United Kingdom company, for
claims by Advanced Banking Solutions against Asphalt Paving International, Inc.
("API"), these claims were transferred to the Company when API merged into the
Company and are for certain license fees alleged to be owed by API in the amount
of $105,000.00, (65,000 UK pounds), plus interest. With respect to the claim by
Advance Banking Solutions Limited, the Company has an indemnification agreement
with certain shareholders of API and has placed shares in escrow with the
attorney for API to cover any liability of the Company with respect to these
claims. In February 2004, certain shareholders of API entered into an
indemnification and release from Escrow agreement to indemnify, defend and hold

<PAGE>


harmless the company against any losses, liabilities, damages, deficiencies,
cost or expenses based upon any claim made by or on behalf of any party due to
failure to deliver to the company, the release contemplated by Section 8.8 of
the Share Exchange Agreement or on behalf of Advanced Banking Solutions Ltd. and
or PCT Corporation. The API shareholders in connection with this further
indemnification have agreed to retire the shares of common stock in connection
with Advanced Banking Solutions claim.

During the period ended July 31, 2004, the Company still had an unsettled claim
from a former employee for wages earned during 2002. Both parties have been in
communication and are in the process of attempting to settle the claim.

A former Director of the Company on June 11th 2004 filed a claim with American
Arbitrators Association for services under a consulting agreements dated January
2003 for $350,000.00. To date the Company has defended such claim in cooperation
with the American Arbitrators Association and has adjourned the hearing until
April 2005 The Company has submitted a settlement offer in the range of
$150,000.00 to $160,000.00 subject to certain repayment agreements. At the time
of this filing negotiations were not yet agreed upon by both parties.

During the period ended January 2004, the Company was presented with a letter of
concern in regards to the company complying with Sarbanes-Oxley Act in its
Filings. The company's council has examined all concerns put forth by Hamilton
Lehrer and completed its due diligence in respect to the company's obligation to
comply with the said securities laws. As of February 2004, both parties agree
that previous concerns had been satisfied according to the regulations set forth
within the Sarbanes-Oxley Act.

During the period of August 2004, the Company received notification of a
judgment entered against both a former employee and the Company for services
rendered of less than $1,000.00. As of November 2004, the Company has satisfied
all monies owed and received a satisfaction of judgment against both the former
employee and the Mobile Reach.

During the period ended July 31, 2004, former legal council of the Company,
Daniels Daniels & Verdonik filed a UCC Security Interest against the Company's
assets, the claim was filed in Wake County North Carolina, against the Company
and one of its subsidiaries for past services in the amount of $208,763.54.
Under the Settlement terms the former council of the Company agreed to cancel
the note for the full amount dated July 28, 2003. In connection with the
February 27, 2004 financing the Company entered into Settlement and Release
Agreement and satisfied all monies owed in the amount of $162,500 on March 16,
2004. As part of the Settlement and Release Agreement terms, the former council
of the Company released all rights to any claims against the Company and
withdrew the UCC Security Interest in Assets claim.


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


Not Applicable


                                     PART II


Item 5.  Market for Common Equity and Related Stockholders Matters.


Market Information

The Company's Common Stock is quoted on the Over-the-Counter Bulletin Board
operated by the National Association of Securities Dealers. Mobile Reach shares
are listed under the symbol "MBRI" since August 6, 2003. Prior to that date, the
Common Stock of its predecessor, Asphalt, traded under the symbol "API."

The following table shows the quarterly high and low bid prices and high and low
ask prices for Mobile Reach common stock over the last two fiscal years, as
reported on the OTC Bulletin Board. The closing price of its common stock on
August 26, 2004 was $0.07 per share.
<TABLE>
<CAPTION>


                                                                                    High       Low
-------------------------------------- -------------------------------------- --- ---------- ---------

<S>                                                                           <C>           <C>
Fiscal year ended July 31, 2003
-------------------------------------- -------------------------------------- --- ---------- ---------
                                       First quarter - (Aug, Sept, Oct)           $0.45      $0.17
-------------------------------------- -------------------------------------- --- ---------- ---------
                                       Second quarter -  (Nov, Dec, Jan)          $0.40      $0.11
-------------------------------------- -------------------------------------- --- ---------- ---------
                                       Third quarter - (Feb, Mar. Apr.)           $0.25      $0.13
-------------------------------------- -------------------------------------- --- ---------- ---------
                                       Fourth quarter - (May, Jun, Jul)           $1.01      $0.48
-------------------------------------- -------------------------------------- --- ---------- ---------

Fiscal year ending July 31, 2004
-------------------------------------- -------------------------------------- --- ---------- ---------
                                       First quarter                              $0.90      $0.13
-------------------------------------- -------------------------------------- --- ---------- ---------
                                       Second quarter                             $0.65      $0.20
-------------------------------------- -------------------------------------- --- ---------- ---------
                                       Third quarter                              $0.40      $0.20
-------------------------------------- -------------------------------------- --- ---------- ---------
                                       Fourth quarter                             $0.30      $0.08

-------------------------------------- -------------------------------------- --- ---------- ---------

Fiscal year ended July 31, 2005
-------------------------------------- -------------------------------------- --- ---------- ---------
                                       First quarter                              $0.09      $0.03
-------------------------------------- -------------------------------------- --- ---------- ---------
</TABLE>

As of July 31, 2004, there were approximately 174 holders of record of Mobile
Reach common stock. The Company believes that a significant number of shares of
its common stock are held in either nominee name or street name brokerage
accounts. Consequently, the Company is unable to determine the number of
beneficial owners of its stock.

As of July 31, 2004, the Company has 42,589,940 issued and outstanding common
shares of stock. Of which, 6, 231, 877 outstanding stock options. Additionally,
the Company has 2,963,628 outstanding warrants.

Under Rule 144, a person (or persons whose shares are aggregated) who has
beneficially owned restricted shares for at least one year (including the
holding period of any prior owner or affiliate) would be entitled to sell within
any three-month period, a number of shares that does not exceed the greater of
(1)% of the number of shares of common stock then outstanding or (2) the average
weekly trading volume of the common stock during the four calendar weeks
preceding the filing of a Form 144 with respect to such sale. Sales under Rule
144 are also subject to certain manner of sale provisions and notice
requirements and to the availability of current public information about the
Company.

Under Rule 144(k), a person who is not deemed to have been an affiliate of the
Company at any time during the three months preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years
(including the holding period of any prior owner except an affiliate), is
entitled to sell such shares without complying with the manner of sale, public
information, volume limitation or notice provisions of Rule 144.

The holders of 11,064,902 restricted shares of Common Stock of the Company have
signed agreements that prohibit resale into public markets by such shareholders
of shares of Common Stock of the Company until after July 31, 2004. Thereafter,
the lock-up limits resales into public markets each month to one third of 1% of
the shares of Company Common Stock outstanding on the first date of the month
until July 31, 2005.

The holders of 2,961,455 restricted shares of Common Stock of the Company have
signed agreements that prohibit resale into public markets by such shareholders
of shares of Common Stock of the Company until after July 31, 2005. Thereafter,
the lock-up limits resales into public markets each month to one third of 1% of
the shares of Company Common Stock outstanding on the first date of the month
until July 31, 2006.

As of July 31, 2004, the Company was in default of filing a registration
statement for the holders of 5,265,678 restricted shares of Common Stock of the
Company. These holders are entitled rights to have the Company register these
shares for resale. Under the Agreement, the Company was required to file a
registration statement on or before November 28, 2003. As of August 31, 2004,
the Company filed its registration statement and included penalty shares in
connection with the registration rights agreements. However, the Company remains
in default of registering the full amount of restricted shares of common stock.

The holders of 453,125 restricted shares of Common Stock of the Company were
issued in connection with a financing dated February 27 2004. These shares were
included in the registration statement that was filed with the Securities
Exchange Commission on August 31, 2004.

<PAGE>


On August 21, 2003 the Company filed a Registration Statement on Form S-8
covering the resale of shares of Common Stock granting part to the Company's
2003 Equity Compensation Plan.

The Company can not offer assurance that an active public market of the
Company's shares will develop. Future sales of substantial amounts of its shares
in the public market could adversely affect market prices prevailing from time
to time and could impair the Company's ability to raise capital through the sale
of its equity securities.

Dividend Policy

The Company has never declared or paid any cash dividends on its common stock.
The Company anticipates that any earnings will be retained for development and
expansion of its business and Mobile Reach does not anticipate paying any cash
dividends in the foreseeable future. The Company's board of directors has sole
discretion to pay cash dividends based on the following; financial condition,
results of operations, capital requirements, contractual obligations and other
relevant factors.


Item 6.  Management Discussion and Analysis or Plan of Operation.


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.

Overview

The Registrant conducts all its business through its subsidiary, Mobile Reach
Technologies, Inc. (MRT), Mobile Reach Solutions, (MRS). The Registrant and its
subsidiaries are also hereafter collectively referred to as the Company or
Mobile Reach.

The Company sells its software products and services to clients who desire to
increase the efficiency by which their employees access, utilize and exchange
data using mobile networks. Mobile Reach solutions are not dependent upon any
single product or system. Currently, most mobile network hardware falls into one
of two categories; some networks serve mobile devices that are always on and are
always connected to the network, while, other networks serve mobile devices that
are connected to the network only when users desire to access or input
information. It is Mobile Reach's belief that most companies would be best
served by having networks that serve both mobile users whose devices are always
on and other devices that are occasionally connected computers (OCC).

Over time, the Company expects equipment manufacturers will begin introducing
networks that serve both types of users on the same network. Mobile Reach
anticipates the market to move toward standardized networks. By being ahead of
this trend, the Company believes its platform and adaptable online-offline
connection features will result in increased sales and greater market
penetration.

The Company sells its mobile infrastructure applications primarily to
enterprises, original equipment manufacturers, application developers and
resellers both directly and through its partner network. The Company derives
revenue from:

     -    Software license fees and royalties;

     -    Support and maintenance fees; and

     -    Professional services, including non-recurring development fees that
          we generate when Mobile Reach adapts products to customers'
          specifications and consulting/mobility strategy services.

     -    Related mobile equipment, devices and related carrier pass through
          incentives or commissions

The Company's future results of operations will be highly dependent upon the
success of its software products and service offerings, specifically its Mobile
Infrastructure Platform as well its accompanying Wizard Tools, and Mobile
Strategy Implementations. The Company expects the license fees, services and

<PAGE>


royalties generated by these products and services to continue to constitute the
majority of its revenue. The Company is seeing key signs in certain sectors
maturing at a greater rate than expected, thus for the company intends to
capitalize on these sectors and deliver best of breed mobility solutions. By
executing against this verifiable traction, the company expects to garner the
competitive advantage it was looking for with the specific sector.

The Company sells its product and services directly to end-users and also
markets and sells many of its products through multiple indirect channels,
primarily distributors and resellers. For the twelve-month period ending July
31, 2004, the company had no customer that accounted for greater than 10% of
revenues.

The Company will continue to pursue strategic acquisitions of, or strategic
investments in, companies with complementary products, technologies or
distribution networks in order to broaden our mobility offerings. Mobile Reach
currently has no commitments or agreements regarding any material transaction of
this kind; however, it may acquire businesses, products or technologies in the
future. As a result, it may require additional financing in the future and, if
the Company were required to obtain additional financing in the future, sources
of capital may not be available on terms favorable to Mobile Reach.

The Company competes with the following:

     o    Mobile data management companies, such as iAnywhere (a division of
          Sybase), Infowave.

     o    Application mobilization companies, including Everypath, iAnywhere,
          Extended Systems,

     o    Mobile enterprise solutions companies, including Aether Systems,
          Dexterra, and Telispark;

     o    Service Consulting and Implementation, such as Lawson and Selectica

As the markets for mobile information management products grow, the company
expects competition from existing competitors to intensify. Additionally, if
existing or new competitors were to merge or form strategic alliances, the
Company's market share may be reduced or pressure may be put on it to reduce
prices resulting in reduced revenue and margins.

The Company has put forth certain initiatives in the sector to commercialize its
mobility product offering. Great strides are being noted by resellers, partners
and clients as the Company has gained both clients and traction in the
marketplace. Additionally, the Company is committed to investing in its mobility
processes and best practices so that the strategic goal of becoming the "go-to
mobility leader" is executed as the management team has put forth.


Financial Discussion


Mobile Reach revenues primarily comprise of licensing and services fees, which
the Company recognizes as revenue when the product or services are provided to
the client. The attached pro-forma consolidated financial data; is provided for
comparative purpose only and does not claim to be indicative of the actual
financial position or result of the Company's carry forward operations.

Total revenue for the twelve-month period ended July 31, 2004 was $1,589,859.00
compared to $94,312.00 reported for the year ended July 31, 2003. Total Net loss
for the twelve-month period ended July 31, 2004 was $3,215,794.00, or $0.11 per
diluted common share. In the execution of its operational plan during the last
fiscal year, the Company's management and Board of Director's were focused on
building profitable subsidiaries and financing activities to grow its business
units and fund its operations.

The Cost of Sales associated with the delivery of the Company's solutions is
expected to be proportioned as the repeatable model is implemented with future
clients. As a result, the Company recognized an above average cost associated
for the twelve months ended July 31, 2004.

The Company sales and marketing expenses consist primarily of compensation and
related costs for ramping up efforts around product marketing, associated
personnel, travel and entertainment and other related costs. The Company expects

<PAGE>


sales and marketing expenses to decrease as a percentage of sales as the Company
continues to leverage its reseller relationships and strategic clients to
further its sales and marketing initiatives.

SG&A for the twelve month ended July 31, 2004 consisted primarily of
compensation and related costs associated with financing activities. The Company
expects its general and administrative expenses to decrease as a percentage of
its annual revenues primarily due to traction the Company's products are
receiving in the marketplace.


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.


Revenue Recognition

To recognize revenues the Company applies the provisions of Statement of
Position 97-2, SOFTWARE REVENUE RECOGNITION (SOP 97-2), as amended by SOP 98-9,
and generally recognize revenue when all of the following criteria are met: (1)
persuasive evidence of an arrangement exists, (2) delivery has occurred, (3) the
fee is fixed or determinable and (4) collection of the resulting receivable is
reasonably assured.

At the time of the transaction, the Company's accounting policies assess whether
the fee associated with the revenue transactions is fixed or determinable based
on the payment terms associated with the transaction. If a significant portion
of a fee is due after the shorter of the Company's normal payment terms or 90
days, the Company accounts for the fee as not being fixed or determinable. In
these cases, the Company recognizes revenue as the fees become due and payable.
If the Company had assessed the fixed or determinable criterion differently, the
timing and amount of its revenue recognition may have differed materially from
that reported.

The Company recognizes revenue for support and maintenance services over the
contract term, which is usually twelve-months, and generally, recognizes revenue
from training services as these services are performed. Revenues from software
licensing is generally recognized when delivery and acceptance; for professional
services that involve significant implementation, customization, or modification
that is essential to the functionality of systems, the company generally
recognize the service revenue over the period of the engagement, using the
percentage-of-completion method. In cases where professional services involve
customizations for which the amount of customization effort cannot be reasonably
estimated, where significant uncertainty about the project completion exists, or
where an arrangement provides for customer acceptance, the Company defers the
contract revenue under the completed contract method of accounting until the
uncertainty is sufficiently resolved or the contract is complete. If the Company
was to make different judgments or utilize different estimates of the total
amount of work expected to be required to complete an engagement, the timing of
the companies revenue recognition from period to period, as well as the related
margins, might differ materially from that previously reported.



<PAGE>


Liquidity and Capital Resources


At July 31, 2004, the Company had current assets of $477,679.00 and current
liabilities of $2,885,571. The independent auditors, who audited the financial
statements for the period ended July 31, 2004, have expressed substantial doubt
about the Company's ability to continue as a going concern given its recurring
losses from operations, negative working capital and net stockholders' deficit.
In addition, the Company must deal with the litigation and claims described in
Item 3 of this Form 10-KSB under the heading "Legal Proceedings."

In response to these issues, the Company raised $525,000 in convertible
debentures dated February 27th 2004, and $1,006,220.00 in common stock.
Management believes it is imperative that the Company raise additional funds, to
fund the Company's operations as well as its sales and marketing efforts;
including the costs of compliance with the continuing reporting requirements of
the Securities Exchange Act of 1934, as amended, for the Company and its
subsidiaries.

Failure by the Company to raise capital is likely to have a material adverse
effect on the business of the Company and may cause shareholders to lose their
entire investment in the Company. There can be no assurance the Company will be
successful in its capital raising efforts. In addition, the Company has
substantial risks associated with financing terms that may or may not be
favorable to the company from potential investors, which could harm the
interests of existing investors, as well as by causing substantial dilution and
by downward pressure on the market price of the Company's Common Stock resulting
from re-sales of securities by new investors. The Company will be required to
register the securities of new investors for re-sale.


Effects of Foreign Currency Exchange Rates


The Company derives a portion of our net revenue from international sales,
principally through our international subsidiary and through a limited number of
resellers. Sales made by its international subsidiary are generally denominated
in each country's respective currency. Fluctuations in exchange rates could
cause the companies results to fluctuate when a translation of revenues and
expenses denominated in other currencies into U.S. dollars. Fluctuations in
exchange rates also may make our products more expensive to resellers or
customers who purchase the companies products in U.S. dollars.


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS


This Report contains certain financial information and statements regarding our
operations and financial prospects of a forward-looking nature, including new
products under development and their features and prediction of industry trends
and future partners. Although these statements accurately reflect management's
current understanding and beliefs, we caution you that certain important factors
(including, without limitation, factors described in the section of this Report
entitled "RISK FACTORS") may affect our actual results and could cause such
results to differ materially from any forward-looking statements which may be
deemed to be made in this Report. For this purpose, any statements contained in
this Report that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the generality of the foregoing,
words such as, "may", "will", "intend", "expect", "believe", "anticipate",
"could", "estimate", "plan" or "continue" or the negative variations of those
words or comparable terminology are intended to identify forward-looking
statements. There can be no assurance of any kind that such forward-looking
information and statements will reflect in any way our actual future operations
and/or financial results, and any of such information and statements should not
be relied upon either in whole or in part in connection with any decision to
invest in the shares.


RISK FACTORS


Investing in our common stock involves a high degree of risk. You should
carefully consider the risks and uncertainties described below before you
purchase any of our common stock. These risks and uncertainties are not the only
ones we face. Unknown additional risks and uncertainties, or ones that we
currently consider immaterial, may also adversely affect our business
operations.

If any of these risks or uncertainties actually occurs, our business, financial
condition or results of operations could be materially adversely affected. In
this event, you could lose all or part of your investment.

<PAGE>


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.


Our financial results for the twelve-month fiscal year ending July 31, 2004 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 July31, 2004 reflect
additional substantial losses due to the ramp up of sales and marketing as well
as the cost associated with the acquisition of Waves Consulting Group, Inc.
Specifically, however, the Company has sustained substantial operating losses in
the twelve months ended July 31, 2004 and the seven months ended July 31, 2003
of $3,142,860 and $1,898,316, respectively. The Company, as of October 1, 2003,
is in default on certain notes payable, payroll taxes and other payables. In
addition, the Company has used substantial amounts of working capital in its
operations. Further, at July 31, 2003, the Company's current liabilities exceed
current assets by $2,546,773, and the Company has an accumulated deficit of
$3,295,885.

Our independent auditor has indicated that it doubts that the Company can
continue as a going concern. Our independent auditor's opinion may negatively
affect our ability to raise additional funds, among other things.

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 the Company is suitable.


We depend upon a limited number of clients.


A significant portion of the Company's revenues during 2004 were derived of
orders from a limited number of clients. The timing of receipt, fulfillment and
deployment of orders from these limited client is likely to cause significant
fluctuations in our operating results, especially on a quarterly basis.


We are dependent on certain key personnel, including members of our management
team


The Company currently has a very small senior management team and is highly
dependent on certain key individuals of this team. The operations would suffer
significantly if some or all of these individuals were to terminate their
relationship with the Company for any reason. Retaining and or replacing these
relationships will become even more important as the Company grows. The Company
cannot assure the investing public that it will be able to replace a key
individual who terminates his or her relationship with the Company. The Company
will utilize best practices in recruitment if and when it's necessary to replace
key individuals. The Company does not have any key-man life insurance on its
current employees.


<PAGE>



We are dependent on proprietary intellectual property, and our measures to
protect such property may be insufficient.

We rely on a combination of trade secrets, copyright and trademark laws,
nondisclosure and other contractual provisions and technical measures to protect
our proprietary rights in our products, such as Splitware. We have not
registered our copyrights or trademarks and instead we are relying on common law
to protect our rights. We cannot assure you that these protections are adequate
or that our competitors will not independently develop technologies that are
substantially equivalent or superior to our technology. We believe that our
products, trademarks and other proprietary rights do not infringe upon the
proprietary rights of third parties, but we cannot assure you that third parties
will not assert infringement claims against us in the future.


The wireless communications industry is highly competitive and we may be unable
to compete effectively.

The industry of providing mobile solutions for information technology systems is
highly competitive. Many companies compete nationwide to provide mobile
solutions to businesses and entities using information technology systems and
communications networks. If a competitor offers products and services that are
equal to or superior to our products and services, or offers products and
services at lower prices than we do, it may be difficult or impossible for us to
sell our products and services in sufficient volumes to sustain operations. We
cannot assure you that market demand will continue to grow, and increases in
capacity by us and our competitors may lead to greater competition in the
market, which competition would adversely affect our ability to sells its
products and services in sufficient volume to sustain operations.


Our market is changing rapidly and we may not be able to move fast enough to
accommodate the market's changes.

The market for information technology systems and communications networks is
changing rapidly as new technologies are introduced and old ones are abandoned.
While we will try to make changes in our products and services to keep up with
the changing market, we cannot assure you that rapid changes in products and
services will not make our products and services obsolete, such that we will be
unable to compete in the market.


Demand for our products may fail to materialize as expected.

The market for the products and services we offer is relatively new and there is
little hard data to validate market demand or predict how this demand will be
segmented. There could be much lower demand than believed, or interest in our
products and services could decline or die out, which would adversely affect our
ability to sustain operations.


We may be subject to product liability or breach of contract claims if our
wireless solutions do not work as promised.

The mobile solutions in which we provide information technology are designed to
facilitate information flows over such systems. If our mobile solutions fail to
work as anticipated, customers may bring claims against us, despite limitations
on such claims in our contracts and agreements with customers. Defending against
such claims can be costly and time consuming, and could have a material adverse
effect on our operations, even if we are found not to have been at fault. We
have liability insurance and anticipate that we will continue such coverage if
it is available at a reasonable cost. Future increases in insurance premiums may
prevent us from maintaining adequate insurance coverage. A large damage award
against us could exceed our insurance coverage and adversely affect our
financial condition.


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.

<PAGE>


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 its 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.


Our founders, officers and directors beneficially own approximately 23% 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; shareholders may be unable to exercise control.

As of July 31, 2004, our founders, officers and directors beneficially owned
approximately 23% of our common stock on a fully diluted basis. In addition,
employees of the Company own additional shares and rights to acquire shares. As
a result, the founders, officers and directors will have significant ability to:

     o    elect or defeat the election of our directors;

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

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

     o    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.



<PAGE>


Item 7.  Financial Statements.

(1) Financial Statements

The following financial statements are included immediately following the
signature page of this Form 10-KSB.

Report of Scharf, Pera & Co., P.L.L.C,
  Independent Certified Public Accountants                                   F1

Balance Sheet as of July 31, 2004                                            F2

Statements of Operations for the years ended July 31, 2004
 and July 31, 2003                                                           F3

Statements of Cash Flows for the years ended July 31, 2004
 and July 31, 2003                                                           F4

Statement of Stockholders' Deficit for the years ended
 July 31, 2004 and July 31, 2003                                             F5

Notes to Financial Statements                                                F6


(2) Financial Statement Schedules

All financial statement schedules are omitted because they are not applicable or
the required information is shown in the financial statements or notes thereto.


Item 8. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosures.


(i)  Not applicable.

(ii) The independent auditor's report on the consolidated financial statements
     for the year ended July 31, 2004 contained no adverse opinion, no
     disclaimer of opinion, nor was it qualified or modified as to uncertainty,
     audit scope or accounting principles.


Item 8A. Controls and Procedures.


Our principal executive officer and principal financial officer evaluated the
effectiveness of the Company's disclosure controls and procedures as of a date
within 90 days prior to the filing of this report. Based on this evaluation, the
Company's principal executive officer and principal financial officer have
concluded that the Company's controls and procedures are effective in providing
reasonable assurance that the information required to be disclosed in this
report has been recorded, processed, summarized and reported within the time
period required for the filing of this report. Subsequent to the date of this
evaluation, there have not been any significant changes in our internal controls
or, to our knowledge, in other factors that could significantly affect our
internal controls.


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

Directors and Officers

The members of the Board of Directors and executive officers of Mobile Reach
International, Inc. together with their respective ages are set forth below. The
Company's' officers are elected by and serve at the designation and appointment
of the Board of Directors.


      Name                  Age                                   Position
      ----                  ---                                   --------

Michael J. Hewitt  (1)      39      Director, Chief Executive Office, President
                                     and Treasurer
Christopher Johnson (2)     36      Director  Acting Chief Executive Officer
Michael Lai Le              49      Director, Chairman of the Board of Directors
Mark Lloyd                  40      Director, Vice President, Secretary
Carl Hartman  (3)           58      Director


<PAGE>


Director Change in Controls


(1) - Served on the Board of the Company as a Director, Chief Executive Officer,
President and Treasurer from December 23, 2002 until his resignation of all such
positions was accepted by the Board on August 2, 2004.


(2) - Served on the Board of the Company as a Director since inception. On
August 6, 2004 Mr. Johnson became the interim CEO by Board consent until further
notice.


(3) - Served on the board of the Company from August 2003 until his resignation
was accepted by the board on August 2004. As of December 2004, Mr. Hartman's
position has not been filled.

Michael Lai Le is a Director and our Chairman of the Board and has held these
positions since our inception. Michael has more than 30 years of IT experience
and has successfully started, grown and exited from technology companies.
Michael worked with IBM for over 10 years as a senior consultant leading a
variety of projects from Artificial Intelligence utilizing Object Oriented
technology to sales force automation utilizing SAP. Mr. Le was a founder and CEO
of LKSP Technologies, Inc. a ERP consulting firm which had partnerships with
Fortune 500 companies such as IBM, SAP, Goodyear, Panasonic, Tenneco, PWC,
Phillip Morris. In July 2000, he co-founded our subsidiary, Mobile Reach
Technologies, Inc. and served as Chief Executive Officer during its first 6
months of existence. During this time, Michael put together the management team
and set up an office in Germany. Michael continues to serve as Chairman of the
Board of MRI but is no longer active in the day-to-day operations.

Alan Christopher Johnson has been a member of our board of directors since
inception, and became our interim Chief Executive Officer in August 2004. Mr.
Johnson was formally the Head Trader for Index Trading for CMT London, a firm he
joined in March 1999 to set up trading operations on the LIFFE. Mr. Johnson has
an extensive financial banking career that involves several international
derivative trading firms. Prior to joining CMT, in 1996 he co-founded S & J
Derivatives Trading GmbH, a market making firm in Germany that traded on the
Deutshe Terminborse. Mr. Johnson established trading operations for major
international banks in Japan and Germany. He has extensive risk management and
trading skills in equity options, future options, fixed income options, market
making, structuring derivative products and volatility trading. Previously, Mr.
Johnson worked for BNP Securities in Tokyo Japan and was in charge of
re-structuring the Nikkei Index trading operation.

Mark Lloyd is a Director and our Vice President, Secretary, Chief Technical
Officer and Vice President of Business Development since our inception. Mr.
Lloyd founded Mobile Reach Technologies in 2000 as a mobile middleware company.
He is responsible for understanding key mobility technology trends across mobile
devices and wireless networks, and how these technologies can be effectively
applied to deliver high-value solutions for Mobile Reach's clients. Mark works
both internally with staff members to set technical direction, as well as
directly with clients to identify areas where mobile and wireless technologies
can provide true business benefit to them. Mr. Lloyd has several years of
mobility experience including wireless device and network experience with
Ericsson, Nortel & AT&T Bell Laboratories in a wide array of technologies
including PDAs, SmartPhone, WAP Browsers, GSM digital cellular phones, dual-mode
cellular phones and SS7 switching systems. In addition, Mr. Lloyd has a deep
background in Software Processes and Object-Oriented development. In 1992, he
founded a company which developed and commercialized a specialized CASE tool
that enabled true Software Engineering via automated support of domain
separation, graphical modeling & source code generation.

Brian R. Balbirnie has been our Chief Operating Officer since December 2003 and
is responsible for our day to day operations. His duties include directing
corporate compliance, investor relations as well as overseeing different
business units of ours. Prior to Chief Operating Officer, Mr. Balbirnie was the
Vice President of Operations for Mobile Reach. Before joining us, Mr. Balbirnie
was a vice president and managing director with Ivue Corporation and during his
tenure, Mr. Balbirnie was involved in the design and beta of one of the
industries first Internet Broadcast player-less technologies. Preceding Ivue,
Mr. Balbirnie spent two years consulting with several telecommunications
companies in the Tampa Bay area, including GCS Telecom and Target Television,

<PAGE>


assisting in operations and M&A to build strong stockholder values and exit
strategies. Mr. Balbirnie attended St. Petersburg College majoring in Business
Administration and Marketing.

Charles W. Joyce has been our Chief Financial Officer since January 2004. Mr.
Joyce has over 19 years of financial and accounting experience with high tech
companies. Prior to joining Mobile Reach, Mr. Joyce was responsibility for
virtual CFO/Controllerships for several high tech companies in the RTP of North
Carolina. Prior to his virtual services, he was one of the original team members
of Extensibility, Inc. and managed the financials and operational functions
leading to the acquisition by TIBCO Software, Inc. for $100M in 2000. Prior to
Extensibility, Mr. Joyce was controller for the Enterprise Solutions Division of
TigerDirect, acquired by Global Direct a fortune 1000 company in 1996. Mr. Joyce
holds a BS in Business Administration with an Accounting Major from Guilford
College.


Board of Directors; Election of Officers


All of our directors hold office until the next annual meeting of the security
holders or until their successors have been elected and qualified. Our officers
are appointed by our board of directors and hold office until their death,
resignation or removal from office.


Board Compensation and Committees


Currently we do not have a policy in place to compensate our directors for board
related activities until our financial condition improves. We do not have any
Audit Committee. No member of our board of directors has the level of experience
required to be considered a financial expert for the purpose of Securities and
Exchange Commission rules related to Audit Committees. Currently,
Over-the-Counter Bulletin Board companies, such as ours, are not required to
have an Audit Committee or an "financial expert." Nevertheless, we are in the
process of identifying people to add to our board of directors and will be
seeking candidates for an Audit Committee.

We do not currently have a nominating committee. Nominations for election to the
board of directors may be made by the board of directors, or by any stockholder
entitled to vote for the election of directors. Special meetings may be held
from time to time to consider matters for which approval of the board of
directors is desirable or is required by law.


Audit Committee and Financial Expert


The Company does not have any Audit Committee. No member of the Board of
Directors of the Company has the level of experience required to be considered a
financial expert for the purpose of Securities and Exchange Commission rules
related to Audit Committees. Currently, over-the-counter Bulletin Board
companies, such as the Company, are not required to have an Audit Committee or a
"financial expert." Nevertheless, the Company is in the process of identifying
people to add to the Company's Board of Directors and will be seeking candidates
for an Audit Committee.


Code of Ethics

The Company does not currently have a Code of Ethics, but intends to evaluate
provisions for a code of ethics in the future.


Item 10. Executive Compensation.


Accounting for stock-based compensation

Employee stock awards under our compensation plans are accounted for in
accordance with Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" ("APB 25"), and related interpretations. We provide
the disclosure requirements of Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation" ("SFAS 123"), and related
interpretations. Stock-based awards to nonemployees are accounted for under the
provisions of SFAS 123. SFAS 123 allows and we have elected to continue to only
disclose the effects on net income or loss of the fair value of the options.

<PAGE>


Executive Compensation Summary

 The following table sets forth the annual and long-term compensation for each
of the past three fiscal years of each of (i) the Company's Chief Executive
Officer, and (ii) each of the Company's three other executive officers, who were
serving as of July 31, 2004 and whose annual compensation exceeded $100,000,
(collectively, with the Chief Executive Officer, the "Named Officers"):
<TABLE>
<CAPTION>


                                             Summary Compensation Table

                                                  Annual Compensation (1)                 Long-Term Compensation
                                                  -------------------                     ----------------------
                                                          Salary ($)                                  Securities
                                                Fiscal    ----------                Restricted        Underlying          Other
Name and Principal Position                     Year (2)     (3)          Bonus    Stock Awards(1)      Options       Compensation
---------------------------                     ----                      -----    ---------------      -------       ------------
<S>                                             <C>        <C>
Michael J. Hewitt                               2004       $250,000(4)       -                                                   -
                                                2003       $200,000                  $1,886,277                -
     President & Chief Executive Officer        2002              -          -                -                -                 -
                                                2001              -          -                -                -                 -

Mark J. Lloyd                                   2004       $175,000          -                -                                  -
                                                2003       $120,000                                    1,088,792
     Chief Technical Officer                    2002        120,000          -                -                -                 -
                                                2001        118,850          -                -                -                 -

Major Lackey                                    2004       $160,000(5)       -                -                -                 -
                                                2003       $160,000
    Vice President of Sales                     2002              -          -                -                -                 -
                                                2001              -          -                -                -                 -

Brian Balbirnie                                 2004       $160,000          -                -                -                 -
                                                2003       $120,000
    Chief Operating Officer                     2002              -          -                -                -                 -
                                                2001              -          -                -                -                 -
</TABLE>


(1)  Excludes perquisites and other personal benefits, the aggregate annual
     amount of which for each officer was less than the lesser of $50,000 or 10%
     of the total salary and bonus reported.

(2)  The fiscal years for 2001 and 2002 were twelve-month periods ended December
     31. Fiscal year 2003 was a seven-month period ended July 31, 2003. Fiscal
     2004 was twelve month period ended July 31, 2004

(3)  The salary for the seven-month fiscal year 2003, represents the annualized
     salary that would have been paid during a 12-month year. Employment and
     Severance Agreements

(4)  Of this amount, $145,833 was paid to Mr. Hewitt prior to him terminating
     his employment relationship with the Company.

(5)  Of this amount, $41,000 was paid to Mr. Lackey prior to him terminating his
     employment relationship with the Company.

Michael J. Hewitt, our former Chief Executive Officer, President and Treasurer,
terminated his employment with Company on August 2, 2004. At the time, he was
receiving a base salary of $200,000. He received no severance payments and no
vesting of his options to purchase shares of the Company's Common Stock.


<PAGE>

Chris Johnson, our current Chief Executive Officer, does not have an Employment
Agreement with the Company. At this time and due to the financial condition of
the Company, Mr. Johnson does not receive and is not accruing a salary. However,
the Board of Directors may grant Mr. Johnson shares of the Company's Common
Stock in consideration of his past and current services.

Mark J. Lloyd, our Vice President and Secretary, is entitled to receive a base
salary of $120,000 per year under his Employment Agreement. However, due to the
financial condition of the Company, Mr. Lloyd has been deferring his salary at a
rate of $4,320.00 per month, since April 2004. Upon the closing by the Company
of financing rounds totaling over $2 million, Mr. Lloyd's base salary will
increase to $175,000 per year. In such an event, Mr. Lloyd will also receive a
bonus equal to twelve and one-half percent (12.5%) of the net sales received by
the Company on certain of its contracts. Mr. Lloyd will also receive a cash
bonus equal to $93,600 upon the earlier to occur of the closing by the Company
of financing rounds totaling over $2 million or December 31, 2003. In the event
of termination of Mr. Lloyd's employment for any reason, Mr. Lloyd is eligible
for a severance payment of $93,600 in lieu of the cash bonus mentioned in the
preceding sentence, plus three months of his then-current salary. Mr. Lloyd is
eligible for options under the Company's Equity Compensation Plan at the
discretion of the Board of Directors.

Brian Balbirnie, the former Chief Operating Officer, received a base salary of
$120,000 per year. He currently acts as a consultant to the Company for a
retainer of $7,000.00 per month. Mr. Balbirnie was deferring his salary at a
rate of $3,076.00 per month from April 2004 to September 27th 2004. Under the
terms of his employment, Mr. Balbirnie is eligible for options under the
Company's Equity Compensation Plan at the discretion of the Board of Directors.

Major Lackey, was the Company's Vice President of Sales, he received a base
salary of $150,000 per year. Mr. Lackey was eligible for options under the
Company's Equity Compensation Plan and did exercise all 400,000 options granted
during the period prior to his departure on April, 2004

Option Grants in Last Fiscal Year

The following table sets forth grants of stock options granted during the
twelve-month fiscal year-ended July 31, 2004 to the Named Officers.


Option Grants in Last Fiscal Year

The following table summarizes all option grants during the fiscal year ended
July 31, 2004 to the Named Executive Officers:

<TABLE>
<CAPTION>

                                         % of Total
                           Number of      Options                                              Potential Realizable
                           Shares        Granted to       Exercise                               Value at Assumed
                         Underlying     Employees in      Or Base                             Annual Rates of Stock
                           Options       Fiscal Year     Price Per      Expiration           Price Appreciation for
Name                       Granted        2003 (1)         Share           Date                  Option Term (2)
-----                      -------        ----             -----           ----                  -----------
                                                                                              5%               10%
                                                                                              --               ---
<S>                         <C>             <C>            <C>            <C>             <C>               <C>
Michael J. Hewitt             -               -              -                                -                 -
Mark J. Lloyd             1,088,792          44%           $.018        03/15/2013         $123,251          $312,374
Major Lackey                  -               -              -                                -                 -
Brian Balbirnie               -               -              -                                -                 -
</TABLE>

---------------------

(1)  Stock options were originally granted by our subsidiary, MRT, as
     nonqualified options or under MRT's 2000 Stock Award Plan as incentive
     stock options at an exercise price equal to the fair market value of MRT's
     common stock on the date of grant. We assumed the options under our 2003
     Equity Compensation Plan pursuant to the share exchange transaction with
     MRT during which MRT became our wholly owned subsidiary. Option shares and
     exercise prices have been adjusted using the exchange ratio in the share
     exchange transaction and to account for a subsequent stock dividend we
     declared.

(2)  Amounts reported in these columns represent amounts that may be realized
     upon exercise of the options immediately prior to the expiration of their
     term assuming the specified compounded rates of appreciation (5% and 10%)
     on the market value of our common stock on the date of option grant over
     the term of the options. These numbers are calculated based on rules
     promulgated by the SEC and do not reflect our estimate of future stock
     price growth. Actual gains, if any, on stock option exercises and common
     stock holdings are dependent on the timing of such exercise and the future
     performance of our common stock. There can be no assurance that the rates
     of appreciation assumed in this table can be achieved or that the amounts
     reflected will be received by the individuals.

<PAGE>


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


         The following table sets forth information with respect to options to
purchase our common stock granted to the Named Officers, including (i) the
number of shares of common stock purchased upon exercise of options in the
fiscal year ended July 31, 2003; (ii) the net value realized upon such exercise;
(iii) the number of unexercised options outstanding at July 31, 2004; and (iv)
the value of such unexercised options at July 31, 2004.
<TABLE>
<CAPTION>

                                                                                                          Value of
                                                               Number of Unexercised                   Unexercised
                                                                     Options                           In-the-Money
                               Shares                                  As of                             Options
                            Acquired on        Value               July 31, 2003                 At July 31, 2003 (1)(2)
                            Exercise (#)   Realized ($)    Exercisable     Unexercisable     Exercisable    Unexercisable
                            ------------   ------------    -----------                       -----------
Name
<S>                         <C>               <C>             <C>             <C>             <C>             <C>
Michael J. Hewitt                -               -              -                -                -                 -
Mark J. Lloyd                    -               -           257,076          831,716          $77,123          $249,515
Major Lackey                     -               -              -                -                -                 -
Brian Balbirnie                  -               -              -                -                -                 -
</TABLE>

-------------------

(1)  Amounts disclosed in this column do not reflect amounts actually received
     by the Named Officers but are calculated based on the difference between
     the fair market value of our common stock on the date of exercise and the
     exercise price of the options. The Named Officers will receive cash only if
     and when they sell the common stock issued upon exercise of the options,
     and the amount of cash received by such individuals is dependent on the
     price of our common stock at the time of such sale.

(2)  Value is based on the difference between the option exercise price and the
     fair market value at July 31, 2003, the fiscal year-end ($0.48 per share as
     quoted on the Over-the-Counter Bulletin Board), multiplied by the number of
     shares underlying the option.


2003 Equity Compensation Plan


We adopted our 2003 Equity Compensation Plan on July 29, 2003. The plan provides
for the grant of options intended to qualify as "incentive stock options",
options that are not intended to so qualify or "non-statutory stock options",
and restricted stock. The total number of shares of common stock reserved for
issuance under the plan is 12,781,149, subject to adjustment in the event of a
stock split, stock dividend, recapitalization or similar capital change.

The plan is administered by our board of directors, which selects the eligible
persons to whom options shall be granted, determines the number of common shares
subject to each option, the exercise price therefore and the periods during
which options are exercisable, interprets the provisions of the plan and,
subject to certain limitations, may amend the plan. Each option granted under
the plan shall be evidenced by a written agreement between us and the optionee.
Grants may be made to employees (including officers), directors, and certain of
our consultants and advisors.

The exercise price for incentive stock options granted under the plan may not be
less than the fair market value of the common stock on the date the option is
granted, except for options granted to 10% stockholders which must have an
exercise price of not less than 110% of the fair market value of the common
stock on the date the option is granted. The exercise price for non-statutory
stock options is determined by the board of directors. Incentive stock options
granted under the plan have a maximum term of ten years, except for 10%
stockholders who are subject to a maximum term of five years. The term of
non-statutory stock options is determined by the board of directors. Options
granted under the plan are not transferable, except by will and the laws of
descent and distribution.


Item 11. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.


The following table sets forth information regarding the beneficial ownership of
our common stock taking into account the stock dividend whose record date is
August 18, 2003. The information in this table provides the ownership
information for:

<PAGE>


     o    each person known by us to be the beneficial owner of more than 5% of
          our common stock;

     o    each of our directors;

     o    each of our executive officers; and

     o    our executive officers and director as a group.

Beneficial ownership has been determined in accordance with the rules and
regulations of the Securities and Exchange Commission and includes voting or
investment power with respect to the shares. Unless otherwise indicated the
persons named in the table below have sole voting and investment power with
respect to the number of shares of Common Stock of Mobile Reach International
indicated as beneficially owned by them. Unless otherwise indicated, the address
of each beneficial owner is: Mobile Reach International, Inc., 2054 Kildaire
Farm Road 353, Cary, North Carolina 27511.


              Name of                   Number of Shares        Percentage of
          Beneficial Owner             Beneficially Owned        Outstanding
        -------------------            ------------------       --------------
        Christopher Johnson                1,319,410                 3.10%
          David Revord (2)                 1,914,026                 4.49%
           Mark Lloyd (1)                  2,474,025                 5.81%
           Michael Le (4)                  2,209,636                 5.19%
         Michael Hewitt(1)                 1,974,041                 4.63%
            Carl Hartman                        --                     --
       Paige E. Bendixsen (3)              1,700,000                 3.99%
       Brian R. Balbirnie (3)                400,000                  .94%

--------------
     (1)  For each reporting person, includes 500,000 shares of common stock
          obtainable upon the exercise of stock options.

     (2)  Consists entirely of shares of common stock obtainable upon the
          exercise of stock options.

     (3)  Includes 400,000 shares of common stock obtainable upon the exercise
          of stock options.


Item 12. Certain Relationships and Related Transactions.


One of our directors, (now current Chief Executive Officer) Alan Christopher
Johnson part of a group, entered into a Secured Bridge Note dated May 31, 2004,
a short term note payable and other financing documents for a total amount of
$435,000. As of October 31, 2004 the Company, its management, board of directors
and Alan Christopher Johnson have agreed to convert the $435,000 into 800,000
shares of Preferred Series A stock at a ten for one conversion ratio, subject to
annual shareholder approval to increase the number or authorized shares of the
Company's common stock.



<PAGE>


Item 13. Exhibits and Reports on Form 8-K

(a) Exhibits

16.1    Letter of Independent Auditor. Incorporated by reference to Exhibit 16.1
        to the Company's Current Report on Form 8-K filed on October 3, 2003.

21.1    Subsidiaries

23.1    Consent of Independent Auditors

31.1    Certificate of Chief Executive Officer pursuant to Section 302
        Certifications

31.2    Certificate of Chief Financial Officer pursuant to Sections 302
        Certifications

32.1    Certificate of Chief Executive Officer pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002.


32.2    Certificate of Chief Financial Officer pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K


For the period ending July 31, 2004, the Company filed the following 8-K
reports:

     Date Filed                                       Items Reported
-----------------                        ---------------------------------------
2004-06-30                                     8K/A- Current Report, Item 7
2004-06-07                                    Current Report, Item 12 and 7
2004-02-10                                    Current Report, Item 12 and 7
2004-01-22                                   Current Report, Items 2, 5 and 7
2003-12-29                                    Current Report, Items 5 and 7
2003-10-15                                    Amended Current Report, Item 7
2003-10-03                                    Current Report, Items 4 and 7
2003-08-14                                Current Report, Items 1, 2, 5, 7 and 8



 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.

                                        MOBILE REACH INTERNATIONAL, INC.
                                                (Registrant)

                                        By:  /s/  Alan Christopher Johnson
                                           -------------------------------------
                                                  Alan Christopher Johnson
                                                  Chief Executive Officer
                                                  December 16, 2004


<PAGE>


In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

       /s/  Alan Christopher Johnson                      December 16, 2004
       ------------------------------------
            Alan Christopher Johnson
            Chief Executive Officer and Director

       /s/  Charles Joyce                                 December 16, 2004
       ------------------------------------
            Charles Joyce
            Chief Financial Officer
            And Chief Accounting Officer

       /s/  Michael Lai Le                                December 16, 2004
       -------------------------------------
            Michael Lai Le,
            Director and Chairman

       /s/  Mark J. Lloyd                                 December 16, 2004
       -------------------------------------
            Mark J. Lloyd,
            Director and Secretary


<PAGE>


               MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
               -------------------------------------------------
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                          YEAR ENDED JULY 31, 2004 AND
                          ----------------------------
                      THE SEVEN MONTHS ENDED JULY 31, 2003
                      ------------------------------------


                                                                         Pages
                                                                         -----

INDEPENDENT AUDITORS' REPORT                                               F1


FINANCIAL STATEMENTS:


    Consolidated Balance Sheet                                             F1


    Consolidated Statements of Operations                                  F2


    Consolidated Statements of Stockholders' Deficit                       F3


    Consolidated Statements of Cash Flows                               F4 - F5


    Notes to Consolidated Financial Statements                          F7 - F24




<PAGE>


Board of Directors
Mobile Reach International, Inc. and Subsidiaries
Charlotte, North Carolina



                          INDEPENDENT AUDITORS' REPORT
                          ----------------------------

     We have audited the accompanying consolidated balance sheet of Mobile Reach
International, Inc. and Subsidiaries as of July 31, 2004 and 2003, and the
related consolidated statements of income, consolidated statement of changes in
stockholders' deficit and consolidated statement of cash flows for the year
ended July 31, 2004 and the seven months ended July 31, 2003. 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 audits.


     We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits 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
audits provide 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 Mobile Reach International,
Inc. and Subsidiaries as of July 31, 2004, and the results of its operations and
its cash flows for the year ended July 31, 2004 and the seven months ended July
31, 2003, in conformity with accounting principles generally accepted in the
United States.


     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 those
matters are also included in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.




December 14, 2004


/s/  Scharf Pera & Co., PLLC
-----------------------------
     Scharf Pera & Co., PLLC


Charlotte, North Carolina

                                     (F-1)


<PAGE>


                MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
                -------------------------------------------------
                           CONSOLIDATED BALANCE SHEETS
                           ---------------------------
                                  JULY 31, 2004
                                  -------------


         ASSETS
         ------

CURRENT ASSETS:
  Cash                                                              $    10,239
  Accounts receivable - trade                                           322,111
  Accounts receivable - employee                                          3,948
  Accounts receivable - other                                             2,500
                                                                    -----------


    Total current assets                                                338,798

PROPERTY AND EQUIPMENT - NET                                            138,882
                                                                    -----------

                                                                    $   477,680

         LIABILITIES AND STOCKHOLDERS' DEFICIT
         -------------------------------------

CURRENT LIABILITIES:
  Current portion of long-term debt                                 $   165,363
  Notes payable                                                         880,836
  Accounts payable                                                      747,375
  Accrued expenses                                                      560,166
  Accrued taxes and withholdings                                        481,005
  Customer deposits                                                      24,540
  Deferred income                                                        26,286
                                                                    -----------

    Total current liabilities                                       $ 2,885,571

LONG-TERM DEBT (net of current portion)                                 362,994

CONVERTIBLE DEBENTURES                                                  525,000

COMMITMENTS AND CONTINGENCIES                                              --

STOCKHOLDERS' DEFICIT:
  Preferred stock; $.0001 par value;
   10,000,000 shares authorized                                            --
  Common stock; par value $.0001; 50,000,000
   shares authorized, 33,394,435 shares issued
   and outstanding                                                    4,492,557
  Accumulated deficit                                                (7,788,442)
                                                                    -----------

                                                                     (3,295,885)

                                                                    $   477,680
                                                                    ===========


                 See Notes to Consolidated Financial Statements

                                     (F-2)

<PAGE>


               MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
               -------------------------------------------------
                         CONSOLIDATED INCOME STATEMENTS
                         ------------------------------
                    FOR THE YEAR ENDED JULY 31, 2004 AND THE
                    ----------------------------------------
                        SEVEN MONTHS ENDED JULY 31, 2003
                        --------------------------------



                                                       2004            2003
                                                   ------------    ------------

NET REVENUES:
    Software license, maintenance, and support
      fees                                         $    591,193    $     94,312
    Product sales                                       854,710            --
    Professional services                               132,225            --
    Other revenue                                        11,731            --
                                                   ------------    ------------
         Total revenues                               1,589,859          94,312

COST AND EXPENSES:
    Cost of revenues                                    937,833         185,284
    Sales and administrative                          3,547,034       1,656,599
    Depreciation                                         46,548          11,560
    Bad debt expense                                     31,705            --
                                                   ------------    ------------
         Total cost and expenses                      4,563,120       1,853,443
                                                   ------------    ------------

LOSS FROM OPERATIONS                                 (2,973,261)     (1,759,131)
                                                   ------------    ------------

OTHER (EXPENSE) INCOME:
    Interest expense                                   (242,532)        (34,285)
    Contingency gain (loss)                             105,000        (105,000)
    Net liabilities exceeding assets on
      acquisition                                       (22,148)           --
    Loss on sale of property                            (10,263)           --
    Currency translation gain and
      interest income                                       344             100
                                                   ------------    ------------
         Total other (expenses) income                 (169,599)       (139,185)
                                                   ------------    ------------

NET LOSS BEFORE INCOME TAXES                         (3,142,860)     (1,898,316)
                                                   ============    ============

INCOME TAX (EXPENSE) BENEFIT                               --              --
                                                   ------------    ------------

NET LOSS                                             (3,142,860)     (1,898,316)
                                                   ============    ============

NET LOSS PER SHARE - BASIC AND DILUTED                    (0.11)         (0,14)
                                                   ============    ============

WEIGHED AVERAGE NUMBER OF SHARES OUTSTANDING -
      BASIC AND DILUTED                              27,891,651      13,482,257
                                                   ============    ============


                 See Notes to Consolidated Financial Statements

                                     (F-3)


<PAGE>
<TABLE>
<CAPTION>


                                        MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
                                        -------------------------------------------------
                                         CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT
                                         -----------------------------------------------
                            FOR THE YEAR ENDED JULY 31, 2004 AND THE SEVEN MONTHS ENDED JULY 31, 2003
                            -------------------------------------------------------------------------



                                         Preferred Stock                  Common Stock
                                   ----------------------------    ----------------------------    Accumulated
                                      Shares          Amount          Shares          Amount          Deficit         Total
                                   ------------    ------------    ------------    ------------    ------------    ------------
<S>                                    <C>        <C>               <C>           <C>             <C>             <C>
Balances at December 31, 2002           768,000    $    192,000      16,109,037    $    778,556    $ (2,747,266)   $ (1,776,710)
                                   ------------    ------------    ------------    ------------    ------------    ------------

Issuance of common stock                   --              --        17,646,522       1,058,788            --         1,058,788
Conversion of debt and
  interest                                 --              --        12,256,783         735,407            --           735,407
Issuance of stock as
  compensation                             --              --         5,730,953         343,857            --           343,857
Issuance of stock for note
  payable and fee for services             --              --         3,000,000         180,000            --           180,000
Accrued wages converted to
  stock options                            --              --              --            32,680            --            32,680
Net loss                                   --              --              --              --        (1,898,316)     (1,898,316)
                                   ------------    ------------    ------------    ------------    ------------    ------------

Balance prior to merger                 768,000         192,000      54,743,295       3,129,288      (4,645,582)     (1,324,254)
Conversion of common stock in
  merger                                   --              --       (36,725,131)           --              --              --
Conversion of preferred stock          (768,000)       (192,000)        505,555         192,000            --              --
Common stock owned by Asphalt
  Paving International, Inc.
  Stockholders                             --              --         5,112,461            --              --              --
                                   ------------    ------------    ------------    ------------    ------------    ------------

Balances at July 31,2003                   --              --        23,636,180       3,321,288      (4,645,582)     (1,324,254)
                                   ------------    ------------    ------------    ------------    ------------    ------------

Issuance of common stock                   --              --         5,005,168       1,006,027            --         1,006,027
Issuance of stock as fee for
 service                                   --              --           803,125          86,500            --            86,500
Issuance of stock in
 settlement of litigation                  --              --           700,000          74,716            --            74,716
Issuance of stock on option
 exercise                                  --              --         1,949,962           4,026            --             4,026
Issuance of stock on acquisition           --              --         1,300,000            --              --              --
Net Loss                                   --              --              --              --        (3,142,860)     (3,142,860)
                                   ------------    ------------    ------------    ------------    ------------    ------------

                                           --              --        33,394,435    $  4,492,557    $ (7,788,442)   $ (3,295,885)
                                   ============    ============    ============    ============    ============    ============


                                         See Notes to Consolidated Financial Statements

                                                             (F-4)
</TABLE>

<PAGE>


                MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
                -------------------------------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                    FOR THE YEAR ENDED JULY 31, 2004 AND THE
                    ----------------------------------------
                        SEVEN MONTHS ENDED JULY 31, 2003
                        --------------------------------



                                                        2004           2003
                                                     -----------    -----------
Cash flows from operating activities:
  Net loss                                           $(3,142,860)   $(1,898,316)

  Adjustments to reconcile net loss to net cash
    used in by operating activities:
    Depreciation                                          48,068         11,560
    Contingency loss                                        --          105,000
    Stock issued for compensation and fees               161,216        448,759
    Loss on disposal equipment                            17,693           --
    Liabilities in excess of assets                       22,148           --
  Changes in operating assets and liabilities:
    Decrease in prepaid expenses                            --            1,056
    (Increase) decrease in accounts receivable          (153,197)        16,979
    Increase in accounts payable                         669,120         14,874
    Increase in notes payable to vendors                    --          265,413
    Increase in accrued expenses, taxes &
      withholdings                                       376,302          5,123
    Increase (decrease) in deferred revenue               50,214         (7,560)
                                                     -----------    -----------

      Net cash used in operating activities           (1,951,296)    (1,037,112)
                                                     -----------    -----------

Cash flows from investing activities:
    Proceeds from the sale of equipment                    4,730
    Purchases of property and equipment                  (46,223)       (13,924)
                                                     -----------    -----------

      Net cash used in investing activities              (41,493)       (13,924)
                                                     -----------    -----------

Cash flows from financing activities:
    Principal payments on long-term debt                (170,440)        (1,442)
    Proceeds from common stock issuance                1,006,220      1,058,788
    Proceeds from issuance of debentures                 525,000           --
    Proceeds from long-term debt                         605,000         12,037
                                                     -----------    -----------

      Net cash provided by financing activities        1,965,780      1,069,383
                                                     -----------    -----------

Net increase in cash                                     (27,009)        18,347

Cash - beginning of year                                  37,248         18,901
                                                     -----------    -----------

Cash - end of year                                   $    10,239    $    37,248
                                                     ===========    ===========


                 See Notes to Consolidated Financial Statements

                                      (F-5)

<PAGE>


                MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
                -------------------------------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                   FOR THE YEARS ENDED JULY 31, 2004 AND 2003
                   ------------------------------------------
                                   (continued)



SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
--------------------------------------------------
                                                             2004         2003
                                                           --------     --------

Cash payments for:
  Interest                                                 $  6,579     $ 12,440

Cash received from:
  Interest                                                      215          100

Conversion of accrued wages to notes payable                   --         49,908

Conversion of debt and interest to common
  stock                                                        --        735,407

Conversion of note payable for wages and
  interest to common stock                                     --         75,098


Acquisition of Waves
  Assets assumed:
    Cash                                                   $  2,923
    Accounts receivable                                     143,194
    Inventory                                                 7,457
    Property and equipment - net                            127,494
                                                           --------

                                                            281,068

  Liabilities assumed:
    Accounts payable                                         67,134
    Notes payable                                           109,024
    Long-term debt                                          110,965
    Accrued expenses                                         16,093
                                                           --------

                                                            303,216

  Net liabilities in excess of assets assumed              $ 22,148
                                                           ========


                 See Notes to Consolidated Financial Statements

                                      (F-6)

<PAGE>


                MOBILE REACH INTERNATIONAL, INC. AND SUBSIDIARIES
                -------------------------------------------------
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                    FOR THE YEAR ENDED JULY 31, 2004 AND THE
                    ----------------------------------------
                        SEVEN MONTHS ENDED JULY 31, 2003
                        --------------------------------


Note 1 - 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 the Company as a going concern. However, the
Company has sustained substantial operating losses in the twelve months ended
July 31, 2004 and the seven months ended July 31, 2003 of $3,142,860 and
$1,898,316, respectively. The Company, as of July 31, 2004, is in default on
certain notes payable, payroll taxes and other payables. In addition, the
Company has used substantial amounts of working capital in its operations.
Further, at July 31, 2004, the Company's current liabilities exceed current
assets by $2,546,773, and the Company has a stockholders' deficit of $3,295,885.


     In view of these matters, management has sought out additional investment
sources to raise additional funds. However, no assurance can be given that the
Company will continue as a going concern without the successful completion of
additional financing. The accompanying consolidated 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 the delinquencies and defaults, the Company may be subject
to collection actions whenever agreements can not be reached, including, but not
limited to, litigation, foreclosure and/or seizure of assets and bank accounts.



Note 2 - Business Combinations:
-------------------------------

     Mobile Reach International, Inc. ("the Company"), a Delaware Corporation,
was formed in July 2003. The Company completed a share exchange agreement with
Asphalt Paving International, Inc. ("API") on July 30, 2003. Subsequently, the
Company completed a share exchange agreement with Mobile Reach Technologies,
Inc. ("MRT") (including its German subsidiary, Mobile Reach Technologies, GmbH)
on July 31, 2003. Former stockholders of MRT received 18,523,720 shares of
common stock of the Company, and the former stockholders of API received
5,112,460 shares of common stock of the Company. Due to the stock-holders of MRT
receiving the larger portion of the voting rights of the combined entity (Mobile
Reach International, Inc.), the share exchange agreements and mergers have been
treated as a reverse acquisition of API by MRT. The Company accounted for the
acquisition of API as prescribed by the Statement of Financial Accounting
Standards ("SFAS") No. 141, Business Combination. The Company did not record any
amount for goodwill on the acquisition of API, because API had no assets or
liabilities on the date of acquisition.

                                      (F7)

<PAGE>


Note 2 - Business Combinations (continued):
-------------------------------------------


     The Company has adopted a July 31 fiscal year end. The consolidated
statement of operations for the seven months ended July 31, 2003 includes the
results from operation of MRT for the seven months ended July 31, 2003 and the
results from operations of API from the date of acquisition, July 30, 2003, to
July 31, 2003.


     Effective January 2, 2004, the Company completed a share exchange agreement
with Waves Consulting Group, Inc ("Waves"), which sells and services digital
telecommunications and computer network systems. The Company exchanged 1,300,000
shares of restricted common stock for all the issued and outstanding common
stock of Waves. The Company accounted for the acquisition of Waves as prescribed
by statement of SFAS No. 141, "Business combinations". The Company did not
record any amount of goodwill for this merger. However; the Company did record
an expense of $22,148 representing the amount that Waves' liabilities exceeded
assets on January 2, 2004. The consolidated financial statements include the
results from operations for Waves from January 2, 2004 to July 31, 2004.
Subsequent to the acquisition, the Company changed this subsidiary's name to
Mobile Reach Solutions, Inc ("MRS").



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

     Organization and Principles of Consolidation:

          The accompanying consolidated financial statements include the
accounts of MRS, Mobile Reach Technologies, Inc. ("MRT") and its subsidiary
company, Mobile Reach Technologies, GmbH (German Company).

          The Company's principle operations have been conducted under the names
of its wholly owned subsidiaries MRS and MRT. The consolidated financial
statements include the holding company Mobile Reach International, Inc. along
with its subsidiaries mentioned above. All significant inter-company
transactions and balances have been eliminated on consolidation.

     Nature of Business:

          Mobile Reach Technology, Inc. sells mobility software products and
development services in the United States of America and Europe.


          Mobile Reach Solutions, Inc. sells and services digital
telecommunication and computer network systems in the United States of America.


     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.

                                      (F8)

<PAGE>


Note 3 - Summary of Significant Accounting Policies (continued):
----------------------------------------------------------------

     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.

     Income taxes:

          The Company accounts for income taxes under the provisions of the
Financial Accounting Standards Board ("FASB") statement of SFAS No. 109,
"Accounting for Income Taxes." SFAS No.109 requires recognition of deferred
income tax assets and liabilities for the expected future income tax
consequences, based on enacted tax laws, of temporary differences between the
financial reporting and tax bases of assets and liabilities.

     Loss per share:

          The Company calculates loss per share in accordance with 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 (Note 12).

     Use of accounting estimates:

          The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of 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.

                                      (F9)

<PAGE>


Note 3 - Summary of Significant Accounting Policies (continued):
----------------------------------------------------------------

     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 on current rates available
for similar types of instruments.

          The Company did not have any outstanding financial derivative
instruments.

     Reclassifications:

          Certain amounts in the financial statements for the seven months ended
July 31, 2003 have been reclassified for comparative purposes to conform with
the presentation in the current year financial statements.

     Revenue recognition:

          Revenues are generated from the license of software products,
professional service arrangements, maintenance and support services. Software
license revenue is recognized in accordance with the American Institute of
Certified Public Accountants ("AICPA") Statement of Position ("SOP") 97-2
"Software Revenue Recognition" ("SOP 97-2") and related interpretations and
amendments as well as Technical Practice Aids issued from time to time by the
AICPA.

          Revenue from software arrangements is recognized only when persuasive
evidence of an agreement exists, delivery has occurred, the fee is fixed or
determinable, and collectibility is probable. Under certain circumstances,
software license revenue is deferred until all criteria of SOP 97-2 are met.
Certain arrangements contain provisions which result in the recognition of
revenue from software licenses ratably over the term of the contract or in
accordance with long-term contract accounting.

          In instances when professional services are performed on fixed price
agreements of relatively short duration, the completed contract method of
accounting is used whereby revenue is recognized when the work is completed.
Customer payments and billed amounts due from customers in excess of recognized
revenue are recorded as deferred revenue.

          Revenue from maintenance and support agreements is recognized on a
straight-line basis over the term of the related agreement.

          Revenue from product sales is recognized when product is shipped from
suppliers to the customer. Customer prepayments for hardware products are
classified as customer deposits.

                                     (F10)

<PAGE>


Note 3 - Summary of Significant Accounting Policies (continued):
----------------------------------------------------------------

          For software arrangements with multiple elements, revenue is
recognized using the residual method prescribed by SOP 98-9, "Modification of
SOP 97-2 `Software Revenue Recognition' with Respect to Certain Transactions."
Revenue applicable to undelivered elements, principally software maintenance,
training and implementation services, is determined based on vendor specific
objective evidence ("VSOE") of the fair value of those elements. VSOE is
established by the price of the element when it is sold separately (i.e., the
renewal rate for software maintenance and normal prices charged for training and
professional services). Revenue applicable to elements for which VSOE of fair
value is not determinable is deemed equal to the remainder/residual amount of
the fixed arrangement price. Assuming none of the undelivered elements and VSOE
of fair value exists for all undelivered elements are essential to the
functionality of any of the delivered elements, the residual revenue attributed
to the delivered elements is recognized when all other criteria for revenue
recognition for those elements have been met.

     Product development:

          Costs for advertising and research and development are expensed as
incurred.

     Accounting for stock-based compensation:

          Employee stock awards under the Company's compensation plans are
accounted for in accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25"), and related
interpretations. The Company provides the disclosure requirements of SFAS No.
123, "Accounting for Stock-Based Compensation" and related interpretations.
Stock-based awards are accounted for under the provisions of SFAS No. 123, which
allows the Company only to disclose the effects on net income or loss of the
fair value of the options.

     Segment Information:

          The Company adopted SFAS No.131, "Disclosures about Segments of an
Enterprise and Related Information" regarding operating segments in financial
statements. SFAS 131 also establishes standards for related disclosures about
products, services and geographic areas. Operating segments are identified as
components of an enterprise about which separate discrete financial information
is available for evaluation by the chief operating decision maker, or decision
making group, in making decisions how to allocate resources and assess
performance. The information disclosed herein, materially represents all of the
financial information related to the Company's principal operating segments.

                                     (F11)

<PAGE>


Note 3 - Summary of Significant Accounting Policies (continued):
----------------------------------------------------------------

     Concentrations of Credit Risk:

          The Company has no significant off-balance-sheet concentration of
credit risk such as foreign exchange contracts, options contracts or other
foreign hedging arrangements. The Company maintains its cash balances with
multiple reputable financial institutions in the form of demand deposits.

     Recent pronouncements:

          SFAS No. 149 -- In April 2004, the FASB issued SFAS No. 149,
"Amendment of Statement 133 on Derivative Instruments and Hedging Activities"
which is effective for contracts entered into or modified after June 30, 2004
and for hedging relationships designated after June 30, 2004. This statement
amends and clarifies financial accounting for derivative instruments embedded in
other contracts (collectively referred to as derivatives) and hedging activities
under SFAS 133. The adoption of SFAS No. 149 did not have a material effect on
the financial statements of the Company.

          SFAS No. 150 -- In May 2004, the FASB issued SFAS No. 150, "Accounting
for Certain Financial Instruments with Characteristics of both Liabilities and
Equity" which is effective for financial instruments entered into or modified
after May 31, 2004, and is otherwise effective at the beginning of the first
interim period beginning after June 15, 2004. This Statement establishes
standards for how an issuer classifies and measures in its statement of
financial position certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset in some
circumstances) because that financial instrument embodies an obligation of the
issuer. The adoption of SFAS No. 150 did not have a material effect on the
financial statements of the Company.

          FASB Interpretation No. 45 -- "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others - an Interpretation of FASB Statements No. 5, 57 and 107". The initial
recognition and initial measurement provisions of this Interpretation are to be
applied prospectively to guarantees issued or modified after July 31, 2002. The
disclosure requirements in the Interpretation were effective for financial
statements of interim or annual periods ending after December 15, 2002. The
adoption of FASB Interpretation No. 45 did not have a material effect on the
financial statements of the Company.

                                     (F12)

<PAGE>


Note 3 - Summary of Significant Accounting Policies (continued):
----------------------------------------------------------------

          FASB Interpretation No. 46 -- In January 2004, the FASB issued FASB
Interpretation No. 46 "Consolidation of Variable Interest Entities." FIN 46
provides guidance on the identification of entities for which control is
achieved through means other than through voting rights, variable interest
entities, and how to determine when and which business enterprises should
consolidate variable interest entities. This interpretation applies immediately
to variable interest entities created after January 31, 2004. It applies in the
first fiscal year or interim period beginning after June 15, 2004, to variable
interest entities in which an enterprise holds a variable interest that it
acquired before February 1, 2004. The adoption of FIN 46 did not have a material
impact on the Company's financial statements.


Note 4 - Property and Equipment:
--------------------------------

     The principal categories and estimated useful lives of property and
equipment at July 31, 2004 are as follows:

                                                                   Estimated
                                                                  Useful Lives
                                                                  ------------

     Office equipment                                  2,772       2 - 5 Years
     Computer equipment and software                  88,008         3 Years
     Automobiles & trucks                            120,747         5 Years
                                                   ---------
                                                     211,527
     Less: accumulated depreciation                  (72,645)
                                                   ---------

                                                   $ 138,882
                                                   =========

Note 5 - Notes Payable:
-----------------------

     Notes payable at July 31, 2004 consisted of the following:


     Note payable to Chief Executive Officer
     dated October 2003; bearing interest at
     6.0 percent; converted to preferred
     stock in October 2004.                                        $    285,000

     Note payable dated September 2003; in
     default as all principal and interest
     was due February 8, 2004; interest of
     $20,000 per month while in default.                                230,000

     Note payable dated November 2003; in
     default as all principal and interest
     was due April 2004; interest of $5,000
     per month while in default.                                         50,000

                                     (F13)

<PAGE>


Note 5 - Notes Payable (continued):
-----------------------------------

     Note payable dated December 2003;
     bearing interest at 18.0 percent; in
     default as all principal and interest
     was due January 2004.                                               40,000

     Equipment obligations dated March
     and June 2003; bearing interest at
     approximately 20.0 percent; in default
     at July 31, 2004; collateralized by
     office equipment costing $12,037; paid
     in full September 2004.                                             11,955

     Note payable to employee and former
     owner of Waves dated January 2004;
     bearing interest at 6.0 percent; no
     specified repayment terms.                                          97,642

     Capitalized leases dated January 2001;
     bearing interest at approximately 20.0
     percent; collateralized by office
     equipment costing $5,981; in default as
     final payment was due September 2003.                                  918

     Note payable dated July 17, 2003 to
     vendor; bearing interest at 5 percent;
     in default at July 31, 2004, all
     principal and interest paid September
     2004.                                                              115,413

     Note payable for accrued wages; bearing
     interest at 6 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                                                        49,908
                                                                     ----------
                                                                     $  880,836
                                                                     ==========

                                     (F14)

<PAGE>


Note 6 - Accrued Expenses:
--------------------------

     Accrued expenses at July 31, 2004 consisted of the following:



     Accrued salaries and wages                                   $  168,328
     Accrued interest                                                218,633
     Accrued consulting fees                                         160,000
     Accrued other expenses                                           13,205
                                                                  ----------
                                                                  $  560,166


     Accrued salaries and wages arise from the Company's inability to pay
certain employees their full salaries and wages at certain periods throughout
2004, 2003, 2002 and 2001. In June 2004, $74,716 of accrued salaries was
converted into 700,000 shares of common stock in settlement of litigation
brought by a former employee.

     Accrued consulting fees represent a tentative settlement reached in
arbitration with an independent contractor consultant. The initial demand for
arbitration made by the consultant was $350,000 plus interest. The Company has
accrued $160,000 for this claim based on the tentative settlement reached. No
agreement has been reached as to how and when payment would be made. If not
completely settled, the case will be arbitrated in April 2005.


Note 7 - Accrued taxes and withholdings:
----------------------------------------

     Accrued taxes and withholdings at July 31, 2004 of $481,005, are comprised
of employee withholdings, payroll taxes, interest and penalties. The Company is
in arrears in remitting withholdings and payroll taxes as required by the
Internal Revenue Service.

                                     (F15)

<PAGE>


Note 8 - Long-Term Debt:


     Long-term debt at July 31, 2004 consisted of the following:


     Note payable to assignees of a former
     officer in redemption of 6,000,000
     shares of common stock; interest at 5
     percent; payable in three annual
     installments including interest
     beginning April 30, 2005                                           395,000

     Note payable to assignees of a former
     officer and director for accrued salary;
     interest at 5 percent; payable in three
     annual installments including interest
     beginning April 30, 2005                                            31,450

     Notes payable dated August and October
     2003; due in 60 monthly installments of
     $1,873 including interest at 6.98
     percent; secured by vehicles costing
     $120,747.                                                          101,907


     Note payable dated June 2003; payable in
     48 monthly installments of $128
     including interest at approximately 20
     percent; collateralized by office
     equipment costing $3,883; in default at
     July 31, 2004 reclassified to current
     notes payable (see Note 5).                                           --
                                                                       --------
                                                                        528,357
   Less current portion                                                (165,363)
                                                                       --------
                                                                       $362,994

     At July 31, 2004, long-term debt is due in aggregate annual installments as
follows:

              Year ending July 31,
                      2006                                $ 165,188
                      2007                                  166,848
                      2008                                   26,480
                      2009                                    4,477
                   Thereafter                                   -
                                                          ---------
                                                          $ 528,357
                                                          =========

                                     (F16)

<PAGE>


Note 9 - Convertible Debentures:
--------------------------------

     In March 2004, the Company issued $525,000 of 5% convertible debentures
that mature on March 15, 2007. The debentures are convertible into the Company's
common stock at a conversion price of $0.16 per share. Interest accrues from
March 15, 2004 and is due and payable on the maturity date. Interest accrued on
debentures that are converted into common stock may be paid in cash or with
common stock (conversion price $0.16 per share). In connection with the issuance
of these debentures, the Company issued 976,173 common stock purchase warrants
at an exercise price of $0.32 per share. The warrants expire March 31, 2006 and
no warrants were exercised at July 31, 2004.


Note 10 - Stockholders' Equity:
-------------------------------

     During the seven months ended July 31, 2003, 17,646,522 pre-merger shares
were sold at $0.06 per share, resulting in $1,058,788 proceeds from the shares
issued. Upon completion of the merger, these shares were converted into
5,808,224 shares of the Company.


     During the seven months ended July 31, 2003, $735,407 of principal and
interest of convertible debt of MRT were converted into 12,256,783 pre-merger
shares at a rate of $0.06 per share. Upon completion of the merger, these shares
were converted into 4,034,167 shares of the Company.


     In March 2003, the Chief Executive Officer of the Company was issued
5,730,953 pre-merger shares as a signing bonus in connection with the employment
agreement with the Chief Executive Officer. The Company recorded compensation
expense of $343,857 ($0.06 per share) in connection with this issuance of stock.
Upon completion of the merger with API, these shares were converted into
1,886,272 shares of the Company.

                                     (F17)

<PAGE>


Note 10 - Stockholders' Equity (continued):
-------------------------------------------

     In July 2003, the Company issued 3,000,000 pre-merger shares to a
consultant and former employee. The shares were issued in exchange for the
cancellation of a promissory note dated September 12, 2002, with a balance,
including interest, of $75,098, and for financial advisory services provided to
the Company. The Company recorded consulting fee expenses of $104,902 in
connection with this issuance. The issuance of 3,000,000 pre-merger shares
represents $0.06 per share for the total $180,000 consideration. Upon completion
of the merger with API, these shares were converted into 987,413 shares of the
Company.

     In connection with the merger with API, 768,000 shares of Series A
convertible Preferred stock of MRT were converted into 505,555 shares of the
Company.

     As discussed in Note 2, the Company issued 1,300,000 shares of restricted
common stock in the acquisition of Waves

     During the year ended July 31, 2004, the Company issued 5,005,168 shares of
common stock for $1,006,027.

     During the year ended July 31, 2004, the Company issued 803,125 shares of
restricted common stock for investment banking and investor relations fees. The
Company recorded $86,500 of expenses in connection with the issuance of these
shares representing the value of the services provided by the consultants.

     In May 2004, the Company settled litigation with a former employee in
exchange for 700,000 shares of common stock. The Company had previously accrued
$74,716 for compensation due to the former employee.

     During the year ended July 31, 2004, the Company issued 1,949,962 shares of
restricted common stock on the exercise of options (See Note 11). The options
were exercised for $193 cash and an account receivable from an employee for
$3,833.

     The Company is authorized to issue 10,000,000 shares of preferred stock. At
July 31, 2004, no shares were issued or outstanding.

                                     (F18)

<PAGE>


Note 11 - Stock Options and Warrants:


     The following table summarizes the changes in options outstanding and the
related prices for the shares of the Company's restricted common stock issued to
employees, consultants and shareholders at July 31, 2004:

                                                Number of    Weighted - Average
                                                 Options       Exercise Price
                                               ----------      --------------
   Outstanding December 31, 2002                4,560,000           $0.04
     Options issued                             7,836,204            0.09
     Options expired                             (510,510)           0.16
                                               ----------
   Balance prior to merger                     11,885,704            0.07
     Options converted                         (7,974,119)           0.07
                                               ----------
     Outstanding July 31, 2003                  3,911,585            0.07
     Options issued                             4,340,000            0.02
     Options expired                              (69,746)           0.02
     Options exercised                         (1,949,962)           0.002
                                               ----------
   Outstanding July 31, 2004                    6,231,877            0.05
                                               ==========


     The Company has adopted the disclosure only provisions of SFAS 123
"Accounting for Stock-Based Compensation". The Company determined that the
options issued had no value using the Black Scholes pricing and a 50 percent
volatility factor at the date of grant. Accordingly, the net loss of $3,142,860
and $1,898,316 for the years ended July 31, 2004 and the seven months ended July
31, 2003, respectively, would be unchanged because no compensation would be
recognized.

     In July 2003, the Company issued a warrant to purchase 2,000,000 shares at
an exercise price of $0.01 per share. Upon completion of the merger, this
warrant was converted into a warrant to purchase 658,275 shares at an exercise
price of $0.01 per share. This warrant was issued to a consultant and former
employee in connection with financial advisory services provided to the Company.
The warrant was contingent upon the consultant raising $1,000,000 in capital for
the Company. Using the Black Scholes pricing model and a 50 percent volatility
factor, the Company determined the warrant had no value and there was no expense
recorded for the grant of the warrant. The warrant expired during the year ended
July 31, 2004.

     In July 2003, the Company issued warrants to purchase 164,565 shares at an
exercise price of $0.18 per share. The warrants were issued in connection with a
note payable (Note 5) to a provider of legal services to the Company. Using the
Black Scholes pricing model and 50 percent volatility factor, the Company
determined the warrants had no value and there was no expense recorded for the
grant of the warrant. The warrants had not been exercised at July 31, 2004.

                                     (F19)

<PAGE>


Note 11 - Stock Options and Warrants (continued):
-------------------------------------------------

     During the year ended July 31, 2004, the Company issued 200,000 warrants at
an exercise price of $0.001 per share and 1,000,000 warrants at an exercise
price of $0.01 per share in connection with the issuance of notes payable. Using
the Black Scholes pricing model and 50 percent volatility factor, the Company
determined the warrants had no value and there was no expense recorded for the
grant of the warrants. The warrants had not been exercised at July 31, 2004.

     In March 2004, the Company issued 976,173 warrants at an exercise price of
$0.32 per share to holders of debentures (Note 9). Additionally, investment
banking consultants involved in the issuance of the debentures were issued
622,890 warrants at the exercise price of $0.32 per share. Using the Black
Scholes pricing model and 50 percent volatility factor, the Company determined
the warrants had no value and there was no expense recorded for the grant of the
warrants. The warrants had not been exercised at July 31, 2004.


Note 12 - Loss per share:
-------------------------

     A reconciliation of basic loss per share to diluted earnings per share is
presented below.

                                                                         Per
                                                                         share
                                       Net Loss           Shares         Amount
                                     ------------      ------------      ------
   Seven months ended July 31,
    2003:
   Basic EPS
    Loss available to common
      shareholders                   $ (1,898,316)       13,482,257      $(0.14)
   Effect of Dilutive Securities
     Stock options and warrants              --                --           --
                                     ------------      ------------      ------
                                     $ (1,898,316)       13,482,257      $(0.14)
                                     ============      ============      ======

   Year ended July 31, 2004:
   Basic EPS
    Loss available to common
      shareholders                   $ (3,142,860)       27,891,651      $(0.11)
   Effect of Dilutive Securities
     Stock options and warrants              --                --           --
                                     ------------      ------------      ------
                                     $ (3,142,860)       27,891,651      $(0.11)
                                     ============      ============      ======

                                     (F20)

<PAGE>


Note 13 - 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, 2004:

                                         Current      Long-Term        Total
                                       -----------   -----------    -----------
   Year ended July 31, 2004:
    Deferred tax assets:
     Net operating loss carryover      $      --     $ 2,670,000    $ 2,670,000
                                       -----------   -----------    -----------

    Deferred tax liabilities                  --            --             --
                                       -----------   -----------    -----------
                                              --       2,670,000      2,670,000
   Valuation allowance                        --      (2,670,000)    (2,670,000)
                                       -----------   -----------    -----------
   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.
Additionally, the realization of these assets is dependent upon the filing of
tax returns for the current and prior years which are unfiled.

     The income tax provision differs from the amount of income tax determined
by applying the U.S. Federal income tax rate to pretax income for the year ended
July 31, 2004 due to the following:

                                                         Year       Seven months
                                                        ended          ended
                                                      7/31/2004      7/31/2003
                                                     -----------    -----------
     Computed "expected" tax (expense)/benefit       $ 1,100,000    $   664,441
      Increase/(decrease) in income taxes
        resulting from:
         Temporary differences                        (1,068,030)      (664,441)
         Permanent differences                           (31,970)          --
                                                     -----------    -----------
                                                     $      --      $      --
                                                     ===========    ===========


     The Company has not filed tax returns for 2003, 2002 and 2001. Dependent on
filing these returns, the Company will have net operating loss carryforwards of
approximately $7,600,000, which begin to expire in 2020.

     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.

                                     (F21)

<PAGE>
<TABLE>
<CAPTION>


Note 14 - Pro-Forma Financial Information:
------------------------------------------

     The following pro-forma data summarizes the results of operations for the
year ended July 31, 2004 and the seven months ended July 31, 2003, as if the
mergers with Waves had been completed January 1, 2003:

                                                      Year          Seven months
                                                     ended             ended
                                                   7/31/2004         7/31/2003
                                                  -----------       -----------

   Net revenue                                    $ 2,125,115       $   813,933
   Operating loss                                  (3,326,744)       (1,698,957)
   Loss per shared - basic and diluted                  (0.12)            (0.07)



Note 15 - Employee Benefit Plan:
--------------------------------

     During the year ended July 31, 2004, the Company established a 401(k) plan
covering all employees over twenty-one years of age with more than thirty days
of service. Under the plan, participants are able to make voluntary
contributions of up to 60 percent of compensation and 100 percent of any bonuses
received, subject to limitations. In addition, the Company can match
contributions on a discretionary but uniform basis.


     For the year ended July, 31, 2004, the Company record no expenses related
to the plan.


Note 16 - Segment Information:
------------------------------

     The Company reports financial results on the basis of two business
segments: a computer hardware application group and a software application
group.

     The following is selected business segment financial information for the
year ended July 31, 2004 (there was only the software application group existing
at July 31, 2003):

                              Software       Hardware
                            Applications   Applications  Eliminations       Total
                            -----------    -----------    -----------    -----------
<S>                         <C>              <C>          <C>            <C>
Revenues                    $   446,918      1,144,458    $    (1,517)   $ 1,589,859
Operating loss               (2,921,648)      (221,212)          --       (3,142,860)
Depreciation                     25,730         20,728           --           46,458
Segment Assets                   96,837        380,843           --          477,680
Expenditures for property
 and equipment                   19,011         31,436           --           50,447

                                         (F22)

</TABLE>

<PAGE>


Note 17 - Legal Matters:
------------------------

     As discussed in Note 6, the Company has accrued $160,000 of consulting fees
based on a tentative settlement reached in arbitration.

     The Company was subject to collection proceedings in connection with a note
payable of $115,413 (Note 5) at July 31, 2004. The debt was paid in full in
September 2004. The Company paid $28,201 in excess of principal and interest on
this note in settlement, this amount is included in accounts payable at July 31,
2004.

     The Company has recorded an account payable at July 31, 2004 of $75,000 to
terminate a lease for office space entered into in September 2003. Additionally,
the Company recorded $34,000 of rent expense in the forfeiture of rental
security deposits in connection with this lease. The Company entered into an
agreement for termination of the lease in October 2004. The agreement required
the Company to forfeit the rental security deposits, pay $25,000 cash in October
2004, and issue a note payable for $50,000 payable in 18 monthly installments of
$2,778 beginning November 1, 2004.

Note 18 - Other Matters:
------------------------

     Concentrations

          During the year ended July 31, 2004, approximately 37 percent of the
Company's sales were to three customers.

     Advertising

          Advertising costs are expensed as incurred. Total advertising costs
were approximately $7,500 and $40,000 for the year ended July 31, 2004 and the
seven months ended July 31, 2003, respectively.

     Foreign Cash and Operations

          The Company's subsidiary Mobile Reach Technologies, GmbH maintains
deposits in foreign accounts, not insured, in the amount of $9,672 at July 31,
2004. This subsidiary had foreign sales of $7,724 and $55,757 for the year ended
July 31, 2004 and the seven months ended July 31, 2003, respectively.

     Operating Leases

          The Company leases office space on a month to month basis. Rent
expense of $150,501 and $21,000 were incurred for the year ended July 31, 2004
and the seven months ended July 31, 2003, respectively. The rent expense for the
year ended July 31, 2004 includes expenses from termination of lease (Note 17).

                                     (F23)

<PAGE>


Note 18 - Other Matters (continued):
------------------------------------

     Contingency Gain (Loss)

          At July 31, 2003 the Company accrued a loss of $105,000 for a possible
claim arising from the Company's merger with API. Since the former majority
stockholder of API indemnified the Company against claims and during the year
ended July 31, 2004 there were no claims, the Company recorded a gain on the
reversal of the accrual.

Note 19 - Subsequent Events:
----------------------------

          Subsequent to July 31, 2004, the management of the Company began the
process of discontinuation of the businesses of Mobile Reach Solutions, Inc. and
Mobile Reach Technologies, GmbH. The Company does not anticipate any losses on
this discontinuation other than losses from operations incurred in the regular
course of business after July 31, 2004.

                                     (F24)

<PAGE>


EXHIBIT INDEX

The following documents are filed as part of this report:

21.1  Subsidiaries

23.1  Consent of Independent Auditors

31.1  Certificate of Chief Executive Officer pursuant to Section 302
      Certifications

31.2  Certificate of Chief Financial Officer pursuant to Sections 302
      Certifications

32.1  Certificate of Chief Executive Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.

32.2  Certificate of Chief Financial Officer pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.