UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549








FORM 10-Q








(Mark
One)


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


For
the quarterly period ended December 31,
2009





OR





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





For
the transition period from _____ to ______





Commission
File Number 000-30675





EnXnet, Inc.


(Name of
issuer in its charter)





Oklahoma
            73-1561191(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)





11333 E. Pine Street, Suite
      92 - Tulsa, Ok 74116(Address
      of principal executive offices & zip code)





(918) 592 -
      0015Registrant's
      telephone number, including area code:





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
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. Yesx   Noo





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.





Large
      accelerated filer
            o
            Accelerated
      filer
            oNon-accelerated
      filer
            o
            Smaller
      reporting company
            x(Do
      not check if a smaller reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yeso Nox





As of
February 02, 2010, there were outstanding 34,914,929 shares of the registrant’s
common stock, $.0005 par value.





1
 Table of Contents







Tableof Contents





PagePART
      I. FINANCIAL INFORMATIONItem
      1.
            Financial
      Statements
            3Balance Sheets December 31, 2009 and
      March 31, 2009
            3Statements of Loss For the three
      months ended December 31, 2009 and 2008 and the nine months ended December
      31, 2009 and 2008
            4Statements of Changes in
      Stockholders Deficit
            5Statements of Cash Flows For the
      nine months ended December 31, 2009 and 2008
            6Summary of Accounting
      Policies
            7Notes to Financial
      Statements
            9Item
      2.
            Management’s Discussion and
      Analysis
            16Item
      3.
            Quantitative and Qualitative
      Disclosures About Market Risk
            20Item
      4T.
            Controls and
      Procedures
            20PART
      II. OTHER INFORMATIONItem
      1.
            Legal
      Proceedings
            21Item
      1A.
            Risk
    Factors
            21Item
      2.
            Unregistered Sales of Equity
      Securities and Use of Proceeds
            21Item
      3.
            Defaults Upon Senior
      Securities
            21Item
      4.
            Submission of Matters to a Vote to
      Security Holders
            21Item
      5.
            Other
      Information
            21Item
      6.
            Exhibits and Reports on Form
      8-K
            21SIGNATURES
            22Exhibit
    Index
            23








2
 Table of Contents




PART
I.    FINANCIAL INFORMATION





ITEM1.     FINANCIAL
STATEMENTS





ENXNET, INC


BALANCE
SHEETS





December
      31,
              2009
            
            
            March
      31,
              2009ASSETS
            
            (Unaudited)
            
            
            (Audited)CURRENT
      ASSETSCash
            
            $
            11,724
            
            
            $
            10,630Accounts
      receivable
            
            
            9,561
            
            
            
            17,290Prepaid
      expenses
            
            
            17,473
            
            
            
            16,306TOTAL
      CURRENT ASSETS
            
            
            38,758
            
            
            
            44,226FIXED
      ASSETSFurniture
      & fixtures
            
            
            6,160
            
            
            
            6,160Machinery
      & equipment
            
            
            74,516
            
            
            
            74,516Less
      accumulated depreciation
            
            
            (69,444
            )
            
            
            (64,876
            )TOTAL
      FIXED ASSETS
            
            
            11,232
            
            
            
            15,800OTHER
      ASSETSLicenses,
      net
            
            
            -
            
            
            
            -Investment
            
            
            -
            
            
            
            -Deposits
            
            
            51,137
            
            
            
            1,137TOTAL
      OTHER ASSETS
            
            
            51,137
            
            
            
            1,137TOTAL
      ASSETS
            
            $
            101,127
            
            
            $
            61,163LIABILITIES
      AND STOCKHOLDERS' DEFICITCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
            
            $
            551,811
            
            
            $
            533,509Advances
      from officer - related party
            
            
            78,980
            
            
            
            41,487Advances
      from stockholder
            
            
            31,000
            
            
            
            31,000Notes
      payable
            
            
            180,000
            
            
            
            175,000Notes
      payable - related party
            
            
            715,558
            
            
            
            695,558TOTAL
      CURRENT LIABILITIES
            
            
            1,557,349
            
            
            
            1,476,554COMMITMENTS
      AND CONTINGENCIES
            
            
            -
            
            
            
            -STOCKHOLDERS'
      EQUITY (DEFICIT)Common
      stock, $0.00005 par value; 200,000,000 shares authorized,34,914,929
      and 32,694,226 shares issued and outstanding
            
            
            1,746
            
            
            
            1,635Additional
      paid-in capital
            
            
            4,620,764
            
            
            
            4,370,440Accumulated
      deficit
            
            
            (5,978,732
            )
            
            
            (5,687,466
            )Other
      comprehensive income
            
            
            (100,000
            )
            
            
            (100,000
            )TOTAL
      STOCKHOLDERS' EQUITY (DEFICIT)
            
            
            (1,456,222
            )
            
            
            (1,415,391
            )TOTAL
      LIABILITIES ANDSTOCKHOLDERS'
      EQUITY (DEFICIT)
            
            $
            101,127
            
            
            $
            61,163





See
accompanying summary of accounting policies and notes to condensed financial
statements








3
 Table of Contents








ENXNET, INC


CONSOLIDATED
STATEMENTS OF OPERATIONS





Three
      Months Ended
            
            
            Nine
      Months EndedDecember
      31,
            
            
            December
      31,2009
            
            
            2008
            
            
            
            2009
            
            
            
            2008REVENUES
            
            $
            -
            
            
            $
            3,990
            
            
            $
            12,540
            
            
            $
            14,708COST
      OF SALES
            
            
            -
            
            
            
            1,325
            
            
            
            7,150
            
            
            
            5,102Gross
      Profit
            
            
            -
            
            
            
            2,665
            
            
            
            5,390
            
            
            
            9,606EXPENSESConsulting
      fees
            
            
            27,960
            
            
            
            30,615
            
            
            
            136,860
            
            
            
            106,330Depreciation
      & amortization
            
            
            198
            
            
            
            10,303
            
            
            
            593
            
            
            
            30,909Advertising
            
            
            -
            
            
            
            -
            
            
            
            2,350
            
            
            
            -Payroll
            
            
            16,977
            
            
            
            63,995
            
            
            
            79,857
            
            
            
            219,025Professional
      services
            
            
            7,908
            
            
            
            51,761
            
            
            
            27,985
            
            
            
            153,910Occupancy
            
            
            3,640
            
            
            
            14,998
            
            
            
            12,326
            
            
            
            26,962Office
            
            
            1,991
            
            
            
            2,255
            
            
            
            6,357
            
            
            
            8,231Travel
            
            
            189
            
            
            
            289
            
            
            
            986
            
            
            
            4,172Other
            
            
            1,475
            
            
            
            25
            
            
            
            1,925
            
            
            
            390Total
      Expenses
            
            
            60,338
            
            
            
            174,242
            
            
            
            269,239
            
            
            
            549,930LOSS
      FROM OPERATIONS
            
            
            (
      60,338
            )
            
            
            (171,577
            )
            
            
            (263,849
            )
            
            
            (540,324
            )OTHER
      INCOME (EXPENSE)Interest
      expense
            
            
            (12,194
            )
            
            
            (13,627
            )
            
            
            (36,185
            )
            
            
            (35,927
            )Other
      income
            
            
            -
            
            
            
            -
            
            
            
            8,768
            
            
            
            -Interest
      income
            
            
            -
            
            
            
            2
            
            
            
            -
            
            
            
            8Total
      Other Income (Expense)
            
            
            (12,194
            )
            
            
            (13,625
            )
            
            
            (27,417
            )
            
            
            (35,919
            )COMPREHENSIVE
      LOSS
            
            $
            (72,532
            )
            
            $
            (185,202
            )
            
            $
            (291,266
            )
            
            $
            (576,243
            )BASIC
      AND DILUTED NET LOSS PER SHARE
            
            $
            (0.002
            )
            
            $
            (0.006
            )
            
            $
            (0.009
            )
            
            $
            (0.018
            )WEIGHTED
      AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND
    DILUTED
            
            
            33,764,129
            
            
            
            31,584,436
            
            
            
            33,764,129
            
            
            
            31,584,436





See
accompanying summary of accounting policies and notes to condensed financial
statements








4
 Table of Contents







ENXNET,
INC


CONSOLIDATEDSTATEMENT OF STOCKHOLDERS' EQUITY
(DEFICIT)





Additional
            
            
            
            
            
            Other
            
            
            TotalCommon
      Stock
            
            
            Paid-in
            
            
            Accumulated
            
            
            Comprehensive
            
            
            Stockholders'Shares
            
            
            Amount
            
            
            Capital
            
            
            (Deficit)
            
            
            Income
            
            
            Equity
      (Deficit)Balance,
      March 31, 2008
            
            
            30,670,226
            
            
            $
            1,534
            
            
            $
            3,836,148
            
            
            $
            (4,937,753
            )
            
            $
            (100,000
            )
            
            $
            (1,200,071
            )Common
      stock issued for:Cash
            
            
            722,500
            
            
            
            36
            
            
            
            149,464
            
            
            
            -
            
            
            
            -
            
            
            
            149,500Services
            
            
            450,955
            
            
            
            23
            
            
            
            108,410
            
            
            
            -
            
            
            
            -
            
            
            
            108,433Note
      payable conversion
            
            
            851,128
            
            
            
            42
            
            
            
            127,627
            
            
            
            -
            
            
            
            -
            
            
            
            127,669Stock
      options issued
            
            
            -
            
            
            
            -
            
            
            
            148,791
            
            
            
            -
            
            
            
            -
            
            
            
            148,791Net
      loss for the year ended March 31, 2009
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (749,713
            )
            
            
            -
            
            
            
            (749,713
            )Balance,
      March 31, 2009
            
            
            32,694,809
            
            
            
            1,635
            
            
            
            4,370,440
            
            
            
            (5,
      687,466
            )
            
            
            (100,000
            )
            
            
            (1,415,391
            )Common
      stock issued for:Services
            
            
            1,844,120
            
            
            
            92
            
            
            
            107,017
            
            
            
            -
            
            
            
            -
            
            
            
            107,109Cash
            
            
            376,000
            
            
            
            19
            
            
            
            24,481
            
            
            
            -
            
            
            
            -
            
            
            
            24,500Stock
      options issued
            
            
            -
            
            
            
            -
            
            
            
            118,826
            
            
            
            -
            
            
            
            -
            
            
            
            118,826Net
      loss for the nine months ended December 31, 2009
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (291,266
            )
            
            
            -
            
            
            
            (291,266
            )Balance,
      December 31, 2009
            
            
            34,914,929
            
            
            $
            1,746
            
            
            $
            4,620,764
            
            
            $
            (5,978,732
            )
            
            $
            (100,000
            )
            
            $
            (1,456,222
            )





See
accompanying summary of accounting policies and notes to condensed financial
statements







5
 Table of Contents







ENXNET, INC


CONSOLIDATED
STATEMENTS OF CASH FLOWS





Nine
      months Ended
              December
      31,2009
            
            
            2008CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Loss
            
            $
            (291,266
            )
            
            $
            (576,243
            )Depreciation
      and amortization
            
            
            4,568
            
            
            
            34,884Common
      stock issued for expenses
            
            
            107,109
            
            
            
            101,944Stock
      options issued
            
            
            118,826
            
            
            
            124,538Adjustments
      to reconcile net loss to net cash used by operations:Decrease
      (increase) in accounts receivable
            
            
            7,729
            
            
            
            (11,970
            )Decrease
      (increase) in prepaid expenses and deposits
            
            
            (51,167
            )
            
            
            22,020Increase
      (decrease) in accounts payable & accrued expenses
            
            
            18,302
            
            
            
            147,002Net
      cash provided (used) by operating activities
            
            
            (85,899
            )
            
            
            (157,825
            )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of equipment
            
            
            -
            
            
            
            -Net
      cash provided (used) in investing activities
            
            
            -
            
            
            
            -CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from issuance of notes payable
            
            
            5,000
            
            
            
            -Proceeds
      from stock sales
            
            
            24,500
            
            
            
            138,500Proceeds
      from advances from officer and stockholder
            
            
            60,693
            
            
            
            53,680Repayment
      of advances
            
            
            (3,200
            )
            
            
            (27,172
            )Net
      cash used by financing activities
            
            
            86,993
            
            
            
            168,008NET
      INCREASE (DECREASE) IN CASH
            
            
            1,094
            
            
            
            7,183CASH
      – Beginning of period
            
            
            10,630
            
            
            
            27,314CASH
      – End of period
            
            $
            11,724
            
            
            $
            34,497SUPPLEMENTAL
      CASH FLOW DISCLOSURES:Interest
      expense
            
            $
            -
            
            
            $
            -Income
      taxes
            
            $
            -
            
            
            $
            -NON-CASH
      FINANCING AND INVESTING TRANSACTIONS:Common
      stock issued for expenses
            
            
            107,109
            
            
            
            101,944Common
      stock issued for payment of debt
            
            
            -
            
            
            
            115,068





See
accompanying summary of accounting policies and notes to condensed financial
statement




6
 Table of Contents





ENXNET, INC


SUMMARY
OF ACCOUNTING POLICIES





The
accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
for interim financial information and in accordance with the instructions to
Form 10-Q and Items 303 and 310(b) of Regulation S-B.





Accordingly,
they do not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included.  Operating results for the nine months ended December
31, 2009, are not necessarily indicative of the results that may be expected for
the year ended March 31, 2009. For further information, refer to the financial
statements and footnotes thereto included in the EnXnet, Inc. or the "Company"
audited financial statements for the year ended March 31, 2009 included in the
Company Form 10-K.





THE
BUSINESS





EnXnet,
Inc. (the "Company") was formed under the laws of the State of Oklahoma on March
30, 1999 as Southern Wireless, Inc. It is a business and technology development
enterprise engaged in the development, marketing, and licensing of emerging
technologies and innovative business strategies and practices, focusing
primarily on products, solutions, and services which support and enhance
multimedia management.





Products
and Services





ThinDisc





The
ThinDisc has many applications, a primary and high-volume use is stored value
cards combining magnetic stripe and bar code data with optical media, in Compact
Disc (CD), Digital Video Disc (DVD) format, or any other optical disc readable
products. Including the optical disc readability allows issuers to promote their
products with both audio and video messages while providing their customers with
added value and convenience when using a stored value card. Stored value cards
include, but are not limited to, debit, event tickets, gift, health services,
incentive, loyalty, merchandise, payroll, prepaid phone, promotion, room key, or
other monetary transaction cards. Stored value cards are one of the most dynamic
and fastest growing products in the financial industry. Anyone who makes
purchases with a merchant gift card, places phone calls with a prepaid telephone
card, or buys goods or services with a prepaid debit card is using a stored
value card. The Company has filed for a United States and an international
patent covering the technology included in the Thin Disc.





DVDplus





The
Company entered into a license on June 2, 2003 with DVDplus International, Inc.
to manufacture and market DVDplus in the United States, Canada, and Mexico.
DVDplus is a dual sided, hybrid optical disc media that uniquely combines two
distinct content storage formats for distribution on a single disc, a DVD
(digital versatile disc) on one side and a CD (compact disc) on the other.
DVDplus allows content publishers to integrate their visual and audio assets
into a single distribution. Utilizing the latest in manufacturing technology,
the CD and DVD layers are bonded together to provide a multi-format hybrid disc,
which is compatible to all CD, CD-ROM, DVD ROM formats, and is readable and
capable of playback in conventional CD and DVD players and personal computers
alike. DVDplus allows content publishers to integrate their visual and audio
assets into a single distribution, such as releasing a DVD movie and its
soundtrack together.










7
 Table of Contents








ENXNET,
INC


SUMMARY
OF ACCOUNTING POLICIES





Disc
Security Tag





Disc
Security Tag, (DSTag), is an invention which utilizes proprietary Electronic
Article Surveillance (EAS) tags embedded or adhered to a DVD or CD during the
injection mold phase of the manufacturing process.  Products, to which this
process is applied, provide unique item identification for its customers and
clients.  With this product, manufacturers are given the opportunity to
enhance the integrity of their product while providing added value to their
customers (retailers) that are desperate to reduce or stop the enormous losses
attributed to employee and retail theft.  Additionally, it can give content
developers, manufacturers, and distributors the ability to protect their
investment by providing an efficient means to authenticate legitimate products
over counterfeit products produced by unauthorized manufacturers. The Company
has filed for a United States and an international patent covering the
technology included in the DSTag.





EnXcase





EnXcase
combines two distinct features for the DVDplus (OneDisc) two-sided (DVD-CD)
optical disc media market. The outer styling of the case has the unique feature
of a semi-rounded top. The second feature is a theft deterrent ring found within
the inner structure of the EnXcase. The Company developed this unique case
primarily for use with the DVDplus (OneDisc) two-sided disc format. On October
10, 2003, the Company filed for a United States patent on EnXcase and was
awarded the patent on June 19, 2006.





ClearVideo
License





In March
2000, the Company acquired exclusive licensing rights, from Iterated Systems,
Inc., to compile, use, copy and modify ClearVideo Source Code and to create and
manufacture products and services.  As part of this acquisition Ryan Corley
acquired the rights for using the ClearVideo Source Code for video/audio
streaming over the internet of TV type programming and content.
 Additionally, the license agreement provides that the Company may
sublicense any products and services that it creates using the technology under
the licensing agreement.  The license was acquired for a $250,000 note
payable and the issuance of 297,500 shares of common stock, valued at
$2,975.





On
January 2, 2002, the company entered into an agreement with Ryan Corley, the
President and majority stockholder of the Company, whereby the Company acquired
his license agreement for video/audio streaming over the internet of TV type
programming and content using the ClearVideo Source Code.  The Company
issued 1,000,000 shares of restricted common stock valued at $100,000 for the
license.  The licenses are being amortized over 10 years which is the
estimated useful life of the patent covering the technology.





ClearVideo
Technology





ClearVideo
utilizes fractal digitization creating the smallest file possible while
virtually duplicating the quality of the original. ClearVideo can reduce video
file sizes by approximately 95-99% and virtually duplicates the quality of the
original files.  ClearVideo enhances how video with synchronized audio
files are transmitted over both narrow and broadband lines.  ClearVideo
works equally well with NTSC, PAL, or SECAM (the three different TV formats used
around the world) television as well as the Internet.  It can be
effectively used worldwide for the compression and transmission of video files
for the broadcast industry.







8
 Table of Contents





ENXNET, INC


NOTES
TO FINANCIAL STATEMENTS





Medical
D-Tect-OR





We are
partners with BAHF, LLC in a joint effort called Medical D-Tect-OR. Medical
D-Tect-OR has developed a Retained Foreign Object Detection System that uses a
hand held wand that is capable of detecting surgical instruments and surgical
products such as gauze, laparoscopy sponges, and OR towels manufactured with
d-Tect-OR’s TM detection technology that may have been left in the body during a
surgical procedure.  Medical D-Tect-OR has filed for patent
protection.





NOTE
1 - SUMMARY OF ACCOUNTING POLICIES





Cash
Equivalents


For
financial reporting purposes, the Company considers all highly liquid
investments with an original maturity of three months or less when purchased to
be a cash equivalent.  Financial instruments, which potentially subject the
Company to a concentration of credit risk, consist of cash and cash equivalents.
 Cash and cash equivalents consist of funds deposited with various high
credit quality financial institutions.





Equipment


Equipment
is recorded at cost. Depreciation and amortization are provided using the
straight-line method over the useful lives of the respective assets, typically
3-10 years. Major additions and betterments are capitalized. Upon retirement or
disposal, the cost and related accumulated depreciation or amortization is
removed from the accounts and any gain or loss is reflected in
operations.





Depreciation
expenses for the nine months ended December 31, 2009 and 2008 was $4,568 and
$4,695, respectively.





Advertising


Advertising
costs are expensed as incurred.





Licenses


The costs
associated with acquiring exclusive licensing rights to patented technology have
been capitalized and are being charged to expense using the straight line method
of amortization over ten years, the estimated remaining useful lives of the
patents.





In
accordance with the provisions of Statement of Financial Accounting Standards
("SFAS") No. 142, "Goodwill and Other Intangible Assets", management of the
Company reviews the carrying value of its intangible assets on a regular basis.
 Estimated undiscounted future cash flows from the intangible assets are
compared with the current carrying value. Reductions to the carrying value are
recorded to the extent the net book value of the property exceeds the estimate
of future discounted cash flows.





RevenueRecognition


Revenue
is generally recognized and earned when all of the following criteria are
satisfied: a) persuasive evidence of sales arrangements exists; b) delivery has
occurred; c) the sales price is fixed or determinable, and d) collectability is
reasonably assured.





Persuasive
evidence of an arrangement is demonstrated via a purchase order from our
customers. Delivery occurs when title and all risks of ownership are transferred
to the purchaser which generally occurs when the products are shipped to the
customer. No right of return exists on sales of products except for defective or
damaged products. The sales price to the customer is fixed upon acceptance of
purchase order. To assure that collectability is reasonably assured we perform
ongoing credit evaluations of all of our customers.







9
 Table of Contents





ENXNET,
INC


NOTES
TO FINANCIAL STATEMENTS





Income
Taxes


Income
taxes are provided based on the liability method of accounting pursuant to SFAS
No. 109, "Accounting for Income Taxes." Under this approach, deferred income
taxes are recorded to reflect the tax consequences on future years of
differences between the tax basis of assets and liabilities and their financial
reporting amounts at each year end.  A valuation allowance is recorded
against deferred tax assets as management does not believe the Company has met
the "more likely than not" standard imposed by SFAS No. 109 to allow recognition
of such an asset.





Accounts
Receivable


Accounts
receivable are uncollateralized customer obligations due under normal trade
terms requiring payment within thirty days from the invoice date or as specified
by the invoice and are stated at the amount billed to the customer. 
Customer account balances with invoices dated over thirty days or thirty days
past the due date are considered delinquent.





The
carrying amount of accounts receivable is reduced by a valuation allowance that
reflects management's best estimate of the amount that will not be collected.
Management individually reviews all accounts receivable balances that are
considered delinquent and based on an assessment of current credit worthiness,
estimates the portion, if any, of the balance that will not be collected. 
In addition, management periodically evaluates the adequacy of the allowance
based on the Company's past experience.





Estimates


The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the dates of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those
estimates.





Fair
Value Measurements


In
September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 157, “Fair
Value Measurements” (SFAS 157). This Statement establishes a framework for
fair value measurements in the financial statements by providing a definition of
fair value, provides guidance on the methods used to estimate fair value and
expands disclosures about fair value measurements. SFAS 157 is effective
for fiscal years beginning after November 15, 2007. In February 2008,
the FASB issued FASB Staff Position (FSP) No. FAS 157-2,
permitting entities to delay application of SFAS 157 to fiscal years
beginning after November 15, 2008, for nonfinancial assets and nonfinancial
liabilities, except for items that are recognized or disclosed at fair value in
the financial statements on a recurring basis (at least annually). On
April 1, 2008, we adopted SFAS 157. We had no assets or liabilities
measured at fair value on a recurring basis. Therefore, the initial adoption of
SFAS 157 had no impact on our Consolidated Financial Statements. Beginning
April 1, 2009, we will apply SFAS 157 fair value requirements to
nonfinancial assets and nonfinancial liabilities that are not recognized or
disclosed on a recurring basis. Application will be prospective when
nonrecurring fair value measurements are required. We will assess the impact on
our Consolidated Financial Statements of applying these requirements to
nonrecurring fair value measurements for nonfinancial assets and nonfinancial
liabilities.





Compensated
Absences


Employees
of the Company do not earn annual leave or sick leave. There is no compensated
absences accrued liability on December 31, 2009 and March 31, 2009.





Research
and Development Costs


Research
and development costs are charged to expense as incurred.








10
 Table of Contents




ENXNET,
INC


NOTES
TO FINANCIAL STATEMENTS





Stock
Based Compensation


The
Company measures compensation cost for its stock based compensation plans under
the provisions of Statement of Financial Accounting Standards No. 123(R),
“Accounting for Stock Based Compensations.” This statement supersedes APB
Opinion No. 25, “Accounting for Stock Issued to Employees,” and its related
implementation guidance.  This statement establishes standards for the
accounting for transactions in which an entity exchanges its equity instruments
for goods or services.  It also addresses transactions in which an entity
incurs liabilities in exchange for goods or services that are based on the fair
value of the entity’s equity instruments or that may be settled by the issuance
of those equity instruments.  This statement focuses primarily on
accounting for transactions in which an entity obtains employee services in
share-based payment transactions.  SFAS No. 123(R), "Accounting for
Stock-Based Compensation", requires companies to include expenses in net income
(loss) and earnings (loss) for each issuance of options and warrants.  The
Company uses the Black-Scholes option valuation model to value its issuance of
options and warrants.





Net
Loss Per Share


SFAS No.
128 requires dual presentation of basic EPS and diluted EPS on the face of all
income statements for all entities with complex capital structures.
  Basic EPS is computed as net income divided by the weighted average
number of common shares outstanding for the period.  Diluted EPS reflects
the potential dilution that could occur from common shares issuable through
stock options, warrants and other convertible securities.





NOTE
2 – GOING CONCERN





The
Company has a working capital deficit and has incurred losses since inception.
 These factors raise substantial doubt about the Company's ability to
continue as a going concern.  The financial statements do not include any
adjustments that may be necessary if the Company is unable to continue as a
going concern.





Management
of the Company has undertaken certain actions to address these conditions.
 Management is currently in negotiations with potential customers and with
marketing representatives to establish a more developed product channel.
 Funds required to carry out management's plans are expected to be derived
from future stock sales and borrowings from outside parties.  There can be
no assurances that the Company will be successful in executing its
plans.





NOTE
3 - LICENSES





In March
2000, the Company acquired exclusive licensing rights, from Iterated Systems,
Inc., to compile, use, copy and modify ClearVideo Source Code and to create and
manufacture products and services.  As part of this acquisition Ryan Corley
acquired the rights for using the ClearVideo Source Code for video/audio
streaming over the internet of TV type programming and content. Additionally,
the license agreement provides that the Company may sublicense any products and
services that it creates using the technology under the licensing agreement.
 The license was acquired for a $250,000 note payable and the issuance of
97,500 shares of common stock, valued at $2,975. In addition during 2004, the
Company issued 74,000 shares valued at $14,800 under an anti-dilution clause in
the license agreement.





On
January 2, 2002, the Company entered into an agreement with Ryan Corley, the
President and majority stockholder of the Company, whereby the Company acquired
his license agreement for video/audio streaming over the internet of TV type
programming and content using the ClearVideo Source Code. The Company issued
1,000,000 shares of restricted common stock valued at $100,000 for the license.





The
licenses have been amortized over the estimated useful life of the patent
covering the technology. Amortization expense for the nine months ended December
31, 2009 and 2008 was $-0- and $30,189 and at December 31, 2009 and March 31,
2009 the license was fully amortized.




11
 Table of Contents





ENXNET,
INC


NOTES
TO FINANCIAL STATEMENTS





NOTE
4 – INCOME TAXES





At
December 31, 2009 and March 31, 2009, the Company had net deferred tax assets of
approximately $2,033,000 and $1,920,000 principally arising from net operating
loss carryforward for income tax purposes.  As management of the Company
cannot determine that it is more likely than not that the Company will realize
the benefit of the net deferred tax asset, a valuation allowance equal to the
net deferred tax asset has been established at December 31, 2009 and March 31,
2009. At December 31, 2009, the Company has net operating loss carry forwards
totaling approximately $5,978,000 which will begin to expire in the year
2015.





NOTE
5 – NOTES PAYABLE





Notes
payable-related party consists of the following:


Notes
      payable-related party consists of the following:
            
            December
      31,
            
            
            March 31,2009
            
            
            20098%
      convertible note payable to Ryan Corley, President of the Company, due
      November 15, 2003,  Convertible into a maximum of 1,100,000
      common shares
            
            $
            110,000
            
            
            $
            110,0006%
      convertible note payable to Ryan Corley, President of the Company, due on
      demand,convertible
      into a maximum of 3,219,018 common shares
            
            
            482,853
            
            
            
            528,6033%
      convertible note payable to Ryan Corley, President of the Company, due on
      demand,convertible
      into a maximum of 271,311 common shares
            
            
            21,705
            
            
            
            -3%
      convertible note payable to an entity controlled by the President of the
      Company,  due on demand, convertible into a maximum of 1,412,500
      common shares
            
            
            101,000
            
            
            
            -Total
      notes payable-related party
            
            $
            715,558
            
            
            $
            638,603Notes
      payable consist of the following:
            
            December
      31,
            March
      31,2009
            
            
            20096%
      convertible notes payable to a stockholder, due on demand, convertible
      into a maximum of 462,120 common shares
            
            $
            -
            
            
            $
            69,3184%
      convertible notes payable to a stockholder, due on demand, convertible
      into a maximum of 350,000 common shares
            
            
            175,000
            
            
            
            175,0002%
      convertible notes payable to a stockholder, due on demand, convertible
      into a maximum of 100,000 common shares
            
            
            5,000
            
            
            
            -Total
      notes payable
            
            $
            180,000
            
            
            $
            270,942





NOTE
6 – ADVANCES FROM OFFICER AND STOCKHOLDER





At
December 31, 2009 and March 31, 2009, advances from one stockholder were $31,000
and $31,000, respectively.





At
December 31, 2009 and March 31, 2009, advances from the CEO were $46,580 and
$35,987, respectively. During the nine months ended December 31, 2009, the CEO
made additional unsecured advances totaling $12,593. During the nine months
ended December 31, 2009 the Company made payments on these advances of
$2,000.





At
December 31, 2009 and March 31, 2009, advances from an entity controlled by the
CEO were $32,400 and $5,500. During the nine months ended December 31, 2009, the
entity made additional unsecured advances totaling $48,100. During the nine
months ended December 31, 2009, the Company charged the entity $1,200 for office
space use and reduced these advances by that amount. On October 15, 2009,
the entity converted $20,000 of the advances into a note payable bearing 3%
interest and convertible into 400,000 shares of common stock.







12
 Table of Contents







ENXNET,
INC


NOTES
TO FINANCIAL STATEMENTS





NOTE
7 - COMMON STOCK TRANSACTIONS





The
Company issued 376,000 and 722,500 shares of restricted common stock in exchange
for cash in the amount of $24,500 and $149,500 during the nine months ended
December 31, 2009 and the year ended March 31, 2009.





The
Company issued 1,844,120 and 450,955 shares of restricted common stock in
exchange for services in the amount of $107,109 and $108,433 during the nine
months ended December 31, 2009 and the year ended March 31, 2009.





The
Company issued 851,128 shares of restricted common stock in exchange for debt
and accrued interest in the amount of $127,669 during the nine months ended
December 31, 2008.





NOTE
8 – STOCK OPTIONS





On July
24, 2001, the Company filed with the SEC Form S-8, for its 2002 Stock Option
Plan, (the Plan). An aggregate amount of common stock that may be awarded and
purchased under the Plan is 3,000,000 shares of the Company's common stock.
Under the Plan during the nine months ended December 31, 2009 and 2008, the
Company did not grant any options under the plan.





The
Company also issues stock options to consultants to purchase Rule 144 restricted
common stock which is not issued under the Plan. During the nine months ended
December 31, 2009 and 2008, the Company granted 250,000 and -0- to a
consultant.





The
Company estimated the fair value of each stock option for employees and
consultants at the grant date by using the Black-Scholes option-pricing model
with the following weighted average assumptions used for grants as
follows:





Dividends
      yield
            
            
            0
            %Expected
      volatility
            
            4.58%
      to .77%Risk-free
      interest rate
            
            
            2.0
      to .50
            %Expected
      life
            
            .23
      to 4.32 years





For
purposes of pro forma disclosures, the estimated fair value of the options is
amortized to expense over the options' vesting period.





Option
valuation models incorporate highly subjective assumptions. Because changes in
the subjective assumptions can materially affect the fair value estimate, the
existing models do not necessarily provide a reliable single measure of the fair
value of the Company's employee stock options. Because the determination of fair
value of all employee stock options granted after such time as the Company
becomes a public entity will include an expected volatility factor and because,
for pro forma disclosure purposes, the estimated fair value of the Company's
employee stock options is treated as if amortized to expense over the options'
vesting period, the effects of applying SFAS No. 123(R) for pro forma
disclosures are not necessarily indicative of future amounts.








13
 Table of Contents








ENXNET,
INC


NOTES
TO FINANCIAL STATEMENTS





The
options were valued using the fair value method as prescribed by SFAS No. 123
(R), resulting in a total value associated with these options for the nine
months ended December 31, 2009 and the year ended March 31, 2009 of $94,900 and
$45,200. Pursuant to SFAS No. 123(R), this amount will be accrued to
compensation expense over the expected service term as vested. The accrued
compensation expense related to these options and all other outstanding for the
nine months ended December 31, 2009 and 2008 is $118,826 and $124,538 and has
been expensed pursuant to the application of SFAS No. 123(R), and credited to
additional paid-in capital.





As of
December 31, 2009 there were 619,200 remaining options available to be issued in
the Stock Option Plan.





A summary
of the status of the Company's stock options as of December 31, 2009 and March
31, 2009 is presented below:





December
      31,
            
            
            March
      31,2009
            
            
            2009Options
      outstanding at beginning of year
            
            
            2,880,800
            
            
            
            2,310,800Options
      granted
            
            
            1,250,000
            
            
            
            620,000Options
      exercised
            
            
            -
            
            
            
            -Options
      canceled
            
            
            (250,000
            )
            
            
            (50,000
            )Options
      outstanding at end of year
            
            
            3,880,800
            
            
            
            2,880,800





The
following table summarizes the information about the stock options as of
December 31, 2009:





Range
      of Exercise Price
            
            
            Number
      Outstanding at March 31
            
            
            Weighted
      Average Remaining Contractual Life Years
            
            
            Weighted
      Average Exercise Price (Total shares)
            
            
            Number
      Exercisable at March 31
            
            
            Weighted
      Average Exercise Price (Exercisable shares)$
            .10
      - .50
            
            
            
            555,800
            
            
            
            .90
            
            
            $
            .39
            
            
            
            555,800
            
            
            $
            .39.50
            
            
            
            795,000
            
            
            
            .89
            
            
            
            .50
            
            
            
            795,000
            
            
            
            .50.40
      - .50
            
            
            
            45,000
            
            
            
            .89
            
            
            
            .43
            
            
            
            45,000
            
            
            
            .43.40
      - .66
            
            
            
            330,000
            
            
            
            1.50
            
            
            
            .56
            
            
            
            330,000
            
            
            
            .56.43
            
            
            
            200,000
            
            
            
            1.50
            
            
            
            .43
            
            
            
            200,000
            
            
            
            .43.38
            
            
            
            135,000
            
            
            
            1.51
            
            
            
            .38
            
            
            
            135,000
            
            
            
            .38.15
      - 51
            
            
            
            1,820,000
            
            
            
            .43
            
            
            
            .18
            
            
            
            820,000
            
            
            
            .18$
            .10
      – .66
            
            
            
            3,880,800
            
            
            
            .98
            
            
            $
            .33
            
            
            
            3,880,800
            
            
            $
            .33











14
 Table of Contents








ENXNET,
INC


NOTES
TO FINANCIAL STATEMENTS








The
following table summarizes the information about the stock options as of March
31, 2009:





Range
      of Exercise Price
            
            
            Number
      Outstanding at March 31
            
            
            Weighted
      Average Remaining Contractual Life Years
            
            
            Weighted
      Average Exercise Price (Total shares)
            
            
            Number
      Exercisable at March 31
            
            
            Weighted
      Average Exercise Price (Exercisable shares)$
            .10
      - .50
            
            
            
            555,800
            
            
            
            1.64
            
            
            $
            .39
            
            
            
            555,800
            
            
            $
            .39.50
            
            
            
            795,000
            
            
            
            1.64
            
            
            
            .50
            
            
            
            795,000
            
            
            
            .50.40
      - .50
            
            
            
            45,000
            
            
            
            1.64
            
            
            
            .43
            
            
            
            45,000
            
            
            
            .43.40
      - .66
            
            
            
            330,000
            
            
            
            2.17
            
            
            
            .43
            
            
            
            330,000
            
            
            
            .43.43
            
            
            
            200,000
            
            
            
            2.25
            
            
            
            .43
            
            
            
            200,000
            
            
            
            .43.38
            
            
            
            135,000
            
            
            
            2.26
            
            
            
            .38
            
            
            
            135,000
            
            
            
            .38.15
      - 51
            
            
            
            620,000
            
            
            
            0.73
            
            
            
            .27
            
            
            
            500,000
            
            
            
            .25$
            .10
      – .66
            
            
            
            2,880,800
            
            
            
            1.62
            
            
            $
            .42
            
            
            
            2,760,800
            
            
            $
            .43





NOTE
9 – COMMITMENTS AND CONTINGENCIES





The
Company is not involved in litigation at this time.  We may from time to
time be a party to various legal actions in the ordinary course of
business.  There can be no assurance that the Company will not be a party
to litigation in the future that could have an adverse effect on the
Company.





15
 Table of Contents










ITEM2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION





STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS.





This
Quarterly Report includes "forward-looking statements" within the meaning of
Section 27A of the Exchange Act which represent the expectations or beliefs
concerning future events that involve risks and uncertainties, including but not
limited to the demand for Company products and services and the costs associated
with such goods and services. All other statements other than statements of
historical fact included in this Quarterly Report including, without limitation,
the statements under "Management’s Discussion and Analysis or Plan of
Operations" and elsewhere in the Quarterly Report, are forward-looking
statements.  While the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct.





The
following discussion of the results of operations and financial conditions
should be read in conjunction with the financial statements and related notes
appearing in this report.





EnXnet,
Inc. was formed under the laws of the State of Oklahoma on March 30, 1999 as
Southern Wireless, Inc. It is a business and technology development enterprise
engaged in the development, marketing, and licensing of emerging technologies
and innovative business strategies and practices, focusing primarily on
products, solutions, and services which support and enhance multimedia
management.





The
Company currently can satisfy its current cash requirements for approximately 30
days and has a plan to raise additional working capital by the sale of shares of
the Company common stock to select perspective individuals and from additional
borrowings. Additionally, holders of outstanding stock options have been
exercising those options which have provided additional working capital for the
Company. This plan should provide the additional necessary funds required to
enable the Company to continue marketing and developing its products until the
Company can generate enough cash flow from sales to sustain its
operations.





The
Company does not anticipate any significant cash requirements for the purchase
of any facilities.





The
Company currently has three full-time employees on the payroll. It is
anticipated that the Company will not need to hire additional employees in order
to expand the marketing and developing of its products. The Company currently
has arrangements with marketing affiliate Duplium for our DVDplus product and
with One28 Marketing Group and Interactive Affinities for our ThinDisc product.
Currently our employees and other outside consultants are used for the further
development of our products.





Results
of Operations – Three months ended December 31, 2009 and 2008.





Revenues
have not been substantial as we refocused our efforts on developing the ThinDisc
technologies and developing marketing affiliates. For the three months ended
December 31, 2009 and 2008, the Company had revenues of $-0- and
$3,990.





The
Company incurred operating expenses of $60,338 and $174,242 for the three months
ended December 31, 2009 and 2008, a decrease of $113,904 or 65.37%. The decrease
in operating expenses of $113,904 for the three months ended December 31, 2009
when compared to the three month period ended December 31, 2008 is attributed
to:





Decreases
in:


·
            Depreciation
      and amortization expenses of $10,105,·
            Payroll
      expenses of $47,018,


·
            Professional
      fees of $43,853,·
            Occupancy
      expense of $11,358, and


·
            All
      other expenses of $1,570.








16
 Table of Contents





The
decrease in depreciation and amortization expense of ($10,105) or (98.08%) for
the three months ended December 31, 2009 compared to the three months ended
December 31, 2008 is attributed to the reduction in amortization expense on our
license which was fully amortized in the year ended March 31, 2009.





The
decrease in payroll expenses of ($47,018) or (73.47%) for the three months ended
December 31, 2009 compared to the three month period ended December 31, 2008 is
attributed to the following:





·
            Reduction
      in three employee resulted in a decrease of ($28,192)·
            Decrease
      in valuation of compensation cost of options issued to employees of
      ($18,826)





The
decrease in professional services of ($43,853) or (84.72%) for the three months
ended December 31, 2009 compared to the three month period ended December 31,
2008 is attributed to:





·
            A
      decrease in legal fees associated with our patent fillings of
      ($38,527)·
            A
      decrease in accounting fees of
($5,326)





The
decrease in occupancy expenses of ($11,358) or (75.73%) for the three months
ended December 31, 2009 compared to the three month period ended December 31,
2008 is attributed to a move to a smaller office and lower lease
rates.





During
the three months ended December 31, 2009 and 2008 we incurred net losses of
$72,532 and $185,202 or $(0.002) and $(0.006) per share.





Results
of Operations – Nine months ended December 31, 2009 and 2008.





Revenues
have not been substantial as we refocused our efforts on developing the ThinDisc
technologies and developing marketing affiliates. For the nine months ended
December 31, 2009 and 2008, the Company had revenues of $12,540 and
$14,708.





The
Company incurred operating expenses of $269,239 and $549,930 for the nine months
ended December 31, 2009 and 2008, a decrease of $280,691 or 51.04%. The decrease
in operating expenses of $280,691 for the nine months ended December 31, 2009
when compared to the nine month period ended December 31, 2008 is attributed
to:





Increases
in:


·
            Consulting
      fees of $30,530,·
            Advertising
      of $2,350, and


Decreases
in:


·
            Depreciation
      and amortization expenses of $30,316,·
            Payroll
      expenses of $139,168,





·
            Professional
      fees of $125,925·
            Occupancy
      expense of $14,636,





·
            Office
      expense of $1,874,·
            Travel
      and entertainment expense of $3,186
and





·
            Increase
      in other expenses of $1,535.





The
increase in consulting fees of $30,530 or 28.71% is attributed to the valuation
of restricted common stock and warrants issued for consulting services for the
nine months ended December 31, 2009 and 2008. Cash paid for consulting fees for
the nine months ended December 31, 2009 and 2008 were $1,810 and $3,830
respectively.





The
increase in advertising of $2,350 is attributed to the purchase of demonstration
ThinDisc gift cards for use by our marketing affiliates as we get prepared to
bring the ThinDisc gift cards to market. We had no advertising cost in the nine
months ended December 31, 2008.




17
 Table of Contents





The
decrease in depreciation and amortization expense of ($30,316) or (98.08%) for
the nine months ended December 31, 2009 compared to the nine months ended
December 31, 2008 is attributed to the reduction in amortization expense on our
license which was fully amortized in the year ended March 31, 2009.





The
decrease in payroll expenses of ($139,168) or (63.54%) for the nine months ended
December 31, 2009 compared to the nine month period ended December 31, 2008 is
attributed to the following:





·
            Decrease
      in our CEO’s salary and related payroll taxes of
  ($37,468)·
            Reduction
      in three employees resulted in a decrease of ($31,555)·
            Decrease
      in valuation of compensation cost of options issued to employees of
      ($58,112)·
            Decrease
      in valuation of restricted common stock issued to employees as
      compensation of ($4,500)





·
            Decrease
      in employee benefits of ($7,533)





The
decrease in professional fees of ($125,925) or (81.82%) for the nine months
ended December 31, 2009 compared to the nine month period ended December 31,
2008 is attributed to:





·
            A
      decrease in legal fees associated with our patent fillings of
      ($121,962)·
            A
      decrease in accounting fees of
($3,963)





The
decrease in occupancy expenses of ($14,636) or (54.28%) for the nine months
ended December 31, 2009 compared to the nine month period ended December 31,
2008 is attributed to a move to a smaller office and lower lease
rates.





Other
classifications of expenses did not fluctuate substantially for the nine month
period ended December 31, 2009 to December 31, 2008.





During
the nine months ended December 31, 2009 and 2008 we incurred net losses of
$291,266 and $576,243 or $(0.009) and $(0.018) per share.





Liquidity
and Capital Resources.





From
inception through December 31, 2009, the Company has issued 34,914,929 shares of
its Common Stock to officers, directors and outside shareholders.  The
Company has little operating history and no material assets other than the
license agreement for ClearVideo and DVDplus, EnXcase and the Passive Resonant
Reflector and the pending patents for ThinDisc, Disc Security Tag and a Design
Patent covering an Antenna for a Storage Disc.  The Company has
$11,724 in cash as of December 31, 2009.





The
Company has incurred operating losses each year since its inception and has had
a working capital deficit at December 31, 2009. At December 31, 2009 and March
31, 2009 the working capital deficit was $1,518,591 and $1,432,328,
respectively. Current liabilities include notes payable, accrued interest on
those notes and advances from the CEO and shareholders in the aggregate amount
of $1,262,861 and $1,164,183, respectively. The adjusted working capital deficit
without these related party liabilities for December 31, 2009 and March 31, 2009
is $255,730 and $268,145, respectively. The working capital deficit and cash
balance raise substantial doubt about the Company's ability to continue as a
going concern.  As a result of these factors, the Company's independent
certified public accountants have included an explanatory paragraph in their
reports on the Company's March 31, 2009 financial statements which expressed
substantial doubt about the Company's ability to continue as a going
concern.





18
 Table of Contents





Contractual
Obligations.





At the
present time, the Company has no material commitments for capital
expenditures.  If capital expenditures are required after operations
commence, the Company will pay for the same through the sale of common stock; or
through loans from third parties.  There is no assurance, however,
that such financing will be available and in the event such financing is not
available, the Company may have to cease operations.





CRITICAL
ACCOUNTING POLICIES AND ESTIMATES.





Management's
discussion and analysis of financial condition and results of operations are
based upon our consolidated financial statements. These statements have been
prepared in accordance with generally accepted accounting principles in the
United States of America.








Use
of estimates in preparation of financial statements





The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates, judgments
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. On an on-going basis, we evaluate our estimates, based on
historical experience, and various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. The following critical
accounting policies rely upon assumptions, judgments and estimates and were used
in the preparation of our consolidated financial statements:





Licenses





The costs
associated with acquiring exclusive licensing rights to patented technology have
been capitalized and are being charged to expense using the straight line method
of amortization over ten years, the estimated remaining useful lives of the
patents.





In
accordance with the provisions of Statement of Financial Accounting Standards
("SFAS") No. 142, "Goodwill and Other Intangible Assets", management of the
Company reviews the carrying value of its intangible assets on a regular basis.
 Estimated undiscounted future cash flows from the intangible assets are
compared with the current carrying value. Reductions to the carrying value are
recorded to the extent the net book value of the property exceeds the estimate
of future discounted cash flows.





Revenue
Recognition





Revenue
is generally recognized and earned when all of the following criteria are
satisfied: a) persuasive evidence of sales arrangements exists; b) delivery has
occurred; c) the sales price is fixed or determinable, and d) collectibility is
reasonably assured.





Persuasive
evidence of an arrangement is demonstrated via a purchase order from our
customers. Delivery occurs when title and all risks of ownership are transferred
to the purchaser which generally occurs when the products are shipped to the
customer. No right of return exists on sales of products except for defective or
damaged products. The sales price to the customer is fixed upon acceptance of
purchase order. To assure that collectibility is reasonably assured we perform
ongoing credit evaluations of all of our customers.





Fair
Value of Financial Instruments





The
carrying amounts reported in the balance sheets as of March 31, 2009 and 2008
for cash equivalents and accounts payable and accrued expenses approximate fair
value because of the immediate or short-term maturity of these financial
instruments.





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Contingent
Liability





In
accordance with Statement of Financial Accounting Standards Interpretation No.
14, we may have certain contingent liabilities with respect to material existing
or potential claims, lawsuits and other proceedings.  We accrue
liabilities when it is probable that future cost will be incurred and such cost
can be measured.





Off
Balance Sheet Arrangements





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





CURRENT
TRADING MARKET FOR THE COMPANY'S SECURITIES.





Currently
the Company's stock is traded under the symbol "EXNT" on the NASD OTC Bulletin
Board, and the symbol “AOHMDW” on the Frankfurt, Berlin and Stuttgart Stock
Exchanges in Germany. There can be no assurance that an active or regular
trading market for the common stock will develop or that, if developed, will be
sustained. Various factors, such as operating results, changes in laws, rules or
regulations, general market fluctuations, changes in financial estimates by
securities analysts and other factors may have a significant impact on the
market of the Company securities. The market price for the securities of public
companies often experience wide fluctuations that are not necessarily related to
the operating performance of such public companies such as high interest rates
or impact of overseas markets.





ITEM3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.





Not
Applicable





ITEM4. CONTROL AND PROCEDURES.





Evaluation
of Disclosure Controls and Procedures. Our Chief Executive Officer and Chief
Financial Officer have concluded, based on their evaluation as of the end of the
period covered by this report, that our disclosure controls and procedures (as
defined in Rules 13(a)-15(e) under the Securities Act of 1934, as amended) are
effective to ensure that all information required to be disclosed by us in the
reports filed or submitted by us under the Securities and Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms, and include controls and procedures designed to
ensure that information required to be disclosed by us in such reports is
accumulated and communicated to the  management, including the Chief
Executive Officer and the Chief Financial Officer, as appropriate and allow
timely decisions regarding required disclosure.





Changes
in Internal Controls.In connection with the
above-referenced evaluation, no change in our internal control over financial
reporting occurred during the period covered by this report that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.





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PART
II. OTHER INFORMATION





ITEM1. LEGAL PROCEEDINGS





The
Company is not involved in litigation at this time.  We may from time to
time be a party to various legal actions in the ordinary course of
business.  There can be no assurance that the Company will not be a party
to litigation in the future that could have an adverse effect on the
Company.





ITEM1A.  RISK FACTORS





There
have been no material changes with regard to the risk factors previously
disclosed in our most recent Annual Report on Form 10-K.





ITEM2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS





None





ITEM3.  DEFAULTS UPON SENIOR SECURITIES





None





ITEM4.  SUBMISSION OF MATTERS TO A VOTE TO SECURITY
HOLDERS





None





ITEM5. OTHER INFORMATION





None





ITEM6. EXHIBITS AND REPORTS ON FORM 8-K





The
following are included herein:








31.1
            
            Rule 15d-14(a) Certification of CEO31.2
            
            Rule 15d-14(a) Certification of CFO32.1
            
            Rule
      1350 Certification of CEO












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SIGNATURES





In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.








EnXnetDated:
      February  12, 2010
            By:
            /s/ Ryan
      CorleyRyan
      Corley, President. Chief Executive Officer(Principal
      Executive Officer)









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EXHIBITINDEX





Exhibit
              
              Description31.1
              
              Rule 15d-14(a) Certification of CEO31.2
              
              Rule 15d-14(a) Certification of CFO32.1
              
              Rule
      1350 Certification of CEO





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