| | OMB APPROVAL                                                                                                           
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United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________

FORM 10-QSB

(Mark One)

[X]     Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2005

OR

[   ]    Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number: 0-23391

XFORMITY TECHNOLOGIES, INC.
(Formerly known as XML-Global Technologies, Inc.)(Exact name of small business issuer as specified in its charter)

| | Colorado                                                         | 84-1434313                          
| | ---------------------------------------------------------------- | ------------------------------------
| | (State or other jurisdiction of 
 incorporation or organization) | (I.R.S. Employer Identification No.)

14333 Proton Road, Dallas, Texas 75244                                 (Address of principal executive offices, including zip code)

Issuer's Telephone No., including area code: (972) 661-1200

Indicate by check mark whether Registrant:  (1)  has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act  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 [  ]

The number of shares of the registrant's common stock, $0.0001 par value, outstanding at November 10, 2005: 35,911,672

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



|PART I.  | FINANCIAL INFORMATION                                                                            | Page 
|-------- | ------------------------------------------------------------------------------------------------ | -----
|Item 1.  | Financial statements                                                                             |      
|         |                                                                                                  |      
|         | Consolidated Balance Sheets - September 30, 2005 (unaudited) and June 30, 2005                   | 3    
|         |                                                                                                  |      
|         | Unaudited Consolidated Statements of Operations - Three Months Ended September 30, 2005 and 2004 | 4    
|         |                                                                                                  |      
|         | Unaudited Consolidated Statements of Cash Flows - Three Months Ended September 30, 2005 and 2004 | 5    
|         |                                                                                                  |      
|         | Notes to Unaudited Consolidated Financial Statements                                             | 6-11 
|         |                                                                                                  |      
|Item 2.  | Management's Discussion and Analysis or Plan of Operations                                       | 11-13
|         |                                                                                                  |      
|Item 3.  | Controls and Procedures                                                                          | 13   
|         |                                                                                                  |      
|PART II. | other INFORMATION                                                                                |      
|         |                                                                                                  |      
|Item 1.  | Legal Proceedings                                                                                | 14   
|         |                                                                                                  |      
|Item 2.  | Unregistered Sales of Securities and Use of Proceeds                                             | 14   
|         |                                                                                                  |      
|Item 3.  | Defaults upon Senior Securities                                                                  | 14   
|         |                                                                                                  |      
|Item 4.  | Submission of Matters to a Vote of Security Holders                                              | 14   
|         |                                                                                                  |      
|Item 5.  | Other Information                                                                                | 14   
|         |                                                                                                  |      
|Item 6.  | Exhibits and Reports on Form 8-K                                                                 | 14   
|         |                                                                                                  |      

PART I.FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

XFormity Technologies, Inc. and Subsidiary
Consolidated Balance Sheets

|                                                                                                                                                 | (Unaudited)               |                |               
|------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------- | -------------- | --------------
|                                                                                                                                                 | September 30, 2005        |                | June 30, 2005 
|Assets                                                                                                                                           |                           |                |               
|Current Assets                                                                                                                                   |                           |                |               
|                                                                                                                                                 | Cash and cash equivalents | $      131,775 |               
|                                                                                                                                                 | Accounts receivable       | 25,929         |               
|                                                                                                                                                 | Prepaid expenses          | 11,514         |               
|                                                                                                                                                 | Other current assets      | 191            |               
|                                                                                                                                                 | Total current assets      | 169,409        |               
|Property and equipment, net                                                                                                                      | 64,122                    |                | 59,908        
|Other assets                                                                                                                                     | 3,800                     |                | 3,800         
|Total Assets                                                                                                                                     | $       237,331           |                | $      253,555
|                                                                                                                                                 |                           |                |               
|Liabilities and Stockholders' Equity (Deficit)                                                                                                   |                           |                |               
|Current Liabilities                                                                                                                              |                           |                |               
|Accounts payable                                                                                                                                 | $    1,177,634            |                | $     749,270 
|Accrued expenses                                                                                                                                 | 46,564                    |                | 32,923        
|Deferred revenue                                                                                                                                 | 14,886                    |                | 28,298        
|Convertible debentures                                                                                                                           | 450,000                   |                | 100,000       
|Total Current Liabilities                                                                                                                        | 1,689,084                 |                | 910,491       
|Deferred credits                                                                                                                                 | 100,000                   |                | 100,000       
|Total Liabilities                                                                                                                                | 1,789,084                 |                | 1,010,491     
|                                                                                                                                                 |                           |                |               
|Stockholders' Equity (Deficit)                                                                                                                   |                           |                |               
|Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding at September 30, 2005 and June 30, 2005             | -                         |                | -             
|Common stock, $0.0001 par value, 125,000,000 shares authorized, 35,911,672 shares issued and outstanding at September 30, 2005 and June 30, 2005 | 3,591                     |                | 3,591         
|Additional paid-in capital                                                                                                                       | 2,991,752                 |                | 2,991,752     
|Accumulated deficit                                                                                                                              | (4,547,096)               |                | (3,752,279)   
|Total Stockholders' Equity (Deficit)                                                                                                             | (1,551,753)               |                | (756,936)     
|Total Liabilities and Stockholders' Equity (Deficit)                                                                                             | $     237,331             |                | $    253,555  
|                                                                                                                                                 |                           |                |               
|The accompanying notes are an integral part of these consolidated financial statements.                                                         



XFormity Technologies, Inc. and Subsidiary
Consolidated Statements of Operations

|                                          |  |                   | (Unaudited)
Three Months EndedSeptember 30, |                 
|----------------------------------------- |  | ----------------- | ------------------------------------------- | ----------------
|2005                                      |  | 2004             
|                                          |  |                   |                                             |                 
|Revenue                                   |  | $     169,003     |                                             | $        80,800 
|Cost of revenue                           |  | 112,824           |                                             | 95,341          
|Research and development                  |  | 134,483           |                                             | 138,565         
|Marketing and selling                     |  | 19,555            |                                             | 38,703          
|General and administrative                |  | 692,596           |                                             | 190,023         
|Total operating expenses                  |  | 959,458           |                                             | 462,632         
|Loss from operations                      |  | (790,455)         |                                             | (381,832)       
|Interest expense, net                     |  | (4,362)           |                                             | (249)           
|Loss before provision for income taxes    |  | (794,817)         |                                             | (382,081)       
|Provision for income taxes                |  | -                 |                                             | -               
|Net loss                                  |  | $    (794,817)    |                                             | $   (382,081)   
|                                          |  |                   |                                             |                 
|Net loss per share - basic                |  | $          (0.02) |                                             | $         (0.02)
|                                          |  |                   |                                             |                 
|Weighted average number of shares - basic |  | 35,911,672        |                                             | 18,533,244      
|                                          |  |                   |                                             |                 

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



XFormity Technologies, Inc. and Subsidiary
Consolidated Statements of Cash Flows

|                                                                                        |                                                                                              |  |  | (Unaudited)                      
|--------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------- |  |  | ---------------------------------
|                                                                                        |                                                                                              |  |  | Three Months Ended 
September 30,
|                                                                                        |                                                                                              |  |  | 2005                             
|Operating activities:                                                                   |                                                                                              |  |  |                                  
|Net loss                                                                                |                                                                                              |  |  | $  (794,817)                     
|Depreciation                                                                            |                                                                                              |  |  | 6,531                            
|Changes in:                                                                             |                                                                                              |  |  |                                  
|                                                                                        | Accounts receivable                                                                          |  |  |                                  
|                                                                                        | Prepaid expenses                                                                             |  |  |                                  
|                                                                                        | Other assets                                                                                 |  |  |                                  
|                                                                                        | Accounts payable                                                                             |  |  |                                  
|                                                                                        | Accrued expenses                                                                             |  |  |                                  
|                                                                                        | Deferred revenue                                                                             |  |  |                                  
|Net cash used in operating activities                                                   |                                                                                              |  |  | (328,247)                        
|                                                                                        |                                                                                              |  |  |                                  
|Investing activities:                                                                   |                                                                                              |  |  |                                  
|                                                                                        | Cash proceeds received upon acquisition of XML-Global Technologies, Inc.                     |  |  |                                  
|                                                                                        | Purchases of property and equipment                                                          |  |  |                                  
|Net cash provided by (used in) investing activities                                     |                                                                                              |  |  | (10,745)                         
|                                                                                        |                                                                                              |  |  |                                  
|Financing activities:                                                                   |                                                                                              |  |  |                                  
|                                                                                        | Issuance of convertible debentures                                                           |  |  |                                  
|                                                                                        | Retirement of stockholders' loans                                                            |  |  |                                  
|                                                                                        | Advances from XML-Global Technologies, Inc.                                                  |  |  |                                  
|Net cash provided by financing activities                                               |                                                                                              |  |  | 350,000                          
|Increase in cash and cash equivalents                                                   |                                                                                              |  |  | 11,008                           
|Cash and cash equivalents, beginning of period                                          |                                                                                              |  |  | 120,767                          
|Cash and cash equivalents, end of period                                                |                                                                                              |  |  | $ 131,775                        
|Supplemental disclosure of cash flow information:                                       |                                                                                              |  |  |                                  
|Interest paid                                                                           |                                                                                              |  |  | $             -                  
|Supplemental disclosure of non-cash financing and investing activities:                 |                                                                                              |  |  |                                  
|                                                                                        | Acquisition legal fees payable, charged to additional paid in capital                        |  |  |                                  
|                                                                                        | Net assets received (liabilities assumed) upon acquisition of XML-Global Technologies, Inc.: |  |  |                                  
|Other accounts receivable                                                               |                                                                                              |  |  | -                                
|Advances due from XFormity, Inc.                                                        |                                                                                              |  |  | -                                
|Prepaid expenses                                                                        |                                                                                              |  |  | -                                
|Accounts payable                                                                        |                                                                                              |  |  | -                                
|Accrued expenses                                                                        |                                                                                              |  |  | -                                
|                                                                                        |                                                                                              |  |  | $            -                   
|                                                                                        |                                                                                              |  |  |                                  
|The accompanying notes are an integral part of these consolidated financial statements.

Part I

XFormity Technologies, Inc. and Subsidiary
Notes to Consolidated Financial Statements
September 30, 2005 
(Unaudited)

Note 1.     Organization and Nature of Business.

The reporting entity in these financial statements is XFormity Technologies, Inc. (a Colorado Corporation) (the Company) formerly known as XML-Global Technologies, Inc. (XML).  In June 2004, XML signed a letter of intent and then in August 2004 entered into an agreement and plan of merger with XFormity, Inc. (a Texas Corporation) ("XFM").Under the merger agreement, completed on September 27, 2004, XFM became a wholly-owned subsidiary of XML and stockholders of XFM received 17,947,984 shares of common stock and 5,869,500 warrants exercisable at $0.26 per share representing 50 percent of the issued and outstanding shares and warrants of XML.In conjunction with this transaction, XML, the surviving legal entity, changed its name to XFormity Technologies, Inc. ("XFormity" or the "Company") and effected a reverse one-for-four stock split, which has been reflected retroactively in the financial statements presented.  All share and per share information contained in this report has been adjusted to give effect to the reverse split.

XFM

All of the Company's operations during the reporting periods were conducted within the quick service restaurant industry and the Company expects to continue to primarily focus its operations in that industry segment; however, there has been interest in the Company's technology from other retail categories that may be pursued in the future.

The Company has incurred significant losses resulting in a stockholders' deficit exceeding $1,500,000 at September 30, 2005.  The Company has addressed resulting liquidity issues through the issuance of convertible debentures that has raised a total of $450,000 in working capital. The Company has met with various institutional and individual investors for the purpose of raising additional capital.  The Company will need additional financing and there is no assurance that such financing will be available, if at all, at terms acceptable to the Company.  If additional funds are raised by the issuance of equity securities, existing stockholders may experience dilution of their ownership interests and these securities may have rights senior to those of holders of the common stock.  If adequate funds are not available or not available on acceptable terms, it could have a materially adverse effect on the Company's financial condition and results of operations.

Note 2.     Basis of Financial Statement Presentation.

The accompanying unaudited condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed financial statements includes normal recurring adjustments and reflects all adjustments which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to not make the information misleading, it is suggested that these interim condensed financial statements be read in conjunction with the Company's most recent audited financial statements and notes thereto included in its June 30, 2005 Annual Report on Form 10-KSB. Operating results for the three months ended September 30, 2005 are not necessarily indicative of the results that may be expected for the entire year or any other period.

The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

In order to continue as a going concern and achieve a profitable level of operations the Company will need, among other things, additional capital resources. Management's plans to obtain these capital resources include raising additional capital through sales of convertible debentures, $450,000 of which was raised as of September 30, 2005, and common stock, and continuing to develop and market its business intelligence software. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

Note 3.    Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of XFormity Technologies, Inc. and its wholly-owned operating subsidiary, XFM.  All material inter-company accounts and transactions have been eliminated in consolidation.

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 disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Cash and Cash Equivalents

All highly liquid investments with a maturity of three months or less at the time of purchase are considered to be cash equivalents.  Cash equivalents include cash on deposit with banks and money market funds.

Credit Risk

All trade accounts receivable are deemed collectible and as such, the Company is not exposed to any significant credit risk.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, convertible debentures and deferred credits reported on the balance sheet are estimated by management to approximate fair value.

Revenue Recognition

The Company contracts with clients for development and sale of business intelligence software products.  Revenue derived from the sales of these products, that is billed on a monthly usage basis, is recognized in accordance with Statement of Position 97-2 (as amended), Software Revenue Recognition, over the term of the agreement or at specific acceptance points. The Company, in many instances, receives payments from some of its customers in advance of the month of actual usage of the software product.  These funds are reflected as deferred revenue until the month of usage, or specific acceptance points, when they are recognized as earned revenue.

Property and Equipment

Property and equipment are stated at cost.  Depreciation of property and equipment is computed for financial statement purposes using accelerated methods over a 5 year estimated useful life of the assets.

Software Development Costs

The Company capitalizes internally generated software development costs in accordance with Statement of Financial Accounting Standards ("SFAS") No.86, Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed. Capitalization of software development costs begins when a product's technological feasibility is established.  Costs incurred for research and development of products where technological feasibility has not yet been established are expensed as incurred.

Amortization of capitalized software development costs begins when the product is available for sale, and is amortized on a product-by-product basis.  The annual amortization amount is the greater of (a) the straight line method over the remaining estimated economic life of the product or (b) the ratio of the product's current gross revenue to its total current and anticipated future gross revenue.  Costs eligible for capitalization have been immaterial for the periods presented.

In fiscal year 2004, the Company entered into agreements with seven of its customers ("consortium members") whereby the Company was to develop a "Back-of-the-House" software program. The terms of the related agreements also included the issuance of common stock for cash totaling $700,000, certain consulting services to be provided through 2008 by the consortium members, and potential credits against future billings of the software program of $150,000 for each member, over a three-year period commencing when and if the program is successfully developed.  If the software program is not completed, one of the consortium members would be entitled to apply this credit against the Company's QSRx business intelligence billings over a four year period.  The agreements for the other six members do not provide for any form of repayment if development is not successful.  Development of the program was halted in December 2004.  The Company is not certain when or if development will be restarted and if the program will be completed.

The Company considers the agreements to represent a funded software development arrangement under Statement of Position 97-2.  Pursuant to Statement of Financial Accounting Standards No. 68 (As Amended), Research and Development Arrangements, the Company has recorded a deferred credit liability of $100,000 to reflect the present value of its obligation to repay the one customer and paid in capital of $600,000 representing the estimated fair market value of common stock issued to the other six members.  The Company has not recorded an asset for prepaid consulting services because its value was uncertain.

Note 4.     Income Taxes

At September 30, 2005, the Company had net operating loss carry-forwards totaling approximately $2,925,000 that begin to expire in 2022. No tax benefit has been reported in the September 30, 2005 financial statements because the Company believes a portion or all of the carry-forward may expire unused. Accordingly, the $971,000 tax benefit of the loss carry-forward has been offset by a valuation allowance of the same amount. The following are the components of the income tax provision:

| | Statement of Operations                    |      |              |             |  | Three Months EndedSeptember 30,
| | ------------------------------------------ | ---- | ------------ | ----------- |  | -------------------------------
| |                                            | 2005 | 2004        
| | Federal income tax provision (benefit)     |      | $  (256,000) | $ (130,000)
| |                                            |      |              |             |  |                                
| | Total provision (benefit) for income taxes |      | (256,000)    | (130,000)  
| |                                            |      |              |             |  |                                
| | Valuation allowance                        |      |              |             |  | 256,000                        
| |                                            |      |              |             |  |                                
| | Provision for income tax                   |      |              |             |  | $              -               



| | Balance Sheet at September 30, 2005                               |                 
| | ----------------------------------------------------------------- | ----------------
| | Deferred tax asset arising from net operating loss carry-forwards | $  971,000      
| | Valuation allowance                                               | (971,000)       
| | Net deferred tax asset                                            | $              -

Note 5.     Accounts Payable

Accounts payable represents balances due to trade creditors and fees for professional services incurred for legal and accounting issues.  Approximately $1,110,000 and $659,000, respectively, are included in the September 30, 2005 and June 30, 2005 balances that are for legal fees incurred in the defense of a patent infringement suit filed by a competitor in the QSR industry.

Note 6.     Convertible Debentures

In April 2005, the Board of Directors of the Company approved a private placement of up to $1,000,000 of unsecured convertible debentures.  The term of these debentures, and their maturity dates, are one year from date of issuance.  The principal amount of the debentures accrues interest at the rate of 7% per annum. The interest will be payable at maturity.  The debentures are convertible, at the option of the debt holder, at any time, into shares of the Company's common stock at a conversion price equal to the lesser of (i) 80% of the price per share of common stock or common stock equivalent paid by investors in the Company's next round of equity or debt financing consisting of at least $2,000,000 in cumulative gross proceeds, or (ii) $0.28 per share.  If the investor elects to receive cash in lieu of stock, that will be payable only at maturity.

As of September 30, 2005, the Company has issued in exchange for cash $450,000 of the debentures. The Company has no assurance as to how much in additional subscriptions will be received in the private offering. Of the total issued through the filing date, $400,000 of these convertible debentures was issued to stockholders who are also customers of the Company and were part of the original investment group of XFM. The remaining $50,000 was issued to an individual stockholder who was also part of the original investment group. Accrued interest on these debentures was $6,079 at September 30, 2005.  There were no discounts or commissions incurred on the sale of the debentures.

Note 7.     Loss Per Share

Basic loss per share is calculated based on the weighted-average number of outstanding common shares.  Diluted loss per share is calculated based on the weighted-average number of outstanding common shares plus the effect of dilutive potential common shares.  The Company's calculation of net loss per share excludes potential common shares as the effect would be anti-dilutive.

Note 8.     Stock Compensation

The Company has elected to apply Accounting Principles Board ("APB") Opinion No.25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock options issued to employees (intrinsic value) and has adopted the disclosure-only provisions of SFAS No. 123, Accounting for Stock-Based Compensation. Application of an option pricing model to the Company's stock options resulted in a $0 fair value and, therefore, no pro forma disclosures are made.

Note 9.     1999 Equity Incentive Plan

On October 19, 1999, the Company adopted the 1999 Equity Incentive Plan (the "Plan") to provide incentives to employees, directors and consultants. Under the Plan, the Company has reserved a total of 1,500,000 shares of common stock for issuance with the maximum term of options being ten years. On November 13, 2003, the Company's shareholders approved an increase in the number of shares issuable under the Plan, but the increase has not yet been implemented. The Board of Directors has the exclusive power over the granting of options and their vesting provisions. All options granted to date have a seven-year term.

| |                                                           | Three Months ended September 30,
| | --------------------------------------------------------- | --------------------------------
| |                                                           | 2005                            
| |                                                           | Number  ofOptions               
| | Options outstanding at June 30, 2005                      | 25,000                          
| | Granted                                                   | -                               
| | Exercised                                                 | -                               
| | Forfeited                                                 | -                               
| | Options outstanding and exercisable at September 30, 2005 | 25,000                          
| |                                                           |                                 

Note 10.     Related Party Transactions

Customers, who are also stockholders in the Company, generated revenues approximating $77,800 and $55,200 for the three month periods ended September 30, 2005 and 2004, respectively.  Owners from two of those respective customers serve as members of the Board of Directors and the Audit Committee.  A senior executive of SEI Information Technology, the company that provides the Company's customers with primary technical support and that received payments approximating $30,400 during fiscal year 2005, also serves as a member of the Board of Directors.

In the three months ended September 30, 2005, the Company paid or accrued rent of $3,000 to a company controlled by a major stockholder of the Company. The rent included space and administrative services provided to the Company.

Note 11.     Lease Commitments

The Company's lease at its Dallas location expired September 30, 2005 and the Company is now on a month-to-month basis with the landlord after the effective date of termination. There were no significant renewal or purchase options and the Company currently intends to relocate its offices in the Dallas area to provide for necessary expansion when necessary. The Company also has a month-to-month lease for $1,000 per month at its Chicago office that includes telephone and secretarial services.

Note 12.     Contingencies

A competitor has claimed in a civil action that the Company has infringed on its patent.  The Company's counsel and management believe there is no basis for this infringement claim and is vigorously defending the matter.

Under agreements entered into with seven of its customers (see Software Development Costs under Note 3), the Company agreed to issue future licensing credits in the aggregate amount of $350,000 per year over a three year period toward future billings of a software program when and if the project is completed. The Company halted development in 2004 and is currently in discussion with those customers to determine the continuation of this project.

|ITEM 2. | MANAGEMENT'S DIOSCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
|------- | -----------------------------------------------------------

The Company believes its critical accounting policies for the period July 1, 2005 to September 30, 2005 are revenue recognition and accounting for research and development expenses under accounting principles generally accepted in the United States and that they are adhered to in the accompanying consolidated financial statements.

FORWARD LOOKING STATEMENTS

When used in this Quarterly Report on Form 10-QSB, in documents incorporated herein and elsewhere by us from time to time, the words "believes," "anticipates," "expects" and similar expressions are intended to identify forward-looking statements concerning our business operations, economic performance and financial condition, including in particular, our business strategy and means to implement the strategy, our objectives, the amount of future capital expenditures required, the likelihood of our success in developing and introducing new products and expanding the business, and the timing of the introduction of new and modified products or services. These forward looking statements are based on a number of assumptions and estimates which are inherently subject to significant risks and uncertainties, many of which are beyond our control and reflect future business decisions which are subject to change.

A variety of factors could cause actual results to differ materially from those expected in our forward-looking statements, including those set forth from time to time in our press releases and reports and other filings made with the Securities and Exchange Commission. We caution that such factors are not exclusive. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-QSB. We undertake no obligation to publicly release the results of any revisions of such forward-looking statements that may be made to reflect events or circumstances after the date hereof, or thereof, as the case may be, or to reflect the occurrence of unanticipated events.

RESULTS OF OPERATIONS

REVENUES.  The Company contracts with its clients for the development and sale of its business intelligence software, primarily its QSRx software product that is billed on a monthly basis to its customers' respective franchise locations. For the three months ended September 30, 2005, the Company generated $169,003 in revenues compared to $80,800 in the comparative period in the prior year. The increase in revenue is attributable to an increased number of customers within different franchises, sales of additional software products to our existing customer base and a professional service contract for a specific development project.

COST OF REVENUES.   The cost of revenue for the three months ended September 30, 2005 consists primarily of salaries, related payroll costs and technical support provided to our customers.

RESEARCH AND DEVELOPMENT.   Research and development costs are charged to operations as incurred and consist primarily of personnel and related benefit costs. The costs for the three month period ended September 30, 2005 of $134,483 compared to $138,565

MARKETING AND SELLING.  The marketing and selling expenses incurred by the Company consisted primarily of trade shows and their related costs.  The costs in the period ended September 30, 2005 were $19,555 compared to $38,703 in the comparative period of the prior year. For the current fiscal year, the Company continues to rely on its relationship with existing clients to expand its market share, and did not incur any significant direct sales costs for this period.

GENERAL AND ADMINISTRATIVE.  Our general and administrative costs consist primarily of executive salaries and related benefits, professional fees for attorneys, patent litigation and our independent auditors, rent, expenses related to being a public company and other operating costs.     The costs in the three month period ended September 30, 2005 were $692,596 compared to $190,023 for the three month period ended September 30, 2004.  The increase for the three month period was primarily attributable to patent litigation and the merger's legal fees of approximately $525,000, and insurance costs of approximately $11,000, offset by reduced executive compensation of $40,000.

NET LOSS.  The net loss for the three-month period ended September 30, 2005 was $794,817 compared with a net loss of $382,081 for the comparative period in 2004. The increase in the net loss was primarily the result of additional technical support costs attributable to new customers and a franchisor, and professional fees attributable to the merger and patent litigation offset by reduced executive compensation.

The net loss applicable to common stockholders for the three months ended September 30, 2005 was $794,817 or $0.02 per common share, on 35,911,672 weighted average common shares outstanding. This compares with the net loss available to common stockholders for the three-month period ended September 30, 2004 of $382,081, or $0.02 per share, on 18,533,244 weighted average common shares outstanding for both periods.

LIQUIDITY AND CAPITAL RESOURCES

The Company has incurred operating losses and negative cash flows from operations in each quarter since it commenced operations.  As of September 30, 2005, there was an accumulated deficit of $4,547,096 and its cash position is $131,775.  The current cash position was acquired primarily through its acquisition of XML Global Technologies, Inc., a public shell corporation, and its operating revenues. The Company does not expect to generate operating earnings in the current fiscal year until it achieves a substantial customer base and related revenues necessary to cover its operational costs.

The Company continues to vigorously defend the patent infringement suit filed by a competitor.

In April 2005, the Board of Directors of the Company approved a $1,000,000 private placement of convertible debentures and to date has issued $450,000.  There can be no assurance how much in subscriptions will be received in the private offering.

The Company will need additional financing and there is no assurance that such financing will be available, if at all, at terms acceptable to the Company.  If additional funds are raised by the issuance of equity securities, stockholders may experience dilution of their ownership interest and these securities may have rights senior to those of holders of the common stock.  If adequate funds are not available or not available on acceptable terms, it could have a materially adverse effect on the Company's financial condition and results of operations.

ITEM 3.  CONTROLS AND PROCEDURES

The Company's Principal Executive Officer, Mark Haugejorde, and Principal Financial Officer, Jack Rabin, have established and are currently maintaining disclosure controls and procedures for the Company.  The disclosure controls and procedures have been designed to ensure that material information relating to the Company is made known to them as soon as it is known by others within the Company.

The Principal Executive Officer and Principal Financial Officer conducted an update review and evaluation of the effectiveness of the Company's disclosure controls and procedures and have concluded, based on their evaluation within 90 days of the filing of this Report, that our disclosure controls and procedures are effective for gathering, analyzing and disclosing the information we are required to disclose in our reports filed under the Securities Exchange Act of 1934.  There have been no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the previously mentioned evaluation.

PART II - OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

Our wholly-owned subsidiary, XFormity, Inc., is a defendant in a civil action brought by a competitor, as Plaintiff, in the United States District Court for the Northern District of Texas, Dallas Division, Civil Action No. 304CV-542-D (the "Litigation").  In the Litigation, the Plaintiff claims that XFormity has infringed upon a patent owned by the plaintiff.  XFormity denies liability and continues to vigorously defend the matter.  Common stock issued to a former XFormity, Inc. shareholder, having a market value of $500,000 at the time of the indemnity agreement, has been withheld in escrow to cover any potential liability arising from the Litigation.

As of the date of this report, there are no other pending legal proceedings in which we or any of our officers, directors or affiliates is a party, and we are not aware of any threatened legal proceedings.

ITEM 2.      UNREGISTERED SALES OF
SECURITIES AND USE OF PROCEEDS

In connection with the acquisition of XML by XFormity that was consummated on September 27, 2004, we issued to the former shareholders of XFormity an aggregate of 17,947,984 shares of common stock and warrants exercisable to purchase an additional 5,869,500 shares of common stock at an exercise price of $0.26 per share.  The securities were issued to a total of 25 former XFormity shareholders, 20 of which qualified as "accredited investors" within the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "Securities Act"), and the other five of whom possessed the knowledge and experience in financial and business matters required under Rule 506(b)(2)(ii) of Regulation D.  The securities were issued without registration under the Securities Act in reliance upon the exemption from the registration requirements thereof contained in Section 4(2) and Regulation D, Rule 506 thereunder.  The securities were all taken for investment and were subject to appropriate restrictions on transfer.

ITEM 3.      DEFAULT UPON SENIOR SECURITIES

Not applicable.

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company did not submit any matters to a vote of security holders in the three months ended September 30, 2005.

ITEM 5.     OTHER INFORMATION

None

ITEM 6.      EXHIBITS AND REPORTS ON
FORM 8-K

|Exhibits           
|-------------------
|31.                
|32.                
|                   
|Reports on Form 8-K
|1                  
|2                  

SIGNATURES

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

|                       | XFormity Technologies, Inc.                               
|---------------------- | ----------------------------------------------------------
|                       |                                                           
|Date:November 25, 2005 | /s/ Mark HaugejordeMark Haugejorde
Chief Executive Officer
|                       |                                                           
|Date:November 25, 2005 | /s/ Jack Rabin
Jack Rabin
Chief Financial Officer