Item 405 of Regulation S-B contained in this form,
and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [   ]

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

- 2 -

State Issuer's revenues for its most recent fiscal year: $Nil

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by
reference to the price at which the common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days:

5,413,786 common shares at $0.12 ⁽¹⁾ = $649,654

⁽¹⁾ Last closing price on December 29, 2006 as quoted on the OTC Bulletin Board.

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date.

11,746,041 common shares issued and outstanding as of October 31, 2007

DOCUMENTS INCORPORATED BY REFERENCE

None.

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

- 3 -

PART I

Item 1. Description of Business.

          This annual report contains forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

          Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

          Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles. In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars.

General

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

Business Overview

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

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

Government Regulation; Government Approval

          Our company is not currently subject to direct regulation by any government agency, other than regulations applicable to businesses generally.

Research and Development Costs

          As at January 31, 2007, our company decided not to expend any additional costs in regards to our software development business. As a result, we recorded an impairment of software development costs of $13,146 for the year ended July 31, 2007 due to the uncertainty about expected future cash flows from the sales of products.

- 4 -

Costs and Effects of Compliance with Environmental Laws

          Our company is not involved in a business that involves the use of materials in a manufacturing stage where such materials are likely to result in the violation of any existing environmental rules and/or regulations. As our company does own real property, it is unlikely that our company will face liability as a landowner. Therefore, our company does not anticipate that there will be any costs associated with the compliance of environmental laws and regulations.

Intellectual Property

          We rely on trade secrets to protect our intellectual property. We do not have any registered patents, trademarks, or copyrights. We do not have and do not intend to apply for patents on our products. Management believes that the patent application process in many countries would be time-consuming and expensive and any patent protection may be out of date by the time the patent is granted. Our proprietary software is protected by a source code held by our company. The Intelligent Credit Application decision logic was developed by Brian Jaggard with the assistance of faculty members from Simon Fraser University.

Employees and Officers

          As of October 31, 2007, our company was operated by two officers: Brian Jaggard as President, Chief Executive Officer and Chief Financial Officer; and Douglas Dunn as Chief Operations Officer and Secretary. There are no employees represented by a labor union or are covered by a collective bargaining agreement.

RISK FACTORS

          Much of the information included in this annual report includes or is based upon estimates, projections or other forward-looking statements. Such forward-looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions, or other future performance suggested herein. We undertake no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of such statements.

          Such estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below. We caution readers of this annual report that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward-looking statements. In evaluating us, our business and any investment in our business, readers should carefully consider the following factors.

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

          To date we have not generated any revenues from operations and we have been dependent on sales of our equity securities to meet the majority of our cash requirements. As at July 31, 2007, we had cash of $467 and a working capital deficiency of $104,400. We do not expect to generate any revenues in the near future until we locate and enter into a suitable business opportunity or combination with another viable pre-existing business. We estimate that we will require approximately $3,500 per month to fund our operations for the next twelve month period. Because we cannot anticipate when or if we will enter into a suitable business opportunity or combination with another entity, we will need to raise additional funds to continue to fund our operations. If we are not able to raise such funds, we may be forced to cease operations and our business may fail.

- 5 -

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

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

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

          Due in part to the lack of our operating history at July 31, 2007, our independent auditors’ report includes an explanatory paragraph about our ability to continue as a going concern. We will, in all likelihood, continue to incur operating expenses without revenues until we succeed at our current business or we determine to enter into a business opportunity or combination with a pre-existing business entity. We estimate our average monthly operating expenses to be approximately $3,500 per month. Our primary source of funds has been the sale of our common stock. We cannot assure that we will be able to generate enough interest in our company. If we are unable to raise funds to cover our operating costs, or obtain adequate future financing, our business will fail and you may lose some or all of your investment in our common stock. These circumstances raise substantial doubt about our ability to continue as a going concern as described in an explanatory paragraph to our independent auditors’ report on the financial statements for the period ended July 31, 2007.

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

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

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

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

          Our officers are involved in other business activities. Brian Jaggard, our President, Chief Executive Officer, Chief Financial Officer and director spends approximately 25 hours, or 50%, of his business time on the management of our company and Douglas Dunn, our Chief Operations Officer, Secretary and director, spends approximately 15 hours, or 30%, of his business time on the management of our company. As a result of their other business endeavours, Mr. Jaggard and Mr. Dunn may not be able to devote sufficient time to our business affairs, which may negatively affect our ability to conduct our ongoing operations and our ability to generate revenues. In

- 6 -

addition, the management of our company may be periodically interrupted or delayed as a result of Mr. Jaggard’s or Mr. Dunn’s other business interests.

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

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

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

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

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

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

RISKS ASSOCIATED WITH OUR COMMON STOCK

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

          We do not currently anticipate declaring and paying dividends to our shareholders in the near future. It is our current intention to apply net earnings, if any, in the foreseeable future to increasing our working capital. Prospective investors seeking or needing dividend income or liquidity should, therefore, not purchase our common stock. We currently have no revenues and a history of losses, so there can be no assurance that we will ever have sufficient earnings to declare and pay dividends to the holders of our shares, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors, who currently do not intend to pay any dividends on our common shares for the foreseeable future.

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

          Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons

- 7 -

other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

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

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

Item 2. Description of Property.

          Our company currently does not own any property. The offices located at Suite 500, 666 Burrard Street, Vancouver, BC, Canada V6C 3P6 are rented on a month-by-month rental basis. The cost of the office is included in the fees paid or accrued to Q4 Financial Group Inc.

          We have not entered into any agreements to acquire any properties.

Item 3. Legal Proceedings.

          Management does not have knowledge of any material litigation pending, threatened or contemplated, or unsatisfied judgments against our company or our affiliates, or any proceedings in which our company or our affiliates is a party. Similarly, management is without knowledge as to any legal actions pending or threatened or judgments entered against our company's executive officers and directors in their capacity as such, other than to the extent such individuals are named in the above actions.

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

          No matters were submitted to the vote of the holders of our company’s securities during the year ended July 31, 2007.

- 8 -

PART II

Item 5. Market for the Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.

Market Price of the Company's Common Stock

          Our common stock was listed and commenced be quoted on the OTC Bulletin Board on October 25, 2006 under the symbol "YZPI.OB". Trading in our common stock has been limited and sporadic. The following table sets forth, for the periods indicated, the high and low sales prices for our common stock on the OTC Bulletin Board.

          Our common shares are issued in registered form. Pacific Stock Transfer Company, of 500 E. Warm Springs Road, Ste. 240, Las Vegas, NV 89119 (telephone: 702.361.3033; facsimile 702.433.1979 is the registrar and transfer agent for our common shares.

          On October 31, 2007, the shareholders' list for our common stock showed approximately 70 registered stockholders and 11,746,041 shares issued and outstanding. Our common stock has not traded since December 29, 2006, which closed at $0.12.

Dividend Policy

          We have not paid any cash dividends on our common stock and have no present intention of paying any dividends on the shares of our common stock. Our future dividend policy will be determined from time to time by our board of directors.

Recent sales of unregistered securities

          We did not issue any securities during the year ended July 31, 2007 that have not otherwise been disclosed in a quarterly report on Form 10-QSB or in a quarterly report on Form 8-K.

Equity Compensation Plan Information

          We do not have any equity compensation plan as of the date of this report.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

          We did not purchase any of our shares of common stock or other securities during the year ended July 31, 2007.

- 9 -

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

Plan of Operations

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

          As of July 31, 2007, our company had cash of $467 and working capital deficit of $104,400. We estimate our operating expenses and working capital requirements for the next twelve period to be as follows:

Estimated Expenses For the Next Twelve Month Period

Professional Fees

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

Employee and Consultant Compensation

          Given the uncertainties related to our future business, we intend to continue to outsource our professional and personnel requirements by retaining consultants on an as needed basis. We estimate that our consultant and related professional compensation expenses for the next twelve month period will be approximately $15,000. As of July 31, 2007, Brian Jaggard and Douglas Dunn were our sole employees. However, our company did not pay salaries or bonuses to such individuals during this time.

General and Administrative Expenses

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

Liquidity and Capital Resources

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

Capital Resources

          As of July 31, 2007, we had $467 in cash and working capital deficit of $104,400. We have suffered recurring losses from inception. The ability of our company to meet our financial liabilities and commitments is primarily dependent upon the continued financial support of our directors and shareholders, the continued issuance of equity to new shareholders, and our ability to enter into a suitable and successful business opportunity or combination.

          Management believes that our company’s cash and cash equivalents and cash will not be sufficient to meet our working capital requirements for the next twelve month period. We estimate that we will require $145,900 over the next twelve month period to fund our plan of operations and eliminate our working capital deficiency. Our

- 10 -

company plans to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our estimated funding requirements for the next twelve months primarily through the private placement of our equity securities. There is no assurance that our company will be able to obtain further funds required for our continued working capital requirements.

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

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

Capital Expenditures

          As of July 31, 2007, our company did not have any material commitments for capital expenditures and management does not anticipate that our company will spend additional material amounts on capital expenditures in the near future.

Off-Balance Sheet Arrangements

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

SIGNIFICANT ACCOUNTING POLICIES

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

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

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

Going Concern

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

- 11 -

          There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further financing. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

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

Stock-based Compensation

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

          All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Recent Accounting Pronouncements

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

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

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

- 12 -

          In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The objective of SFAS No. 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The Company is evaluating the impact of this statement on our company's future reported financial position or results of operations.

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

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

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

Item 7. Financial Statements.

	(i)	Report of Independent Registered Public Accounting Firm.
	(ii)	Report of Independent Registered Public Accounting Firm.
	(iii)	Consolidated Balance Sheets as of July 31, 2007 and 2006.
	(iv)	Consolidated Statements of Operations for the years ended July 31, 2007 and 2006 and accumulated from August 24, 2000 (Date of Inception) to July 31, 2007.

- 13 -

	(v)	Consolidated Statements of Cash Flows for the years ended July 31, 2007 and 2006 and accumulated from August 24, 2000 (Date of Inception) to July 31, 2007.
	(vi)	Consolidated Statement of Stockholders' Equity (Deficit) from August 24, 2000 (Date of Inception) to July 31, 2007.
	(vii)	Notes to Consolidated Financial Statements.

YzApp International Inc.
(A Development Stage Company)

July 31, 2007

 

 

 

	Index
Report of Independent Registered Public Accounting Firm	F–1
Report of Independent Registered Public Accounting Firm	F–2
Consolidated Balance Sheets	F–3
Consolidated Statements of Operations	F–4
Consolidated Statements of Cash Flows	F–5
Consolidated Statement of Changes in Stockholders’ Equity (Deficit)	F–6
Notes to the Consolidated Financial Statements	F–8

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
YzApp International Inc. (A Development Stage Company)

We have audited the accompanying consolidated balance sheet of YzApp International Inc. (A Development Stage Company) as of July 31, 2007 and the related consolidated statements of operations, cash flows and stockholders’ equity (deficit) for the year then ended and accumulated from August 1, 2006 to July 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above, present fairly, in all material respects, the financial position of YzApp International Inc. (A Development Stage Company), as of July 31, 2007, and the results of its operations and its cash flows for the year then ended and accumulated from August 1, 2006 to July 31, 2007 in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has a working capital deficiency, has accumulated losses since inception and will need additional debt/equity financing to begin realizing its business plan. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Manning Elliott LLP
CHARTERED ACCOUNTANTS

Vancouver, Canada

November 9, 2007

F–1

N.I. CAMERON INC. Chartered Accountants
	303 – 475 Howe Street
	Vancouver, B.C. CANADA V6C 2B3
	Tel: (604) 669-9631, Fax: (604) 669-1848

 

INDEPENDENT AUDITORS’ REPORT

 

To the Board of Directors and Stockholders
YzApp International Inc.

We have audited the accompanying consolidated balance sheet of YzApp International Inc. (a development stage company) as of July 31, 2006 and the related consolidated statements of operations, stockholders’ equity and cash flows for the year then ended and for the period from August 24, 2000 (date of incorporation) to July 31, 2006. The financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of July 31, 2006, and the results of their operations and their cash flows for the year then ended and for the period from August 24, 2000 (date of incorporation) to July 31, 2006 in conformity with generally accepted accounting principles used 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 experienced accumulated losses and has had no material revenue producing operations to date. The Company’s ability to continue as a going concern is dependent upon its ability to raise additional capital, achieve profitable operations or to merge with a revenue producing venture partner. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

	/s/ N.I. Cameron Inc.
VANCOUVER, B.C.	CHARTERED ACCOUNTANTS
October 25, 2006

F–2

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

		July 31,			July 31,
		2007			2006
		$			$
ASSETS
Current Assets
Cash		467			14,979
Amounts receivable		–			8,502
Total Current Assets		467			23,481
Property and Equipment (Note 4)		–			9,669
Software Development Costs (Note 5)		–			38,306
Total Assets		467			71,456
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable		26,318			10,739
Accrued liabilities		449			11,315
Loans payable (Note 6)		46,706			9,835
Current liabilities of discontinued operations (Note 3)		31,394			271,055
Due to related parties (Note 7)		–			32,772
Total Current Liabilities		104,867			335,716
Going Concern (Note 1)
STOCKHOLDERS’ DEFICIT
Preferred Stock:
1,000,000 authorized, $0.001 par value;
Nil shares issued and outstanding		–			–
Common Stock:
50,000,000 shares authorized, $0.001 par value;
11,746,041 and 11,546,041 shares issued and outstanding, respectively		11,746			11,546
Additional Paid-in Capital		788,959			769,159
Donated Capital (Note 7)		179,799			142,152
Deficit Accumulated During the Development Stage		(1,025,766	)		(1,127,083	)
Accumulated Other Comprehensive Loss		(59,138	)		(60,034	)
Total Stockholders’ Deficit		(104,400	)		(264,260	)
Total Liabilities and Stockholders’ Deficit		467			71,456

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

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

								Accumulated from
								August 24, 2000
		Years Ended						(Date of Inception)
		July 31,						to July 31,
		2007			2006			2007
		$			$			$
Revenue		–			–			–
Operating Expenses
General and administrative (Note 7)		52,901			63,416			528,977
Total Operating Expenses		52,901			63,416			528,977
Loss before Other Income (Expense)		(52,901	)		(63,416	)		(528,977	)
Other Income (Expense)
Gain on debt settlement		201,726			–			201,726
Interest expense		(449	)		–			(3,057	)
Interest income		–			–			2,789
Loss on disposal of property and equipment		–			–			(2,017	)
Total Other Income (Expense)		201,277			–			199,441
Income (Loss) from Continuing Operations		148,376			(63,416	)		(329,536	)
Loss from discontinued operations (Note 3)		(47,059	)		(3,741	)		(696,230	)
Net Income (Loss) for the Period		101,317			(67,157	)		(1,025,766	)
Other Comprehensive Income (Loss)
Foreign currency translation adjustments		896			(21,838	)		(59,138	)
Comprehensive Income (Loss)		102,213			(88,995	)		(1,084,904	)
Net Income (Loss) Per Share:
Continuing Operations – Basic and Diluted		0.01			(0.01	)
Discontinued Operations – Basic and Diluted		–			–
		0.01			(0.01	)
Weighted Average Common Shares Outstanding		11,668,00			11,467,411

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

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

								Accumulated from
								August 24, 2000
		Year Ended			Year Ended			(Date of Inception) to
		July 31,			July, 31			July 31,
		2007			2006			2007
		$			$			$
Operating Activities
Net income (loss)		101,317			(67,157	)		(1,025,766	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Donated services		5,000			34,500			147,152
Gain on settlement of debt		(201,726	)		–			(201,726	)
Loss from discontinued operations		47,059			3,741			75,473
Loss on disposal of property and equipment		–			–			2,017
Stock-based compensation		–			–			169,245
Changes in operating assets and liabilities:
Amounts receivable		8,502			634			3,141
Accounts payable and accrued liabilities		(15,106	)		(24,099	)		215,021
Due to related parties		–			13			12,185
Net Cash Used In Operating Activities		(54,954	)		(52,368	)		(603,258	)
Investing Activities
Software development costs		–			–			(29,687	)
Purchase of property and equipment		–			–			(34,420	)
Net Cash Used in Investing Activities		–			–			(64,107	)
Financing Activities
Increase (decrease) in loans payable		34,550			(3,294	)		60,233
Proceeds from issuance of common stock		–			70,000			599,251
Net Cash Provided By Financing Activities		34,550			66,706			659,484
Effect of Exchange Rate Changes on Cash		5,892			367			8,348
Increase (Decrease) In Cash		(14,512	)		14,705			467
Cash – Beginning Of Period		14,979			274			–
Cash – End Of Period		467			14,979			467
Non-cash Financing Activities
Common shares issued for to settle debt		20,000			–			30,500
Supplemental Disclosures
Interest paid		–			711			7,778
Income taxes paid		–			–			–

(The accompanying notes are an integral part of these consolidated financial statements)
F–5

YzApp International Inc.
(A Development Stage Company)
Consolidated Statement of Changes in Stockholders’ Equity (Deficit)
Accumulated from August 24, 2000 (Date of Inception) to July 31, 2007
(expressed in U.S. dollars)

Deficit