**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**





**FORM
      10-QSB**





x
            **Quarterly
                Report under Section 13 or 15(d) of the Securities Exchange Act of
                1934**


For
      the
      quarterly period ended: June 30, 2007





o
            **Transition
                Report under Section 13 or 15(d) of the Exchange Act of
                1934**


For
      the
      transition period from ________ to _________





Commission
      File Number: 000-51213




**XL
      GENERATION INTERNATIONAL INC.**


(Exact
      Name of Small Business Issuer as specified in its charter)




**NEVADA**
            **20-0909393**(State
                or other Jurisdiction of
              Incorporation
                or Organization)
            (IRS
                Employer
              Identification
                No.)





**353,
      St-Nicolas Street**


**Suite
      205**


**Montreal
      A8 H2Y 2P1**


(Address
      of principal executive offices)





**(514)
      397-0575**


(Issuer’s
      telephone number, including area code)





**Sumpfstrasse
      32**


**6304
      Zug, Switzerland**


(Former
      name, former address and former fiscal year, if changed since last
      report)




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





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





The
      Issuer had 35,228,268 shares of Common Stock, par value $.001, outstanding
      as of
      August 19, 2007.





Transitional
      Small Business Disclosure format (Check one):  Yes
o No x







**TABLE
      OF CONTENTS**


PART
                  IItem
                  1.
              Financial
                  StatementsBalance
                  Sheet
              3Statements
                  of Stockholders Deficiency
              4Statements
                  of Operations
              5Statements
                  of Cash Flows
              6Notes
                  to Financial Statements
              7Item
                  2.
              Management’s
                  Discussion and Analysis or Plan of Operation
              13Item
                  3.
              Controls
                  and Procedures
              15PART
                  IIItem
                  1.
              Legal
                  Proceedings
              16Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              17Item
                  3.
              Defaults
                  Upon Senior Securities
              17Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              17Item
                  5.
              Other
                  Information
              17Item
                  6.
              Exhibits
              17SIGNATURES
              19
 -
            2
            -


**PART
      I: FINANCIAL INFORMATION**


**Item
      1.**  **Financial
      Statements**





XL
      GENERATION INTERNATIONAL INC.


BALANCE
      SHEET


June
      30,
      2007


June
                  30,
              
              December
                  31,2007
              
              2006(unaudited)
              
              (audited)ASSETSCURRENT
                  ASSETSCash
              
              $
              0
              
              $
              128,607Prepaid
                  expenses and sundry current assets
              
              
              0
              
              
              41,345TOTAL
                  CURRENT ASSETS
              
              
              0
              
              
              169,952PROPERTY
                  AND EQUIPMENT, AT COST,LESS
                  ACCUMULATED DEPRECIATION
              
              
              0
              
              
              29,352TOTAL
                  ASSETS
              
              $
              0
              
              $
              199,304LIABILITIES
                  AND STOCKHOLDERS’ DEFICIENCYCURRENT
                  LIABILITIES:Stock
                  subscription payable
              
              $
              0
              
              $
              1,000,000Note
                  payable-stockholders
              
              
              2,354,526
              
              
              2,188,332Accounts
                  payable- related party
              
              
              0
              
              
              5,061,880Accrued
                  expenses and sundry current liabilities
              
              
              478,559
              
              
              3,361,365TOTAL
                  CURRENT LIABILITIES
              
              $
              2,833,085
              
              $
              11,611,577STOCKHOLDERS'
                  DEFICIENCYCommon
                  stock
              
              $
              98,152
              
              $
              97,502Additional
                  paid in capital
              
              
              15,171,059
              
              
              13,329,355Accumulated
                  Deficit
              
              
              (18,322,759
              )
              
              (25,059,593
              )Other
                  comprehensive income (loss)
              
              
              220,463
              
              
              220,463TOTAL
                  STOCKHOLDERS' DEFICIENCY
              
              $
              (2,833,085
              )
              $
              (11,412,273
              )TOTAL
                  LIABILITIES AND STOCKHOLDERS’DEFICIENCY
              
              $
              0
              
              $
              199,304




-
          3
          -




XL
      GENERATION INTERNATIONAL INC.


STATEMENTS
      OF STOCKHOLDERS DEFICIENCY


Year
      ended December 31, 2006 and Six months period ended June 2007


(unaudited)


StockholdersDeficiency
              
              Shares
              
              Common
                  stock
              
              Additional
                  paidin Capital
              
              Accumulated
                  Deficit
              
              Other
                  Comprehensive Income (Loss)
              
              TotalBalance
                  January 1,2006
              
              
              29,999,333
              
              $
              92,923
              
              $
              4,195,467
              
              
              ($7,311,239
              )
              $
              262,403
              
              
              ($2,760,446
              )Proceeds
                  fromthe
                  issuance ofcommon
                  stock
              
              
              3,342,111
              
              
              3,342
              
              
              8,449,254
              
              
              -
              
              
              -
              
              
              8,452,596Shares
                  issued for settlement of a debt
              
              
              1,236,824
              
              
              1,237
              
              
              
              
              
              
              
              
              
              
              
              1,237Stock
                  basedcompensation
              
              
              
              
              
              
              
              
              684,634
              
              
              
              
              
              
              
              
              684,634Net
                  Loss
              
              
              
              
              
              -
              
              
              -
              
              
              (17,748,354
              )
              
              
              
              
              (17,748,354
              )Other
                  comprehensiveLoss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              41,940
              
              
              41,940Balance
                  December 31,2006
              
              
              34,578,268
              
              $
              97,502
              
              $
              13,329,355
              
              
              ($25,059,593
              )
              $
              220,463
              
              
              ($11,412,273
              )Proceeds
                  fromthe
                  issuance ofcommon
                  stock
              
              
              650,000
              
              
              650
              
              
              999,350
              
              
              
              
              
              
              
              
              1,000,000Stock
                  basedcompensation
              
              
              
              
              
              -
              
              
              842,354
              
              
              -
              
              
              -
              
              
              842,354Net
                  Income
              
              
              
              
              
              -
              
              
              -
              
              
              6,736,834
              
              
              -
              
              
              6,736,834Other
                  comprehensiveIncome
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              -
              
              
              -Balance
                  June 30,2007
              
              
              35,228,268
              
              $
              98,152
              
              $
              15,171,059
              
              
              ($18,322,759
              )
              $
              220,463
              
              
              ($2,833,085
              )
  -
            4
            -





XL
      GENERATION INTERNATIONAL INC.


STATEMENTS
      OF OPERATIONS





Six
      months ended June 30, 2007 and 2006 and


three
      months ended March 31, 2007 and 2006


(unaudited)


Six
                  Months ended
              
              Three
                  Months endedJune
                  30,
              
              June
                  30,
              
              June
                  30,
              
              June
                  30,2007
              
              2006
              
              2007
              
              2006SALES
              
              $
              -
              
              $
              1,789,665
              
              $
              -
              
              $
              578,694COSTS
                  AND EXPENSES:Cost
                  of sales
              
              
              -
              
              
              1,274,935
              
              
              -
              
              
              467,655Selling,
                  general and administrative
              
              
              379,199
              
              
              4,229,826
              
              
              379,199
              
              
              2,276,129Provision
                  for note receivable
              
              
              -
              
              
              2,321,020
              
              
              -
              
              
              103,413Gain
                  on settlement of debts-foreignsubsidiary
                  (see note 9)
              
              
              (8,013,125
              )
              
              -
              
              
              (8,013,125
              )
              
              -Forgiveness
                  of accounts payable
              
              
              -
              
              
              -
              
              
              -
              
              
              -Compensation
                  expense
              
              
              842,354
              
              
              
              
              
              421,177Interest
              
              
              54,738
              
              
              88,041
              
              
              54,738
              
              
              45,889Foreign
                  exchange loss
              
              
              -
              
              
              7,386
              
              
              -
              
              
              291TOTAL
                  COSTS AND EXPENSES
              
              
              (6,736,834
              )
              
              7,921,210
              
              
              (7,158,011
              )
              
              2,893,377NET
                  INCOME (NET LOSS)
              
              $
              6,736,834
              
              $
              (6,131,544
              )
              $
              7,158,011
              
              $
              (2,314,682
              )Net
                  Income (Loss) Per Share
              
              $
              0.20
              
              $
              (0.18
              )
              $
              0.21
              
              $
              (0.07
              )Average
                  weighted Number of Shares
              
              
              34,639,379
              
              
              34,044,725
              
              
              34,700,490
              
              
              34,044,725
 -
            5
            -





XL
      GENERATION INTERNATIONAL INC.


STATEMENTS
      OF CASH FLOWS


Six
      months ended June 30, 2007 and 2006


(unaudited)


June
                  30
              
              June
                  302007
              
              2006Net
                  Income (Loss)
              
              $
              6,736,834
              
              $
              (6,131,544
              )Adjustment
                  to reconcile net income to net cash provided by operating
                  activitiesDepreciation
                  and amortization
              
              
              0
              
              
              8,539Inventory
              
              
              
              
              
              (3,740
              )Note
                  receivable
              
              
              0
              
              
              1,047,643Stock
                  based compensation
              
              
              842,354Unrealized
                  foreign exchange
              
              
              -
              
              
              127,125Changes
                  in operating assets and liabilities:Prepaid
                  expenses and sundry current assets
              
              
              41,345
              
              
              (126,949
              )Accrued
                  expenses and sundry current liabilities
              
              
              (2,884,100
              )
              
              598,670Net
                  cash used by operating activities
              
              $
              4,736,433
              
              $
              (4,479,696
              )Investing
                  activities(Acquisitions)Dispositions
                  of property and equipment
              
              
              29,352
              
              
              (23,038
              )Net
                  cash used in investing activities
              
              $
              0
              
              $
              (19,338
              )Financing
                  activitiesStock
                  payable
              
              
              (1,000,000
              )
              
              0Issuance
                  of common stock
              
              
              650
              
              
              9,855Premium
                  on issuance of common stock
              
              
              999,350
              
              
              4,547,547Proceeds
                  of loans payable stockholders
              
              
              166,194
              
              
              226,674Proceeds
                  (repayments) of loans from suppliers
              
              
              (5,060,586
              )
              
              (436,108
              )Net
                  cash provide by financing activities
              
              $
              (4,894,392
              )
              $
              4,347,968Increase
                  (decrease) in cash
              
              
              (128,607
              )
              
              (154,966
              )Cash-
                  beginning of period
              
              
              128,607
              
              
              262,446Cash-
                  end of period
              
              $
              0
              
              $
              107,680





-
          6
          -


XL
      GENERATION INTERNATIONAL INC.


NOTES
      TO
      FINANCIAL STATEMENTS




NOTE
      1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


NATURE
      OF
      BUSINESS





**Introduction**





XL
      Generation International Inc. is the holding company of a Swiss entity, XL
      Generation AG, which was the manufacturer of an artificial sport surface called
      “XL Turf.” XL Turf is designed to reduce accidents while reproducing the natural
      feeling of playing on grass. Until September 2006, the Company aspired to become
      a leading global force in the artificial turf and flooring markets by building
      on the strength of the XL Generation brand and developing strategic partnerships
      with key regional turf and flooring providers. However, because of worsening
      financial conditions, irregularities regarding registration of certain
      intellectual property rights and deterioration of the brand name of the Company,
      the Board of Directors have decided that it is in the Company’s and the
      stockholders’ best interest to initiate a complete and total withdrawal from the
      artificial flooring sector, artificial turf and all related business as soon
      as
      reasonably possible.





**Business
      Development**





The
      Company was incorporated in the State of Nevada on March 18, 2004, as Cygni
      Systems Corporation. It was originally formed with the intent of raising funds
      and entering into business as a software design company. From the date of its
      incorporation until June 17, 2005, the Company was in the development stage
      of
      its business of developing online and network security management software
      and
      online and network security consulting services.





A
      change
      of control occurred on June 17, 2005. On August 19, 2005, the Company entered
      into and closed a Share Exchange Agreement (the "Share Exchange Agreement")
      with
      XL Generation AG. Pursuant to the terms of the Share Exchange Agreement, the
      Company acquired all of the issued and outstanding shares of common stock of
      XL
      Generation AG. On August 23, 2005, the Company filed a Certificate of Amendment
      with the States of Nevada, changing its name to "XL Generation International
      Inc."





**Our
      Business**





The
      Company currently has no employees or production. The Company's plan is now
      to
      seek, investigate and, if such investigation warrants, merge or acquire an
      interest in business opportunities presented to it by persons or companies
      who
      or which desired to seek the perceived advantages of a Securities Exchange
      Act
      of 1934 registered corporation. The Company's discretion in the selection of
      business opportunities is unrestricted, subject to the availability of such
      opportunities, economic conditions, and other factors.





**Intellectual
      Property**





The
      current relationship between XL Generation AG and the patents, patents pending
      and all the intellectual and industrial property rights (collectively, the
      "Intellectual Property") which XL Generation AG was using is as follows:





The
      Intellectual Property is owned by WKF/5 Ltd, a Maltese corporation controlled
      (and majority owned) by a related party, the Alain Lemieux Trust. Mr. Alain
      Lemieux served as President and CEO of the Company until August 18, 2006. WKF/5
      Ltd owns the worldwide commercial and manufacturing rights for the "XL
      technology." The “XL technology” consists of six patents. Of these six patents,
      one is patented in 38 countries, with patents pending in 6 more countries;
      another is patented in 16 countries, with patents pending in 28 more; two of
      these patents are pending in seven countries; and two of the six patents are
      pending in one country each.





On
      January 1, 2005, XL Generation AG was granted a worldwide exclusive license
      (the
      "License Agreement") to manufacture, assemble, sell, distribute and promote
      all
      the products covered by the Intellectual Property, by WKF5/Ltd. It was provided
      that the License Agreement shall continue in full force and effect until it
      automatically expires upon the later of (a) the termination or expiration date
      of the latest patent granted; or (b) the expiration date of any extension made
      by Licensee pursuant to the License Agreement. On October 2, 2006, WKF5/Ltd
      served a notice to XL Generation AG terminating the License agreement. This
      Notice claims that WKF/5 Ltd has the right to terminate the License, and claims
      the alleged insolvency of XL Generation AG as the cause of such right of
      termination.





There
      was
      no minimum quota required under the License Agreement. The royalty rate had
      been
      determined at 5% of gross sales of XL Generation AG. Subsequently, it was agreed
      by XL Generation AG and WKF/5 Ltd that the initial lump sum royalty fee would
      initially be $416,047. Pursuant to the same agreement entered into by WKF/5
      Ltd,
      the lump sum royalty fee of $416,047 was assumed by a trust controlled by Alain
      Lemieux which assumed XL Generation AG’s duty to pay WKF/5 Ltd.





-
          7
          -




Irregularities
      concerning the proper registration of the trademarks “XL Turf” and “XL
      Generation” served as the basis of a legal action against WKF/5 Ltd, where the
      Company claimed that the Register of Trade-marks relating to registration no.
      671 108 (application no. 1 266 983) for the trade-mark XLGENERATION, registered
      on August 24, 2006, be struck on the grounds that at the date of the application
      or at the date of registration, the entry as it appears on the Register does
      not
      accurately express or define the existing rights of the person appearing to
      be
      the registered owner of the mark. Furthermore, the Company asked for an order
      declaring that WKF/5 Ltd was not and is not entitled to obtain registration
      of
      any trade-mark containing the word XLGENERATION on the claim that the
      registration in the name of WKF/5 Ltd of the trade-mark XLGENERATION is contrary
      to the Company’s rights, as detailed in Part II, Item 1 of this
      Report.





CASH
      AND
      CASH EQUIVALENTS





The
      Company considers all highly liquid debt instruments with original maturities
      not exceeding three months to be cash equivalents.





PROPERTY
      & OFFICE EQUIPMENT





Equipment
      is stated at cost. Depreciation is computed using the straight-line method
      over
      3 to 10 years.




June
                  30,
              
              December
                  312007
              
              2006Computer
                  equipment--3 yrs
              
              $
              0
              
              $
              2,904Furniture
                  & fixtures--5 yrs
              
              
              0
              
              
              46,364$
              0
              
              $
              49,268Less:
                  accumulated depreciation
              
              
              ($0
              )
              
              ($19,916
              )Balance
                  June 30, 2007
              
              $
              0
              
              $
              29,352





REVENUE
      RECOGNITION





The
      Company recognizes revenue when it is realized or realizable and earned. The
      Company considers revenue realized or realizable and earned when persuasive
      evidence of an arrangement exists, the product has been shipped or the services
      have been provided to the customer, the sales price is fixed or determinable
      and
      collectibles is reasonably assured. The Company reduces revenue for estimated
      customer returns, rotations and sales rebates when such amounts are estimable.
      When not estimable, the Company defers revenue until the product is sold to
      the
      end customer. As part of its product sales price, the Company provides support,
      which is generally utilized by the customer shortly after the sale.





INCOME
      TAXES





The
      asset
      and liability approach is used to account for income taxes by recognizing
      deferred tax assets and liabilities for the expected future tax consequences
      of
      temporary differences between the carrying amounts and the tax bases of assets
      and liabilities. The Company records a valuation allowance to reduce the
      deferred tax assets to the amount that is more likely than not to be
      realized.





LOSS
      PER
      COMMON SHARE





The
      basic
      net loss per common share is computed by dividing the net loss by the weighted
      average number of common shares outstanding.





Diluted
      net loss per common share is computed by dividing the net loss, adjusted on
      an
      "as if converted" basis, by the weighted average number of common shares
      outstanding plus potential dilutive securities.




WARRANTY
  PROVISIONS





The
      Company provides a reserve based upon management experience and assessment
      of
      potential replacement costs. Company management will continue to monitor the
      stability of its products and will adjust the provision accordingly.





-
          8
          -




USE
      OF
      ESTIMATES





In
      preparing financial statements, management makes estimates and assumptions
      that
      affect the reported amounts of assets and liabilities in the balance sheet
      and
      revenue and expenses in the income statement. Actual results could differ from
      those estimates.





STOCK
      BASED COMPENSATION





The
      Company accounts for stock options and similar equity instruments issued in
      accordance with SFAS No. 123(revised), "Share-Based Payment".  Accordingly,
      compensation costs attributable to stock options or similar equity instruments
      granted are measured at the fair value at the grant date, and expensed over
      the
      expected vesting period. Transactions in which goods or services are received
      in
      exchange for the issuance of equity instruments are accounted for based on
      the
      fair value of the consideration received or the fair value of the equity
      instruments issued, whichever is more reliably measurable. SFAS
      No. 123(revised) requires excess tax benefits be reported as a financing
      cash inflow rather than as a reduction of taxes paid.





RECENT
      ACCOUNTING PRONOUNCEMENTS





The
      Company does not expect the adoption of recently issued accounting
      pronouncements to have a significant impact on its results of operations,
      financial position or cash flow. For further information regarding recent
      accounting pronouncements, please see Note 12.




NOTE
      2--GOING CONCERN





The
      Company's consolidated financial statements have been prepared on a going
      concern basis, which contemplates the realization of assets and settlement
      of
      liabilities and commitments in the normal course of business for the foreseeable
      future. During the three months ended June 30, 2007 and 2006, the Company has
      incurred gain of $7,158,011 and loss of $2,314,682 respectively. The Company
      had
      negative working capital of $2,833,085 and $11,441,625 at June 30, 2007 and
      2006, respectively and a stockholders deficiency of $2,833,085 and $11,412,273
      at June 30, 2007 and 2006. These factors among others raise substantial doubt
      about the Company's ability to continue as a going concern.





Management's
      plans for the Company's continued existence include selling additional stock
      and
      borrowing additional funds to pay overhead expenses.





The
      Company's plan is now to seek, investigate and, if such investigation warrants,
      merge or acquire an interest in business opportunities presented to it by
      persons or companies who or which desired to seek the perceived advantages
      of a
      Securities Exchange Act of 1934 registered corporation. The Company's discretion
      in the selection of business opportunities is unrestricted, subject to the
      availability of such opportunities, economic conditions, and other
      factors.





The
      Company's future success is dependent upon its ability to achieve profitable
      operations, generate cash from operating activities and obtain additional
      financing. There is no assurance that the Company will be able to generate
      sufficient cash from operations, sell additional shares of common stock or
      borrow additional funds.





The
      Company's inability to obtain additional cash could have a material adverse
      effect on its financial position, results of operations and its ability to
      continue in existence. The consolidated financial statements do not include
      any
      adjustments that might result from the outcome of this uncertainty.




NOTE
      3--ACCRUED EXPENSES AND SUNDRY CURRENT LIABILITIES





Accrued
      expenses consisted of the following at June 30, 2007:




Accrued
                  interest
              
              $
              54,738
              
              $
              252,000Accrued
                  operating expenses
              
              
              423,821
              
              
              1,468,365Warranty
              
              $
              -
              
              $
              1,641,000$
              478,559
              
              $
              3,361,365




-
          9
          -




NOTE
      4--STOCK SUBSCRIPTION PAYABLE





The
      Company received a deposit of five hundred thousand dollars ($500,000) from
      Aton
      Select Fund Ltd on July 6, 2006 to purchase from the Company (i) 250,000 shares
      of the Company's common stock. The shares have not been issued as of the date
      of
      the accompanying financial statements. The Company received a deposit of five
      hundred thousand dollars ($500,000) from Emper Overseas S.A. on August 10,
      2006
      to purchase from the Company (i) 400,000 shares of the Company's common stock;
      and (ii) Series A Warrants to purchase up to an additional 400,000 shares of
      the
      company's common stock at an exercise price initially set at $1.25 per share.
      The shares were issued on May 22, 2007.




NOTE
      5--PAYABLE - STOCKHOLDERS





On
      December 31, 2006, the Company had received loans from CAPEX Investment Limited,
      a stockholder, in the amount of $2,068,474. In 2007, the Company received
      additional loans from CAPEX Investment Limited in the amount of $286,052. These
      loans carry an interest of 10% and are payable on demand.





Amounts
      owed to stockholders at June 30, 2007 are as follows:




Payable
                  Capex Investment Ltd
              
              
              2,354,526Payable
                  stockholders
              
              $
              2,354,526




NOTE
      6
      -CAPITAL STOCK





The
      company is authorized to issue 100,000,000 shares of common stock (par value
      $0.001) of which 35,228,268 were issued and outstanding as of June 30, 2007.





STOCK-BASED
      COMPENSATION EXPENSE





During
      the year ended December 31, 2006, the Company issued 1,455,000 stock options
      to
      officers and directors of the Company with an average exercise price of $1.05
      per share. Of the stock options issued, 320,000 vested on September 6,
      2006, 150,000 vested on September 7, 2006, 25,000 vested on September 15,
      2006, 150,000 vested on December 25, 2006, 660,000 will vest on September 6,
      2007 and the balance will vest on September 6, 2008. These options will expire
      on September 6, 2008 (240,000), September 15, 2008 (25,000), December 25, 2006
      (150,000), September 6, 2013 (440,000) and September 6, 2016 (600,000). The
      options had a fair value of $1,526,989 at the date of grant. The Company valued
      these options using the Black-Scholes option -pricing valuation model. The
      model
      uses market sourced inputs such as interest rates, stock prices, and option
      volatilities, the selection of which requires Company management’s judgment, and
      which may impact the value of the options. The assumptions used in the
      Black-Scholes valuation model were: a risk-free interest rate of 3.8%, 3.9%
      and
      4.0%; the current stock price at date of issuance of $1.04, $1,10 and $0.90
      per
      share; the exercise price of the options of $1.05 and $0.01 per share; the
      term
      of 2, 7 and 10 years; volatility of 315% and 311%. For the three month period
      ended June 30, 2007, the Company recorded compensation expense of $421,177.
      As
      of June 30, 2007, there was no unrecognized compensation cost related to
      non-vested share-based compensation. No options were exercised during the three
      month period ended June 30, 2007.





A
      summary
      of option activity for the three month period ended June 30, 2007 is presented
      below:


Options
              
              Shares
              
              Weighted-Average
                  Exercise Price
              
              Weighted-Average
                  Remaining Contractual TermOutstanding
                  at December 31, 2006
              
              -
              
              -
              
              -Granted
              
              
              1,455,000
              
              $
              1.48
              
              
              5.72Exercised,
                  forfeited, or expired
              
              
              -
              
              
              -
              
              
              -Outstanding
                  at June 30, 2007
              
              
              1,455,000
              
              $
              1.48
              
              
              5.72Exercisable
                  at June 30, 2007
              
              
              620,000
              
              $
              1.48
              
              
              5.72





The
      weighted-average grant-date fair value of options granted during the period
      ended December 31, 2006 was $1.05 per share.





-
          10
          -





NOTE
      7
      -INCOME TAXES





Income
      taxes are not due since the Company has incurred a loss since inception. The
      Company has deductible net operating losses of approximately $7,321,193 at
      June
      30, 2007. These losses expire as follows: in 2023 $626,000 will expire and
      in
      2024 $2,142,000 will expire.





Components
      of deferred tax assets and liabilities at June 30, 2007 are as
      follows:


Deferred
                  tax asset
              
              $
              2,768,000Valuation
                  allowance
              
              
              (2,768,000
              )Net
                  deferred tax asset
              
              $
              0





The
      Company has recorded a full valuation allowance against its deferred tax asset
      since it believes it is more likely than not that such deferred tax asset will
      not be realized.




NOTE
      8
      -RELATED PARTY TRANSACTIONS




Mr.
        Albert Beerli, a significant stockholder, advanced funds and then was partially
        repaid by the Company during the year. The total note balance at June 30,
        2007
        was $0 ($119,858 as of December 31, 2006). The note carries an interest of
        4.5%
        and is payable on demand.
 
 The
        Company has reviewed the recoverability of a receivable from XL Generation
        Canada Inc., a related party. The Company had taken a charge of $5,916,694
        in
        respect of such receivable as of December 31, 2006. The funds underlying
        the
        receivable were previously forwarded to XL Generation Canada Inc. for
        Company-related activities in Canada, including building up inventory with
        our
        suppliers to facilitate shorter delivery periods. As XL Generation Canada
        Inc.
        does not have sufficient cash resources to repay the advance, management
        determined to take a charge for the full amount of such outstanding
        advances.




NOTE
      9
      -SETTLEMENT OF LITIGATION AND RELATED MATTERS




The
      Company has experienced a number of unresolved matters regarding certain
      individuals and entities involved in the August 2005 reverse takeover (RTO)
      through which it entered the artificial turf business. Efforts to resolve these
      matters lead to the filing of five actions against these individuals and
      entities in Quebec Provincial or Canadian Federal courts between September
      and
      November 2006 seeking a variety of relief and remedies. Discussions subsequent
      to these filings resulted in settlement of all matters of controversy and in
      April 2007 notices of settlement and discharge were filed with the courts.
      Among
      the outcomes from the foregoing was the cancellations of various operating
      agreements and understanding entered into as part of the RTO and the Board’s
      decision to cancel 15,000,000 unregistered shares of the Company’ issued at the
      time of the above RTO. While the Company believes there are no impediments
      to
      such cancellation and intends to cancel such shares, it has referred the matter
      to its legal counsel for final review prior to effecting cancellation.





The
      cancellation of various operating agreements and understandings referred to
      above lead to the May 2007 resignation of the Directors of the Company’s
      wholly-owned Swiss subsidiary XLG AG and the inability of the Company to replace
      such Directors (required by law to be Swiss residents). This situation was
      reported to the Cantonal Commerce Register Office in Zug, Switzerland which,
      after a statutory waiting period when public notices concerning the matter
      were
      posted, delivered the XLG AG entity to the Swiss courts in order to wind up
      its
      affairs. Swiss Counsel has advised the Company that under Swiss law concerning
      such matters a shareholder’s liability is limited to the amount of stated
      capital of the entity being delivered to the Swiss Courts and, as in the case
      of
      XLG AG, where all of the stated capital had been paid in by the shareholders,
      the law does not provide for further claims against the shareholders. Counsel
      has also advised that while Swiss law does not provide for further liabilities
      and/or claims against the shareholders when stated capital is fully paid,
      aggrieved parties may from time to time file claims in Swiss courts against
      the
      former management and directors of the entity whose affairs are being settled
      by
      the Court as well as its former shareholders.





In
      accounting for the above settlements and possible legal actions in Switzerland
      the Company has (1) recognized the winding up of the affairs of XLG AG by the
      Swiss courts and (2) provided for the possible costs of litigation. The effects
      of these actions beyond the Company’s exit from the artificial turf business
      within the Company’s balance sheet at June 30, 2007 are summarized below. The
      Company has recognized approximately $8,000,000 in gain on settlement of
      debts-foreign subsidiary.




Effects
                  of SettlementBefore
              
              AfterOutstanding
                  Common Shares
              
              
              34,578,268
              
              
              34,578,268Wind
                  up of XLG AG affairsAsset
              
              
              77,372
              
              
              0Liabilities*
              
              
              11,758,979
              
              
              2,649,148Shareholder
                  Deficiency
              
              
              (11,681,607
              )
              
              (2,649,148
              )


(*)
      Includes provision of $250,000 for litigation arising from XLG AG





-
          11
          -





Note
      10 -
      RECENTLY ISSUED ACCOUNTING STANDARDS





In
      December 2003, the Financial Accounting Standards Board issued FASB
      Interpretation Number 46-R ("FIN 46-R") "Consolidation of Variable Interest
      Entities." FIN 46-R, which modifies certain provisions and effective dates
      of
      FIN 46, sets forth criteria to be used in determining whether an investment
      in a
      variable interest entity should be consolidated. These provisions are based
      on
      the general premise that if a company controls another entity through interests
      other than voting interests, that company should consolidate the controlled
      entity. The Company believes that currently, it does not have any material
      arrangements that meet the definition of a variable interest entity, which
      would
      require consolidation.





In
      November 2004, the FASB issued SFAS No. 151, "Inventory Costs - An Amendment
      of
      ARB No. 43, Chapter 4" (SFAS No. 151). SFAS No. 151 requires all companies
      to
      recognize a current-period charge for abnormal amounts of idle facility expense,
      freight, handling costs and wasted materials. This statement also requires
      that
      the allocation of fixed production overhead to the costs of conversion be based
      on the normal capacity of the production facilities. SFAS No. 151 will be
      effective for fiscal years beginning after June 15, 2005. The Company does
      not
      expect the adoption of this statement to have a material effect on its
      consolidated financial statements.





In
      December 2004, the FASB issued SFAS No.123(R), "Share-Based Payment" (SFAS
      No.
      123(R)). This statement replaces SFAS No. 123 and supersedes APB 25. SFAS 123(R)
      requires all stock-based compensation to be recognized as an expense in the
      financial statements and that such compensation be measured according to the
      grant-date fair value of stock options. SFAS 123 (R) will be effective for
      annual periods beginning after June 15, 2005. The Company currently does not
      provide for any stock-based compensation and it will evaluate the impact this
      statement will have on its consolidated financial statements if such
      compensation were to take place in the future.





In
      December 2004, the FASB issued SFAS No. 153, "Exchanges on Nonmonetary Assets
      An
      Amendment of APB Opinion No. 29, Accounting for Nonmonetary Transactions" (SFAS
      153) SFAS eliminates the exception from fair value measurement for nonmonetary
      exchanges of similar productive assets in paragraph 21(b) of APB Opinion No.
      29,
      "Accounting for Nonmonetary Transactions," and replaces it with an exception
      for
      exchanges that do not have commercial substance. SFAS 153 specifies that a
      nonmonetary exchange has commercial substance if the future cash flows of the
      entity are expected to change significantly as a result of the exchange. SFAS
      153 is effective for fiscal periods beginning after June 15, 2005. The Company
      does not expect the adoption of this statement to have a material effect on
      its
      consolidated financial statements.





In
      May
      2005, the FASB issued SFAS No. 154, "ACCOUNTING FOR CHANGES AND ERROR
      CORRECTIONS, A REPLACEMENT OF APB OPINION NO. 20 AND FASB STATEMENT NO. 3"
      SFAS
      154 applies to all voluntary changes in accounting principle and requires
      retrospective application to prior periods' financial statements of changes
      in
      accounting principle. This statement also requires that a change in
      depreciation, amortization, or depletion method for long-lived, nonfinancial
      assets be accounted for as a change in accounting estimate effected by a change
      in accounting principle. SFAS 154 carries forward without change the guidance
      contained in Opinion No. 20 for reporting the correction of an error in
      previously issued financial statements and a change in accounting estimate.
      This
      statement is effective for accounting changes and corrections of errors made
      in
      fiscal years beginning after December 15, 2005. The Company does not expect
      the
      adoption of this standard to have a material impact on its financial condition,
      results of operations, or liquidity.





-
          12
          -


**Item
      2.**   **Management’s
      Discussion and Analysis**





**The
      Company's Operations**





The
      following discussion of the financial condition and results of operations of
      XL
      Generation International Inc. (referred to herein as the "Company") should
      be
      read in conjunction with the financial statements and the related notes thereto
      included elsewhere in this Quarterly Report on Form 10-QSB for the period ended
      June 30, 2007 (this “Report”). This Report contains certain forward-looking
      statements and the Company's future operating results could differ materially
      from those discussed herein. Certain statements contained in this Report,
      including, without limitation, statements containing the words "believes,"
      "anticipates," "expects" and the like, constitute "forward-looking statements"
      within the meaning of Section 27A of the Securities Act of 1933, as amended,
      and
      Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”). However, as the Company issues “penny stock,” as such term is defined in
      Rule 3a51-1 promulgated under the Exchange Act, the Company is ineligible to
      rely on these safe harbor provisions. Such forward-looking statements involve
      known and unknown risks, uncertainties and other factors which may cause the
      actual results, performance or achievements of the Company to be materially
      different from any future results, performance or achievements expressed or
      implied by such forward-looking statements. Given these uncertainties, readers
      are cautioned not to place undue reliance on such forward-looking statements.
      The Company disclaims any obligation to update any such factors or to announce
      publicly the results of any revisions of the forward-looking statements
      contained or incorporated by reference herein to reflect future events or
      developments.





The
      Company was incorporated in the State of Nevada on March 18, 2004 as Cygni
      Systems Corporation. On August 19, 2005, the Company entered into the Share
      Exchange Agreement with XL Generation AG. Pursuant to the terms of the Share
      Exchange Agreement, the Company acquired all of the issued and outstanding
      shares of Common Stock of XL Generation AG in exchange for the issuance at
      closing of an aggregate of fifteen million shares of restricted Common Stock
      of
      the Company.





The
      Company served as the holding company for XL Generation AG. Management's
      Discussion and Analysis of Financial Condition and Results of Operations
      describe the financial condition and results of operations for XL Generation
      International. The Company had no other operations other than XL Generation
      AG.





On
      August
      23, 2005, the Company filed a Certificate of Amendment with the State of Nevada,
      changing its name to "XL Generation International Inc." The Company also changed
      its stock symbol to XLGI.





XL
      Generation AG, based in Zug, Switzerland, designed specific flooring products
      for sports, recreational and commercial markets. XL Generation AG developed
      new
      artificial turf systems for sports fields. XL Generation AG held the worldwide
      commercial and manufacturing rights for the "XL technology." The “XL technology”
consists of six patents owned by WKF5/Ltd. However, on October 2, 2006, WKF5/Ltd
      served a notice to XL Generation AG terminating the usage of the XL Technology.
      This Notice claimed that WKF/5 Ltd has the right to terminate the License,
      and
      claimed the alleged insolvency of XL Generation AG as the cause of such right
      of
      termination.





**Business
      Plan**





Initially,
      XL Generation AG's core business was the production, distribution and sales
      of
      artificial turf sport surfaces, using Expanded Polypropylen (EPP) as a
      replacement for the usual infill (sand and/or rubber) used in the installation
      of artificial sport surfaces.





Due
      to
      worsening financial conditions, irregularities regarding registration of certain
      intellectual property rights and deterioration of the brand name of the Company,
      the Company’s Board of Directors have decided that it is in the Company’s and
      investors’ best interest to initiate a complete and total withdrawal from the
      artificial flooring sector, artificial turf and all related concerns as soon
      as
      possible. The Company currently has no employees or production.





The
      Company's plan is now to seek, investigate and, if such investigation warrants,
      merge or acquire an interest in business opportunities presented to it by
      persons or companies who or which desired to seek the perceived advantages
      of a
      Securities Exchange Act of 1934 registered corporation. The Company's discretion
      in the selection of business opportunities is unrestricted, subject to the
      availability of such opportunities, economic conditions, and other
      factors.




-
          13
          -




**Results
      of Operations**





**For
      the Three and Six Month Periods ended June 30, 2007**





**Overview**





The
      Company posted for the three and six month periods ended June 30, 2007 net
      profit of $7,158,011 and $6,736,834, respectively, as compared to net losses
      of
      $2,314,682 and $6,131,544 for the comparable period of 2006. The reason for
      the
      increase in the profits of the Company was as a result of the settlement of
      various debts of the Company’s former Swiss subsidiary. See note 9 for the
      details of this event.




**Sales**





For
      the
      three and the six month periods ended June 30, 2007, the Company achieved no
      gross revenues. This compared to gross revenues of $578,894 and $1,789,665
      for
      the same periods of 2006.  The decrease is due to the fact that the Company
      effectively has no operating business as of February28, 2007.




**Total
      Cost and Expenses**





For
      the
      three and six month periods ended June 30, 2007, the Company incurred total
      costs and expenses of $(7,158,011) and $(6,736,834), respectively. This compared
      to $2,893,377 and $7,921,210 for the same periods last year. The decrease in
      total cost and expenses was caused by the gain on settlement of debts-foreign
      subsidiary related to the winding up of the affairs of XLG AG.





**Cost
      of Sales**





There
      were no fields sold during the three and six month periods ended June 30, 2007.
      For the three and six month periods ended June 30, 2006, the Company realized
      gross margins of 19% and 28%, respectively. These margins reflect substantial
      improvements against what the Company previously achieved in any reported
      quarter. This improvement in the Company’s gross margins is mostly attributable
      the continuous production of highly similar products over a long period of
      time.
      Management efficiencies obtained in our supply chain facilitated improvement
      in
      the Company’s position to buy in bulk and obtain better prices.





**Selling,
      General and Administration**





For
      the
      three and six month periods ended June 30, 2007, the Company incurred selling,
      general and administration expenses of $379,199 and $379,199, respectively.
      This
      compared to $2,276,129 and $4,229,826 for the same periods last year. The
      decrease was due to the layoff of all of the Company’s staff. The Company has
      undertaken a review of corporate overhead and implemented measures to reduce
      corporate overhead to a level more sustainable in relation to current revenue
      volume and management’s expectations.





**Depreciation
      and Amortization**





Depreciation
      and amortization for the three and six month periods ended June 30, 2007 were
      $0
      and $3,044.





**Interest**





The
      Company calculates interest in accordance with the respective note payable.
      For
      the three and six month periods ended June 30, 2007, the Company incurred a
      charge of $54,738. This compared to $45,889 and $88,041 for the same periods
      of
      the previous year. This increase mirrors the increase liabilities which the
      Company has assumed to finance its operations.





-
          14
          -




**Liquidity
      and Capital Resources**





At
      June
      30, 2007, the Company had $0 in cash, as opposed to $128,607 in cash at December
      31, 2006. Total cash requirements for operations for the six month period ended
      June 30, 2007 was $128,607. As a result of certain measures implemented to
      reduce corporate overhead, management estimates that cash requirements through
      the end of the fiscal year ended December 31, 2007 will be between $1.0 million
      to $1.2 million. As of the date of this Report, the Company does not have
      available resources sufficient to cover the expected cash requirements through
      the end of the second quarter of 2007 or the balance of the year. As a result,
      there is substantial doubt that we can continue as an ongoing business without
      obtaining additional financing. Management's plans for maintaining
      Company operations and continued existence include selling additional
      equity securities and borrowing additional funds to pay operational expenses.
      There is no assurance that the Company will be able to generate sufficient
      cash
      from operations, sell additional shares of Common Stock or borrow additional
      funds. The Company's inability to obtain additional cash could have a material
      adverse effect on our financial position, results of operations
      and the Company's ability to continue its existence. If our losses continue
      and we are unable to secure additional financing, we may ultimately be required
      to seek protection from creditors under applicable bankruptcy laws.





At
      June
      30, 2007, the Company had total assets of $0 compared to total assets of
      $199,304 at December 31, 2006. The decrease is mainly due to general and
      administration expenses.





At
      June
      30, 2007, the Company had total current liabilities of $2,833,085 compared
      to
      total current liabilities of $11,611,577 at December 31, 2006. The liabilities
      are mainly due to (i) accrued operational costs; (ii) loan notes from
      shareholders and suppliers.





On
      December 31, 2006, the Company had received loans from CAPEX Investment Limited,
      a stockholder, in the amount of $2,068,474. In the first six months of 2007,
      the
      Company received loans from CAPEX Investment Limited, a stockholder, in the
      amount of $286,052. These loans carry an interest of 10% and are payable on
      demand. As of June 30, 2007, total loans from CAPEX Investment Limited amounted
      to $2,354,526. This compared to $2,068,474 as of December 31, 2006.





The
      financial conditions of the Company raise substantial doubt about the Company's
      ability to continue as a going concern. Management's plan for the Company's
      continued existence includes selling additional stock through private placements
      and borrowing additional funds to pay overhead expenses. The future success
      of
      the Company is dependent upon its ability to achieve profitable operations,
      generate cash from operating activities and obtain additional financing. There
      is no assurance that the Company will be able to generate sufficient cash from
      operations, sell additional shares of Common Stock or borrow additional funds.
      The inability of the Company to obtain additional cash could have a material
      adverse effect on its financial position, results of operations and its ability
      to continue as a going concern.





**Off-Balance
      Sheet Arrangements**





The
      Company is not a party to any off-balance sheet arrangements.





**ITEM
      3.**  **Controls
      and Procedures**





As
      of the
      end of the period covered by this Report, an evaluation was carried out under
      the supervision and with the participation of the Company’s management,
      including the Company’s Chief Executive Officer and Chief Financial Officer, of
      the effectiveness of the Company’s disclosure controls and procedures, as
      defined in Rule 13a-15(e) promulgated under the Securities and Exchange Act
      of
      1934 (the “Exchange Act”). Based on their evaluation, the Company’s Chief
      Executive Officer and Chief Financial Officer have concluded that the Company’s
      disclosure controls and procedures are effective to ensure that information
      required to be disclosed by the Company in reports that it files or submits
      under the Exchange Act is accumulated and communicated to the Company's
      management, including the Company's Chief Executive Officer and Chief
      Financial Officer, to allow timely decisions on required disclosure and
      is recorded, processed, summarized and reported within the time periods
      specified in Securities and Exchange Commission rules and forms. There have
      been
      no changes in the Company’s internal controls over financial reporting during
      the Company’s most recently completed fiscal quarter that have materially
      affected, or are reasonably likely to materially affect, our internal controls
      over financial reporting.





-
          15
          -




**PART
      II**   **OTHER
      INFORMATION**





**Item
      1.********Legal
      Proceedings**





Several
      pending legal proceedings involving the Company were resolved during the
      quarter-ended June 30 2007. On April 24, 2007, the Company entered into four
      settlement agreements to resolve certain disputes. Three of these settlement
      agreements were filed with the Quebec Superior Court and Quebec Court, District
      of Montreal (under court file numbers 500-17-033768-063, 500-22-129010-065,
      500-17-033823-066). One settlement agreement was filed at the Canadian Federal
      Court of the District of Montreal (under court file number T-1872-06). Neither
      the Company nor any other party to these settlement agreements made any
      admission of wrongdoing or liability. In each of these settlement agreements,
      the parties agreed to be responsible for their own legal fees, court fees or
      other fees. Each of the settlement agreements shall be governed and construed
      in
      accordance with the laws of the Province of Quebec, Canada. The settlements
      and
      a related dismissal of a bankruptcy action are summarized as
      follows:





WKF/5
      Ltd





On
      October 26, 2006, the Company filed a motion against WKF/5 Ltd, the Alain
      Lemieux Trust (Jersey) and Professional Trust Company Limited in the Canadian
      Federal Court of the District of Montreal (court file number T-1872-06). The
      Company claimed that the Register of Trade-marks relating to registration no.
      671 108 (application no. 1 266 983) for the trade-mark XLGENERATION, registered
      on August 24, 2006, be struck on the grounds that at the date of the application
      or at the date of registration, the entry as it appears on the Register does
      not
      accurately express or define the existing rights of the person appearing to
      be
      the registered owner of the mark. Furthermore, the Company asked for an order
      declaring that WKF/5 Ltd was not and is not entitled to obtain registration
      of
      any trade-mark containing the word XLGENERATION on the claim that the
      registration in the name of WKF/5 Ltd of the trade-mark XLGENERATION is contrary
      to the Company’s rights. Pursuant to the settlement agreement dated April 24,
      2007, the Company has agreed to relinquish its license to manufacture products
      utilizing the technology patented by WKF/5 Ltd, retroactively effective October
      2, 2006. For up to six (6) months from April 24, 2007, the Company may continue
      to utilize (i) technology created by WKF/5 Ltd; and (ii) the trademark XL
      Generation. Thereafter, the Company will have no rights to use either the
      technology owned by WKF/5 Ltd or the trademark XL Generation. The Company has
      agreed that for a period of five (5) years thereafter, the Company and its
      subsidiaries may not engage in any business related to the production of
      artificial turf.





Solutions
      Highmedia Interactif Inc.





On
      November 10, 2006, the Company filed a motion seeking injunctive relief against
      Solutions Highmedia Interactif Inc. and Domenico Malatesta, in the Quebec
      Superior Court of the District of Montreal (court file number 500-17-033768-063)
      to forbid the selling, and prevent the cession of the internet domain name
      and
      emails of the Company and its affiliates, and to reactivate the Company’s and
      its affiliates related internet services. In a related matter, on November
      16,
      2006, Solutions Highmedia Interactif Inc. filed a motion for monetary claim
      against the Company, XL Generation AG and XL Canada, in the Quebec Court of
      the
      District of Montreal (court file number 500-22-129010-065) totalling $54,418
      CAD
      covering expenses for webdesign, printing, translation, and webhosting mandates
      performed towards the website of the Company and its affiliates between January
      1, 2006 and August 15, 2006. Pursuant to the settlement agreement dated April
      24, 2007, Solutions Highmedia Interactif Inc. and Domenico Malatesta have agreed
      to release the Company from any amounts owed. The Company has agreed that the
      Company’s domain name will become the property of WKF/5 Ltd.





Share
      Exchange Agreement





On
      November 14, 2006, the Company filed a motion seeking the annulment of the
      Share
      Exchange Agreement signed on August 19, 2005 between the Company and XL
      Generation AG. In addition, this action seeks to require certain of the
      Company’s former management and affiliated parties to pay $11,000,000 in damages
      and to order the escrow agent and Pacific Stock Transfer Company to deposit
      the
      13,500,000 shares of the Company issued to the Alain Lemieux Trust and
      Professional Trust Company Limited at the Quebec Superior Court of the District
      of Montreal (court file number 500-17-033823-066). This action alleged
      misconduct by former officers and directors of the Company, including
      unjustified and irresponsible spending of the Company’s financial resources.
      Pursuant to the settlement agreement dated April 24, 2007, all claims for
      damages and for the annulment of the Share Exchange Agreement have been dropped,
      and the Alain Lemieux Trust was permitted to receive the disputed 13,500,000
      shares of the Company’s common stock, and sell such shares to a third party for
      $500,000.




-
          16
          -




Polyprod
      Litigation





XL
      Generation AG has ceased pursuing judicial proceedings seeking injunctive and
      other relief against Polyprod Inc. in the Quebec Superior Court of the District
      of Montreal (court file number 500-17-032933-064) to allow XL Generation AG
      to
      halt Polyprod Inc. from locking XL Generation AG out of the production site,
      and
      to force Polyprod Inc. to allow XL Generation AG access to said production
      site.





Bankruptcy
      Dismissed





On
      May
      11, 2007 the Bankruptcy Court of the Québec Superior Court of the District of
      Montreal (court file number 500-11-029010-069) dismissed claims made by XL
      Generation AG seeking to have Polyprod Inc. declared bankrupt pursuant to
      applicable law for an unpaid claim totalling $1,052,069 CAD. This amount
      represented monetary advances towards the production of artificial turf and
      related products, made by XL Generation AG to Polyprod Inc. from January 5,
      2006
      to October 10, 2006. Neither party was awarded costs.





**Item
      2.** ****   **Unregistered
      Sales of Equity Securities and Use of Proceeds**





The
      Company received a deposit of five hundred thousand dollars ($500,000) from
      Emper Overseas S.A. on August 10, 2006 to purchase from the Company (i) 400,000
      shares of
      the
      Company's common stock ;
      and
      (ii) Series A Warrants to purchase up to an additional 400,000 shares of the
      company's common stock at an exercise price initially set at $1.25 per share.
      The shares of the Company's common stock were issued on May 22, 2007 pursuant
      to
      the exemption from registration provided by Regulation S.





**Item
      3.********Defaults
      Upon Senior Securities**





None.





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





None.





**Item
      5.** ****   **Other
      Information**





None.





**Item
      6.** ****   **Exhibits
      and Reports on Form 8-K**





(a)
       Reports on Form 8-K





The
      Company filed a Report on Form 8-K on April 23, 2007 reporting a stock
      transaction between the Alain Lemieux Trust (Jersey) and DT Crystal Holdings
      Ltd.





The
      Company filed a Report on Form 8-K on May 31, 2007 reporting the resignation
      of
      Mr. Albert Beerli and Mr. Pascal Beerli as the Directors of XL Generation
      AG.




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(b)
       Exhibits





Exhibit
                No.
            
            Description
                of ExhibitsExhibit
                31.1
            
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 2002.Exhibit
                31.2
            
            Certification
                of Principal Financial Officer pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.Exhibit
                32.1
            
            Certification
                of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
                as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.Exhibit
                32.2
            
            Certification
                of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
                as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.





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          -





**SIGNATURES**




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


**XL
                GENERATION INTERNATIONAL INC.**August
                19, 2007
            By:
            /s/ Alexander
                C. GilmourName:Alexander
                C. GilmourTitle:Acting
                Principal Executive Officer


By:
            /s/ Michel
                St-PierreName:Michel
                St-PierreTitle:  
                Acting Principal Financial Officer and
              Acting
                Principal Accounting Officer




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