_______________________________________________________________________________  UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ___________________________  FORM 10-Q  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended June 30, 2010  Commission File Number: 1-15863 __________________________  IA GLOBAL, INC. (Exact name of registrant as specified in its charter) ___________________________


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|DELAWARE                                                       | 13-4037641                       
|(State or other jurisdiction of
incorporation or organization) | (IRS Employer Identification No.)

101 CALIFORNIA STREET, SUITE 2450, SAN FRANCISCO, CA 94111 (Address of principal executive offices) (Zip Code)  (Registrants telephone number, including area code) (415)-946-8828 ___________________________  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. Yes x    No o  Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o    No o  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):


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

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No x  As of August 16, 2010 there were issued and outstanding 360,007,174 shares of the registrant’s common stock. ________________________________________________________________________________  IA GLOBAL, INC.
FORM 10-Q
TABLE OF CONTENTS

PagePART I  FINANCIAL INFORMATIONItem 1.Financial Statements3Consolidated Balance Sheets3Consolidated Statements of Operations4Consolidated Statement of Cash Flows5Notes to Consolidated Financial Statements6Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations26Item 3.Quantitative and Qualitative Disclosures About Market Risk35Item 4.Controls and Procedures36PART II  OTHER INFORMATIONItem 1.Legal Proceedings36Item 1A.Risk Factors36Item 2.Unregistered Sales of Equity Securities and Use of Proceeds36Item 6.Exhibits40Signatures41Exhibit 31.1Exhibit 31.2Exhibit 32

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

IA GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

June 30, 2010March 31, 2010ASSETS(unaudited)(audited)CURRENT ASSETS:Cash and cash equivalents$291,526$2,228,808Accounts receivable, net of allowance for doubtful accounts of $0 and $0, respectively128,667Inventories1,780,679Prepaid expenses311,620170,852Other current assets97,12629,936Net assets- discontinued operations43,759118,582Total current assets2,653,3772,548,178EQUIPMENT, NET105,433226OTHER ASSETSIntangible assets, net1,315,031Other assets508,398Total assets$4,582,239$2,548,404LIABILITIES AND STOCKHOLDERS' DEFICIENCYCURRENT LIABILITIES:Accounts payable - trade$947,881$848,426Accrued liabilities1,107,179911,630Note payable and current portion of long term debt901,6496,000Net liabilities- discontinued operations817,4331,116,602Total current liabilities3,774,1422,882,658LONG TERM  LIABILITIES:Long term debt2,649,776199,500STOCKHOLDERS' DEFICIENCY:Preferred stock, $.01 par value, 5,000 authorized, none outstandingLLC Series Preferred stock, $.01 par value, 317 shares authorized and 317 and 0, issued and outstanding, respectively (liquidation value $317,000)317,000317,000Common stock, $.01 par value, 450,000,000 shares authorized, 344,294,950 and 315,677,003 issued, and 342,667,050 and 314,049,103 outstanding, respectively3,442,9503,156,771Additional paid in capital54,996,65556,466,939Accumulated deficit(60,391,904)(60,146,365)Accumulated other comprehensive loss(57,163)(45,192)(1,692,462)(250,847)Noncontrolling interest133,690Less common stock in treasury, at cost(282,907)(282,907)Total stockholders' deficiency(1,841,679)(533,754)Total liabilities and stockholders' deficiency$4,582,239$2,548,404
See notes to consolidated financial statements.


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IA GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended June 30,20102009(unaudited)(unaudited)REVENUE$670,933$COST OF SALES313,708GROSS PROFIT357,225SELLING, GENERAL AND ADMINISTRATIVE EXPENSES493,2541,009,191OPERATING LOSS(136,029)(1,009,191)OTHER INCOME (EXPENSE):Interest expense and amortization of finance costs(37,695)(21,510)Other income(191)(380)Profit on equity investment in Slate Consulting Co Ltd11,706Total other expense(37,886)(10,184)NET LOSS FROM CONTINUING OPERATIONS(173,915)(1,019,375)(Loss) from discontinued operations(26,934)(2,443,207)NET LOSS(200,849)(3,462,582)Deemed preferred stock dividend(192,000)Noncontrolling interest(44,690)NET LOSS ATTRIBUTABLE TO IA GLOBAL, INC. COMMON SHAREHOLDERS$(245,539)$(3,654,582)Basic and diluted loss per share of common-Basic and diluted loss per share from continuing operations$$Basic and diluted loss per share from discontinued operations(0.02)Total basic loss per share$$(0.02)Weighted average shares of common stock outstanding- basic and diluted302,937,087218,834,533
See notes to consolidated financial statements.


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IA GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended June 30,20102009(unaudited)(unaudited)CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss)$(200,849)$(3,462,582)Loss from discontinued operations26,9342,443,207Depreciation and amortization38,751Amortization of prepaid financing23,5592,053Stock based compensation20,000352,679Gain on equity investments(11,706)Accounts receivable(33,555)Inventories(72,306)Prepaid expenses(65,792)(21,557)Other current assets(4,574)(17,147)Other assets25,523Accounts payable - trade(146,861)239,572Accrued liabilities and payroll taxes(142,018)47,655Net cash (used in) operating activities - continuing operations(531,188)(427,826)Net cash (used in) operating activities - discontinued operations(251,280)(1,997,284)NET CASH (USED IN)  OPERATING ACTIVITIES(782,468)(2,425,110)CASH FLOWS FROM INVESTING ACTIVITIES:Capital expenditures(3,511)Net cash from acquisitions296,004NET CASH PROVIDED BY INVESTING ACTIVITIES:292,493CASH FROM FINANCING ACTIVITIES:Proceeds from debt333,0992,280,146Repayments of debt(2,124,152)Proceeds from sale of common stock440,68040,050Proceeds from sale of preferred shares317,000Return of stock subscription(2,228,808)NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES(1,455,029)513,044NET (DECREASE) IN CASH AND CASH EQUIVALENTS(1,945,004)(1,912,066)EFFECT OF EXCHANGE RATE CHANGES ON CASH7,722412CASH AND CASH EQUIVALENTS, beginning of period2,228,8083,614,731CASH AND CASH EQUIVALENTS, end of period$291,526$1,703,077Supplemental disclosures of cash flow information:Interest paid$2,096$3,491Taxes paid$2,895$Non-cash investing and financing activities:Deemed dividend on issuance of LLC Series Preferred Stock$$192,000Shares issued for finance fee$75,000$
See notes to consolidated financial statements.


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IA GLOBAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. BUSINESS

THE COMPANY AND OUR BUSINESS

IA Global, Inc. (IA Global or the Company) is a global services and outsourcing company focused on growing existing businesses and expansion through global mergers and acquisitions.  The Company is utilizing its current partnerships to acquire growth businesses in target sectors and markets at discounted prices.  The Company is actively engaging in discussions with businesses that would benefit from our business acumen and marketing expertise, knowledge of Asian Markets, and technology infrastructure.

Financial Results

During the fiscal year ended March 31, 2010, the Company had no revenues from continuing operations.  During the three months ended June 30, 2010, the Company reported revenues of $670,933.

Certain recent developments relating to the Companys efforts to generate additional liquidity, including through sales of its common stock, are described in more detail in the notes to the financial statements included in this Form 10-Q.

Acquisition of Car Planner Co. Ltd. (Car Planner)

On May 20, 2010, the Company closed the 100% acquisition of JSK Fund Co. Ltd., which owns 100% of Car Planner, both of which are Japanese companies, from JSK Fund, Inc. Group, a party affiliated with an existing shareholder, RXR Cross Border Investment Un.

Car Planner receives service and commission revenue by selling automotive parts over the Internet to approximately 728 car dealers, gas stations, and car maintenance shops in Japan. Car Planner is expected to expand its Business-to-Business model to include Business-to-Consumer transactions during fiscal year 2011. Car Planners website is www.carplanner.jp.

Car Planner was acquired for 30,000,000 JPY or approximately $325,000 at the current exchange rate. The acquisition was financed through the issuance of 25,000,000 shares of our common stock valued at $.013 per share.

Acquisition of Johnny Co. Ltd.  (Johnny)

On June 4, 2010, the Company closed the 60% acquisition of Johnny from Hynox Corporation, both of which are Japanese companies.

Johnny engages in the distribution and sales of new video gaming hardware such as the Sony PlayStation 3, Playstation Portable, Nintendo DS, Wii and XBox 360 along with associated gaming software. Johnny is also engaged in buying used hardware and software and selling refurbished hardware and secondhand software.

Johnny operates seven direct management stores and three franchise stores in the Iwate, Akita and Aomori prefectures in Northern Japan. Mr. Jun Sugiura, founder and Chief Executive Officer, will retain 40% ownership of the company. Johnnys website is http:// www.fc-johnny.jp and the mobile website is http://www.fc-johnny.jp/mobile.

The 60% share of Johnny was acquired for 14,000,000 shares of our common stock valued at $.013, or approximately $178,000.

Proposed Acquisition of Zest Corporation Co. Ltd. and Zest Home Co. Ltd. (Zest)

On July 12, 2010, the Company signed a letter of intent to acquire 100% of Zest Corporation Co. Ltd. and Zest Home Co. Ltd., both Japanese companies, from Kansai Trust Co. Ltd.


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Zest is engaged in the custom home design and construction business for middle-class families looking for high quality at reasonable prices.  Zest operates out of three locations in Central Japan (Himeji, Tatsuno, and Kakogawa) under an exclusive license from Universal Home Co. Ltd.

Established in 1997, Zest is expected to be acquired for the equivalent of 80,000,000 JPY or approximately $890,000 at the current exchange rate. The acquisition is expected to be financed through the issuance of 33,333,333 shares of IAGI common stock (or the equivalent of 60,000,000 JPY at $0.02 per share), with the balance funded through debt.

The letter of intent is subject to (i) our boards approval of the acquisition and (ii) agreement to customary terms and conditions, including a prohibition on issuance of new shares, options or warrants by the parties. The acquisition is expected to close by August 31, 2010.

Business Process Outsourcing

In the Philippines, the Company acquired 100% of each of Shift Resources, Inc. (Shift) on April 10, 2008 and Asia Premier Executive Suites, Inc. (Asia Premier) on May 27, 2008.  Shift and Asia Premier are multi-service call center operations that have now been merged into a single company operating as Global Hotline Philippines. On June 14, 2010, the Company outsourced its call center operations and recorded an intangible asset impairment of $793,000 as of March 31, 2010.

Deconsolidation of Global Hotline, Inc. (Global Hotline or GHI)

Until recently, the Company also operated in Japan through our wholly-owned subsidiary, Global Hotline. In May 2009, a dispute arose between GHI and one of its lenders, H Capital, Inc (H Capital). The dispute resulted in H Capital claiming ownership of IA Globals shares in GHI, which had been pledged as collateral for certain loans borrowed by the subsidiary. Although the Company continues to sue H Capital for damages, on December 8, 2009, the Company reached the decision to deconsolidate the operations of Global Hotline, effective as of July 1, 2009. As a result, the Company accounted for Global Hotline as a discontinued operation. The Companys reported net loss improved by $10.1 million for the year ended March 31, 2010 and its stockholders deficiency as of March 31, 2010 decreased by $10.1 million as a result of recording a gain from the forfeiture of Global Hotline represented by the excess of Global Hotlines liabilities over its assets on the deconsolidation date. These events and their impact on our financial statements are discussed in more detail in Note 3 of the Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2010.

CORPORATE INFORMATION

The Company was incorporated in Delaware on November 12, 1998. The Companys executive offices are located at 101 California Street, Suite 2450, San Francisco, CA 94111, with its operating units being located primarily in the Pacific Rim region. The Companys telephone number is (415) 946-8828 and its principal website address is located at www.iaglobalinc.com. The information on our website is not incorporated as a part of this Form 10-Q.

THE COMPANYS COMMON STOCK

The Companys common stock currently trades on the OTCBB Exchange ("OTCBB") under the symbol "IAGI."

UNAUDITED FINANCIAL STATEMENTS

The accompanying unaudited consolidated financial statements of IA Global and our subsidiaries have been prepared in accordance with generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The financial statements for the periods ended June 30, 2010 and 2009 are unaudited and include all adjustments necessary to a fair statement of the results of operations for the periods then ended. All such adjustments are of a normal, recurring nature. The results of the Companys operations for any interim period are not necessarily indicative of the results of the Companys operations for a full fiscal year. For further information, refer to the financial statements and footnotes thereto included in the Companys Annual Report on Form 10-K for the fiscal year ended March 31, 2010 as filed with the Securities and Exchange Commission (the SEC) on July 14, 2010.

In this Form 10-Q, the phrase at current exchange rates refers to the exchange rate in effect as of the date of the applicable event or transaction.


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GOING CONCERN

These consolidated financial statements have been prepared by management in accordance with GAAP on a going concern basis, which presumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.

The Company has incurred operating losses for the three months ended June 30, 2010, the year ended March 31, 2010 and 2009, the transition period for the three months ended March 31, 2008, and for the year ended December 31, 2007, as well having an accumulated deficit of approximately $60.4 million and a working capital deficit of approximately $1.1 million as of June 30, 2010.

The Companys ability to continue as a going concern is dependent upon the continued development of our business and investments, obtaining additional financing to develop such business, and the success of the Companys business plan. The outcome of these matters cannot be predicted at this time. These consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue its business.

On December 8, 2009, the Company reached the decision to deconsolidate the operations of Global Hotline, effective as of July 1, 2009. As a result, the Company accounted for Global Hotline as a discontinued operation. The Companys reported net loss improved by $10.1 million for the year ended March 31, 2010 and our stockholders deficiency as of March 31, 2010 decreased by $10.1 million as a result of recording a gain from the forfeiture of Global Hotline represented by the excess of Global Hotlines liabilities over its assets on the deconsolidation date. These events and their impact on our financial statements are discussed in more detail Note 3 of the Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2010.

RECLASSIFICATIONS

Certain reclassifications have been made to the Companys financial statements for prior periods to conform to the current presentation. These reclassifications had no effect on previously reported results of operations or retained earnings.

Included in such reclassification is the presentation of Global Hotline as a discontinued operation for the quarter ended June 30, 2009 and for all subsequent periods.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. Inter-Company items and transactions have been eliminated in consolidation.

CASH AND CASH EQUIVALENTS - The Company classifies highly liquid temporary investments with an original maturity of three months or less when purchased as cash equivalents. The Company maintains cash balances at various financial institutions. Balances at US banks are insured by the Federal Deposit Insurance Corporation up to US$250,000. Balances in Japanese banks are generally insured by the Deposit Insurance Corporation of Japan up to 10,000,000 Yen per depositor per bank or approximately US$111,000 as of June 30, 2010. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk for cash on deposit.

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS - Accounts receivable consists primarily of amounts due to the Company from normal business activities. The Company maintains an allowance for doubtful accounts to reflect the expected non-collection of accounts receivable based on past collection history and specific risks identified within the portfolio. If the financial condition of the customers were to deteriorate resulting in an impairment of their ability to make payments, or if payments from customers are significantly delayed, additional allowances might be required.

INVENTORIES  Inventory consist primarily of gaming hardware being refurbished at Johnny and are stated at the lower of cost or market on the first-in, first-out method.  Inventories are considered available for resale when drop shipped and invoiced directly to a customer from a vendor, or when physically received by Johnny at a warehouse location.  The company records a provision for excess and obsolete inventory whenever an impairment has been identified. There is no provision for impaired inventory as of June 30, 2010.

EQUIPMENT - Equipment consists of machinery, equipment and software, which are stated at cost less accumulated depreciation and amortization. Depreciation of machinery and equipment is computed by the accelerated or straight-line methods over the estimated useful lives of the relevant asset, generally 2-5 years.


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INTANGIBLE ASSETS / INTELLECTUAL PROPERTY - The Company is amortizing the intellectual property and other intangible assets acquired in connection with its acquisition of Car Planner and Johnny over 36 months on a straight-line basis, which corresponds with the period of time for which management was able to project future revenues, either under the parties agreement or through ongoing business activities following the closing of the transaction.

LONG-LIVED ASSETS - The Company reviews its long-lived assets for impairment when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets under certain circumstances are reported at the lower of carrying amount or fair value. Assets to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying amount or fair value (less the projected cost associated with selling the asset). To the extent carrying values exceed fair values, an impairment loss is recognized in operating results.

FAIR VALUE OF FINANCIAL INSTRUMENTS - The Company has adopted FASB Accounting Standards Codification (ASC) Topic 820, Fair Value Measurements (Topic 820), for assets and liabilities measured at fair value on a recurring basis. Topic 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements, establishes a framework for measuring fair value and expands disclosure about such fair value measurements. Topic 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, Topic 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:Observable inputs such as quoted market prices in active markets for identical assets or liabilitiesLevel 2:Observable market-based inputs or unobservable inputs that are corroborated by market dataLevel 3:Unobservable inputs for which there is little or no market data, which require the use of the reporting entitys own assumptions.
All cash and cash equivalents include money market securities and commercial paper that are considered to be highly liquid and easily tradable as of June 30, 2010. These securities are valued using inputs observable in active markets for identical securities and are therefore classified as Level 1 within our fair value hierarchy.

The carrying amounts of the Companys financial assets and liabilities, such as cash, accounts receivable, prepayments and other current assets, accounts payable, taxes payable, accrued expenses and other current liabilities, approximate their fair values because of the short maturity of these instruments. The Companys note payable approximates the fair value of such instrument based upon managements best estimate of interest rates that would be available to the Company for similar financial arrangement at June 30, 2010 and 2009.

In addition, Topic 820 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value option for any of its qualifying financial instruments.

REVENUE RECOGNITION  Car Planner and Johnny revenue is derived from other products and services. Revenue is considered realized when the services have been provided to the customer, the work has been accepted by the customer and collectability is reasonably assured. Furthermore, if an actual measurement of revenue cannot be determined, the Company defers all revenue recognition until such time that an actual measurement can be determined. If during the course of a contract management determines that losses are expected to be incurred, such costs are charged to operations in the period such losses are determined. Revenues are deferred when cash has been received from the customer but the revenue has not been earned. The Company recorded deferred revenue of $0 as of June 30, 2010 and March 31, 2010, respectively.

ADVERTISING COSTS - Advertising costs are expensed as incurred. There were minimal advertising costs incurred for the three months ended June 30, 2010 and 2009.

FOREIGN CURRENCY TRANSLATION - Foreign entities whose functional currency is the local currency translate net assets at the end of period rates and income and expense accounts at average exchange rates for the periods ended. Adjustments resulting from these translations are reflected in the consolidated balance sheet under other comprehensive income and the statement of operations under other income (expense).


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STOCK BASED COMPENSATION - The Company accounts for the grant of stock options and restricted stock awards in accordance with ASC 718, Compensation-Stock Compensation (ASC 718).   ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity based compensation. In addition, the Company records expense over the vesting period in connection with stock options granted. The compensation expense for stock-based awards includes an estimate for forfeitures and is recognized over the expected term of the award on a straight line basis.

When stock options are granted, the fair value of each option grant is estimated on the date of grant using the Black-Scholes valuation model and the weighted assumptions noted in the following table:

For the Three Months Ended
June 30,20102009Risk-free interest rate3.61%3.96%Expected life9.36 years8.00 yearsDividend rate0.00%0.00%Expected volatility174%112%
The Company recorded $20,000 and $365,679 of compensation expense, net of related tax effects, relative to stock options for the three months ended June 30, 2010 and 2009  in accordance with ASC 718. Net loss per share (basic and diluted) associated with this expense was approximately ($0.00).

As of June 30, 2010, there is approximately $47,606 of total unrecognized costs related to employee granted stock options that are not vested. These costs are expected to be recognized over a period of approximately three years.

In addition to options granted to employees, the Company grants options to non-employees for services. On May 14, 2010, the Company issued an option to purchase 2,000,000 shares of the Companys common stock to Derek Schneideman, our former Chief Executive Officer, at the fair market price of $0.01 per share based on the adjusted closing price of the Companys common stock on May 14, 2010, the day the Board of Directors approved the grant. In accordance with the 2007 Stock Incentive Plan, the stock option vested immediately.

The Company did not issue any shares of common stock to non-employees during the three months ended June 30, 2009. There are 2,273,929 stock options outstanding that are held by non-employees as of June 30, 2010, which carry an average exercise price of $.050 per share.

On June 17, 2009, certain key executives, employees, and directors of the Company voluntarily cancelled stock option grants to purchase an aggregate of 5,439,583 shares of common stock. The grants were previously issued on various dates and prices above $.13 per share.

On June 17, 2009, the Company awarded stock option grants totaling 5,439,583 shares to certain key executives, employees, and directors. The grants were priced at $.05 per share, the closing price of the Companys common stock on June 16, 2009, the date before the scheduled compensation committee meeting at which such grants were approved. In accordance with the 2007 Stock Incentive Plan, the grants are vested immediately and expire on June 16, 2019. The stock options were granted to provide a proper incentive for employees, officers and directors. The Company expensed $345,846 during the three months ended June 30, 2009 related to this transaction.

COMPREHENSIVE INCOME - The Company has adopted ASC 220, Comprehensive Income. This statement establishes rules for the reporting of comprehensive income and its components. Comprehensive income consists of net loss to common shareholders and foreign currency transaction adjustments and is presented in the Consolidated Statements of Operations and Stockholders Equity.

INCOME TAXES - Income tax provision (benefit) is based on reported income (loss) before income taxes. Deferred income taxes reflect the effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws in the countries and locations where the Company (or its applicable subsidiary) operates. The Company recognizes refundable and deferred assets to the extent that management has determined their realization.


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NET LOSS PER SHARE  Under the provisions of ASC 260, Earnings Per Share, basic income (loss) per common share is computed by dividing income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. The common stock equivalents have not been included as they are anti-dilutive. As of June 30, 2010, there were options outstanding for the purchase of 8,738,929 common shares, warrants for the purchase of 18,232,064 common shares, 3,554,546 shares of common stock issued as collateral for loans, which could potentially dilute future earnings per share. As of June 30, 2009, there were options outstanding for the purchase of 11,274,012 common shares, warrants for 16,695,169 common shares, 3,554,546 shares of common stock issued as collateral for loans of and potential shares totaling 33,300,000 related to ArqueMax Ventures transactions, which could potentially dilute future earnings per share.

DIVIDEND POLICY - The Company has never paid any cash dividends and intends, for the foreseeable future, to retain any future earnings for the development of our business. Our future dividend policy will be determined by the board of directors on the basis of various factors, including our results of operations, financial condition, capital requirements and investment opportunities.

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

RECENT ACCOUNTING PRONOUNCEMENTS

Recent accounting pronouncements applicable to the Company are summarized below.

In June 2009, the FASB approved the FASB Accounting Standards Codification (the Codification) as the single source of authoritative nongovernmental U.S. GAAP to be launched on July 1, 2009. The Codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All existing accounting standard documents will be superseded and all other accounting literature not included in the Codification will be considered non-authoritative. The Codification is effective for interim and annual periods ending after September 15, 2009.In August 2009, the FASB issued the FASB Accounting Standards Update No. 2009-04 Accounting for Redeemable Equity Instruments - Amendment to Section 480-10-S99 which represents an update to section 480-10-S99, distinguishing liabilities from equity, per EITF Topic D-98, Classification and Measurement of Redeemable Securities. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.In August 2009, the FASB issued the FASB Accounting Standards Update No. 2009-05 Fair Value Measurement and Disclosures Topic 820  Measuring Liabilities at Fair Value, which provides amendments to subtopic 820-10, Fair Value Measurements and Disclosures  Overall, for the fair value measurement of liabilities. This update provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: 1. A valuation technique that uses: a. The quoted price of the identical liability when traded as an asset b. Quoted prices for similar liabilities or similar liabilities when traded as assets. 2. Another valuation technique that is consistent with the principles of Topic 820; two examples would be an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at the measurement date that the reporting entity would pay to transfer the identical liability or would receive to enter into the identical liability. The amendments in this update also clarify that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. The amendments in this update also clarify that both a quoted price in an active market for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are Level 1 fair value measurements. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.

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In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-08 Earnings Per Share  Amendments to Section 260-10-S99,which represents technical corrections to topic 260-10-S99, Earnings per share, based on EITF Topic D-53, Computation of Earnings Per Share for a Period that includes a Redemption or an Induced Conversion of a Portion of a Class of Preferred Stock and EITF Topic D-42, The Effect of the Calculation of Earnings per Share for the Redemption or Induced Conversion of Preferred Stock. The Company does not expect the adoption of this update to have a material impact on its consolidated financial position, results of operations or cash flows.In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-09 Accounting for Investments-Equity Method and Joint Ventures and Accounting for Equity-Based Payments to Non-Employees. This update represents a correction to Section 323-10-S99-4, Accounting by an Investor for Stock-Based Compensation Granted to Employees of an Equity Method Investee. Additionally, it adds observer comment Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees to the Codification. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.In September 2009, the FASB issued the FASB Accounting Standards Update No. 2009-12 Fair Value Measurements and Disclosures Topic 820  Investment in Certain Entities That Calculate Net Assets Value Per Share (or Its Equivalent), which provides amendments to Subtopic 820-10, Fair Value Measurements and Disclosures-Overall, for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent). The amendments in this update permit, as a practical expedient, a reporting entity to measure the fair value of an investment that is within the scope of the amendments in this update on the basis of the net asset value per share of the investment (or its equivalent) if the net asset value of the investment (or its equivalent) is calculated in a manner consistent with the measurement principles of Topic 946 as of the reporting entitys measurement date, including measurement of all or substantially all of the underlying investments of the investee in accordance with Topic 820. The amendments in this update also require disclosures by major category of investment about the attributes of investments within the scope of the amendments in this update, such as the nature of any restrictions on the investors ability to redeem its investments at the measurement date, any unfunded commitments (for example, a contractual commitment by the investor to invest a specified amount of additional capital at a future date to fund investments that will be made by the investee), and the investment strategies of the investees. The major category of investment is required to be determined on the basis of the nature and risks of the investment in a manner consistent with the guidance for major security types in U.S. GAAP on investments in debt and equity securities in paragraph 320-10-50-1B. The disclosures are required for all investments within the scope of the amendments in this update regardless of whether the fair value of the investment is measured using the practical expedient. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.In October 2009, the FASB issued guidance for amendments to FASB Emerging Issues Task Force on EITF Issue No. 09-1 Accounting for Own-Share Lending Arrangements in Contemplation of a Convertible Debt Issuance or Other Financing (Subtopic 470-20) Subtopic. This accounting standards update establishes the accounting and reporting guidance for arrangements under which own-share lending arrangements issued in contemplation of convertible debt issuance. This Statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2009. Earlier adoption is not permitted. The Company does not expect the adoption to have a material impact on its consolidated financial position, results of operations or cash flows.
A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation of such proposed standards would be material to our consolidated financial statements.

NOTE 3. SUMMARY OF ACQUISITIONS AND DISCONTINUED OPERATIONS

A summary of acquisitions and discontinued operations for the three months ended June 30, 2010 and 2009 is as follows:

Acquisition of Car Planner

On May 20, 2010, the Company closed the 100% acquisition of JSK Fund Co. Ltd., which owns 100% of Car Planner, both of which are Japanese companies, from JSK Fund, Inc. Group, a party affiliated with an existing shareholder, RXR Cross Border Investment Un.


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Car Planner receives service and commission revenue by selling automotive parts over the Internet to approximately 728 car dealers, gas stations, and car maintenance shops in Japan. Car Planner is expected to expand its Business-to-Business model to include Business-to-Consumer transactions during fiscal year 2011. Car Planners website is www.carplanner.jp.

Car Planner was acquired for 30,000,000 JPY or approximately $325,000 at the current exchange rate. The acquisition was financed through the issuance of 25,000,000 shares of our common stock valued at $.013 per share.

The cost to acquire these assets has been preliminarily allocated to the assets acquired according to estimated fair values and is subject to adjustment when additional information concerning asset valuations is finalized, but no later than May 20, 2011. The preliminary allocation is as follows:

Purchace price-Common stock$325,000Cash(235,617)Accounts receivable, net(43,435)Fixed assets(26,773)Other assets(121,594)Accounts payable - trade32,322Accrued liabilities37,161Notes payable454,436Total purchase price$421,500Portion allocated to identifiable intangible assets$421,500
The results of operations of Car Planner were included in the Consolidated Statements of Operations for the period May 21, 2010 to June 30, 2010.

Acquisition of Johnny

On June 4, 2010, the Company closed the 60% acquisition of Johnny from Hynox Corporation, both of which are Japanese companies.

Johnny engages in the distribution and sales of new video gaming hardware such as the Sony PlayStation 3, Playstation Portable, Nintendo DS, Wii and XBox 360 along with associated gaming software. Johnny is also engaged in buying used hardware and software and selling refurbished hardware and secondhand software.

Johnny operates seven direct management stores and three franchise stores in the Iwate, Akita and Aomori prefectures in Northern Japan. Mr. Jun Sugiura, founder and Chief Executive Officer, will retain 40% ownership of the company. Johnnys website is http:// www.fc-johnny.jp and the mobile website is http://www.fc-johnny.jp/mobile.

The 60% share of Johnny was acquired for 14,000,000 shares of our common stock valued at $.013, or approximately $178,000.

The cost to acquire these assets has been preliminarily allocated to the assets acquired according to estimated fair values and is subject to adjustment when additional information concerning asset valuations is finalized, but no later than June 4, 2011. The preliminary allocation is as follows:


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Purchace price-Common stock$178,000Noncontrolling interest89,000Accounts receivable, net(51,677)Inventories(1,700,291)Equipment, net(79,338)Other assets(566,183)Accounts payable - trade213,994Accrued liabilities285,222Notes payable2,558,401Other liabilities3,975Total purchase price$931,103Portion allocated to identifiable intangible assets$931,103
The results of operations of Johnny were included in the Consolidated Statements of Operations for the period June 5, 2010 to June 30, 2010.

Proposed Acquisition of Zest

On July 12, 2010, the Company signed a letter of intent to acquire 100% of Zest Corporation Co. Ltd. and Zest Home Co. Ltd., both Japanese companies, from Kansai Trust Co. Ltd.

Zest is engaged in the custom home design and construction business for middle-class families looking for high quality at reasonable prices.  Zest operates out of three locations in Central Japan (Himeji, Tatsuno, and Kakogawa) under an exclusive license from Universal Home Co. Ltd.

Established in 1997, Zest is expected to be acquired for the equivalent of 80,000,000 JPY or approximately $890,000 at the current exchange rate. The acquisition is expected to be financed through the issuance of 33,333,333 shares of IAGI common stock (or the equivalent of 60,000,000 JPY at $0.02 per share), with the balance funded through debt.

The letter of intent is subject to (i) our boards approval of the acquisition and (ii) agreement to customary terms and conditions, including a prohibition on issuance of new shares, options or warrants by the parties. The acquisition is expected to close by August 31, 2010.

Business Process Outsourcing

In the Philippines, the Company acquired 100% of each of Shift on April 10, 2008 and Asia Premier on May 27, 2008.  Shift and Asia Premier are multi-service call center operations that have now been merged into a single company operating as Global Hotline Philippines. On June 14, 2010, the Company outsourced its call center operations and recorded an intangible asset impairment of $793,000 as of March 31, 2010.

Deconsolidation of Global Hotline, Inc.

Until recently, the Company also operated in Japan through our wholly-owned subsidiary, Global Hotline. In May 2009, a dispute arose between GHI and one of its lenders, H Capital, Inc (H Capital). The dispute resulted in H Capital claiming ownership of IA Globals shares in GHI, which had been pledged as collateral for certain loans borrowed by the subsidiary. Although the Company continues to sue H Capital for damages, on December 8, 2009, the Company reached the decision to deconsolidate the operations of Global Hotline, effective as of July 1, 2009. As a result, the Company accounted for Global Hotline as a discontinued operation. The Companys reported net loss improved by $10.1 million for the year ended March 31, 2010 and its stockholders deficiency as of March 31, 2010 decreased by $10.1 million as a result of recording a gain from the forfeiture of Global Hotline represented by the excess of Global Hotlines liabilities over its assets on the deconsolidation date. These events and their impact on our financial statements are discussed in more detail in Note 3 of the Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2010.


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PRO-FORMA FINANCIAL INFORMATION

The unaudited pro-forma financial information for the acquisitions for three months ended June 30, 2010 was as follows:

As Reported
Three Months
Ended
June 30, 2010Pre-Acquisition
Operations of
Car Planner Co Ltd
April 1, 2010 
May 20, 2010Pre-Acquisition
Operations of
Johnny Co Ltd
April 1, 2010 
June 4, 2010Pro Forma
Three Months
Ended
June 30, 2009Revenue$   670,933$   104,906$   932,279$   1,708,118Net (loss) income(200,849)5,48018,227(177,143)Net loss per common share
There were no material, nonrecurring items included in the reported and the pro-forma information.

NOTE 4. ACCOUNTS RECEIVABLE

Accounts receivable were $128,667 and $0 as of June 30, 2010 and March 31, 2010, respectively. The Company did not have customers with sales or accounts receivable in excess of 10% as of June 30, 2010.

NOTE 5. INVENTORIES

Inventories were $1,780,679 and $0 as of June 30, 2010 and March 31, 2010, respectively. Inventories consist primarily of cards and gaming hardware being refurbished at Johnny. There is no provision for impaired inventory as of June 30, 2010 and March 31, 2010.

NOTE 6. PREPAID EXPENSES

Prepaid expenses were $311,620 and $170,872 as of June 30, 2010 and March 31, 2010, respectively. These assets included prepaid insurance, prepaid financing costs, rent and other costs incurred by the Company.

NOTE 7. EQUIPMENT

Equipment, net of accumulated depreciation, was $105,433 and $226 as of June 30, 2010 and March 31, 2010, respectively. Accumulated depreciation was $6,193 and $2,482 as of June 30, 2010 and March 31, 2010, respectively. Total depreciation expense was $6,193 and $338 for the three months ended June 30, 2010 and 2009, respectively. All equipment is used for selling, general and administrative purposes and accordingly all depreciation is classified in selling, general and administrative expenses.

Property and equipment is comprised of the following:

EstimatedJune 30,March 31,Useful Lives20102010(unaudited)(audited)Equipment and vehicles2 - 5 years$63,397$2,708Leasehold improvements5 years48,230111,6262,708Less: accumulated depreciation(6,193)(2,482)$105,433$226

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NOTE 8. INTANGIBLE ASSETS

Intangible assets as of June 30, 2010 and March 31, 2010 consisted of the following:

EstimatedJune 30,March 31,Useful Lives20102010(unaudited)(audited)Customer contracts3 years$1,352,603$Less: accumulated amortization(37,572)Intangible assets, net$1,315,031$
Total amortization expense was $37,572 and $0 for the three months ended June 30, 2010 and 2009, respectively.

The fair value of the Car Planner intellectual property acquired was $421,500, estimated by using a discounted cash flow approach based on future economic benefits associated with agreements with its customers, or through expected continued business activities with its customers. In summary, the estimate was based on a projected income approach and related discounted cash flows over three years, with applicable risk factors assigned to assumptions in the forecasted results.

The fair value of the Johnny intellectual property acquired was $931,103, estimated by using a discounted cash flow approach based on future economic benefits associated with agreements its customers, or through expected continued business activities with its customers. In summary, the estimate was based on a projected income approach and related discounted cash flows over three years, with applicable risk factors assigned to assumptions in the forecasted results.

NOTE 9. ACCRUED LIABILITIES

Accrued liabilities were $1,107,179 and $911,360 as of June 30, 2010 and March 31, 2010, respectively. Such liabilities consisted of the following:

June 30,March 31,20102010(unaudited)(audited)Accrued salaries$202,941$235,874Trade debt not in accounts payable417,107192,117Accrued interest487,131483,639$1,107,179$911,630
NOTE 10. NOTES PAYABLE/ LONG-TERM DEBT

Notes payable and long term debt were $3,551,425 and $205,500 as of June 30, 2010 and March 31, 2010 consisted of the following:

IA Global, Inc.

On July 14, 2008 and August 11, 2008, the Company entered into three-year loan agreements with Artemis Capital Group LLC, pursuant to which the Company received loans in the principal amount totaling approximately $199,500 at an interest rate of 7.0% per annum. The interest was payable quarterly beginning in October 2008. The Company issued 3,000,000 shares of common stock as of September 30, 2008 and 554,546 shares of common stock on November 19, 2008, which serves as collateral for the loans. In addition, the Company paid $34,613 in fees, which are being amortized over the life of the loan. At the termination of the loans, the Company may repay the loans, forfeit the shares to the lender or renew the loans on a year by year basis based on mutually agreeable terms. The loan cannot be terminated within the first eighteen months of the loan and after this period, it can be repaid with a 10% penalty. Total interest expense for these loans for the three months ended June 30, 2010 and 2009 was $3,491.

In connection with the acquisition of Asia Premier, the Company entered into a note payable totaling $268,000. As of March 31, 2010, a total of $6,000 remains unpaid from this note payable. The note payable is secured by the assets of Asia Premier and is non-interest bearing.


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Car Planner

On January 10, 2010, Car Planner entered into an amended one year interest only loan agreement with Orix Corporation, a Japanese company and a customer of Car Planner. The amended loan has a principal balance of 41,100,000 Yen or approximately $463,561 at current exchange rates as of June 30, 2010 and requires monthly 2.5% interest only payments of 86,833 Yen or approximately $979 at current exchange rates. The loan is not guaranteed.

Johnny

Johnny has the following notes payable and long term debt as of June 30, 2010:

Balance as ofInterestMonthlyLendorJune 30, 2010GuaranteeCollateralDueRatePaymentIwate Bank Co Ltd¥69,890,000Chief Executive OfficerNoneDecember 1, 20234.625%¥274,000Iwate Bank Co Ltd75,575,000Guaranty Society and Chief Executive OfficerNoneDecember 1, 20232.700%290,000Iwate Bank Co Ltd18,890,000Guaranty Society and Chief Executive OfficerNoneDecember 1, 20232.700%74,000Iwate Bank Co Ltd27,929,601Guaranty Society and Chief Executive OfficerInventoryMarch 1, 20164.875%582,956Loan to Shareholder6,763,214NoneNoneNoneNoneJapan Finance Corporation Co Ltd10,158,000Chief Executive OfficerNoneSeptember 1, 20231.500%20,000Japan Finance Corporation Co Ltd4,026,000Chief Executive OfficerNoneDecember 1, 20163.000%61,000Japan Finance Corporation Co Ltd20,000,000Chief Executive OfficerNoneMay 1, 20245.200%0Total Yen¥233,231,815.00¥1,301,956.0088.661588.6615Total $$2,630,587$14,685
All the loans were used for working capital. Future principal repayments for all long term debt as of June 30, 2010 are as follows:

Years Ended June 30,2011$901,6492012375,7152013176,2152014175,625201597,314Beyond1,824,907Total3,551,425Less current portion of long term debt(901,649)Long term debt$2,649,776

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NOTE 11. RELATED PARTY TRANSACTIONS

Any related party transactions are reported in applicable sections of this Form 10-Q.

NOTE 12. EQUITY TRANSACTIONS/ TREASURY STOCK

During the three months ended June 30, 2010, the following stockholder equity events occurred:

PRIVATE PLACEMENTS WITH INTER ASSET JAPAN LBO NO. 1 FUND

On April 16, 2010, the Company signed an Amendment to Escrow Agreement (Escrow Agreement) with Inter Asset Japan LBO No.1 Fund, Beseto Partners Incorporation Committee and M&A Japan Inc. The parties agreed to terminate the Escrow Agreement dated December 18, 2009. The Company agreed to return 200 million Yen or approximately $2.2 million in exchange for not issuing 55,969,633 shares of IAGI common stock. The Korean Venture Capital Fund was not successfully formed.

EQUITY LINE OF CREDIT TRANSACTION WITH ASCENDIANT CAPITAL GROUP, LLC

On September 29, 2009, the Company entered into a Securities Purchase Agreement with Ascendiant, pursuant to which Ascendiant agreed to purchase up to $5,000,000 worth of shares of the Companys common stock from time to time over a 24-month period, provided that certain conditions are met. The financing arrangement entered into by the Company and Ascendiant is commonly referred to as an equity line of credit or an equity drawdown facility.

Under the terms of the Securities Purchase Agreement, Ascendiant will not be obligated to purchase shares of IA Globals common stock unless and until certain conditions are met, including but not limited to the SEC declaring effective a Registration Statement (the Registration Statement) on Form S-1 and the Company maintaining an Effective Registration Statement which registers Ascendiants resale of any shares purchased by it under the equity drawdown facility. The customary terms and conditions associated with Ascendiants registration rights are set forth in a Registration Rights Agreement that was also entered into by the parties on September 29, 2009.

The Registration Statement was declared effective on March 9, 2010 and IA Global has the right to sell and issue to Ascendiant, and Ascendiant will be obligated to purchase from IA Global, up to $5,000,000 worth of shares of the Companys common stock over a 24-month period beginning on such date (the Commitment Period). IA Global will be entitled to sell such shares from time to time during the Commitment Period by delivering a draw down notice to Ascendiant. In such draw down notices, IA Global will be required to specify the dollar amount of shares that it intends to sell to Ascendiant, which will be spread over a nine-trading-day pricing period. For each draw, IA Global will be required to deliver the shares sold to Ascendiant in three installments (following the third, sixth and ninth trading days in the pricing period, respectively). Ascendiant is entitled to liquidated damages in connection with certain delays in the delivery of its shares.

The Securities Purchase Agreement also provides for the following terms and conditions:
Purchase Price - 90% of the Companys volume-weighted average price (VWAP).Threshold Price - IA Global may specify a price below which it will not sell shares during the applicable nine-trading-day pricing period. If the purchase price falls below the threshold price on any day(s) during the pricing period, such day(s) will be removed from the pricing period (and Ascendiants investment amount will be reduced by 1/9 for each such day).Maximum Draw - 15% of IA Globals total trading volume for the 10-trading-day period immediately preceding the applicable draw down, times the average VWAP during such period (but in no event more than $250,000).Minimum Draw - None.Minimum Time Between Draw Down Pricing Periods - Two trading days.

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Minimum Use of Facility - IA Global is obligated to sell at least $1,000,000 worth of shares of its common stock to Ascendiant during the Commitment Period.Commitment Fees - IA Global issued 8,333,333 shares of its common stock to Ascendiant ($125,000 worth of shares based on the Companys closing bid price on the trading day immediately prior to the SEC declaring the Registration Statement effective, IA Global issued another 7,058,581 or $75,000 worth of shares of its common stock in three installments over a period of 90 days following the effectiveness date.Other Fees and Expenses  On October 21, 2009, the Company issued 400,000 shares of common stock valued at $10,000 under the 2007 Stock Incentive Plan as compensation to Ascendiants legal counsel for the legal fees and expenses it incurred in connection with negotiating and documenting the equity line of credit. Pursuant to separate agreements, IA Global has also agreed to pay an aggregate of 3.0% in fees (to be paid in connection with each draw down).Indemnification - Ascendiant is entitled to customary indemnification from IA Global for any losses or liabilities it suffers as a result of any breach by IA Global of any provisions of the Securities Purchase Agreement, or as a result of any lawsuit brought by any stockholder of IA Global (except stockholders who are officers, directors or principal stockholders of IA Global).Conditions to Ascendiants Obligation to Purchase Shares - Trading in IA Globals common stock must not be suspended by the SEC or other applicable trading market; IA Global must not have experienced a material adverse effect; all liquidated damages and other amounts owing to Ascendiant must be paid in full; the Registration Statement must be effective with respect to Ascendiants resale of all shares purchased under the equity drawdown facility; there must be a sufficient number of authorized but unissued shares of IA Global common stock; and the issuance must not cause Ascendiant to own more than 9.99% of the then outstanding shares of IA Global common stock, or more than 19.9% of the number of shares of common stock outstanding on September 29, 2009 to have been issued under the equity drawdown facility (without shareholder approval).Termination - The Securities Purchase Agreement will terminate if IA Globals common stock is not listed on one of several specified trading markets (which include the NYSE AMEX, OTC Bulletin Board and Pink Sheets, among others); if IA Global files for protection from its creditors; or if the Registration Statement was not declared effective by the SEC by June 29, 2010. IA Global may terminate the Securities Purchase Agreement if Ascendiant fails to fund a draw down within 10 trading days after the end of the applicable settlement period, or if the SEC provides comments on the Registration Statement requiring certain changes in the transaction structure and/or documents.
The Securities Purchase Agreement also contains certain representations and warranties of IA Global and Ascendiant, including customary investment-related representations provided by Ascendiant, as well as acknowledgements by Ascendiant that it has reviewed certain disclosures of the Company (including the periodic reports that the Company has filed with the SEC) and that the Companys issuance of the shares has not been registered with the SEC or qualified under any state securities laws. IA Global provided customary representations regarding, among other things, its organization, capital structure, subsidiaries, disclosure reports, absence of certain legal or governmental proceedings, financial statements, tax matters, insurance matters, real property and other assets, and compliance with applicable laws and regulations. IA Globals representations and warranties are qualified in their entirety (to the extent applicable) by the Companys disclosures in the reports it files with the SEC. IA Global also delivered confidential disclosure schedules qualifying certain of its representations and warranties in connection with executing and delivering the Securities Purchase Agreement.

The shares to be issued by IA Global to Ascendiant under the Securities Purchase Agreement will be issued in private placements in reliance upon the exemption from the registration requirements set forth in the Securities Act provided for in Section 4(2) of the Securities Act, and the rules promulgated by the SEC thereunder.

Under the terms of its September 29, 2009 Securities Purchase Agreement with Ascendiant, during the three months ended June 30, 2010, the Company sold to Ascendiant 5,610,598 shares at a purchase price of $.011 per share, or an aggregate price of $61,021. Under the terms of its September 29, 2009 Securities Purchase Agreement with Ascendiant, as of August 16, 2010, the Company sold to Ascendiant 12,189,770 shares at a purchase price of $.011 per share, or an aggregate price of $133,276.


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OTHER EQUITY ISSUANCES

On May 21, 2010, the Company issued 1,385,818 shares of common stock to Brian Hoekstra, its Chief Executive Officer for $15,244, or $.011 per share. The shares do not have registration rights.

On May 25, 2010, the Company issued 4,500,000 warrants to acquire shares of common stock to National Securities Corporation and two individuals in connection with investment banking services. The warrants are exercisable at $.010 per share and expire on May 24, 2013.

On June 8, 2010, the Company issued 5,000,000 shares of common stock to Derek Schneideman, its former Chief Executive Officer for $50,000, or $.01 per share. The shares do not have registration rights.

On June 14, 2010, the compensation committee awarded Mr. Senda 500,000 shares of stock at the fair market price of $0.013 per share based on the adjusted closing price on June 14, 2010, the date the committee approved the grant. In accordance with the 2007 Stock Incentive Plan, the grant vested on June 14, 2010.

STOCK PURCHASE AGREEMENT WITH RXR CROSS BORDER INVESTMENT UN

On April 16, 2010, the Company received a $102,915 funding commitment under a Stock Purchase Agreement (Agreement) with RXR, a new shareholder of the Company. Under the terms of the Agreement, the Company agreed to issue and sell to RXR 8,576,250 shares of the Companys common stock for an aggregate purchase price of $102,915, funded during March 10, 2010 and April 16, 2010. The price per share is $.012, the average during the periods of the wires.

On April 29, 2010, the Company received a $100,000 funding commitment under a Stock Purchase Agreement 2 (Agreement 2) with RXR. Under the terms of Agreement2, the Company agreed to issue and sell to RXR 12,000,000 shares at a purchase price of US$.012 per share, the price on signing, or an aggregate price of US$100,000 on or before May 31, 2010. RXR did not fund the $100,000 on or before May 31, 2010.

RXRs obligation to purchase the foregoing shares by the dates specified was conditioned upon the representations and warranties of the Company contained in the Agreement being accurate as of such dates.

The Company issued and sold the shares of common stock to RXR in reliance on the exemption provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC thereunder.

The Agreement contains certain representations and warranties of the RXR and the Company, including customary investment-related representations provided by RXR, as well as acknowledgements by RXR that it has reviewed certain disclosures of the Company (including the periodic reports that the Company has filed with the SEC) and that the Companys issuance of the shares has not been registered with the SEC or qualified under any state securities laws. The Company provided customary representations regarding, among other things, its organization, capital structure, subsidiaries, disclosure reports, absence of certain legal or governmental proceedings, financial statements, tax matters, insurance matters, real property and other assets, and compliance with applicable laws and regulations.

The Company issued and sold the shares of common stock to RXR in reliance on the exemption from the registration requirements set forth in the Securities Act provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC under the Securities Act.

ACQUISITION OF CAR PLANNER CO LTD

On May 20, 2010, we closed the 100% acquisition of JSK Fund Co Ltd., which owns 100% of Car Planner, both of which are Japanese companies, from JSK Fund, Inc. Group, a party affiliated with an existing shareholder, RXR. Car Planner was acquired for 30,000,000 JPY or approximately $325,000 at current exchange rate. The acquisition was financed through the issuance of 25,000,000 shares of our common stock valued at $.013 per share.

The Share Exchange Agreement requires that the common stock be registered within ninety days of closing.


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ACQUISITION OF JOHNNY CO LTD

On June 4, 2010, we closed the 60% acquisition of Johnny from Hynox Corporation, both of which are Japanese companies.

The 60% share of Johnny was acquired for 14,000,000 shares of our common stock valued at $.013 or approximately $178,000.

The Share Exchange Agreement requires that the common stock be registered within ninety days of closing.

STOCK PURCHASE AGREEMENT WITH WORLD INVESTMENT UN

On June 15, 2010, the Company received a $145,000 funding commitment under a Stock Purchase Agreement ( World Agreement) with World, a new shareholder of the Company. Under the terms of the World Agreement, the Company agreed to issue and sell to World 12,083,333 shares at a purchase price of US$.012 per share, the price on signing, or an aggregate price of US$145,000 on or before June 15, 2010.

Worlds obligation to purchase the foregoing shares by the dates specified was conditioned upon the representations and warranties of the Company contained in the Agreement being accurate as of such dates.

The Company issued and sold the shares of common stock to World in reliance on the exemption provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC thereunder.

The World Agreement contains certain representations and warranties of World and the Company, including customary investment-related representations provided by World, as well as acknowledgements by the World that it has reviewed certain disclosures of the Company (including the periodic reports that the Company has filed with the SEC) and that the Companys issuance of the shares has not been registered with the SEC or qualified under any state securities laws. The Company provided customary representations regarding, among other things, its organization, capital structure, subsidiaries, disclosure reports, absence of certain legal or governmental proceedings, financial statements, tax matters, insurance matters, real property and other assets, and compliance with applicable laws and regulations.

The Company issued and sold the shares of common stock to World in reliance on the exemption from the registration requirements set forth in the Securities Act provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC under the Securities Act.

STOCK PURCHASE AGREEMENT WITH MGVJ CO LTD

On June 28, 2010 and July 20, 2010, the Company received $60,000 and $150,000 funding commitment under Stock Purchase Agreements (Stock Purchases) with MGVJ, respectively. Under the terms of the Stock Purchases, the Company agreed to issue and sell to MGVJ 5,000,000 and 12,500,000 shares of the Companys common stock for an aggregate purchase price of $60,000 and $150,000, or $0.012 per share.

MGVJs obligation to purchase the foregoing shares by the dates specified was conditioned upon the representations and warranties of the Company contained in the Stock Purchases being accurate as of such dates.

The Company issued and sold the shares of common stock to MGVJ in reliance on the exemption provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC thereunder.

The Stock Purchases contain certain representations and warranties of MGVJ and the Company, including customary investment-related representations provided by MGVJ, as well as acknowledgements by MGVJ that it has reviewed certain disclosures of the Company (including the periodic reports that the Company has filed with the SEC) and that the Companys issuance of the shares has not been registered with the SEC or qualified under any state securities laws. The Company provided customary representations regarding, among other things, its organization, capital structure, subsidiaries, disclosure reports, absence of certain legal or governmental proceedings, financial statements, tax matters, insurance matters, real property and other assets, and compliance with applicable laws and regulations.


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The Company issued and sold the shares of common stock to the Investor in reliance on the exemption from the registration requirements set forth in the Securities Act provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC under the Securities Act.

NOTE 13. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS

There are no pending legal proceedings against us that are expected to have a material adverse effect on our cash flows, financial condition or results of operations. The Company continues to work with various vendors and former employees on past due liabilities.

POTENTIAL LEGAL PROCEEDING  GLOBAL HOTLINE

As has been previously disclosed, the Company pledged its shares of Global Hotline as collateral for certain loans borrowed from H Capital, an unlicensed Japanese lender, for such subsidiary. On May 26, 2009, Global Hotline and IA Global received notices from H Capital demanding repayment of the loans. On May 27, 2009, Global Hotline and SG Telecom did not repay the loans as requested by H Capital. On June 2, 2009, H Capital submitted documents claiming ownership of the Companys 600 shares of Global Hotline. Global Hotlines management previously provided the Companys stock certificates to H Capital in March 2009.

Although the Company has engaged Japanese corporate counsel to sue H Capital for damages, the aforementioned events have resulted in IA Global losing control over the day-to-day management and operations of Global Hotline. In addition, the Company did not have access to the financial records of Global Hotline that are necessary to periodically report our financial position and results of operations as a consolidated subsidiary of IA Global.

On December 8, 2009, the Company reached the decision to deconsolidate the operations of Global Hotline, effective as of July 1, 2009. As a result, the Company accounted for Global Hotline as a discontinued operation. The Companys reported net loss improved by $10.1 million for the year ended March 31, 2010 and our stockholders deficiency as of March 31, 2010 decreased by $10.1 million as a result of recording a gain from the forfeiture of Global Hotline represented by the excess of Global Hotlines liabilities over its assets on the deconsolidation date.

Concurrent with Companys deconsolidation of Global Hotline, management has determined, in conjunction with Japanese counsel, that any obligations that may arise from Global Hotline, that existed prior, or subsequent, to their decision to deconsolidate, is not an obligation of the Company.

Prior to December 8, 2009 Global Hotline had significant liabilities to Japanese banks in excess of approximately $12,000,000. These loans were unsecured and personally guaranteed by either the CEO or CFO of Global Hotline. In addition to theses bank loans, Global Hotline had payroll, social insurance and other tax liabilities at of approximately 800,000,000 Yen, or approximately $9.0 million at current exchange rates, as of September 30, 2009. Portions of the payroll, social insurance and other tax liabilities were repaid from cash flow from accounts receivable.

The status of Global Hotlines bank loans and tax liabilities is unknown subsequent to December 8, 2009. In addition, the status of other trade debt, or any debt or obligation of Global Hotline is unknown subsequent to December 8, 2009. In addition to debt, Global Hotline has obligation under various operating leases, the status of which is unknown subsequent to December 8, 2009.

Global Hotline has revenue contracts requiring performance for their various vendors. The status of performance, or any liability for non-performance, is unknown subsequent to December 8, 2009.

With regards to the above referenced liabilities, or potential liabilities of Global Hotline, management of the Company along with their Japanese legal counsel, has determined that the Company has no legal obligation for these liabilities or potential liabilities. Assertions against the Company for Global Hotline liabilities, or potential liabilities, might be sustained. The Company intends to defend themselves against any assertions related to liabilities or potential liabilities resulting from Global Hotline prior to or subsequent to December 8, 2009. The Company has not accrued for any liabilities related to Global Hotline as of March 31, 2010. Global Hotline filed for bankruptcy on February 12, 2010 in accordance with Japanese bankruptcy laws.


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On October 7, 2009, the Company filed a civil claim against H Capital in Tokyo, Japan District Court related to the ownership of Global Hotline. On May 5, 2010, the Company dropped the original civil claim and filed a new civil claim for damages of $1,000,000 against H Capital and other affiliated parties. The claim has not been reviewed by the Tokyo, Japan District Court. Management, based on their consultation with Japanese legal counsel, is unable to determine the outcome of this dispute with H Capital.

POTENTIAL LEGAL PROCEEDING  AMV

On April 1, 2009, the Company agreed to issue IAO Preferred Stock, at $1,000 per share, to AMV for $317,000 in the Amendment to Share Exchange Agreement. On January 11, 2010, AMV requested that the $317,000 of IAO Preferred Stock be converted into 12,800,000 shares of the Companys common stock. The Company declined to convert this IAO Preferred Stock.

At AMVs sole discretion, AMV had the option to (1) convert some or all of its IAO Preferred Stock into 12,800,000 shares of our common stock pro rata at $0.025 per share; or (2) exchange IAO Preferred Stock for 971,458 Taicom Stock owned by the Company on a pro rata basis. The conversion of IAO Preferred Stock intoTaicom Stock was to be automatically triggered in the case of certain events, including delisting from the NYSE AMEX Equities Exchange, bankruptcy or insolvency.

On July 17, 2009 and September 28, 2009, AMV notified us that we were in default under clause 3.1 (vi) of the Agreement and as a result did not fund the $60,000 due June 30, 2009, July 15, 2009 and July 31, 2009. However, AMV was late in funding as required by the Agreement.

On November 16, 2009, but effective August 4, 2009, AMV claimed ownership of our shares in Taicom. This resulted in a loss on investment of approximately $2,820,000.

Taicom declared bankruptcy on December 25, 2009 in accordance with Japanese bankruptcy laws.

EMPLOYMENT AGREEMENTS

Brian Hoekstras Employment Agreement

On November 5, 2009, the Company entered into an Employment Agreement with Brian Hoekstra, the Companys Chief Executive Officer, which is effective as of September 4, 2009.

The Employment Agreement provides for a one-year term and is renewable on a mutually agreeable basis. The Company agreed to pay Mr. Hoekstra an annual base salary of $98,000, and provide for participation in the Companys benefit programs available to other senior executives (including group insurance arrangements). Mr. Hoekstra is also eligible for discretionary performance bonuses based upon performance criteria to be determined by the Companys Compensation Committee. If Mr. Hoekstras employment is terminated without Cause (as defined in the Employment Agreement), Mr. Hoekstra will be entitled to a payment equal to three months base salary paid at the Companys discretion in a lump sum or over the subsequent year.

The Compensation Committee also awarded Mr. Hoekstra 800,000 shares of restricted stock and an option to purchase 1,200,000 shares of the Companys common stock. The awards were granted at the fair market price of $0.04 per share based on the adjusted closing price of the Companys common stock on November 4, 2009, the last trading day before the Compensation Committee granted such awards. In accordance with the Companys 2007 Stock Incentive Plan, the restricted stock and the stock option vest in quarterly installments over three years beginning on September 4, 2009. The stock options expire on September 3, 2019.

Mark Scotts Employment Agreement

On August 24, 2009, the Company entered into a new Employment Agreement with Mark Scott, which replaced his Employment Agreement dated September 5, 2007.


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Mark Scotts Employment Agreement (Scott Agreement) had a one-year term beginning on August 24, 2009, and is renewable on a mutually agreeable basis. The Company agreed to pay Mr. Scott an annual base salary of $96,000, and provide for participation in the Companys benefit programs available to other senior executives (including group insurance arrangements). Also under the Scott Agreement, Mr. Scott is eligible for discretionary performance bonuses based upon performance criteria to be determined by the Companys Compensation Committee based on criteria under development. If Mr. Scotts employment is terminated without Cause (as defined in the Scott Agreement), Mr. Scott will be entitled to a payment equal to one years annual base salary paid at the Companys discretion in a lump sum or over the next year.

On August 24, 2009, the board of directors awarded Mr. Scott 200,000 shares of restricted stock and an option to purchase 300,000 shares of the Companys common stock. The awards were granted at the fair market price of $0.05 per share based on the adjusted closing price on August 20, 2009, the last trading day before the board of directors approved the grant. These options vest quarterly over three years from the date of the grant. In accordance with the 2007 Stock Incentive Plan, the restrictions on the restricted stock lapsed on November 23, 2009 and the stock options expire on August 23, 2019.

On May 17, 2010, the Company entered into an Amendment to Employment Agreement (Amended Scott Agreement) with Mark Scott, our Chief Financial Officer.

The Amended Scott Agreement allows Mr. Scott to serve as a consultant for unrelated businesses so long as such activities do not interfere with the performance of Executives duties under his Employment Agreement dated August 24, 2009.

LEASES

The Company is obligated under various non-cancelable operating leases for their various facilities and certain equipment.

The aggregate unaudited future minimum lease payments, to the extent the leases have early cancellation options and excluding escalation charges, are as follows:

Year Ended June 30,2011$497,161
NOTE 14. INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION

IA Global, Inc. is a global services and outsourcing company focused on growing existing businesses and expansion through global mergers and acquisitions.  It is organized by subsidiary. Each subsidiary reported to the Chief Executive Officer who has been designated as the Chief Operating Decision Maker ("CODM") as defined by ASC Topic 280. The CODM allocates resources to each of the companies using information regarding revenues, operating income (loss) and total assets.

The following subsidiaries are the only reportable segments under the criteria of ASC Topic 280 (i) IA Global, the parent Company, operates as a global services and outsourcing company focused on growing existing businesses and expansion through global mergers and acquisitions; (ii) Car Planner Co Ltd. , which operates exclusively in Japan and receives service and commission revenue by selling automotive parts over the Internet to approximately 728 car dealers, gas stations, and car maintenance shops; and (iii) Johnny Co Ltd, which operates in Japan and engages in the distribution and sales of new video gaming hardware and software.


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The following unaudited table presents revenues, operating income (loss) and total assets by Company for the three months ended June 30, 2010 and 2009:

(dollars in thousands)


|                                  |                         |      |            |        |             |        |        |       |   |            |  |              |        |   |   |        |  |   |        |  
|--------------------------------- | ----------------------- | ---- | ---------- | ------ | ----------- | ------ | ------ | ----- | - | ---------- |  | ------------ | ------ | - | - | ------ |  | - | ------ | -
|                                  |                         |      | IA Global, |        | Car Planner |        | Johnny |       |   |            |  | Discontinued |        |   |   |       
|Company                           |                         | Inc. |            | Co Ltd |             | Co Ltd |        | Total |   | Operations |  | Total        |       
|Three Months Ended June 30, 2010- |                         |      |            |        |             |        |        |       |   |            |  |              |        |   |   |        |  |   |       
|                                  | Revenue                 |      | $          |       |             | $      | 113    |       | $ | 558        |  | $            | 671    |   | $ |       |  | $ | 671    |  
|                                  | Operating (loss) profit |      |            | (249   | )           |        | (5     | )     |   | 118        |  |              | (136   | ) |   |       |  |   | (136   | )
|                                  | Total assets            |      |            | 268    |             |        | 879    |       |   | 3,391      |  |              | 4,538  |   |   | 44     |  |   | 4,582  |  
|                                  |                         |      |            |        |             |        |        |       |   |            |  |              |        |   |   |        |  |   |        |  
|Three Months Ended June 30, 2009- |                         |      |            |        |             |        |        |       |   |            |  |              |        |   |   |        |  |   |       
|                                  | Revenue                 |      | $          |       |             | $      |       |       | $ |           |  | $            |       |   | $ |       |  | $ |       |  
|                                  | Operating loss          |      |            | (1,009 | )           |        |       |       |   |           |  |              | (1,009 | ) |   |       |  |   | (1,009 | )
|                                  | Total assets            |      |            | 92     |             |        |       |       |   |           |  |              | 92     |   |   | 26,555 |  |   | 26,647 |  

DiscontinuedGeographic RegionU.S.JapanTotalOperationsTotalThree Months Ended June 30, 2010-Revenue$$671$671$$671Operating (loss) profit(249)113(136)(136)Total assets2684,2704,538444,582Three Months Ended June 30, 2009-Revenue$$$$$Operating loss(1,009)(1,009)(1,009)Total assets929226,55526,647  The following reconciles operating loss to net loss:  (dollars in thousands)  Three Months Ended June 30,20102009Operating loss$(136)$(1,009)Other expense(38)(10)Net loss from continuing operations(174)(1,019)(Loss) from discontinued operations(27)(2,444)Net loss(201)(3,463)Deemed preferred stock dividend(192)Noncontrolling interest(45)Net loss attributable to IA Global, Inc. common shareholders$(246)$(3,655)  NOTE 15. SUBSEQUENT EVENTS  The Company evaluates subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements are issued.  25   ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking statements in this report reflect the good-faith judgment of our management and the statements are based on facts and factors as we currently know them. Forward-looking statements are subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, but are not limited to, those discussed below as well as those discussed elsewhere in this report (including in Part II, Item 1A (Risk Factors)). Readers are urged not to place undue reliance on these forward-looking statements because they speak only as of the date of this report. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report.

GENERAL DEVELOPMENT OF BUSINESS

THE COMPANY AND OUR BUSINESS

We are a global services and outsourcing company focused on growing existing businesses and expansion through global mergers and acquisitions.  We are utilizing our current partnerships to acquire growth businesses in target sectors and markets at discounted prices.  We are actively engaging in discussions with businesses that would benefit from our business acumen and marketing expertise, knowledge of Asian Markets, and technology infrastructure.

Financial Results

During the fiscal year ended March 31, 2010, we had no revenues from continuing operations.  During the three months ended June 30, 2010, we reported revenues of $670,933. We acquired Car Planner on May 20, 2010 and Johnny on June 4, 2010.

Certain recent developments relating to our efforts to generate additional liquidity, including through sales of our common stock, are described in more detail in the notes to the financial statements included in this Form 10-Q.

Acquisition of Car Planner Co. Ltd.

On May 20, 2010, we closed the 100% acquisition of JSK Fund Co. Ltd., which owns 100% of Car Planner, both of which are Japanese companies, from JSK Fund, Inc. Group, a party affiliated with an existing shareholder, RXR Cross Border Investment Un.

Car Planner receives service and commission revenue by selling automotive parts over the Internet to approximately 728 car dealers, gas stations, and car maintenance shops in Japan. Car Planner is expected to expand its Business-to-Business model to include Business-to-Consumer transactions during fiscal year 2011. Car Planners website is www.carplanner.jp.

Car Planner was established in 2006. During the fiscal year ended March 31, 2010, Car Planner recorded sales of $1.5 million and net income of $120,000. Car Planner was acquired for 30,000,000 JPY or approximately $325,000 at the current exchange rate. The acquisition was financed through the issuance of 25,000,000 shares of our common stock valued at $.013 per share.

Acquisition of Johnny Co. Ltd.

On June 4, 2010, we closed the 60% acquisition of Johnny from Hynox Corporation, both of which are Japanese companies.

Johnny engages in the distribution and sales of new video gaming hardware such as the Sony PlayStation 3, PSP, Nintendo DS, Wii and XBox 360 along with associated gaming software. Johnny is also engaged in buying used hardware and software and selling refurbished hardware and secondhand software.

Johnny operates seven direct management stores and three franchise stores in the Iwate, Akita and Aomori prefectures in Northern Japan. Mr. Jun Sugiura, founder and Chief Executive Officer, will retain 40% ownership of the company. Johnnys website is http:// www.fc-johnny.jp and the mobile website is http://www.fc-johnny.jp/mobile.

During the fiscal year ended August 31, 2009, Johnny reported revenues of approximately $6.2 million and net income of approximately $100,000. During the fiscal year ended August 31, 2010, Johnny expects to report revenues of approximately $9.6 million and net income of approximately $250,000 in accordance with JGAAP. The 60% share of Johnny was acquired for 14,000,000 shares of our common stock valued at $.013, or approximately $178,000.


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Proposed Acquisition of Zest Corporation Co. Ltd. and Zest Home Co. Ltd.

On July 12, 2010, we signed a letter of intent to acquire 100% of Zest Corporation Co. Ltd. and Zest Home Co. Ltd., both Japanese companies, from Kansai Trust Co. Ltd. Zest reported revenues of 2.37 billion JPY, or approximately $28 million at current exchange rates, and net income of approximately $115,000 in accordance with JGAAP during the fiscal year ended March 31, 2010.

Zest is engaged in the custom home design and construction business for middle-class families looking for high quality at reasonable prices.  Zest operates out of three locations in Central Japan (Himeji, Tatsuno, and Kakogawa) under an exclusive license from Universal Home Co. Ltd.

Established in 1997, Zest is expected to be acquired for the equivalent of 80,000,000 JPY or approximately $890,000 at the current exchange rate. The acquisition is expected to be financed through the issuance of 33,333,333 shares of IAGI common stock (or the equivalent of 60,000,000 JPY at $0.02 per share), with the balance funded through debt.

The letter of intent is subject to (i) our boards approval of the acquisition and (ii) agreement to customary terms and conditions, including a prohibition on issuance of new shares, options or warrants by the parties. The acquisition is expected to close by August 31, 2010.

Business Process Outsourcing

In the Philippines, we acquired 100% of each of Shift Resources on April 10, 2008 and Asia Premier on May 27, 2008.
Shift and Asia Premier are multi-service call center operations that have now been merged into a single company operating as Global Hotline Philippines. On June 14, 2010, we outsourced our call center operations and recorded an intangible asset impairment of $793,000 as of March 31, 2010.

Deconsolidation of Global Hotline, Inc.

Until recently, we also operated in Japan through our wholly-owned subsidiary, Global Hotline. In May 2009, a dispute arose between GHI and one of its lenders, H Capital, Inc (H Capital). The dispute resulted in H Capital claiming ownership of IA Globals shares in GHI, which had been pledged as collateral for certain loans borrowed by the subsidiary. Although we continue to sue H Capital for damages, on December 8, 2009, we reached the decision to deconsolidate the operations of Global Hotline, effective as of July 1, 2009. As a result, we accounted for Global Hotline as a discontinued operation. Our reported net loss improved by $10.1 million for the year ended March 31, 2010 and our stockholders deficiency as of March 31, 2010 decreased by $10.1 million as a result of recording a gain from the forfeiture of Global Hotline represented by the excess of Global Hotlines liabilities over its assets on the deconsolidation date. These events and their impact on our financial statements are discussed in more detail in Note 3 of the Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2010.

CORPORATE INFORMATION

We were incorporated in Delaware on November 12, 1998. The Companys executive offices are located at 101 California Street, Suite 2450, San Francisco, CA 94111, with its operating units being located primarily in the Pacific Rim region. The Companys telephone number is (415) 946-8828 and its principal website address is located at www.iaglobalinc.com. The information on our website is not incorporated as a part of this Form 10-Q.

THE COMPANYS COMMON STOCK

Our common stock currently trades on the OTCBB Exchange ("OTCBB") under the symbol "IAGI."

KEY MARKET PRIORITIES

Currently, our key market priorities are, among other things, to:

To acquire profitable, sustainable global service and outsourcing companies primarily in Asia.Capitalize on our funding from RXR Cross Border Investment Un, World Investment Un, MGVJ Co Ltd and Ascendiant.

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Effectively manage and scale, where appropriate, our recent acquisitions of Car Planner and Johnny.Acquire international growth businesses at discounted prices in our target sectors and markets in conjunction with business partners. We expect to focus on growth opportunities with businesses that require improvements in management, business development, and liquidity to be successful.Leverage our presence in Asia with U.S.-based companies seeking to expand their Asian businesses.Enhance our investor relations.
PRIMARY RISKS AND UNCERTAINTIES

We are exposed to various risks related to legal claims, our need for additional financing, declining economic conditions, our controlling shareholder groups, the sale of significant numbers of our shares and a volatile market price for our common stock. These risks and uncertainties are discussed in more detail below in this item.

RESULTS OF OPERATIONS

The following table presents certain consolidated statement of operations information and presentation of that data as a percentage of change from period-to-period.

(dollars in thousands)

Three Months Ended June 30,20102009$ Variance% Variance(unaudited)(unaudited)Revenue$671$$671100.0%Cost of sales314314-100.0%Gross profit357357100.0%Selling, general and administrative expenses4931,009(516)51.1%Operating loss(136)(1,009)87386.5%Other income (expense):Interest expense and amortization of beneficial conversion feature(38)(22)(16)-72.7%Loss on equity investment in Slate Consulting Co Ltd12(12)-100.0%Total other expense(38)(10)(28)-280.0%Loss from continuing operations(174)(1,019)84582.9%(Loss) from discontinued operations(27)(2,444)2,417-98.9%Net loss(201)(3,463)3,26294.2%Noncontrolling interest(45)(45)-100.0%Deemed preferred stock dividend(192)192100.0%Net loss attributable to IA Global, Inc. common shareholders$(246)$(3,655)$3,40993.3%
THREE MONTHS ENDED JUNE 30, 2010 COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2009

REVENUE

Net revenue for the three months ended June 30, 2010 increased $671,000 to $671,000 as compared to $0 for the three months ended June 30, 2009.  We acquired Car Planner on May 20, 2010 and Johnny on June 4, 2010.

COST OF SALES

Cost of sales for the three months ended December 31, 2009 increased $314,000 to $314,000 as compared to $0 for the three months ended June 30, 2009. We acquired Car Planner on May 20, 2010 and Johnny on June 4, 2010.


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EXPENSES

Selling, general and administrative expenses for the three months ended June 30, 2010 decreased $516,000 to $493,000 as compared to $1,009,000for the three months ended June 30, 2009. We acquired Car Planner on May 20, 2010 and Johnny on June 4, 2010.The expenses for the three months ended June 30, 2009 forensic audit expenses of $414,000 incurred during the review of Global Hotline.

The selling, general and administrative expenses for the three months ended June 30, 2010 consisted primarily of employee and independent contractor expenses, rent, audit, overhead, equipment and depreciation, professional and consulting fees, sales and marketing costs, investor relations, legal, stock option, amortization of intangible assets and other general and administrative costs.

NET LOSS

Net loss for the three months ended June 30, 2010 was $201,000 as compared to a net loss of $3,463,000 for the year ended March 31, 2009.

During the three months ended June 30, 2010 and 2009, respectively, we recorded net loss on discontinued operations of $27,000 million and $2.4 million at Global Hotline and Global Hotline Philippines. Also, on December 8, 2009, we reached the decision to deconsolidate the operations of Global Hotline, effective as of July 1, 2009. As a result, we accounted for Global Hotline as a discontinued operation. Our reported net loss improved by $10.1 million for the year ended March 31, 2010 and our stockholders deficiency as of March 31, 2010 decreased by $10.1 million as a result of recording a gain from the forfeiture of Global Hotline represented by the excess of Global Hotlines liabilities over its assets on the deconsolidation date. These events and their impact on our financial statements are discussed in more detail in Note 3 of the Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2010.

LIQUIDITY AND CAPITAL RESOURCES

We had cash of approximately $.3 million, a net working capital deficit of approximately $ 1.1 million and total indebtedness of $3.6 million as of June 30, 2010.

We will need to obtain additional financing to implement the business plan, service our debt repayments and acquire new businesses. There can be no assurance that we will be able to secure funding, or that if such funding is available, whether the terms or conditions would be acceptable to us.

Volatility and disruption of financial markets could affect our access to credit. The current difficult economic market environment is causing contraction in the availability of credit in the marketplace. This could potentially reduce or eliminate the sources of liquidity for the Company.

If the Company is unable to obtain additional financing, we may need to restructure our operations, divest all or a portion of our business or file for bankruptcy.

Since our inception, we have financed our operations primarily through sales of our equity securities in our initial public offering and from several private placements, loans and capital contributions, primarily from related parties. Net cash proceeds from these items have totaled approximately $22.3  million as of June 30, 2010, with approximately $8.8 million raised in the initial public offering, $10.0 million raised in private placements and $4.0 million raised in the conversion of debt, offset by $0.7 million used for the share repurchase program. In addition, we have issued equity for non-cash items totaling $33.0 million, including $7.0 million from the ASFL equity investment, $4.1 million from the Taicom equity investment, $1.4 million each from the GPlus and Slate equity investments, $.3 and $.2 million related to the Asia Premier and Shift acquisition, respectively, $.3 and $.2 million related to the acquisition of Car Planner and Johnny, respectively, $7.4 million issued for services, $3.6 million related to a beneficial conversion feature, $4.0 million from debenture conversions, and $3.1 million related to the Global Hotline acquisition. Additional funding was obtained from notes payable and long term debt of approximately $.2 million, excluding debt assumed with the acquisition of Johnny and Car Planner.


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OPERATING ACTIVITIES

Net cash used in operating activities from for the three months ended June 30, 2010 was $.8 million. This amount was primarily related to a net loss of $.2 million, net cash used for discontinued operations $.3 million, a decrease in accounts payable and accrued liabilities of $.3 million, offset by depreciation and amortization and other non-cash expenses of $.1 million. We acquired Car Planner on May 20, 2010 and Johnny Co Ltd on June 4, 2010.

INVESTING ACTIVITIES

Net cash provided by investing activities for the three months ended June 30, 2010 was $.3 million. This amount was primarily related to net cash from acquisitions of $.3 million. We acquired Car Planner on May 20, 2010 and Johnny Co Ltd on June 4, 2010.

FINANCING ACTIVITIES

Net cash used in financing activities for the three months ended June 30, 2010 was $1.5 million. This amount was primarily related to the return of the $2.2 million Korean escrow deposit on April 16, 2010, offset by sale of common stock of $.4 million.

The Companys unaudited contractual cash obligations as of December 31, 2009 are summarized in the table below (1):

Less ThanGreater ThanContractual Cash ObligationsTotal1 Year1-3 Years3-5 Years5 YearsOperating leases$497,161$497,161$0$0$0Note payable3,551,425901,649551,930272,9391,824,907Capital expenditures00000Acquisitions00000$4,048,587$1,398,811$551,930$272,939$1,824,907(1) Based on the end of period exchange rate.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The application of GAAP involves the exercise of varying degrees of judgment. On an ongoing basis, we evaluate our estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe that of our significant accounting policies (see summary of significant accounting policies more fully described in Note 2 to the financial statements set forth in this report), the following policies involve a higher degree of judgment and/or complexity:

INCOME TAXES

We are subject to income taxes in both the U.S. and foreign (Japan and Philippines) jurisdictions. Significant judgment is required in determining the provision for income taxes. We recorded a valuation for the deferred tax assets from our net operating losses carried forward in the US due to IA Global, Inc. not demonstrating any consistent profitable operations. In the event that the actual results differ from these estimates or we adjust these estimates in future periods, we may need to adjust the recorded valuation.

STOCK-BASED COMPENSATION

Effective January 1, 2006, we began recording compensation expense associated with stock-based awards and other forms of equity compensation in accordance with the accounting guidance as interpreted by SEC Staff Accounting Bulletin No. 107. We adopted the modified prospective transition method provided for under the accounting guidance and consequently has not retroactively adjusted results from prior periods. Under this transition method, compensation cost associated with stock-based awards recognized in 2006 includes 1) quarterly amortization related to the remaining unvested portion of stock-based awards granted prior to December 15, 2005, based on the grant date fair value estimated in accordance with the accounting guidance; and 2) quarterly amortization related to stock-based awards granted subsequent to January 1, 2006 based on the grant date fair value estimated in accordance with the provisions of the accounting guidance. In addition, we record expense over the vesting period in connection with stock options granted. The compensation expense for stock-based awards includes an estimate for forfeitures and is recognized over the expected term of the award on a straight line basis.


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FACTORS THAT MAY AFFECT FUTURE RESULTS

The following factors, in addition to the other information contained in this report, should be considered carefully in evaluating us and our prospects. This report (including without limitation the following factors that may affect operating results) contains forward-looking statements (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) regarding us and our business, financial condition, results of operations and prospects. Words such as expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this report. Additionally, statements concerning future matters such as the development of new products, enhancements or technologies, projections of revenues and profitability, possible changes in legislation and other statements regarding matters that are not historical are forward-looking statements.

THE COMPANY COULD BE EXPOSED TO LEGAL CLAIMS, AND THE OUTCOME OF ANY DISPUTES RESULTING FROM SUCH CLAIMS COULD ADVERSED AFFECT THE COMPANYS FINANCIAL CONDITION OR RESULTS OF OPERATIONS

There are no pending legal proceedings against us that are expected to have a material adverse effect on our cash flows, financial condition or results of operations. We continue to work with various vendors and former employees on past due liabilities.

POTENTIAL LEGAL PROCEEDING  GLOBAL HOTLINE

As has been previously disclosed, we pledged our shares of our Global Hotline Japanese subsidiary as collateral for certain loans borrowed from H Capital, an unlicensed Japanese lender, for such subsidiary. On May 26, 2009, Global Hotline and IA Global received notices from H Capital demanding repayment of the loans. On May 27, 2009, Global Hotline and SG Telecom did not repay the loans as requested by H Capital. On June 2, 2009, H Capital submitted documents claiming ownership of our 600 shares of Global Hotline. Global Hotlines management previously provided our stock certificates to H Capital in March 2009.

Although we engaged Japanese corporate counsel to sue H Capital for damages, the aforementioned events have resulted in IA Global losing control over the day-to-day management and operations of Global Hotline. In addition, we did not have access to the financial records of Global Hotline that are necessary to periodically report our financial position and results of operations as a consolidated subsidiary of IA Global.

On December 8, 2009, we reached the decision to deconsolidate the operations of Global Hotline, effective as of July 1, 2009. As a result, we accounted for Global Hotline as a discontinued operation. Our reported net loss improved by $10.1 million for the year ended March 31, 2010 and our stockholders deficiency as of March 31, 2010 decreased by $10.1 million as a result of recording a gain from the forfeiture of Global Hotline represented by the excess of Global Hotlines liabilities over its assets on the deconsolidation date. These events and their impact on our financial statements are discussed in more detail in Note 3 of the Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2010.

Concurrent with our deconsolidation of Global Hotline, management has determined, in conjunction with legal counsel, that any obligations that may arise from Global Hotline, that existed prior or subsequent to our decision to deconsolidate are not our obligations.

Prior to December 8, 2009 Global Hotline had significant liabilities to Japanese banks in excess of approximately $12,000,000. These loans were unsecured and personally guaranteed by either the CEO or CFO of Global Hotline. In addition to theses bank loans, Global Hotline had payroll, social insurance and other tax liabilities of approximately 800,000,000 Yen, or approximately $9.0 million at current exchange rates, as of September 30, 2009.  Portions of the payroll, social insurance and other tax liabilities were repaid from cash flow from accounts receivable.

The status of Global Hotlines bank loans and tax liabilities is unknown subsequent to December 8, 2009. In addition, the status of other trade debt, or any debt or obligation of Global Hotline is unknown subsequent to December 8, 2009. In addition to debt, Global Hotline has obligation under various operating leases, the status of which is unknown subsequent to December 8, 2009.

Global Hotline has revenue contracts requiring performance for their various vendors. The status of performance, or any liability for non-performance, is unknown subsequent to December 8, 2009.


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With regards to the above referenced liabilities, or potential liabilities of Global Hotline, our management along with our Japanese legal counsel, has determined that we have no legal obligation for these liabilities or potential liabilities. Assertions against us for Global Hotline liabilities, or potential liabilities, might be sustained. The Company intends to defend themselves against any assertions related to liabilities or potential liabilities resulting from Global Hotline prior to or subsequent to December 8, 2009. The Company has not accrued for any liabilities related to Global Hotline as of March 31, 2010.  Global Hotline filed for bankruptcy on February 12, 2010 in accordance with Japanese bankruptcy laws.

On October 7, 2009, we filed a civil claim against H Capital in Tokyo, Japan District Court related to the ownership of Global Hotline. On May 5, 2010, we dropped the original civil claim and filed a new civil claim for damages of $1,000,000 against H Capital and other affiliated parties. The claim has not been reviewed by the Tokyo, Japan District Court. Management, based on their consultation with Japanese legal counsel, is unable to determine the outcome of this dispute with H Capital.

POTENTIAL LEGAL PROCEEDING  AMV

On April 1, 2009, we agreed to issue preferred stock (IAO Preferred Stock), at $1,000 per share, to AMV for $317,000 in the Amendment to Share Exchange Agreement. On January 11, 2010, AMV requested that the $317,000 of IAO Preferred Stock be converted into 12,800,000 shares of our common stock. We declined to convert this IAO Preferred Stock.

At AMVs sole discretion, AMV had the option to (1) convert some or all of its IAO Preferred Stock into 12,800,000 shares of our common stock pro rata at $0.025 per share; or (2) exchange IAO Preferred Stock for 971,458 Taicom Securities Co Ltd (Taicom) Stock owned by us on a pro rata basis. The conversion of IAO Preferred Stock intoTaicom Stock was to be automatically triggered in the case of certain events, including delisting from NYSE AMEX Equities Exchange, bankruptcy or insolvency.

On July 17, 2009 and September 28, 2009, AMV notified us that we were in default under clause 3.1 (vi) of the Agreement and as a result did not fund the $60,000 due June 30, 2009, July 15, 2009 and July 31, 2009. However, AMV was late in funding as required by the Agreement.

On November 16, 2009, but effective August 4, 2009, AMV claimed ownership of our shares in Taicom. This resulted in a loss on investment of approximately $2,820,000.

Taicom declared bankruptcy on December 25, 2009 in accordance with Japanese bankruptcy laws.

WE WILL NEED ADDITIONAL FINANCING TO SUPPORT OUR BUSINESS STRATEGY (WHICH INCLUDES ACQUIRING OR INVESTING IN NEW BUSINESSES) AND ONGOING OPERATIONS

We will need to obtain additional financing in order to continue our current operations, service our debt repayments and acquire businesses. There can be no assurance that we will be able to secure funding, or that if such funding is available, the terms or conditions would be acceptable to us. If the Company is unable to obtain additional financing, we may need to restructure our operations, divest all or a portion of our business or file for bankruptcy.

Our recent efforts to generate additional liquidity, including through sales of our common stock, are described in more detail in the financial statement notes set forth in this report.

If we raise additional capital through borrowing or other debt financing, we will incur substantial interest expense. Sales of additional equity securities will dilute on a pro rata basis the percentage ownership of all holders of common stock. When we raise more equity capital in the future, it will result in substantial dilution to our current stockholders.

DECLINING GENERAL ECONOMIC, BUSINESS, OR INDUSTRY CONDITIONS MAY CAUSE REDUCED REVENUES AND PROFITABILITY

Recently, concerns over inflation, energy costs, geopolitical issues, the availability and cost of credit, the U.S. mortgage market and a declining real estate market in the U.S. have contributed to increased volatility and diminished expectations for the global economy and expectations of slower global economic growth going forward. These factors, combined with volatile oil prices, declining business and consumer confidence and increased unemployment, precipitated a recession. If the economic climate in the U.S. or abroad does not improve from its current condition or continues to deteriorate, our customers or potential customers could reduce or delay their purchases of our products, which would adversely impact our revenues and our ability to manage inventory levels, collect customer receivables and ultimately our profitability.


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Volatility and disruption of financial markets could affect our access to credit. The current difficult economic market environment has caused contraction in the availability of credit in the marketplace. This could potentially reduce or eliminate sources of liquidity for the Company.

OUR CONTROLLING SHAREHOLDER GROUP HAS SUBSTANTIAL INFLUENCE OVER OUR COMPANY

As of June 30, 2010, large unaffiliated Japanese investors, (collectively, the Japanese investors) collectively held approximately 41.4% of our common stock. Such Japanese investors could cause a change of control of our board of directors if in combination with another large shareholder, elects candidates of their choice to the board at a shareholder meeting, and approve or disapprove any matter requiring stockholder approval, regardless of how our other shareholders may vote. Further, under Delaware law, Japanese investors and other large shareholders could have a significant influence over our affairs, if in combination with another large shareholder, including the power to cause, delay or prevent a change in control or sale of the Company, which in turn could adversely affect the market price of our common stock.

THE SALE OF A SIGNIFICANT NUMBER OF OUR SHARES OF COMMON STOCK COULD DEPRESS THE PRICE OF OUR COMMON STOCK

Sales or issuances of a large number of shares of common stock (including pursuant to the equity line of credit transaction that we recently entered into with Ascendiant Capital Group, LLC, which is described in more detail elsewhere in this prospectus) in the public market or the perception that sales may occur could cause the market price of our common stock to decline. As of August 16, 2010, there were 360.0 million shares of common stock issued and outstanding. Significant shares of common stock are held by our principal shareholders, other Company insiders and other large shareholders. Any affiliates (as defined under Rule 144 of the Securities Act (Rule 144)) of the Company and other Company insiders may only sell their shares of common stock in the public market pursuant to an effective registration statement or in compliance with Rule 144.

THE MARKET PRICE OF OUR COMMON STOCK MAY BE VOLATILE

The market price of our common stock has been and is likely in the future to be volatile. Our common stock price may fluctuate in response to factors such as:

A bankruptcy filing by the Company,Announcements by us regarding liquidity, significant acquisitions, equity investments and divestitures, strategic relationships, addition or loss of significant customers and contracts, capital expenditure commitments, loan, note payable and agreement defaults, loss of our subsidiaries and impairment of assets and our OTCBB Exchange listing,Issuance of convertible or equity securities for general or merger and acquisition purposes,Issuance or repayment of debt, accounts payable or convertible debt for general or merger and acquisition purposes,Alleged manipulation of our stock price,Sale of a significant number of our common stock by shareholders,General market and economic conditions,Quarterly variations in our operating results,Defending significant litigation,Investor relation activities,Announcements of technological innovations,New product introductions by us or our competitors,

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Competitive activities,Additions or departures of key personnel,Issuance of loans to customers or related or affiliated parties, andForeign exchange gains and losses.
These broad market and industry factors may have a material adverse effect on the market price of our common stock, regardless of our actual operating performance. These factors could have a material adverse effect on our business, financial condition and results of operations.

RISKS ASSOCIATED WITH EQUITY LINE OF CREDIT WITH ASCENDIANT CAPITAL GROUP, LLC

The Securities Purchase Agreement with Ascendiant will terminate if our common stock is not listed on one of several specified trading markets (which include the OTCBB and Pink Sheets, among others), if we file protection from its creditors or if a Registration Statement on Form S-1 or S-3 is not effective.

If the price or the trading volume of our common stock does not reach certain levels, we will be unable to draw down all or substantially all of our $5,000,000 equity line of credit.

The maximum draw down amount every 11 trading days under our equity line of credit facility is the lesser of $250,000 or 15% of the total trading volume of our common stock for the 10-trading-day period prior to the draw down multiplied by the volume-weighted average price of our common stock for such period. If our stock price and trading volume remain at current levels, we will not be able to draw down all $5,000,000 available under the equity line of credit.

If we not able to draw down all $5,000,000 available under the equity line of credit or if the Securities Purchase Agreement is terminated, we may be forced to curtail the scope of our operations or alter our business plan if other financing is not available to us.

WE MAY UNDERTAKE ACQUISITIONS, MERGERS, STRATEGIC ALLIANCES, JOINT VENTURES AND/OR DIVESTITURES THAT COULD RESULT IN FINANCIAL RESULTS THAT ARE DIFFERENT THAN EXPECTED

In the normal course of business, we engage in discussions relating to possible acquisitions, equity investments, mergers, strategic alliances, joint ventures and divestitures. Such transactions are accompanied by a number of risks, including:

- Use of significant amounts of cash,

- Potentially dilutive issuances of equity securities on potentially unfavorable terms,

- Incurrence of debt on potentially unfavorable terms as well as impairment expenses related to goodwill and amortization expenses related to other intangible assets, and

- The possibility that we may pay too much cash or issue too many of our shares as the purchase price for an acquisition relative to the economic benefits that we ultimately derive from such acquisition.

- The process of integrating any acquisition may create unforeseen operating difficulties and expenditures. The areas where we may face difficulties include:

- Diversion of management time, during the period of negotiation through closing and after closing, from its focus on operating the businesses to issues of integration,

- Decline in employee morale and retention issues resulting from changes in compensation, reporting relationships, future prospects or the direction of the business,


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- The need to integrate each Company's accounting, management information, human resource and other administrative systems to permit effective management, and the lack of control if such integration is delayed or not implemented,

- The need to implement controls, procedures and policies appropriate for a public Company that may not have been in place in private companies, prior to acquisition,

- The need to incorporate acquired technology, content or rights into our products and any expenses related to such integration, and

- The need to successfully develop any acquired in-process technology to realize any value capitalized as intangible assets.

From time to time, we have also engaged in discussions with candidates regarding the potential acquisitions of our product lines, technologies and businesses. If a divestiture such as this does occur, we cannot be certain that our business, operating results and financial condition will not be materially and adversely affected. A successful divestiture depends on various factors, including our ability to:

- Effectively transfer liabilities, contracts, facilities and employees to any purchaser,

- Identify and separate the intellectual property to be divested from the intellectual property that we wish to retain,

- Reduce fixed costs previously associated with the divested assets or business, and

- Collect the proceeds from any divestitures.

In addition, if customers of the divested business do not receive the same level of service from the new owners, this may adversely affect our other businesses to the extent that these customers also purchase other products offered by us. All of these efforts require varying levels of management resources, which may divert our attention from other business operations.

If we do not realize the expected benefits or synergies of any divestiture transaction, our consolidated financial position, results of operations, cash flows and stock price could be negatively impacted.

WE ARE DEPENDENT ON KEY PERSONNEL

Our success depends to a significant degree upon the continued contributions of key management and other personnel, some of whom could be difficult to replace. We do not maintain key man life insurance covering certain of our officers. Our success will depend on the performance of our officers, our ability to retain and motivate our officers, our ability to integrate new officers into our operations and the ability of all personnel to work together effectively as a team. Our employment agreements with our Chief Executive Officer and Chief Financial Officer expire September 4, 2010 and August 24, 2010, respectively. Our failure to retain and recruit officers and other key personnel could have a material adverse effect on our business, financial condition and results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

FOREIGN CURRENCY RISK

We were exposed to foreign currency risks due to our operations in Japan. We do not trade in hedging instruments or other than trading instruments and we are exposed to foreign currency exchange risks.

INTEREST RATE RISK

We are not exposed to interest rate risks. The Company does not trade in hedging instruments or other than trading instruments and is exposed to interest rate risks. We believe that the impact of a 10% increase or decline in interest rates would not be material to our financial condition and results of operations.



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ITEM 4. CONTROLS AND PROCEDURES

Our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2010. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2010, our disclosure controls and procedures were effective in ensuring that (1) information to be disclosed in reports we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms promulgated under the Exchange Act and (2) information required to be disclosed in reports filed under the Exchange Act is accumulated and communicated to the principal executive officer and principal financial officer as appropriate to allow timely decisions regarding required disclosure. There were no changes in the Companys internal control over financial reporting that occurred during the Companys last fiscal quarter that have materially affected or are reasonably likely to materially affect the Companys internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1A. RISK FACTORS

For information regarding factors that could affect our results of operations, financial condition and liquidity, see the risk factors discussed under the heading Factors That May Affect Future Results included in Part I, Item 2 (Managements Discussion and Analysis of Financial Condition and Results of Operations) of this Quarterly Report on Form 10-Q.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended June 30, 2010, the Company made the following sales (or agreed to make future sales) of equity securities pursuant to the exemption from registration provided under Section 4(2) of the Securities Act:

PRIVATE PLACEMENTS WITH INTER ASSET JAPAN LBO NO. 1 FUND

On April 16, 2010, the Company signed an Amendment to Escrow Agreement (Escrow Agreement) with Inter Asset Japan LBO No.1 Fund, Beseto Partners Incorporation Committee and M&A Japan Inc. The parties agreed to terminate the Escrow Agreement dated December 18, 2009. The Company agreed to return 200 million Yen or approximately $2.2 million in exchange for not issuing 55,969,633 shares of IAGI common stock. The Korean Venture Capital Fund was not successfully formed.

EQUITY LINE OF CREDIT TRANSACTION WITH ASCENDIANT CAPITAL GROUP, LLC

On September 29, 2009, the Company entered into a Securities Purchase Agreement with Ascendiant, pursuant to which Ascendiant agreed to purchase up to $5,000,000 worth of shares of the Companys common stock from time to time over a 24-month period, provided that certain conditions are met. The financing arrangement entered into by the Company and Ascendiant is commonly referred to as an equity line of credit or an equity drawdown facility.

Under the terms of the Securities Purchase Agreement, Ascendiant will not be obligated to purchase shares of IA Globals common stock unless and until certain conditions are met, including but not limited to the SEC declaring effective a Registration Statement (the Registration Statement) on Form S-1 and the Company maintaining an Effective Registration Statement which registers Ascendiants resale of any shares purchased by it under the equity drawdown facility. The customary terms and conditions associated with Ascendiants registration rights are set forth in a Registration Rights Agreement that was also entered into by the parties on September 29, 2009.

The Registration Statement was declared effective on March 9, 2010 and IA Global has the right to sell and issue to Ascendiant, and Ascendiant will be obligated to purchase from IA Global, up to $5,000,000 worth of shares of the Companys common stock over a 24-month period beginning on such date (the Commitment Period). IA Global will be entitled to sell such shares from time to time during the Commitment Period by delivering a draw down notice to Ascendiant. In such draw down notices, IA Global will be required to specify the dollar amount of shares that it intends to sell to Ascendiant, which will be spread over a nine-trading-day pricing period. For each draw, IA Global will be required to deliver the shares sold to Ascendiant in three installments (following the third, sixth and ninth trading days in the pricing period, respectively). Ascendiant is entitled to liquidated damages in connection with certain delays in the delivery of its shares.


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The Securities Purchase Agreement also provides for the following terms and conditions:

Purchase Price - 90% of the Companys volume-weighted average price (VWAP).Threshold Price - IA Global may specify a price below which it will not sell shares during the applicable nine-trading-day pricing period. If the purchase price falls below the threshold price on any day(s) during the pricing period, such day(s) will be removed from the pricing period (and Ascendiants investment amount will be reduced by 1/9 for each such day).Maximum Draw - 15% of IA Globals total trading volume for the 10-trading-day period immediately preceding the applicable draw down, times the average VWAP during such period (but in no event more than $250,000).Minimum Draw - None.Minimum Time Between Draw Down Pricing Periods - Two trading days.Minimum Use of Facility - IA Global is obligated to sell at least $1,000,000 worth of shares of its common stock to Ascendiant during the Commitment Period.Commitment Fees - IA Global issued 8,333,333 shares of its common stock to Ascendiant ($125,000 worth of shares based on the Companys closing bid price on the trading day immediately prior to the SEC declaring the Registration Statement effective, IA Global issued another 7,058,581 or $75,000 worth of shares of its common stock in three installments over a period of 90 days following the effectiveness date.Other Fees and Expenses  On October 21, 2009, the Company issued 400,000 shares of common stock valued at $10,000 under the 2007 Stock Incentive Plan as compensation to Ascendiants legal counsel for the legal fees and expenses it incurred in connection with negotiating and documenting the equity line of credit. Pursuant to separate agreements, IA Global has also agreed to pay an aggregate of 3.0% in fees (to be paid in connection with each draw down).Indemnification - Ascendiant is entitled to customary indemnification from IA Global for any losses or liabilities it suffers as a result of any breach by IA Global of any provisions of the Securities Purchase Agreement, or as a result of any lawsuit brought by any stockholder of IA Global (except stockholders who are officers, directors or principal stockholders of IA Global).Conditions to Ascendiants Obligation to Purchase Shares - Trading in IA Globals common stock must not be suspended by the SEC or other applicable trading market; IA Global must not have experienced a material adverse effect; all liquidated damages and other amounts owing to Ascendiant must be paid in full; the Registration Statement must be effective with respect to Ascendiants resale of all shares purchased under the equity drawdown facility; there must be a sufficient number of authorized but unissued shares of IA Global common stock; and the issuance must not cause Ascendiant to own more than 9.99% of the then outstanding shares of IA Global common stock, or more than 19.9% of the number of shares of common stock outstanding on September 29, 2009 to have been issued under the equity drawdown facility (without shareholder approval).Termination - The Securities Purchase Agreement will terminate if IA Globals common stock is not listed on one of several specified trading markets (which include the NYSE AMEX, OTC Bulletin Board and Pink Sheets, among others); if IA Global files for protection from its creditors; or if the Registration Statement was not declared effective by the SEC by June 29, 2010. IA Global may terminate the Securities Purchase Agreement if Ascendiant fails to fund a draw down within 10 trading days after the end of the applicable settlement period, or if the SEC provides comments on the Registration Statement requiring certain changes in the transaction structure and/or documents.

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The Securities Purchase Agreement also contains certain representations and warranties of IA Global and Ascendiant, including customary investment-related representations provided by Ascendiant, as well as acknowledgements by Ascendiant that it has reviewed certain disclosures of the Company (including the periodic reports that the Company has filed with the SEC) and that the Companys issuance of the shares has not been registered with the SEC or qualified under any state securities laws. IA Global provided customary representations regarding, among other things, its organization, capital structure, subsidiaries, disclosure reports, absence of certain legal or governmental proceedings, financial statements, tax matters, insurance matters, real property and other assets, and compliance with applicable laws and regulations. IA Globals representations and warranties are qualified in their entirety (to the extent applicable) by the Companys disclosures in the reports it files with the SEC. IA Global also delivered confidential disclosure schedules qualifying certain of its representations and warranties in connection with executing and delivering the Securities Purchase Agreement.

The shares to be issued by IA Global to Ascendiant under the Securities Purchase Agreement will be issued in private placements in reliance upon the exemption from the registration requirements set forth in the Securities Act provided for in Section 4(2) of the Securities Act, and the rules promulgated by the SEC thereunder.

Under the terms of its September 29, 2009 Securities Purchase Agreement with Ascendiant, during the three months ended June 30, 2010, the Company sold to Ascendiant 5,610,598 shares at a purchase price of $.011 per share, or an aggregate price of $61,021. Under the terms of its September 29, 2009 Securities Purchase Agreement with Ascendiant, as of August 16, 2010, the Company sold to Ascendiant 12,189,770 shares at a purchase price of $.011 per share, or an aggregate price of $133,276.

OTHER EQUITY ISSUANCES

On May 21, 2010, the Company issued 1,385,818 shares of common stock to Brian Hoekstra, its Chief Executive Officer for $15,244, or $.011 per share. The shares do not have registration rights.

On May 25, 2010, the Company issued 4,500,000 warrants to acquire shares of common stock to National Securities Corporation and two individuals in connection with investment banking services. The warrants are exercisable at $.010 per share and expire on May 24, 2013.

On June 8, 2010, the Company issued 5,000,000 shares of common stock to Derek Schneideman, its former Chief Executive Officer for $50,000, or $.01 per share. The shares do not have registration rights.

On June 14, 2010, the compensation committee awarded Mr. Senda 500,000 shares of stock at the fair market price of $0.013 per share based on the adjusted closing price on June 14, 2010, the date the committee approved the grant. In accordance with the 2007 Stock Incentive Plan, the grant vested on June 14, 2010.

STOCK PURCHASE AGREEMENT WITH RXR CROSS BORDER INVESTMENT UN

On April 16, 2010, the Company received a $102,915 funding commitment under a Stock Purchase Agreement (Agreement) with RXR, a new shareholder of the Company. Under the terms of the Agreement, the Company agreed to issue and sell to RXR 8,576,250 shares of the Companys common stock for an aggregate purchase price of $102,915, funded during March 10, 2010 and April 16, 2010. The price per share is $.012, the average during the periods of the wires.

On April 29, 2010, the Company received a $100,000 funding commitment under a Stock Purchase Agreement 2 (Agreement 2) with RXR. Under the terms of Agreement2, the Company agreed to issue and sell to RXR 12,000,000 Shares at a purchase price of US$.012 per share, the price on signing, or an aggregate price of US$100,000 on or before May 31, 2010. RXR did not fund the $100,000 on or before May 31, 2010.

RXRs obligation to purchase the foregoing shares by the dates specified was conditioned upon the representations and warranties of the Company contained in the Agreement being accurate as of such dates.

The Company issued and sold the shares of common stock to RXR in reliance on the exemption provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC thereunder.


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The Agreement contains certain representations and warranties of the RXR and the Company, including customary investment-related representations provided by RXR, as well as acknowledgements by RXR that it has reviewed certain disclosures of the Company (including the periodic reports that the Company has filed with the SEC) and that the Companys issuance of the shares has not been registered with the SEC or qualified under any state securities laws. The Company provided customary representations regarding, among other things, its organization, capital structure, subsidiaries, disclosure reports, absence of certain legal or governmental proceedings, financial statements, tax matters, insurance matters, real property and other assets, and compliance with applicable laws and regulations.

The Company issued and sold the shares of common stock to RXR in reliance on the exemption from the registration requirements set forth in the Securities Act provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC under the Securities Act.

ACQUISITION OF CAR PLANNER CO LTD

On May 20, 2010, we closed the 100% acquisition of JSK Fund Co Ltd., which owns 100% of Car Planner, both of which are Japanese companies, from JSK Fund, Inc. Group, a party affiliated with an existing shareholder, RXR. Car Planner was acquired for 30,000,000 JPY or approximately $325,000 at current exchange rate. The acquisition was financed through the issuance of 25,000,000 shares of our common stock valued at $.013 per share.

The Share Exchange Agreement requires that the common stock be registered within ninety days of closing.

ACQUISITION OF JOHNNY CO LTD

On June 4, 2010, we closed the 60% acquisition of Johnny from Hynox Corporation, both of which are Japanese companies.

The 60% share of Johnny was acquired for 14,000,000 shares of our common stock valued at $.013 or approximately $178,000.

The Share Exchange Agreement requires that the common stock be registered within ninety days of closing.

STOCK PURCHASE AGREEMENT WITH WORLD INVESTMENT UN

On June 15, 2010, the Company received a $145,000 funding commitment under the World Agreement with World, a new shareholder of the Company. Under the terms of the World Agreement, the Company agreed to issue and sell to World 12,083,333 shares at a purchase price of US$.012 per share, the price on signing, or an aggregate price of US$145,000 on or before June 15, 2010.

Worlds obligation to purchase the foregoing shares by the dates specified was conditioned upon the representations and warranties of the Company contained in the Agreement being accurate as of such dates.

The Company issued and sold the shares of common stock to World in reliance on the exemption provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC thereunder.

The World Agreement contains certain representations and warranties of World and the Company, including customary investment-related representations provided by World, as well as acknowledgements by the World that it has reviewed certain disclosures of the Company (including the periodic reports that the Company has filed with the SEC) and that the Companys issuance of the shares has not been registered with the SEC or qualified under any state securities laws. The Company provided customary representations regarding, among other things, its organization, capital structure, subsidiaries, disclosure reports, absence of certain legal or governmental proceedings, financial statements, tax matters, insurance matters, real property and other assets, and compliance with applicable laws and regulations.

The Company issued and sold the shares of common stock to World in reliance on the exemption from the registration requirements set forth in the Securities Act provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC under the Securities Act.


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STOCK PURCHASE AGREEMENT WITH MGVJ CO LTD

On June 28, 2010 and July 20, 2010, the Company received $60,000 and $150,000 funding commitment under Stock Purchase Agreements (Stock Purchases) with MGVJ, respectively. Under the terms of the Stock Purchases, the Company agreed to issue and sell to MGVJ 5,000,000 and 12,500,000 shares of the Companys common stock for an aggregate purchase price of $60,000 and $150,000, or $0.012 per share.

MGVJs obligation to purchase the foregoing shares by the dates specified was conditioned upon the representations and warranties of the Company contained in the Stock Purchases being accurate as of such dates.

The Company issued and sold the shares of common stock to MGVJ in reliance on the exemption provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC thereunder.

The Stock Purchases contain certain representations and warranties of MGVJ and the Company, including customary investment-related representations provided by MGVJ, as well as acknowledgements by MGVJ that it has reviewed certain disclosures of the Company (including the periodic reports that the Company has filed with the SEC) and that the Companys issuance of the shares has not been registered with the SEC or qualified under any state securities laws. The Company provided customary representations regarding, among other things, its organization, capital structure, subsidiaries, disclosure reports, absence of certain legal or governmental proceedings, financial statements, tax matters, insurance matters, real property and other assets, and compliance with applicable laws and regulations.

The Company issued and sold the shares of common stock to the Investor in reliance on the exemption from the registration requirements set forth in the Securities Act provided under Section 4(2) of the Securities Act and Regulation D promulgated by the SEC under the Securities Act.

ITEM 6. EXHIBITS

Exhibit No.Description10.1Stock Purchase Agreement dated April 15, 2010 by and between IA Global, Inc. and RXR Cross Border Investment Un (filed herewith)10.2Amendment to Stock Purchase Agreement dated April 16, 2010 by and between IA Global, Inc. and MGVJ Co Ltd (filed herewith)10.3Amendment to Stock Purchase Agreement dated April 16, 2010 by and between IA Global, Inc. and Inter Asset Japan LBO No.1 Fund (filed herewith)10.4Agreement on Annulment of Deposit Contract dated April 16, 2010 by and between IA Global, Inc., Inter Asset Japan LBO No.1 Fund and Beseto Partners LLC (filed herewith)10.5Letter of Intent dated April 19, 2010 by and between IA Global, Inc. and JSK Partners, Inc.(filed herewith)10.6Amendment to Amended and Restated Employment Agreement dated May 17, 2010 by and between IA Global, Inc. and Mark Scott (filed herewith) *10.7Share Exchange Agreement dated May 20, 2010 by and between IA Global, Inc. and Partners Fund Corporation (filed herewith)10.8Letter of Intent dated May 21, 2010 by and between IA Global, Inc. and Hynox Corporation (filed herewith)10.9Share Exchange Agreement dated June 4, 2010 by and between IA Global, Inc. and Hynox Corporation (filed herewith)10.10Subscription Agreement dated June 8, 2010 by and between IA Global, Inc. and Derek Schneideman (filed herewith)10.11Stock Purchase Agreement dated June 15, 2010 by and between IA Global, Inc. and World Investment Un (filed herewith)10.12Stock Purchase Agreement dated June 28, 2010 by and between IA Global, Inc. and MGVJ Co. Ltd. (filed herewith)31.1Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer31.2Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer32Section 906 Certifications__________________

* Indicates management contract or compensatory plan.


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 16, 2010IA GLOBAL, INC.
(Registrant)
By:/s/ Brian HoekstraBrian Hoekstra
Chief Executive Officer
(Principal Executive Officer)
By:/s/ Mark ScottMark Scott
Chief Financial Officer
(Principal Financial and Accounting Officer)

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EXHIBIT INDEX

Exhibit No.Description10.1Stock Purchase Agreement dated April 15, 2010 by and between IA Global, Inc. and RXR Cross Border Investment Un (filed herewith)10.2Amendment to Stock Purchase Agreement dated April 16, 2010 by and between IA Global, Inc. and MGVJ Co Ltd (filed herewith)10.3Amendment to Stock Purchase Agreement dated April 16, 2010 by and between IA Global, Inc. and Inter Asset Japan LBO No.1 Fund (filed herewith)10.4Agreement on Annulment of Deposit Contract dated April 16, 2010 by and between IA Global, Inc., Inter Asset Japan LBO No.1 Fund and Beseto Partners LLC (filed herewith)10.5Letter of Intent dated April 19, 2010 by and between IA Global, Inc. and JSK Partners, Inc.(filed herewith)10.6Amendment to Amended and Restated Employment Agreement dated May 17, 2010 by and between IA Global, Inc. and Mark Scott (filed herewith) *10.7Share Exchange Agreement dated May 20, 2010 by and between IA Global, Inc. and Partners Fund Corporation (filed herewith)10.8Letter of Intent dated May 21, 2010 by and between IA Global, Inc. and Hynox Corporation (filed herewith)10.9Share Exchange Agreement dated June 4, 2010 by and between IA Global, Inc. and Hynox Corporation (filed herewith)10.10Subscription Agreement dated June 8, 2010 by and between IA Global, Inc. and Derek Schneideman (filed herewith)10.11Stock Purchase Agreement dated June 15, 2010 by and between IA Global, Inc. and World Investment Un (filed herewith)10.12Stock Purchase Agreement dated June 28, 2010 by and between IA Global, Inc. and MGVJ Co. Ltd. (filed herewith)31.1Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer31.2Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer32.1Section 906 Certifications

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