DuringTable November, 2010, the Company issued 13,809,524 common shares for the conversion of $20,000 of notes payable. Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

DuringTable November, 2010, the Company issued 13,809,524 common shares for the conversion of $20,000 of notes payable. Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~January~~April 3130, 2011

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

For the transition period from to

Commission File No. 0-50089

NX GLOBAL, INC.

(Name of Registrant in its Charter)

Nevada

52-2082372

(State or Other Jurisdiction of

incorporation or organization)

(I.R.S. Employer

I.D. No.)

16238 F-108 Ranch Road, Austin, TX 78717

(Address of Principal Executive Offices)

Issuer’s Telephone Number: (~~877~~512) ~~249~~ 354-~~9089~~7840

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One)

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

As of ~~March 21~~June 9, 2011 there were ~~264~~785,~~916~~602,~~386~~553 shares of the Registrant’s Common stock, $0.001 par value per share, outstanding.

NX GLOBAL, INC.

FORM 10-Q QUARTERLY REPORT

~~January~~April 3130, 2011

TABLE OF CONTENTS

PART 1 - FINANCIAL INFORMATION		1
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1211
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	1312
Item 4.	Controls and Procedures	1312
PART II - OTHER INFORMATION		1413
Item 1.	Legal Proceedings	1413
Item 1A.	Risk Factors	1413
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1413
Item 3.	Defaults Upon Senior Securities	1413
Item 4.	(Removed and Reserved)	1413
Item 5.	Other Information	1413
Item 6.	Exhibits	1413
SIGNATURES

THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ASSUMPTIONS, ESTIMATES AND PROJECTIONS ABOUT THE COMPANY AND ITS INDUSTRY. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE, ACHIEVEMENT AND PROSPECTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS FOR ANY REASON EVEN IF NEW INFORMATION BECOMES AVAILABLE OR OTHER EVENTS OCCUR IN THE FUTURE.

PART I - FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

NX GLOBAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	January 31, 2011			October 31, 2010
	April 30, 2011			October 31, 2010
ASSETS
Current Assets:
Cash	$	61,~~447~~978		$	242
Accounts receivable		1114,~~723~~983			15,575
Prepaid expenses and other current assets		6542,~~062~~700			72,856
Prepaid commitment fees		61,108			—
Total current assets		59,661			88,673
Total current assets		144,340			88,673
Investments		500,000			1,000,000
Investments		1,000,000			1,000,000
TOTAL ASSETS	$	559,661		$	1,088,673
TOTAL ASSETS	$	1,144,340		$	1,088,673
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES AND STOCKHOLDERS’ EQUITY(DEFICIT)
LIABILITIES
Current Liabilities:
Notes payable - other	$	~~116~~181,~~748~~830		$	179,283
Note payable - related party		~~400~~392,~~000~~500			276,692
Derivative liability		~~102~~229,~~525~~596			717,043
Accounts payable and accrued expenses		~~374~~360,~~742~~093			277,592
TOTAL CURRENT LIABILITIES		~~994~~1,~~015~~164,019			1,450,610
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY (DEFICIT)
STOCKHOLDERS’ DEFICIT
Preferred stock, Series A, $.001 par value, 500,000 shares authorized, 0 shares issued and outstanding at January 31, 2011 and October 31, 2010		—			—
Preferred stock, Series A, $.001 par value, 500,000 shares authorized, 0 shares issued and outstanding at April 30, 2011 and October 31, 2010		—			—
Preferred stock, Series B, $.001 par value, 10,000 shares authorized, 10,000 shares issued and outstanding at January 31, 2011 and October 31, 2010		10			10
Preferred stock, Series B, $.001 par value, 10,000 shares authorized, 10,000 shares issued and outstanding at April 30, 2011 and October 31, 2010		10			10
Common stock, $.001 par value; 950,000,000 shares authorized; 277,416,386 and 186,352,401 shares issued and outstanding at January 31, 2011 and October 31, 2010		277,416			186,352
Common stock, $.001 par value; 950,000,000 shares authorized; 437,503,760 and 186,352,401 shares issued and outstanding at April 30, 2011 and October 31, 2010		437,504			186,352
Additional paid-in capital		65,~~175~~696,~~804~~108			6,076,660
Accumulated deficit		(6,~~302~~737,~~905~~980	)		(6,624,959	)
Total Stockholders’ Equity (Deficit)		150,325			(361,937	)
Total Stockholders’ Deficit		(604,358	)		(361,937	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	1,144,340		$	1,088,673
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	559,661		$	1,088,673

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

NX GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended January 31,
	Three Months Ended April 30,
	2011			2010
REVENUES
Training revenue	$	3234,~~201~~528		$	—
OPERATING EXPENSES
General and administrative expenses		~~236~~233,~~865~~807			89487,~~463~~416
LOSS FROM CONTINUING OPERATIONS BEFORE OTHER INCOME (EXPENSES)		(204,664	)		(89,463	)
(LOSS) FROM CONTINUING OPERATIONS BEFORE OTHER INCOME (EXPENSES)		(199,279	)		(487,416	)
OTHER INCOME (EXPENSES)
Gain on derivative instruments		675,993			—
Gain on sale of subsidiary		—			683,804
Interest expense		(149,275	)		(161	)
(Loss) on derivative instruments		(39,988	)		(43,563	)
		526,718			(161	)
Interest expense		(195,807	)		(22,590	)
INCOME (LOSS) FROM CONTINUING OPERATIONS		322,054			(89,624	)
		(235,795	)		617,651
INCOME FROM DISCONTINUED OPERATIONS		—			76,672
INCOME (LOSS) FROM CONTINUING OPERATIONS		(435,074	)		130,235
NET INCOME (LOSS)	$	322,054		$	(12,952	)
(LOSS) FROM DISCONTINUED OPERATIONS		—			(5,011	)
NET INCOME (LOSS)	$	(435,074	)	$	125,224
EARNINGS (LOSS) PER SHARE, BASIC AND DILUTED
FROM CONTINUING OPERATIONS	$	*		$	*
FROM DISCONTINUED OPERATIONS		*—			*
NET INCOME (LOSS)	$	*		$	*
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC		~~225~~355,~~386~~538,~~411~~579			3240,~~210~~902,~~846~~981
COMMON STOCK EQUIVALENTS		~~506~~2,~~265~~375,~~339~~245,237			—56,491,954
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, DILUTED		~~731~~2,~~651~~730,~~750~~783,816			3297,~~210~~394,~~846~~935

*	Less than $0.005 or $(0.005)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

NX GLOBAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH~~OPERATIONS ~~FLOWS~~

(UNAUDITED)

	Three Months Ended January 31,
	Six Months Ended April 30,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
REVENUES
Net income (loss)	$	322,054		$	(12,952	)
Training revenue	$	66,728		$	—
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
OPERATING EXPENSES
Depreciation		—			2,334
General and administrative expenses		470,672			628,239
Common stock issued for services		10,500			—
(LOSS) FROM CONTINUING OPERATIONS BEFORE OTHER INCOME (EXPENSES)		(403,944	)		(628,239	)
Gain on derivative instruments		(675,993	)		—
OTHER INCOME (EXPENSES)
Amortization of debt discount		147,773			—
Gain on sale of subsidiary		—			683,804
Changes in assets and liabilities
Gain (loss) on derivative instruments		636,005			(43,563	)
(Increase) decrease in accounts receivable		3,852			63,059
Interest expense		(345,082	)		(29,186	)
(Increase) decrease in prepaid expenses and other current assets		35,794			22,605
		290,923			611,055
Increase (decrease) in accounts payable and accrued expenses		100,750			(22,972	)
(LOSS) FROM CONTINUING OPERATIONS		(113,021	)		(17,184	)
Net cash provided by (used in) operating activities		(55,270	)		54,646
INCOME FROM DISCONTINUED OPERATIONS		—			129,457
CASH FLOWS FROM FINANCING ACTIVITIES
NET INCOME (LOSS)	$	(113,021	)	$	112,273
Proceeds from notes payable - other		61,475			—
EARNINGS (LOSS) PER SHARE, BASIC AND DILUTED
Proceeds from notes payable - related parties		—			7,760
FROM CONTINUING OPERATIONS	$	*		$	*
Net cash provided by financing activities		61,475			7,760
FROM DISCONTINUED OPERATIONS		—			*
NET INCREASE IN CASH		6,205			62,406
NET INCOME (LOSS)	$	*		$	*
CASH - BEGINNING OF PERIOD		242			4,724
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC		291,951,841			36,484,879
CASH - END OF PERIOD	$	6,447		$	67,130
COMMON STOCK EQUIVALENTS		2,375,245,237			56,491,954
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, DILUTED		2,667,197,078			92,976,833
Cash paid for interest during the period	$	—		$	161
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Repayment of notes payable with common stock	$	87,000		$	—
Repayment of accrued interest with common stock	$	3,600		$	—
Debt discount on issuance of notes payable - other	$	61,475		$	—
Consulting fees paid in advance with common stock	$	28,000		$	—
Prepaid commitment fees satisfied in common stock	$	61,108		$	—

*	Less than $0.005 or $(0.005)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

NX GLOBAL, INC.

~~NOTES TO~~ CONDENSED CONSOLIDATED ~~FINANCIAL~~ STATEMENTS OF CASH FLOWS

(UNAUDITED)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION


	Six Months Ended April 30,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash (used in) operating activities	$	(253,822	)	$	(45,068	)


CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of subsidiary		—			10

Net cash provided by investing activities		—			10


CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - other		255,558			90,000
Principal payments on notes payable - related parties		—			(57,000	)
Proceeds from notes payable - related parties		—			7,760

Net cash provided by financing activities		255,558			40,760


NET INCREASE (DECREASE) IN CASH		1,736			(4,298	)
CASH - BEGINNING OF PERIOD		242			4,724


CASH - END OF PERIOD	$	1,978		$	426


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest during the period	$	—		$	2,266

NXThe ~~Global,~~accompanying ~~Inc. (“NX Global”) was incorporated on February 17, 1998 in Nevada as Coastal Enterprises, Inc. to engage in an~~notes ~~internet-related~~are ~~business. NX Global and National Energy Services Company, Inc.,~~ an ~~unaffiliated~~integral ~~New~~part ~~Jersey corporation formed in 1995 (“NESNJ”), entered into an Agreement and Plan~~ of ~~Share~~these ~~Exchange,~~unaudited ~~dated~~condensed ~~January 19,~~consolidated ~~2001,~~financial ~~pursuant to which the shareholders of NESNJ on January 19, 2001 were issued 10,000,000 shares of common stock of NX Global, par value $0~~statements.~~001~~ in exchange for 100% of the issued and outstanding shares of NESNJ, which became a wholly-owned subsidiary of NX Global. For accounting purposes, the transaction was accounted for as a reverse acquisition. In September 2010, the company changed its name to NX Global, Inc. from National Energy Services Company, Inc.

NX Global together with its subsidiaries ( the “Company”, “we”, “us”, or, “our”), are engaged in operating three divisions and various subsidiaries within each division either created by the Company or to be purchased for more rapid growth. The divisions include Renewable Energy Project Management, Renewable Energy Product Sales and Green Internet Technologies.

Renewable Energy Project Management will initially consist of project management and marketing of those services to algae growing facilities, bio-fuels and waste to energy project owners. These projects include bio-fuel from algae and from pyrolisis of tires, and pyrolisis of municipal solid waste to energy. Currently, various joint ventures and investments are being negotiated to enable the Company to get into the markets with signed projects.

The Renewable Energy Product Sales division will market products produced from the other divisions to recyclers and other businesses seeking to improve their eco-friendly foot print.

The Green Internet Technologies Service and Training Division is designed to first assist all affiliated divisions in the marketing of their products and services plus green social networking products and services and training for new technology development and certification initially in the virtualization and cloud computing markets.

Except for the Green Internet Technologies Service and Training Division that became active in April, 2010, none of the divisions were active during the three months ended January 31, 2011 and 2010. Applied Concepts for Energy Corp. (“ACEC”), which was previously formed, had no operations during the three months ended January 31, 2011 and 2010.

On January 21, 2010, the Company acquired an agreement to manage the construction of a solar/thermal site in California (the “Agreement”). The Agreement required former management to transfer to the seller 13,000,000 of the common shares they held, the Company to issue 10,000 shares of Series B Cumulative Convertible Preferred Stock with a stated value of $400,000 and a voting preference as if the holder held 50.1% of the outstanding votes of the Company and the settlement of the related party notes payable of approximately $1.3 million with a cash payment of $57,000 and the issuance of a $400,000 convertible promissory note. The settlement of the related party notes payable resulted in an effective reduction of $890,318 in related party debt.

The Agreement also required the resignation of all officers and directors at that time and the placement of a new director and officer to operate the Company. Further requirements caused the 13,000,000 common shares and 10,000 shares of Series B Cumulative Convertible Preferred Stock to be issued in accordance with the acquisition to be placed in escrow until all sales tax debts had been paid or negotiated for payment and the payment of certain debts to prior management and a counsel to the Company. The shares in escrow were released on April 30, 2010. The Company did not declare any preferred stock dividends during the three months ended January 31, 2011 and 2010.

In March 2010, the Company purchased Nube, Inc. (“Nube”) for 6,000,000 restricted common shares with a stock value of $180,000. Nube’s assets consisted of its training software and contract and it had no liabilities. Nube provides training programs for green technologies such as cloud computing and data virtualization. At October 31, 2010, The Company recognized an impairment loss of $180,000 related to these assets. Nube had no revenues until April 2010, at which time it started to recognize revenues from providing training classes. In November 2010, Global Green resources, Inc changed its name to Nube, Inc.

In November, the Company’s subsidiary ACEC signed two joint venture agreements to further its business operations in algae production and the conversion of waste to energy. The agreements include terms for funding, the licensing of patented and non-patented production and manufacturing and growing technologies, site management and project development, site procurement plus other related items. The joint ventures will not begin operations until funding is in place for their furtherance.

InNX ~~January 2011~~GLOBAL, ~~the Company has received a letter committing the first $100,000,000 of financing for the proposed site near Portage Du Fort, Quebec, Canada~~INC. Negotiations are ongoing with the governmental agencies necessary to acquire permits and guarantees required to begin construction and operations. The site has recently been designated by the Pontiac MRC Quebec (“MRC”) as the region’s Environmental Industrial Park and the municipal waste collected throughout the region under the MRC must be delivered to the site for eco friendly disposal. This project is under review as a consortium of the MRC and the City of Gatineau, Quebec issued a qualifications request from the general business population within days of ACEC having signed a letter of intent to lease the property for this project in January 2011. The request for qualification requires several businesses from Quebec to be involved and significantly impairs the ability of ACEC or its joint venture partners from controlling its own destiny or operating the facility as it would like to maximize its potential economic impact.

~~These~~NOTES ~~unaudited~~TO ~~condensed~~CONDENSED ~~consolidated~~CONSOLIDATED ~~financial~~FINANCIAL ~~statements~~STATEMENTS ~~reflect the sale of the Company’s New Jersey subsidiary (see Note 8 – Discontinued Operations and Sale of Subsidiary) for the three months ended January 31, 2010.~~

The unaudited condensed consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The unaudited condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain all the information included in the Company’s annual financial statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (~~“GAAP”~~UNAUDITED) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the October 31, 2010 audited consolidated financial statements and the accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2010. The October 31, 2010 consolidated balance sheet was derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. The results of operations for the three months ended January 31, 2011, are not necessarily indicative of the results for the full fiscal year ending October 31, 2011 or for any other period. These unaudited condensed consolidated financial statements reflect all the adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the operations and cash flows for the period presented.

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The unaudited condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain all the information included in the Company’s annual financial statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the October 31, 2010, audited consolidated financial statements and the accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2010. The October 31, 2010, consolidated balance sheet was derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. The results of operations for the three months and six months ended April 30, 2011, are not necessarily indicative of the results for the full fiscal year ending October 31, 2011 or for any other period. These unaudited condensed consolidated financial statements reflect all the adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the operations and cash flows for the period presented.

Going Concern

The Company incurred net losses from continuing operations before other income (expenses) for the three and six months ended ~~January~~April 3130, 2011 and 2010, and had working capital deficiencies and accumulated deficits as of ~~January~~April 3130, 2011, and October 31, 2010. The Company also had negative cash flows from operations for the three months and six ended ~~January~~April 3130, 2011. There is no guarantee the Company will be able to continue to generate sufficient revenue and/or raise capital to support its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The unaudited condensed consolidated financial statements have been prepared on a basis which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company’s ability to continue as a going concern is dependent upon its ability to execute management’s plans to be profitable, generate positive cash flows from operations and to raise additional capital through the issuance of debt and/or equity securities. Although management continues to pursue these plans and believes it will be successful, there is no assurance that the Company will be successful in generating such profitable operations or obtaining financing on terms acceptable to the Company.

The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Nube and ACEC. All significant inter-company accounts and transaction have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting ~~period~~periods. Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenues when services are rendered, evidence of a contract exists, the price is fixed or reasonably determinable, and collectability is reasonably assured.

Accounts Receivable

Accounts receivable are stated at the amount management expects to collect. When needed, an allowance for doubtful accounts is recorded based on information on the collectability of specific accounts. Accounts are considered past due or delinquent based on contractual terms, how recently payments have been received and management’s judgment of collectability. At January 31, 2011, no allowance had been established.

Cash and Cash Equivalents

Cash balances in banks are insured by the Federal Deposit Insurance Corporation subject to certain limitations. For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Investments

The Company reviews investments for impairment annually, or more frequently if impairment indicators arise, and the investments are written off when impaired. Impairment, if any, would be determined based on an implied fair value model for determining the carrying value of the investments. The impairment test is a two-step process. The first step requires comparing the fair value of each reporting unit to its net book value. The Company uses management estimates of future cash flows to perform the first step of the investments’ impairment test.

Estimates made by management include assumptions about future conditions such as future revenues, gross margins and operating expenses. The second step is only performed if impairment is indicated after the first step has been performed.

Business Combinations

The Company accounts for business combinations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations” (“Topic 805”). Topic 805 establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree. Topic 805 also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.

Earnings (Loss) Per Common Share

Earnings (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share includes additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants and conversion of convertible debt and preferred stock. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for ~~the~~these periods ~~presented~~.

The following table shows the approximate number of common stock equivalents outstanding at ~~January~~April 3130, 2011 and 2010, that could potentially dilute basic income per share~~, but were not included in the calculation of diluted loss per share for the three months ended January 31, 2010, because their inclusion would have been anti-dilutive~~.

	Outstanding atJanuary 31,
	Outstanding atApril 30,
	2011		2010
Warrants		1,000,000		1,000,000
Preferred stock – Series B		~~153~~571,~~846~~428,~~154~~571		—20,000,000
Convertible notes – other		65769,~~142~~616,~~262~~666		—7,758,621
Convertible note – related party		~~286~~1,~~276~~033,~~923~~200,000		—27,733,333
Total		~~506~~2,~~265~~375,~~339~~245,237		156,~~000~~491,~~000~~954

6The potential issuable common shares at April 30, 2011, when added to the outstanding common shares at April 30, 2011, exceed the current authorized capital of the Company.

Fair Value of Financial Instruments

The Company’s financial instruments are comprised of current assets, current liabilities and investments. The carrying amounts reported in the unaudited condensed consolidated balance sheets for current assets and current liabilities approximate fair value due to their short term nature. The carrying amounts reported in the unaudited condensed consolidated balance sheets for investments approximate fair value since the investments were acquired on October 29, 2010.

Derivative Instruments

The Company has outstanding convertible debt instruments that contain derivative features. The Company accounts for these derivatives in accordance with FASB ASC 815, “Accounting for Derivative Instruments and Hedging Activities,” including “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock.” In accordance with the provisions of ASC 815, the embedded derivatives are required to be bifurcated from the debt instrument and recorded as a liability at fair value on the balance sheet. Changes in the fair value of the derivatives are recorded at each reporting period and recorded inas ~~gain on derivative instruments,~~ a separate component of other income (expenses).

Income Taxes

The Company utilizes ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Reclassification

Certain prior period amounts have been reclassified to conform to the current period presentation.

Recent Accounting Pronouncements

The Company does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, will have a material effect on its consolidated financial position, results of operations, or cash flows.

NOTE 32 - INVESTMENTS

As of ~~January~~April 3130, 2011 and October 31, 2010, investments consist of 4.95% of the intellectual property held by Propalms Ltd. valued at $500,000 and $500,000 of Preferred Series A Stock of ProTek Capital, Inc. (“ProTek”) ~~and~~plus 4.95% of the intellectual property held by Propalms Ltd. also valued at $500,000, which were recorded at cost, respectively.

On September 2, 2010, the Company purchased Propalms International Ltd., a Nevada corporation, which was formed on August 24, 2010, (“Propalms International”) pursuant to a stock purchase agreement, dated August 31, 2010 (“Stock Purchase Agreement”), for 250,000,000 restricted common shares. Propalms International had no revenues and no liabilities and its asset consisted solely of an intangible asset, a worldwide marketing and sales agreement between Propalms Ltd, a UK corporation and Propalms International as of September 2, 2010. The Company and Propalms International agreed to a purchase price of $2.5 million, which was allocated entirely to Propalms International’s intangible asset.

In completion of the closing of the Stock Purchase Agreement, the Company increased its authorized common stock to 950,000,000 shares from 150,000,000 shares after approval by a stockholder with a majority voting interest (50.1%) and issued 250,000,000 common shares as required.

On October 29, 2010, the Company terminated the Stock Purchase Agreement by mutual consent of all parties and returned the parties to their original condition, except for the distribution of 100,000,000 shares of the Company’s common stock that was delivered to ProTek and will not be returned. In exchange for those shares, the Company received 500,000 shares of Preferred Series A Stock of ProTek at $1.00 per share for 50,000,000 shares of the Company’s common stock and 4.95% of the intellectual property of Propalms Ltd. for 50,000,000 shares of the Company’s common stock also valued at $500,000.

In February 2011, the Board of Directors of the Company agreed to rescind the investment agreement with ProTek. Pursuant to the rescission, ProTek returned the 50,000,000 common shares to the Company and the Company returned the 500,000 shares of Preferred Series A Stock to ProTek.

NOTE 3 - NOTES PAYABLE - OTHER

At October 31, 2010, the Company had an aggregate of $197,500 of principal balance in notes payable outstanding at interest rates ranging from 5% to 10% per annum which are convertible into shares of common stock at variable conversion prices as defined in the agreements.

The notes were due as follows: $182,500 on demand and $15,000 due during March 2011.

The Company received the proceeds of notes totaling $255,558 during the six months ended April 30, 2011. The notes bear interest at 6% to 12% per annum and are convertible into shares of common stock at variable conversion prices as defined in the agreements.

The notes are due as follows: $107,000 on demand, $32,500 due in September 2011, $82,725 due during the year ended October 31, 2012, and $33,333 due during the year ended October 31, 2013.

During the six months ended April 30, 2011, the Company converted an aggregate of $171,000 of the principal balance of these notes and $3,600 of accrued interest into 233,866,302 shares of common stock.

Interest expense was $3,724 and $4,476 for the three and six months ended April 30, 2011, compared to $0 for the same periods in 2010. Notes payable – other consist of the following at:


	April 30, 2011			October 31, 2010
Cost	$	336,726		$	213,000
Less: Repayment by conversion into common stock		(171,000	)		(15,500	)
Less: Debt discount		(107,727	)		(133,000	)
Add: Accumulated amortization of debt discount		123,831			114,783

Total	$	181,830		$	179,283

Debt discount is amortized over the terms of the notes payable. During the six months ended April 30, 2011, the amortization of debt discount on notes payable - other was $59,345.

NOTE 4 - NOTES PAYABLE - RELATED PARTIES

Charter Management, LLC (“Charter”) previously funded the operations of the Company with a credit facility through January 2010. The balance payable to Charter before the reduction described below was $1,347,318. With the execution of the Agreement entered into on January 21, 2010, the debt was extinguished after two principal payments totaling $57,000 and the issuance of a new convertible promissory note to the former CEO of the Company and owner of Charter, for $400,000. As a result of the extinguishment, the debt was reduced by $890,318, which was reflected as a reduction to additional paid-in capital since it was a debt reduction from a related party. Charter was related to the Company through common ownership, but as of May 5, 2010, these parties are no longer affiliates of the Company due to the Agreement.

InThe ~~February~~convertible ~~2011,~~promissory ~~the~~note ~~Board~~was ofnon-interest ~~Directors~~bearing until maturity and is convertible into shares of the Company’s ~~agreed~~common tostock ~~rescind~~at a variable conversion price as defined in the ~~investment~~ agreement. ~~with~~The ~~ProTek~~note matured on January 21, 2011, and is currently in default. Pursuant to agreement, the ~~rescission,~~note ~~ProTek~~bears ~~returned~~interest ~~the~~at ~~50,000,000~~10% per ~~common~~annum if ~~shares~~not tosatisfied at maturity. During the ~~Company~~six months ended April 30, 2011 and ~~the~~2010, ~~Company~~interest ~~returned~~expense on the ~~500~~note was $11,~~000~~205 ~~shares~~and of$0, ~~Preferred~~respectively. ~~Series~~Notes Apayable ~~Stock~~– torelated ~~ProTek.~~parties consist of the following at:

NOTE 4 - NOTES PAYABLE - OTHER


	April 30, 2011			October 31, 2010
Cost	$	392,500		$	400,000
Less: Debt discount		(400,000	)		(400,000	)
Add: Amortization of debt discount		400,000			276,692

Total	$	392,500		$	276,692

~~The~~Debt ~~Company~~discount ~~received~~was amortized over the ~~proceeds~~term of ~~two~~the ~~notes~~note ~~totaling~~payable. ~~$61,475~~During ~~during~~ the ~~three~~six months ended ~~January~~April 3130, 2011., ~~The~~amortization ~~notes bear interest at 8% per annum and are convertible into shares~~ of ~~common stock~~debt atdiscount ~~a variable conversion price as defined in the agreements. The note with a principal value of $32,500 matures~~ on ~~September 6, 2011 and~~ the note ~~with~~payable ~~the~~was ~~principal value of~~ $28123,~~975 matures on January 13, 2012~~308.

~~Proceeds~~NOTE ~~from~~5 ~~three~~- ~~additional~~DERIVATIVE ~~notes~~LIABILITIES totaling $105,000 were received during the year ended October 31, 2010. These notes bear interest at 8% per annum and are convertible into shares of common stock at a variable conversion price as defined in the agreements. The $50,000 note bore interest at 8% per annum and matured on October 25, 2010 (the “$50,000 Note”), the $40,000 note bore interest at 8% per annum and matured on December 22, 2010 (the “$40,000 Note”) and the $15,000 note bore interest at 9% per annum and matured on March 1, 2011 (the “$15,000 Note”), which is in default as of March 2, 2011.

~~During~~In ~~the~~accordance ~~year~~with ~~ended~~FASB ~~October 31,~~ASC ~~2010,~~815-10 ~~the~~“Accounting ~~Company~~for ~~converted $15,500~~Derivative ofInstruments ~~the~~and ~~$50,000~~Hedging ~~Note~~Activities” ~~into~~and ~~4,305,555~~FASB ~~shares~~ASC of815-40 “Accounting ~~the~~for ~~Company’s~~Derivative ~~common~~Financial ~~stock~~Instruments Indexed to, and ~~during~~Potentially ~~November~~Settled ~~2010~~In ~~and~~a ~~December~~Company’s ~~2010~~Own Stock,” the ~~Company~~conversion ~~converted~~features associated with the ~~remaining~~convertible ~~$34,500~~promissory ~~principal~~notes of– ~~the~~other ~~$50,000~~(see ~~Note~~Notes 3) and convertible promissory note – related ~~accrued~~party ~~interest~~(see ofNote ~~$2,000~~4) ~~into 24,365,080~~represent ~~shares~~derivatives. ofAs such, the Company’s ~~common~~has ~~stock.~~recognized ~~During~~the ~~December~~amount ~~2010~~of ~~and January 2011~~$1,432,966 ~~the~~as ~~Company~~derivative ~~converted~~liabilities at the ~~principal~~time of issuance of the ~~$40,000~~debt ~~Note~~instruments. ~~and~~These ~~related~~derivative ~~accrued~~liabilities ~~interest~~are measured ofat ~~$1,600~~their ~~into~~estimated ~~35,787,878~~fair ~~shares~~value of ~~the~~$229,526 ~~Company’s~~at ~~common~~April 30, ~~stock~~2011.

~~During~~The ~~the~~estimated ~~year~~fair ~~ended~~value ~~October 31,~~of ~~2010,~~ the ~~Company issued a $28,000, non-interest bearing note to settle accrued~~derivative ~~consulting~~liabilities ~~fees~~have ~~(the~~been ~~“$28,000~~calculated ~~Note”).~~based ~~The $28,000 Note matured~~ on ~~November 5,~~a ~~2010~~Black-Scholes ~~and~~option ispricing ~~currently~~model inusing ~~default. As of maturity,~~ the ~~$28,000~~following ~~Note~~assumptions ~~bears~~(level ~~interest~~2 inputs) at 5%April ~~per annum. On January 24~~30, 2011,: ~~the Company converted $12,500 of the $28,000 Note into 12,500,000 shares of the Company’s common stock.~~

The Company received proceeds of two notes totaling $102,500 during the year ended October 31, 2009. In April 2010, one of the notes with a value of $22,500 was satisfied through the issuance of 1.5 million shares of the Company’s common stock. The remaining note has no stated terms and is due on demand.


Fair market value of stock		$0.0006
Exercise price		$0.0005 to $0.00025
Dividend yield		0.00%
Risk free interest rate		0.15% to 0.26%
Expected volatility		284% to 405%
Expected life		0.35 to 1.76 years

~~Interest~~NOTE ~~expense~~6 ~~was~~- ~~$297 and $0 for the three months ended January 31, 2011 and 2010.~~STOCKHOLDERS’ ~~Notes~~(DEFICIT) ~~payable – other consist of the following at:~~

	January 31,2011			October 31,2010
Cost	$	258,975		$	213,000
Less: Repayment / Conversion into common stock		(87,000	)		(15,500	)
Less: Debt discount		(144,475	)		(133,000	)
Add: Accumulated amortization of debt discount		89,248			114,783
Total	$	116,748		$	179,283

Debt discount is amortized over the terms of the notes payable. During the three months ended January 31, 2011, the amortization of debt discount on notes payable - other was $24,465.

NOTE 5 - NOTES PAYABLE - RELATED PARTIES

new convertible promissory note to the former CEO of the Company and owner of Charter, for $400,000. As a result of the extinguishment, the debt was reduced by $890,318, which was reflected as a reduction to additional paid-in capital since it was a debt reduction from a related party. Charter was related to the Company through common ownership, but as of May 5, 2010, these parties are no longer affiliates of the Company due to the Agreement.

The convertible promissory note was non-interest bearing until maturity and is convertible into shares of the Company’s common stock at a variable conversion price as defined in the agreement. The note matured on January 21, 2011 and is currently in default. Pursuant to agreement, the note bears interest at 10% per annum if not satisfied at maturity. During the three months ended January 31, 2011 and 2010, interest expense on the note was $1,205 and $0, respectively. Notes payable – related parties consist of the following at:

	January 312011			October 31,2010
Cost	$	400,000		$	400,000
Less: Debt discount		(400,000	)		(400,000	)
Add: Amortization of debt discount		400,000			276,692
Total	$	400,000		$	276,692

Debt discount was amortized over the term of the note payable. During the three months ended January 31, 2011, amortization of debt discount on the note payable was $123,308.

NOTE 6 - DERIVATIVE LIABILITIES

In accordance with FASB ASC 815-10 “Accounting for Derivative Instruments and Hedging Activities” and FASB ASC 815-40 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled In a Company’s Own Stock,” the conversion features associated with the convertible promissory notes – other (see Note 4) and convertible promissory note – related party (see Note 5) represent derivatives. As such, the Company has recognized the amount of $1,008,917 as derivative liabilities at the time of issuance of the debt instruments, and are measured at their estimated fair value of $102,525 at January 31, 2011.

The estimated fair value of the derivative liabilities have been calculated based on a Black-Scholes option pricing model using the following assumptions (level 2 inputs) at January 31, 2011:

Fair market value of stock	$	0.0022
Exercise price	$	0.0012 to $0.0020
Dividend yield		0.00	%
Risk free interest rate		0.15% to 0.26	%
Expected volatility		371% to 448	%
Expected life		0.08 to 0.95 years

NOTE 7 - STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred Stock:

As of ~~January~~April 3130, 2011, the Company had 500,000 authorized shares of $0.001 par value Series A preferred stock and zero shares outstanding. The Series A preferred shares convert at a ratio of 58:1 ~~into~~ into shares of the Company’s common stock.

The Board of directors amended the Company’s Articles of Incorporation by filing a Stock Designation with the Nevada Secretary of State on January 26, 2010, to authorize 10,000 shares of Series B Cumulative Convertible Preferred Stock, at a par value of $0.001. The Series B Convertible Preferred Stock represents a 50.1% voting interest regardless of the common shares outstanding. As of ~~January~~April 3130, 2011 and 2010, the Company had 10,000 shares of the Series B Cumulative Convertible Preferred Stock issued and outstanding. The Company did not declare any preferred stock dividends during the ~~three~~periods ~~months~~ ended ~~January~~April 3130, 2011 and 2010.

Common Stock:

During the ~~three~~six months ended ~~January~~April 3130, 2011, the following transactions occurred:

OnDuring ~~November~~the six months ended April 2330, ~~2010~~2011, the Company issued 2an aggregate of 13,~~150~~785,~~000~~057 common shares with a fair ~~market~~ value of $23147,~~005~~ 500 to pay for ~~prepaid~~ commitment fees per an agreement with an investor. These fees are directly related to the utilization of the Line of Credit (as defined in Note 108). The investor may hold up to 9.9% of the outstanding shares of the Company.

On8 ~~November 23, 2010, the Company issued 1,500,000 common shares with a fair market value of $10,500 for consulting services.~~

OnDuring ~~November~~the six months ended April 2930, ~~2010~~2011, the Company issued 9an aggregate of 25,~~500~~200,000 shares of common ~~shares~~stock ~~with~~for aservices. ~~fair~~The ~~market~~shares ~~value~~were ofvalued ~~$101,650~~at ~~for~~their ~~prepaid~~fair ~~commitment~~value ~~fees~~which ~~per an~~approximated ~~agreement~~the ~~with~~trading anprice ~~investor.~~of ~~These~~the shares ~~were~~on ~~returned~~the indate ~~January~~of ~~2011~~the agreements of $48,500.

During ~~December~~the six months ended April 30, ~~2010~~2011, the Company ~~issued 18,888,889~~converted ~~common~~an ~~shares~~aggregate toof ~~convert~~ $24171,~~500~~000 of ~~notes~~the ~~payable~~principal balance of convertible notes and $23,~~000~~600 of ~~related~~ accrued interest into 233,866,302 shares of common stock.

During ~~January~~the six months ended April 30, 2011, ~~the~~ the Company issued 39an aggregate of 28,~~954~~300,~~545~~000 ~~common~~ shares toof ~~convert~~common ~~$42,500~~stock ofto ~~notes~~be ~~payable~~held ~~and~~as ~~$1,600~~collateral ofon ~~related~~convertible ~~accrued~~debt ~~interest~~aggregating $53,000.

~~On January 21,~~In February 2011, the ~~Company~~Board ~~issued~~of ~~3,561,027~~Directors ~~common~~of ~~shares~~the ~~with~~Company aagreed ~~fair~~to ~~market~~rescind ~~value~~the ofinvestment ~~$38,103~~agreement ~~for~~with ~~prepaid~~ProTek. ~~commitment~~Pursuant ~~fees, which are directly related~~ to the ~~utilization~~rescission, ofProTek returned the ~~Line~~50,000,000 ofcommon ~~Credit~~shares ~~(as~~with ~~defined~~a invalue ~~Note 10). The investor may hold up~~of $500,000 to ~~9.9% of~~ the ~~outstanding~~Company ~~shares~~(see ofNote ~~the Company~~2).

On January 26, 2011, the Company issued 11,200,000 common shares with a fair market value of $28,000 for consulting services.

Warrants:

As of ~~January~~April 3130, 2011 and 2010, the Company has 1,000,000 million warrants outstanding at a weighted average exercise price of $0.96. The remaining contractual life of the warrants was 1.41 years at ~~January~~April 3130, 2011.

Stock Compensation Plans:

On January 11, 2011, Company’s Board of Directors approved the 2011 Consultant Stock Compensation Plan (the “2011 Plan”). Under the terms of the 2011 Plan, the Company reserved 20,000,000 shares of common stock to be issued during the 2011 Plan’s one-year term. Professionals and consultants who provide services to the Company are eligible to participate in the 2011 Plan. At ~~January~~April 3130, 2011, 11,200,000 shares of common stock had been issued under the 2011 Plan.

On March 30, 2010, Company’s Board of Directors approved the 2010 Professional/Consultant Stock Compensation Plan (the “2010 Plan”). Under the terms of the 2010 Plan, the Company reserved 10,000,000 shares of common stock to be issued during the 2010 Plan’s one-year term. Professionals and consultants who provide services to the Company are eligible to participate in the 2010 Plan. At ~~January~~April 3130, 2011, all shares were issued under the 2010 Plan.

The Board of Directors adopted the 2007 Equity Incentive Plan in 2007 (the “2007 Plan”). The 2007 Plan authorizes the Board to issue up to 1,500,000 common shares during the ten year period of the 2007 Plan. The shares may be awarded to employees or directors of the Company as well as to consultants to those entities. The shares may be awarded as outright grants or in the form of options, restricted stock or performance shares. At ~~January~~April 3130, 2011, 1,158,703 shares remain available for issuance under the 2007 Plan.

NOTE 87 - DISCONTINUED OPERATIONS AND SALE OF SUBSIDIARY

In January 2010, the Company discontinued sales of its ozone laundry equipment business and all warranty, supply and repair services associated with it (“Ozone division”) and in March 2010 the Company sold its New Jersey subsidiary and realized a gain of $683,804. The New Jersey subsidiary was sold for cash proceeds of $10 and the assumption of all the Company’s liabilities, net of property and equipment. The Company has classified these operations as discontinued operations for the ~~current and~~ prior periods reported.

109

The discontinuance had the following effects:

	January 31,2011			October 31,2010
	April 30, 2010
Liabilities
	(Unaudited)
Current liabilities of discontinued operations:
Assets
Accounts payable and other current liabilities	$	28,681		$	28,681
Current assets from discontinued operations:
	Three Months EndedJanuary 31,
Accounts receivable	$	6,704
	2011			2010
Liabilities
Revenues	$	—		$	236,719
Current liabilities of discontinued operations:
Cost and expenses		—			160,047
Settlement payable	$	—
Income from discontinued operations	$	—		$	76,672
Accounts payable and other current liabilities		23,885
	$	23,885
Net liabilities of discontinued operations	$	(17,181	)

NOTE 9 - CONCENTRATION


	Three and Six Months Ended April 30,
	2010			2010
Revenues	$	437		$	235,789

Cost and expenses		5,448			106,332


Income (loss) from discontinued operations	$	(5,011	)	$	129,457

~~One~~NOTE ~~debtor,~~7 ~~Technology~~- ~~Business~~CONCENTRATION Group, represented 100% of the total outstanding accounts receivable as of January 31, 2011 and 100% of the training revenue was earned from one customer, Technology Business Group during the three months ended January 31, 2011.

~~NOTE~~One 10debtor, -Technology ~~COMMITMENTS~~Business ~~AND~~Group, ~~CONTINGENCIES~~represented 100% of the total outstanding accounts receivable as of April 30, 2011 and 100% of the training revenue was earned from one customer, Technology Business Group during the six months ended April 30, 2011.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Consulting Contracts

The Company has entered into consulting contracts for various services ranging from professional services to merger and acquisition services. All of the contracts expire in February 2012. As a result of the Company entering into a certain Stock Purchase Agreement, dated August 31, 2010 (see Note 3), all three consulting contracts were terminated. The three contracts were reinstated immediately following the rescission of the Stock Purchase Agreement in October 2010. At ~~January~~April 3130, 2011, the future minimum payments required under these consulting contracts are $~~408~~306,000 and $34,000 for the years ending January 31, 2012 and 2013, respectively.

Line of Credit

In April 2010, the Company secured a $10,000,000 line of credit (the “Line of Credit”) to facilitate its business model. The Company will be able to draw down on the line of credit after a form S-1 Registration Statement is filed and becomes effective. During the ~~three~~six months ended ~~January~~April 3130, 2011, the Company issued stock with a fair market value of $61147,~~108~~500 to partially satisfy its commitment fee obligation of $150,000 in connection with the Line of Credit. The agreement does not allow the provider of the Line of Credit to hold more than 9.9% of the company’s common stock outstanding at anytime.

NOTE 119 - SUBSEQUENT EVENTS

Note Issuances

On ~~February~~May 312, 2011, the Company issued a $2520,000 convertible redeemable note that bears interest at 68% interest per annum and ~~matures~~ is due on demand ~~February~~but not later than November 112, ~~2013~~2011 (the “$2520,000 Note”). The $2520,000 Note may be converted into the Company’s common stock at 50% of the lowest bid price for four days, including the day of conversion and prior three days.

On February 3, 2011, the Company issued a $28,000 convertible redeemable note that bears interest at 6% interest per annum and matures on February 1, 2013 (the “2nd $28,000 Note”). The 2nd $28,000 Note may be converted into the Company’s common stock at 50% of the lowest bid price for four days, including the day of conversion and prior three days.

On February 9, 2011, the Company issued a $22,000 non-interest bearing promissory note, which is due on demand, but no later than August 9, 2011. Subsequent to August 9, 2011 the note will bear interest at a rate of 8% per annum. The note may be converted into the Company’s common stock at the average bid price for ten days prior to the conversion at a minimum conversion price of $0.001. The discount may be applied at the time of the conversion through negotiations of the parties.

On February 16, 2011, the Company issued a $28,750 convertible promissory note that bears interest at 8% interest per annum and matures on February 16, 2012. The note may be converted into the Company’s common stock at 85% of the average of the lowest five bid prices for ten days prior to the conversion.

On February 24, 2011, the Company issued an $18,000 non-interest bearing promissory note, which is due on demand, but no later than August 24, 2011. Subsequent to August 24, 2011, the note will bear interest at a rate of 8% per annum. The note may be converted into the Company’s common stock at the average bid price for ten days prior to the conversion at a minimum conversion price of $0.001. The discount may be applied at the time of the conversion through negotiations of the parties.

On February 24, 2011, the Company issued a $25,000 non-interest bearing promissory note, which is due on demand, but no later than August 24, 2011. Subsequent to August 24, 2011 the note will bear interest at a rate of 8% per annum. The note may be converted into the Company’s common stock at the average bid price for ten days prior to the conversion at a minimum conversion price of $0.001. The discount may be applied at the time of the conversion through negotiations of the parties.

Stock Issuances

On ~~February~~May 34, 2011, the Company issued 1220,000,000 common shares ~~into~~to anconvert ~~escrow account as collateral for future note conversions on the~~ $253,000 ~~Note~~of ~~and~~ the ~~2nd~~principal of a $2830,000 Note. ~~During~~The ~~February~~Company ~~and~~also ~~March~~issued ~~2011~~15,500 ~~the~~common ~~12,000,000~~ shares inas ~~escrow~~collateral ~~were~~for ~~used~~a to$25,000 ~~redeem the principal amounts of these notes.~~ Note

On ~~February~~May 919, 2011, the Company issued 1317,000,000 common shares to convert $134,~~000~~250, of the principal of ~~the~~a ~~$28,000~~note ~~Note~~payable.

On ~~February~~May 1823, 2011, the Company issued 1221,~~500~~428,~~000~~571 common shares to convert $123,~~500~~000, of the principal of a note payable.

On May 24, 2011, the Company issued 25,000,000 common shares to convert $7,500 of the principal of a $25,000 Note and 51,000,000 common shares for the conversion of $13,000 of a $15,000 Note.

On May 25, 2011, the Company issued 35,000,000 common shares to convert $10,000, of the principal of a note payable.

On May 27, 2011, the Company issued 27,000,000 common shares as collateral for a note payable.

On June 3, 2011, the Company issued 30,000,000 common shares as collateral for a note payable.

On June 7, 2011, the Company issued 12,000,000 common shares to convert $3,000, of the principal of a note payable.

On June 8, 2011, the Company issued 77,222,222 common shares to convert $19,000, of the principal of notes payable.

Item 2.

Managements’ Discussion and Analysis of Financial Condition and Results of Operations

Going Concern and Recent Events

NX Global, Inc., together with its subsidiaries (collectively the “Company”, “we”, “us” or “our”) incurred net losses from continuing operations before other income (expenses) for the three and six months ended ~~January~~April 3130, 2011 and 2010, and has working capital deficiencies and accumulated deficits. The Company also had negative cash flows from operations for the three and six months ended ~~January~~April 3130, 2011. There is no guarantee the Company will be able to continue to generate sufficient revenue and/or raise capital to support its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Results of Operations

The Company had $3234,~~201~~528 inand $66,728 in revenue for the three and six months ended ~~January~~April 3130, 2011, and no revenue for this period in 2010. Nube, Inc. (“Nube”) commenced its training classes in May 2010.

Operating expenses for the three and six months ended ~~January~~April 3130, 2011, ~~totaled~~were $~~236~~233,~~865,~~807 anand ~~increase of~~ $~~147~~470,~~402~~672 compared to ~~the three months ended January 31~~$487,416 ~~2010.~~and ~~Management increased expenses to pay~~$628,329 for anthe ~~awareness~~comparable ~~campaign~~prior ~~for~~periods. ~~the~~Management ~~changes~~decreased inexpenses ~~the~~by ~~Company~~reducing tocost ~~help~~of ~~support~~investor ~~the~~relations ~~value~~and ofpublic ~~the~~relations ~~common~~by ~~stock~~$185,914. WeThis ~~also~~reduction ~~hired~~was ~~consultants~~offset toby ~~seek~~a ~~out~~small ~~acquisitions~~increase ~~and~~in ~~provide~~General ~~accounting, legal~~ and ~~business~~Administrative ~~management services~~Expenses.

12Interest expense for the three and six months ended April 30, 2011 was $195,807 and $345,082, compared to $22,590 and $29,186 in the three and six months ended April 30, 2010. Interest expense has primarily increased as a result of the amortization of the debt discount on the notes payable and the commitment fee paid to secure a line of credit. Management also expects that interest expense will continue to increase as additional borrowings are received.

~~Table~~The Company recognized gains (losses) on its derivative instruments of ~~Contents~~$(39,988) and $636,005 during the three and six months ended April 30, 2011, compared to $(43,563) and $(43,563) for the three and six months ended April 30, 2010, related to the convertible promissory notes issued during the six months ended April 30, 2011, and the year ended October 31, 2010.

~~Interest~~During ~~expense for~~ the three ~~months~~and ~~ended January 31, 2011 was $149,275, compared to~~six ~~$161 in the three~~ months ended ~~January~~April 3130, 2010., ~~Interest~~the ~~expense~~Company ~~has~~recognized ~~primarily increased as~~ a ~~result~~gain ofon the ~~amortization~~disposition of ~~the~~a ~~debt~~subsidiary ~~discount on the notes payable~~ of ~~approximately~~ $~~147~~683,~~773 during the three months ended January 31, 2011~~804. ~~Management~~ ~~also expects that interest expense will continue to increase as additional borrowings are received.~~

The Company recognized a gain on its derivative instruments of $675,993 during the three months ended January 31, 2011 related to the convertible promissory notes issued during the three months ended January 31, 2011 and the year ended October 31, 2010.

Liquidity and Capital Resources

During the years prior to October 31, 2010, the Company’s only significant source of working capital financing was Charter Management, LLC, which is owned by two former members of the Company’s Board of Directors. The financing from this source ceased in January 2010 and current management is seeking new sources of credit and equity financing. During the ~~three~~ six months ended ~~January~~April 3130, 2011, the Company raised approximately $61255,~~000~~558 through the issuance of notes payable and debentures, and additional cash ~~proceeds~~ of approximately $~~111~~20,000 from the issuance of notes payable and debentures during ~~February~~ ~~and~~May ~~March~~ 2011.

The Company’s working capital deficit decreased by $~~512~~257,~~262~~579 during the ~~three~~six months ended ~~January~~ April 3130, 2011, primarily as a result of the ~~gain~~decrease onin derivative instruments of approximately $~~676~~487,~~000~~447. The Company’s working capital deficit was $~~849~~1,~~675~~104,358 at ~~January~~April 3130, 2011. The Company has no liquidity and working capital is severely strained, as credit lines have been fully utilized. Our working capital deficit is primarily a result of the change in and development of a new core business strategy. It is expected that there will continue to be a working capital deficit until revenues increase significantly.

lines have been fully utilized. Our working capital deficit is primarily a result of a lack of revenue and the change in and development of a new core business strategy. It is expected that there will continue to be a working capital deficit until revenues increase significantly.

To the extent that it becomes necessary to raise additional capital in the future, we may seek to raise it though the sale of debt or equity securities. There can be no assurances that we will be able to continue to sell shares of our common stock or borrow additional funds in order to fund the costs associated with our future operating and investing activities.

If we are successful at raising additional equity capital, it may be on terms which would result in substantial dilution to existing shareholders. If our costs and expenses prove to be greater than we currently anticipate, or if we change our current business plan in a manner that will increase our costs, we may be forced to suspend or cease operations.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

Critical Accounting Policies and Estimates

There has been no ~~changes~~change toin our critical accounting policies during the three and six months ended ~~January~~April 3130, 2011. Critical ~~accounting~~ accounting policies and the significant estimates made in accordance with them are discussed under “Critical Accounting Policies” in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” ~~included~~ included in Item 7 of our Annual Report on Form 10-K for the year ended October 31, 2010.

Impact of Accounting Pronouncements

Please refer to Note 2 to our unaudited condensed consolidated financial statements.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

None.

Item 4.

Controls and Procedures

(a) Evaluation of disclosure controls and procedures.

The term “disclosure controls and procedures” (defined in SEC Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within required time periods specified by the Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of ~~January~~April 3130, 2011, the Company’s Chief Executive Officer and Chief Financial Officer (or persons performing similar functions) have concluded that such controls and procedures are not effective to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms.

The material weakness consisted primarily of inadequate staffing and supervision that could lead to the untimely identification and resolution of accounting and disclosure matters and failure to perform timely and effective reviews. However, our size prevents us from being able to employ sufficient resources to enable us to have adequate segregation of duties within our internal control system. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

(b) Changes in internal controls.

The term “internal control over financial reporting” (defined in SEC Rule 13a-15(f)) refers to the process of a company that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer (or persons performing similar functions), has evaluated any changes in the Company’s internal control over financial reporting that occurred during the three months covered by this quarterly report, and they have concluded that there was no change to the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

similar functions), has evaluated any changes in the Company’s internal control over financial reporting that occurred during the three and six months covered by this quarterly report, and they have concluded that there was no change to the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

None.

Item 1A.

Risk Factors

None.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.

Defaults Upon Senior Securities

None.

Item 4.

(Removed and Reserved)

None.

Item 5.

Other Information

None.

Item 6.

Exhibits


31.1		Certification of Chief Executive Officer pursuant to Sarbanes-Oxley Section 302

31.2		Certification of Chief Financial Officer pursuant to Sarbanes-Oxley Section 302

32.1		Certification of Chief Executive Officer pursuant to Sarbanes- Oxley Section 906

32.2		Certification of Chief Financial Officer pursuant to Sarbanes- Oxley Section 906

1413

SIGNATURES

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

NX Global, Inc. By: /S/ David F. LaFave David F. LaFave, Director, ~~and~~ Chief Executive Officer and Chief Financial Officer

In accordance with the Exchange Act, this Report has been signed below on ~~March 22~~June 10, 2011 by the following persons, on behalf of the Registrant and in the capacities and on the dates indicated.

/S/ David F. LaFave David F. LaFave, Director and Chief Executive Officer /S/ David F. LaFave David F. LaFave, Chief Financial Officer

1514

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Filing Compare · NX Global, Inc