United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_______________________________

FORM 10-QSB

(Mark One)

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

For the period ended December 31, 2003

OR

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

Commission file number: 0-23391

XML-GLOBAL TECHNOLOGIES, INC.

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

c/o 609 Granville Street, Suite 880Vancouver, BC, Canada V7Y 1G5

Registrant's Telephone No., including area code: (604) 685-5535

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

As of February 11, 2004, there were 58,055,736 shares of the issuer's Common Stock outstanding.

INDEX

|PART I.  | FINANCIAL INFORMATION                                                                                          | 
|-------- | -------------------------------------------------------------------------------------------------------------- | 
|Item 1.  | Financial statements                                                                                           | 
|         | Unaudited Consolidated Balance Sheets - December 31, 2003 and June 30, 2003                                    | 
|         | Unaudited Consolidated Statements of Operations - Three Months and Six Months Ended December 31, 2003 and 2002 | 
|         | Unaudited Consolidated Statements of Cash Flows - Six Months Ended December 31, 2003 and 2002                  | 
|         | Notes to Unaudited Consolidated Financial Statements                                                           | 
|Item 2.  | Management's Discussion and Analysis of Financial Condition and Results of Operations                          | 
|Item 3.  | Controls and Procedures                                                                                        | 
|PART II. | OTHER INFORMATION                                                                                              | 
|Item 1.  | Pending Legal Proceedings                                                                                      | 
|Item 2.  | Changes in Securities                                                                                          | 
|Item 4.  | Submission of Matters to a Vote of Security Holders                                                            | 
|Item 6.  | Exhibits and Reports Filed on Form 8-K                                                                         | 

PART 1.       FINANCIAL INFORMATION

ITEM 1.       FINANCIAL STATEMENTS

XML-Global Technologies, Inc. and Subsidiaries(A Development Stage Company)
Unaudited Consolidated Balance Sheet
At December 31, 2003 and June 30, 2003

|                                                     | December 31, 2003                                                                                                                                      |                 | June 30, 
2003
|---------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------- | --------------
|Assets                                               |                                                                                                                                                        |                 |               
|Current Assets                                       |                                                                                                                                                        |                 |               
|                                                     | Cash                                                                                                                                                   | $       656,714 |               
|                                                     | Other receivables                                                                                                                                      | 20,347          |               
|                                                     | Prepaid expenses                                                                                                                                       | 589             |               
|                                                     | Marketable securities (Note 3)                                                                                                                         | 2,019,000       |               
|                                                     | Net assets to be disposed of (Note 6)                                                                                                                  | -               |               
|Total Assets                                         | $    2,696,650                                                                                                                                         |                 | $    137,851  
|                                                     |                                                                                                                                                        |                 |               
|Liabilities and Stockholders' Deficit                |                                                                                                                                                        |                 |               
|Current Liabilities                                  |                                                                                                                                                        |                 |               
|Accounts payable and accrued liabilities             | $       113,487                                                                                                                                        |                 | $    185,745  
|Foreign income taxes payable                         | 128,094                                                                                                                                                |                 | 116,010       
|Total Liabilities                                    | 241,581                                                                                                                                                |                 | 301,755       
|                                                     |                                                                                                                                                        |                 |               
|Stockholders' Equity (Deficit)                       |                                                                                                                                                        |                 |               
|                                                     | Preferred stock, $0.01 par value, 100,000,000 shares 
   authorized, none issued and outstanding at December 31, 
   2003 and June 30, 2003            | -               |               
|                                                     | Common stock, $.0001 par value, 500,000,000 shares 
   authorized, 58,055,736 shares issued and outstanding at 
   December 31, 2003 and June 30, 2003 | 5,806           |               
|                                                     | Additional paid-in capital                                                                                                                             | 16,292,837      |               
|                                                     | Accumulated other comprehensive loss                                                                                                                   | (76,080)        |               
|                                                     | Accumulated deficit                                                                                                                                    | (13,735,740)    |               
|Deficit accumulated during the development stage     | (31,754)                                                                                                                                               |                 | -             
|Total Stockholders' Equity (Deficit)                 | 2,455,069                                                                                                                                              |                 | (163,904)     
|Total Liabilities and Stockholders' Equity (Deficit) | $    2,696,650                                                                                                                                         |                 | 137,851       
|                                                     |                                                                                                                                                        |                 |               
|See accompanying notes                              

XML-Global Technologies, Inc. and Subsidiaries
(A Development Stage Company)Unaudited Consolidated Statement of Operations
For the Period Ended December 31, 2003

|                                                         |                                     | Cumulative During Development Stage November 17, 2003 to December 31, 2003 |                       | Three Months EndedDecember 31, |                      | Six Months EndedDecember 31,
|-------------------------------------------------------- | ----------------------------------- | -------------------------------------------------------------------------- | --------------------- | ------------------------------ | -------------------- | ----------------------------
|2003                                                     |                                     | 2002                                                                       | 2003                  |                                | 2002                
|                                                         |                                     |                                                                            |                       |                                |                      |                             
|Revenue                                                  | $                -                  |                                                                            | $                   - |                                | $                  - |                             
|Cost of revenue                                          | -                                   |                                                                            | -                     |                                | -                    |                             
|Gross profit (loss)                                      | -                                   |                                                                            | -                     |                                | -                    |                             
|Operating expenses                                       |                                     |                                                                            |                       |                                |                      |                             
|                                                         | Research and development            | -                                                                          |                       | -                              |                      | -                           
|                                                         | Marketing and selling               | -                                                                          |                       | -                              |                      | -                           
|                                                         | General and administrative (Note 5) | 31,754                                                                     |                       | 57,518                         |                      | 161,750                     
|                                                         | Depreciation and amortization       | -                                                                          |                       | -                              |                      | -                           
|                                                         | Total operating expenses            | 31,754                                                                     |                       | 57,518                         |                      | 161,750                     
|Operating loss                                           | (31,754)                            |                                                                            | (57,518)              |                                | (161,750)            |                             
|Other income (expense)                                   |                                     |                                                                            |                       |                                |                      |                             
|Interest income                                          | -                                   |                                                                            | -                     |                                | -                    |                             
|Gain on sale of business
           assets               | -                                   |                                                                            | 2,837,215             |                                | -                    |                             
|Net income loss) before provision for income taxes       | (31,754)                            |                                                                            | 2,779,697             |                                | (161,750)            |                             
|Provision for income taxes                               | -                                   |                                                                            | -                     |                                | -                    |                             
|Net income (loss) from continuing operations             | (31,754)                            |                                                                            | 2,779,697             |                                | (161,750)            |                             
|Loss from discontinued operations, net of taxes (Note 6) | -                                   |                                                                            | (178,873)             |                                | (609,444)            |                             
|Net income (loss)                                        | (31,754)                            |                                                                            | 2,600,824             |                                | (771,194)            |                             
|                                                         |                                     |                                                                            |                       |                                |                      |                             
|Other comprehensive income,
      net of tax:            |                                     |                                                                            |                       |                                |                      |                             
|Foreign currency translation
      adjustment            | -                                   |                                                                            | (8,427)               |                                | (3,669)              |                             
|                                                         |                                     |                                                                            |                       |                                |                      |                             
|Comprehensive income (loss)                              | $     (31,754)                      |                                                                            | $   2,592,397         |                                | $       774,863      |                             
|                                                         |                                     |                                                                            |                       |                                |                      |                             
|Net income (loss)                                        |                                     |                                                                            | $    2,600,824        |                                | $     (771,194)      |                             
|Accumulated deficit, beginning
      of period           | $                -                  |                                                                            | $(16,368,318)         |                                | $(12,860,908)        |                             
|Accumulated deficit, end of
      period                 | $     (31,754)                      |                                                                            | $(13,767,494)         |                                | $(13,632,102)        |                             
|Net income (loss) per share                              |                                     |                                                                            |                       |                                |                      |                             
|- basic                                                  |                                     |                                                                            | $            0.05     |                                | $          (0.02)    |                             
|- diluted                                                |                                     |                                                                            | $            0.03     |                                | $          (0.02)    |                             
|                                                         |                                     |                                                                            |                       |                                |                      |                             
|Weighted average number of
      shares                  |                                     |                                                                            |                       |                                |                      |                             
|- basic                                                  |                                     |                                                                            | 58,055,736            |                                | 38,406,606           |                             
|- diluted                                                |                                     |                                                                            | 101,739,596           |                                | 38,406,606           |                             
|                                                        
|See accompanying notes.                                 

XML-Global Technologies, Inc. and Subsidiaries
(A Development Stage Company)

|                                                                                 |                                                        |                                          | Cumulative During Development November 17, 2003 to
 December 31, 2003 | Six Months Ended 
December 31,
2003 | Six Months 
Ended 
December 31,
2002
|-------------------------------------------------------------------------------- | ------------------------------------------------------ | ---------------------------------------- | --------------------------------------------------------------------- | ----------------------------------- | ------------------------------------
|Cash flows from operating activities                                             |                                                        |                                          |                                                                       |                                     |                                     
|Net income (loss) from continuing operations                                     |                                                        | $        (31,754)                        |                                                                       | $   2,721,326                       |                                     
|Net income (loss) from discontinued operations                                   |                                                        | -                                        |                                                                       | (96,155)                            |                                     
|                                                                                 |                                                        | (31,754)                                 |                                                                       | 2,625,171                           |                                     
|Adjustments to reconcile net loss to net cash used in
      operating activities |                                                        |                                          |                                                                       |                                     |                                     
|                                                                                 | Net advances to discontinued operations                |                                          | -                                                                     |                                     | (86,531)                            
|                                                                                 | Gain on sale of business assets                        |                                          | -                                                                     |                                     | (2,837,215)                         
|                                                                                 | Changes in assets and liabilities                      |                                          |                                                                       |                                     |                                     
|                                                                                 |                                                        | Other receivables                        |                                                                       | (1,463)                             |                                     
|                                                                                 |                                                        | Prepaid expenses                         |                                                                       | 142                                 |                                     
|                                                                                 |                                                        | Accounts payable and accrued liabilities |                                                                       | (241,527)                           |                                     
|                                                                                 |                                                        | Foreign income taxes payable             |                                                                       | -                                   |                                     
|                                                                                 |                                                        | Deferred income taxes                    |                                                                       | -                                   |                                     
|Net cash used in operating activities                                            |                                                        | (274,602)                                |                                                                       | (363,043)                           |                                     
|                                                                                 |                                                        |                                          |                                                                       |                                     |                                     
|Cash flows from investing activities                                             |                                                        |                                          |                                                                       |                                     |                                     
|                                                                                 | Proceeds on sale of business assets                    |                                          | -                                                                     |                                     | 1,250,000                           
|                                                                                 | Purchase of intellectual property from developer group |                                          | -                                                                     |                                     | (250,000)                           
|                                                                                 | Investments in respect of discontinued operations      |                                          | -                                                                     |                                     | -                                   
|Net cash provided (used) in investing activities                                 |                                                        | -                                        |                                                                       | 1,000,000                           |                                     
|                                                                                 |                                                        |                                          |                                                                       |                                     |                                     
|Cash flows from financing activities                                             |                                                        |                                          |                                                                       |                                     |                                     
|Deferred issue costs                                                             |                                                        | -                                        |                                                                       | -                                   |                                     
|Issuance of capital stock net of issue costs                                     |                                                        | -                                        |                                                                       | -                                   |                                     
|Net cash from financing activities                                               |                                                        | -                                        |                                                                       | -                                   |                                     
|                                                                                 |                                                        |                                          |                                                                       |                                     |                                     
|Effect of changes in exchange rates                                              |                                                        | -                                        |                                                                       | (13,618)                            |                                     
|                                                                                 |                                                        |                                          |                                                                       |                                     |                                     
|Increase (decrease) in cash                                                      |                                                        | (274,602)                                |                                                                       | 623,339                             |                                     
|Cash, beginning of period                                                        |                                                        | 931,316                                  |                                                                       | 33,375                              |                                     
|Cash, end of period                                                              |                                                        | $       656,714                          |                                                                       | $    656,714                        |                                     
|                                                                                 |                                                        |                                          |                                                                       |                                     |                                     
|Supplemental disclosure of cash information                                      |                                                        |                                          |                                                                       |                                     |                                     
|Interest paid                                                                    |                                                        | $                  -                     |                                                                       | $           516                     |                                     
|Income taxes paid                                                                |                                                        | $                  -                     |                                                                       | $               -                   |                                     
|                                                                                 |                                                        |                                          |                                                                       |                                     |                                     
|See accompanying notes.                                                         

XML-Global Technologies, Inc. and Subsidiaries
(A Development Stage Company)Notes to Condensed Consolidated Financing Statements
December 31, 2003 and 2002
(Unaudited)

Note 1 - Organization

Organization

The Company is a Colorado corporation. From July 1, 2003 through the date of the sale of substantially all of its business assets to Xenos Group Inc. ("Xenos"), it had two active subsidiaries, XML-Technologies, Inc. (a Nevada corporation) and Xtract Informatics Inc. (a British Columbia, Canada corporation). Since November 17, 2003, XML-Technologies, Inc. has been inactive.

Going Concern

The Company incurred significant losses from inception to since inception, but effective November 17, 2003, sold substantially all of its business assets to Xenos. Following the closing of the Xenos transaction, the Company's principal assets are cash and Xenos stock received from the sale. The Company retains some residual license and other intellectual property rights, but these are non-productive and immaterial. The Company intends to acquire another business or merge with another company, although no acquisition target has been identified.  The Company has sufficient cash reserves to meet its operating obligations for at least 12 months.

Xenos Transaction

In August 2003, the Company entered into a definitive agreement to sell its business assets (comprising trade accounts receivable, fixed assets and intellectual property relating to GoXML Transform, GoXML Registry, GoXML Messaging and GoXML Search). The transaction closed effective November 17, 2003. As consideration for these assets, Xenos Group Inc. ("Xenos") tendered $1.25 million in cash and 1,000,000 shares of common stock of Xenos, which represented 10% of Xenos' outstanding stock after the transaction. The Xenos common stock was deposited in escrow and could not be sold for a period of 12 months following the closing without Xenos' consent. The agreement also provided for a price guarantee such that if one year after the transaction closes, the 20-day average closing price of Xenos stock is less than C$3.50 (approximately $2.71) per share, Xenos will provide cash for the difference between C$3.50 per share and the average closing price of the Xenos stock. The maximum price guarantee, however, is limited to C$1.34 (approximately $1.04) per share of Xenos common stock.  Subsequent to December 31, 2003, the Company sold its shares of Xenos stock with the consent of Xenos, as described in Note 9.

From the proceeds, the Company has paid $250,000 in cash and 250,000 shares of Xenos stock to the Developers as discussed below.

Developers

On July 29, 2003, the Company entered into an agreement with the Developers to allocate proceeds from the Xenos sale. The agreement provides that upon the Xenos transaction closing, the Developers would receive $200,000 on closing, $50,000 one year after closing (unless the Developers leave or are dismissed for cause) and 250,000 shares of Xenos stock subject to the same one-year escrow. We have paid the $50,000 due one year after closing into trust for the Developers. The 16,000,000 warrants held by the developers were surrendered at the closing of the Xenos transaction effective November 17, 2003.

Note 2 - Basis of Presentation

These condensed consolidated financial statements are unaudited and reflect all adjustments that, in our opinion, are necessary for a fair presentation of the results for the interim period. The results of operations for the current interim period are not necessarily indicative of results to be expected for the current year or any other period.

These consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended June 30, 2003 and notes thereto included in our 10-KSB as filed with the Securities and Exchange Commission on October 3, 2003.

Note 3 - Marketable Securities

Marketable securities represent the 1,000,000 shares of Xenos stock received on the sale of our business assets, less the 250,000 shares of Xenos stock reserved for the Developers, for a net holding of 750,000 shares. The shares of Xenos are traded on the Toronto Stock Exchange in Canada. The Company's shareholding is subject to an escrow provision that prevents the shares being sold before November 17, 2004 without the consent of Xenos.

The carrying value of the stock is C$3.50 ($2.71) per share of Xenos stock. The shares of Xenos stock were trading at C$3.45 ($2.67) on December 31, 2003. Under the terms of the agreement with Xenos, there was a price guarantee (see Note 1 above) that protected the Company's investment. Accordingly, the Company has not recorded an impairment in value.

In February 2004, the Company sold the 750,000 shares of Xenos stock with that company's consent, as described in Note 9.

Note 4 - 1999 Equity Incentive Plan

On October 19, 1999, the Company adopted the 1999 Equity incentive plan (the "1999 Plan") to provide incentives to employees, directors and consultants. Under the 1999 Plan, the Company has reserved a total of 6,000,000 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 1999 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.

|                                   | 2003             | 2002                          
|---------------------------------- | ---------------- | ------------------------------
|                                   | Number ofOptions | Weighted
Average
ExercisePrice
|Options outstanding at June 30     | 3,167,060        | $      0.13                   
|Granted                            | -                | -                             
|Exercised                          | -                | -                             
|Forfeited                          | (2,397,600)      | 0.09                          
|Options outstanding at December 31 | 769,460          | $        0.27                 
|Options exercisable at December 31 | 769,460          | $       0.27                  

Note 5 - General and Administrative Expenses

|                       |                      | Cumulative Amounts From The Start of Development Stage on November 17, 2003 to December 31, 2003 | Three Months EndedDecember 31, | Six Months EndedDecember 31,
|---------------------- | -------------------- | ------------------------------------------------------------------------------------------------ | ------------------------------ | ----------------------------
|2003                   |                      | 2002                                                                                             | 2003                           |                             
|                       | Professional fees    | $     15,310                                                                                     | $     31,098                   |                             
|                       | Contractor fees      | 10,758                                                                                           | 7,864                          |                             
|                       | Travel               | 3,952                                                                                            | 3,951                          |                             
|                       | Investor relations   | 612                                                                                              | 1,293                          |                             
|                       | Public company costs | 750                                                                                              | 12,940                         |                             
|                       | Other                | 372                                                                                              | 372                            |                             
|                       | Public company costs | $     31,754                                                                                     | $    57,518                    |                             
|Other income (expense) |                      |                                                                                                  |                                |                             

Note 6 - Discontinued Operations

On November 17, 2003, the Company completed the sale of substantially all of its business assets to Xenos. The following discloses information regarding the financial position and results of operations relating to the discontinued operations.

Net assets to be disposed of comprised the following at June 30, 2003:

| | Trade accounts receivable                   |  | $     23,505
| | ------------------------------------------- |  | ------------
| | Prepaid expenses                            |  | 3,912       
| | Current assets to be disposed of            |  | 27,417      
| |                                             |  |             
| | Fixed assets                                |  | 45,432      
| | Trademarks and patents                      |  | 43,958      
| | Non-current assets to be disposed of        |  | 89,390      
| | Total assets to be disposed of              |  | 116,807     
| |                                             |  |             
| | Accounts payable and accrued liabilities    |  | 12,748      
| | Unearned revenue                            |  | 14,397      
| | Total current liabilities to be disposed of |  | 27,145      
| | Net assets to be disposed of                |  | $     89,662
| |                                             |  |             

The results of operations of discontinued operations for the six months ended December 31, 2003 and 2002 were as follows:

| |                                                    |                               | 2003          |         | 2002        
| | -------------------------------------------------- | ----------------------------- | ------------- | ------- | ------------
| |                                                    |                               |               |         |             
| | Revenue                                            |                               | $   287,225   |         | $   661,741 
| | Cost of revenue                                    |                               | 24,645        |         | 58,180      
| | Gross profit                                       |                               | 262,580       |         | 603,561     
| | Operating expenses                                 |                               |               |         |             
| |                                                    | Research and development      |               | 68,933  |             
| |                                                    | Marketing and selling         |               | 125,107 |             
| |                                                    | General and administrative    |               | 136,111 |             
| |                                                    | Depreciation and amortization |               | 20,771  |             
| |                                                    | Stock-based compensation      |               | -       |             
| |                                                    | Total operating expenses      |               | 350,922 |             
| | Operating loss                                     |                               | (88,342)      |         | (1,254,777) 
| | Interest expense                                   |                               | (265)         |         | -           
| | Net loss before income taxes                       |                               | (88,607)      |         | (1,254,777) 
| | Income taxes                                       |                               | 7,548         |         | 58,920      
| | Income (loss) from discontinued 
       operations |                               | $    (96,155) |         | $(1,313,697)

Note 7 - Income Taxes

At December 31, 2003, the Company has net loss carryforward totaling approximately $12.9 million that begin to expire in 2018. No tax benefit has been reported in the December 31, 2003 financial statements, however, because the Company believes there is at least a 50% chance that the carryforward will expire unused. Accordingly, the $4,463,802 tax benefit of the loss carryforward 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 EndedDecember 31, |      | Six Months EndedDecember 31,
|---- | ----------------------------------- | ---- | ---- | ------------------------------ | ---- | ----------------------------
|2003 |                                     | 2002 | 2003 |                                | 2002
|     | Federal income tax provision        |      |      | $   945,097                    |      | $ (262,207)                 
|     | State income tax provision          |      |      | 128,700                        |      | (35,706)                    
|     | Total provision for income taxes    |      |      | 1,073,797                      |      | (297,913)                   
|     | Utilization of Net Operating Loss   |      |      | (1,069,888)                    |      |                             
|     | Valuation allowance                 |      |      |                                |      | 326,941                     
|     | Relating to discontinued operations |      |      | (3,909)                        |      | (29,028)                    
|     | Provision for income tax            |      |      | $              -               |      | $                -          



| | Balance Sheet                                  |                    
| | ---------------------------------------------- | -------------------
| | Tax asset from Net Operating Loss Carryforward | $   4,463,802      
| | Valuation allowance                            | (4,463,802)        
| | Net tax asset                                  | $                
-

Note 8 - Related Party Transactions

In the six months ended December 31, 2003, the Company paid or accrued fees of $92,910 to a company controlled by a director of the company. The fees were in respect of accounting and administrative services provided to the company and on account of director's fees.

Note 9 - Subsequent Event

On February 4, 2004, the Company received an offer to purchase 750,000 shares of Xenos stock for C$3.50 ($2.71) per share.  The Company's board of directors approved this transaction, which closed on February 19, 2004.  The proceeds of the transaction will be held in escrow pending the outcome of certain withholding tax obligations imposed by Canadian tax authorities on Xenos, since Xenos is a Canadian company.

|ITEM 2. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
|------- | -------------------------------------------------------------------------------------

XENOS TRANSACTION

Effective August 2003, we signed a definitive agreement to sell all of our business assets to Xenos Group Inc. Following approval by our shareholders, Xenos acquired our intellectual property, customer relationships, and operating assets and hired our employees. Full particulars of the transaction and information about Xenos were provided to shareholders in a definitive Proxy Statement, which we filed with the Securities and Exchange Commission. The Xenos transaction closed effective November 17, 2003.

Xenos paid $1,250,000 and was issued 1,000,000 shares of common stock to XML Global in exchange for the purchased assets, including our trade accounts receivable, fixed assets and the GoXML eBusiness product line. Xenos has provided a price guarantee on the Xenos shares issued to XML Global such that Xenos under certain conditions may make additional cash payments to XML Global, not to exceed C$1,340,000, in the event that Xenos shares are trading below C$3.50 prior to the anniversary date of the closing. The shares of Xenos are traded on the Canadian TSX exchange with the symbol "XNS". The Xenos shares issued in the transaction will be held in escrow and could not be sold for a period of 12 months following the closing without Xenos' consent.

We have paid $250,000 to, and reserved 250,000 shares of Xenos common stock for, a developer group in settlement of obligations arising from the purchase of intellectual property in April 2003. The developer group surrendered 16 million share purchase warrants exercisable at $0.04 and entered into employment contracts with Xenos to facilitate the transfer of intellectual property. We plan to transfer the 250,000 shares of Xenos common stock to the developer group in March 2004, concurrent with the expiry of a hold period dictated by Canadian securities law.

In February 2004, we sold the 750,000 shares of Xenos stock for C$3.50 per share and realized proceeds of C$2,625,000 (approximately $1.98 million at then-prevailing exchange rates).

Concurrent with the closing of the Xenos transaction, we commenced operations as a development stage company.

OPERATING PLAN

We believe we can offer owners of potential merger or acquisition candidates the opportunity to acquire a controlling ownership interest in a public company at substantially less cost than is required to conduct an initial public offering.  The target company will, however, incur significant post-merger or acquisition registration costs in the event target company shareholders wish to offer a portion of their shares for subsequent sale.  Further, while target company shareholders will receive "restricted securities" in any merger or acquisition transaction, those restricted securities will represent, if a trading market develops for our common stock, ownership in a "publicly-traded" as opposed to a "privately-held" company.  We also believe target company shareholders may benefit in obtaining a greater ownership percentage in us remaining after a merger or acquisition than may be the case in the event a target company offered its shares directly for sale to the public.  Nevertheless, our officers and directors have not conducted market research and are not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction for target company shareholders.

We expect to concentrate primarily on the identification and evaluation of prospective merger or acquisition "target" entities, including private companies, partnerships or sole proprietorships.  We do not intend to act as a general or limited partner in connection with partnerships we may merge with or acquire.  We have not identified any particular area of interest within which we will concentrate our efforts.

We contemplate that we will seek to merge with or acquire a target company with either assets or earnings, or both, and that preliminary evaluations undertaken by us will assist in identifying possible target companies.  We have not established a specific level of earnings or assets below which we would not consider a merger or acquisition with a target company. Moreover, we may identify a target company, which is generating losses, which it will seek to acquire or merge with us.  The merger with or acquisition of a target company which is generating losses or which has negative shareholders' equity may have a material adverse affect on the price of our common stock, if a public trading market develops.

You should note, however, that our independent accountants audit report for the fiscal year ended June 30, 2003 contains a qualification and explanatory language that due to our recurring losses from operations and net capital deficiency, substantial doubts exist about our ability to continue as a going concern.

RESULTS OF OPERATIONS

Since we had sold substantially all of our business operations at December 31, 2003, we have adopted a discontinued operations presentation in respect of our e-business software operations. Our continuing operations are, on an interim basis, limited to maintaining our public company disclosure obligations and evaluating business opportunities.

REVENUE AND COST OF REVENUE.  All revenues and costs of revenue related to discontinued operations. Accordingly, we have not recognized any revenue associated with continuing operations in either the three and six months ended December 31, 2003 or the comparative period.

RESEARCH AND DEVELOPMENT AND SALES AND MARKETING EXPENSES. All research and development, and sales and marketing expenses related to discontinued operations. Accordingly, we did not incur any such expenses associated with continuing operations in either the three and six months ended December 31, 2003 or the comparative period.

GENERAL AND ADMINISTRATIVE EXPENSE. General and administrative expense includes professional fees, investor relations costs and contractor fees associated with meeting our public reporting obligations. Such expenses decreased to $57,500 and $115,900 in the three months and six months ended December 31, 2003 from $161,800 and $320,600 in the comparative period. The decrease was attributable to lower investor relations costs and professional fees.

LOSS FROM DISCONTINUED OPERATIONS: The results of discontinued operations represent the majority of our operating activities. The results of operations discussed below are for the period from July 1, 2003 to November 17, 2003 (the date of the sale to Xenos) compared to the results of operations for the six months ended December 31, 2002.

Revenue consists of fees received from the sale of e-business and data integration solutions and XML-related implementation services.  Revenue was $287,200 for the period ended November 17, 2003, compared to $661,700 for the six months ended December 31, 2002. In the six months ended December 31, 2003, we experienced increased market acceptance of our Transformation software products. This improvement was offset by the shorter operating period in 2003, the loss of a major contract with a large customer that accounted for approximately $214,000 of the 2002 comparative revenue, and a loss of sales momentum caused by the pending sale of our business.

Cost of revenue includes salaries to employees and contractor fees that are directly attributable to services provided in the period, and license fees for software products that we license from third parties.  For the period ended November 17, 2003, these costs were $24,600, while for the six months ended December 31, 2002 these costs were $58,200. The decreased cost of revenue reflects decreased sales in the current period.

Product and content development costs include expenses we incur to develop our technology.  These costs consist primarily of salaries and fees paid to employees and consultants to develop and maintain software.  Research and development expenses were $68,900 for the period ended November 17, 2003, compared to $579,700 for the six months ended December 31, 2002.  The decreased expenditures over the previous year reflect the shorter operating period and, our focus on one product and decreased staffing levels following our restructuring in March 2003.

Marketing, selling and client services costs include expenses we incur to obtain and maintain client relationships and manage product development.  These costs include fees paid to contractors and consultants, related travel and incidental costs and advertising and promotion costs. For the period ended November 17, 2003 sales and marketing expenses were $125,100, compared to $583,100 in the six months ended December 31, 2002. Expenses decreased significantly following our restructuring in March 2003 and the 2003 amount represents costs for a shorter period.

General and administrative expenses associated with discontinued operations consist primarily of salaries, contractor fees, and related costs for general corporate functions, including travel, but excluding professional fees, investor relations costs and the cost of our public filings. For the period ended November 17, 2003, general and administrative expenses associated with discontinued operations were $136,100, down from $482,500 in the six months ended December 31, 2002.  The decrease reflects lower expenses of all types following our restructuring and the shorter operating period.

Depreciation and amortization expense reflects depreciation of computer hardware, software, equipment, leasehold improvements and amortization of intellectual property and completed patents over estimated useful lives of between two and five years. Depreciation and amortization expense was $20,800 for the period ended November 17, 2003, compared to $210,000 in the six months ended December 31, 2003. The decrease is due to the shorter operating period and a lower investment in intellectual property, which in turn is due to the write-off of our investment in GoXML TM Transform in March 2003.

We recorded income tax expense of $7,500 for the period ended November 17, 2003 compared to $58,900 in the six months ended December 31, 2002. The income tax expense related to certain income attributable to taxing jurisdictions in Canada. Increases in deferred tax assets resulting from the foreign tax credits generated by these taxes have been offset completely by similar increases in the valuation allowance applied to the Company's net income tax expense or benefit. The decrease reflects our overall reduced level of activity.

LIQUIDITY AND CAPITAL RESOURCES

Our independent auditor's report states that our consolidated financial statements for the year ending June 30, 2003 have been prepared assuming that the Company will continue as a going concern. Following the sale of its business assets to Xenos, we believe that we have sufficient cash reserves to meet our operating obligations for at least 12 months.

To date, we have experienced negative cash flows from operating activities. For the six months ended December 31, 2003, net cash used in operating activities was $363,000. Our net income of $2,625,200 was offset by net advances to discontinued operations of $86,500, the gain on sale of our business assets of $2,837,200 and a net cash outflow of $64,500 with respect to working capital changes.  In the six months ended December 31, 2002, net cash used in operating activities was $1,392,200.

In the six months ended December 30, 2003, we generated cash of $1,250,000 from the sale of our business assets and paid $250,000 to the Developer group in consideration of intellectual property acquired, for net cash generated by investing activities of $1,000,000. In the six months ended December 31, 2002, we used net cash of $9,600 in investing activities.

In the six months ended December 31, 2003 there were no net cash flows from financing activities. In the six months ended December 31, 2002, we generated $1,209,600 from financing activities.

Changes in exchange rates had a net effect of decreasing our cash balance by $13,600 in the quarter ended September 30, 2003 compared to an increase of $700 in the prior year.

As of December 31, 2003, we had $656,700 in cash and cash equivalents, compared to $178,100 at December 31, 2002.

As of December 31, 2003, we had no contractual capital commitments outstanding.

We have incurred operating losses and negative cash flows from operations in each quarter since we commenced operations. As of December 31, 2003 we had an accumulated deficit of $13,735,700 plus a deficit accumulated during the deficit stage of $31,754. Apart from interest earned on short-term investments, we currently have no sources of revenue. Our expenses are limited to the cost of maintaining our public company disclosure obligations and expenses incurred to review new business opportunities.

In the event that future operating cash flows do not meet all our cash requirements, we will need additional financing. Should the Company need additional financing through debt or equity placements, 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 the holders of the common stock. If additional funds are raised by the issuance of debt, we may be subject to certain limitations on our operations, including limitations on the payment of dividends. If adequate funds are not available or are not available on acceptable terms, we may be unable to take advantage of acquisition opportunities, which could have a materially adverse effect on our financial condition and results of operations.

We do not expect to generate operating earnings in the foreseeable future since, following the Xenos transaction, we do not have any revenue generating operations. We will likely incur losses and the losses may increase. If we do not find a new business venture, we are unlikely to achieve or sustain profitability, which would have a materially adverse effect on our financial condition and results of operations. Even if we achieve or maintain profitability, we may not sustain or increase profitability on a quarterly or annual basis in the future.

Some of our expenses are paid outside the United States in currencies other than US dollars. Because our financial results are reported in US dollars, they are affected by changes in the value of the various foreign currencies in which we make payments in relation to the US dollar. We do not cover known or anticipated currency fluctuation exposures through foreign currency exchange option or forward contracts. The primary currency for which we have foreign currency exchange rate exposure is the Canadian dollar. Our financial instruments, including cash, accounts receivable, accounts payable and accrued liabilities are carried at cost which approximates their fair value because of the short-term maturity of these instruments.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are described in Note 2 to our financial statements for the year ended June 30, 2003, included in our 10-KSB as filed with the Securities Exchange Commission on October 3, 2002. We believe our most critical accounting policies for the period July 1 to November 16, 2003 included revenue recognition, accounting for impairment of long-lived assets, and accounting for research and development expenses. Following the sale of our business assets to Xenos, our largest asset is Xenos stock and our most critical valuation policy relates to the valuation of that Xenos stock. We value our interest in 750,000 shares of Xenos stock at the lower of cost and market, reflecting the existence of the price guarantee provided by Xenos. The details of the Xenos stock price guarantee are discussed in the Management Discussion and Analysis section of this report on Form 10-QSB. The effect of the guarantee is that as long as the trading price of the Xenos stock is at least C$2.16 (approximately $1.67), no valuation provision is necessary.

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 the following factors: (a) we may find a business to purchase, in which case our financial statements will reflect the financial position, results of operations and changes in cash flow of the acquired entity; (b) we may be unable to find a suitable business to purchase but incur significant costs evaluating opportunities; and (c) 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.

ITEM 3.        CONTROLS AND PROCEDURES

Simon Anderson, Principal Executive Officer and Chief Financial Officer of XML Global, has established and is 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.

Our Principal Executive Officer and Chief Financial Officer conducts an update and a review and evaluation of the effectiveness of the Company's disclosure controls and procedures and has concluded, based on his 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.     PENDING
LEGAL PROCEEDINGS

At the date of this report, there are no pending legal proceedings in which we are a party and we are not aware of any threatened legal proceedings, except as follows:

On May 14, 2003, we received correspondence from counsel for ecMarket.com Inc. claiming that certain confidential and proprietary information of ecMarket.com Inc. has been unlawfully disclosed to us and has been used by us in our GoXML Transform product. We have retained counsel and responded to the claims of ecMarket.com Inc., which has not made any specific claim regarding the alleged unlawful disclosure. We have agreed to indemnify Xenos from any liability which may be determined arising from the claims of ecMarket.com, Inc.

ITEM 2.     CHANGES IN SECURITIES

There were no changes in our securities in the period.

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

We held our annual shareholders' meeting on November 14, 2003 at which we submitted six matters to be voted on by our shareholders. In aggregated, we received proxies representing 50,577,388 shares of stock. With 58,055,736 shares of common stock outstanding at the record date, a quorum represents 19,349,977 shares, and accordingly there was a quorum represented at the meeting. The proposals presented each required 29,027,869 shares voting in favor to be approved.

The first proposal was to elect five directors (Peter Shandro, Simon Anderson, Robert Gayton, Sergio Nesti and Jun Li) to serve until the next annual meeting of shareholders or until their successors have been duly elected and qualified. There were proxies representing 49,453,467 shares voting in favor, 887,500 voting against and 236,421 abstaining. The proposal was therefore approved in respect of all candidates.

The second proposal was to ratify our selection of our independent certified public accountants. There were proxies representing 50,405,212 shares voting in favour, 109,526 voting against and 62,650 abstaining. The proposal was therefore approved.

The third proposal was to approve the sale of substantially all of our assets to Xenos Group Inc. in exchange for $1,250,000 in cash, 1,000,000 shares of Xenos and the assumption of certain of our current accounts payable and certain support and maintenance obligations to our customers, all as set forth in the Purchase and Sale Agreement between the parties dated as of August 21, 2003. There were proxies representing 32,995,457 shares voting in favor, 1,317,416 voting against and 30,495 abstaining. The proposal was therefore approved.

The fourth proposal was, subject to the shareholders' approval of Proposal three, to approve the change of our corporate name to a name selected by our board of directors in their discretion. There were proxies representing 32,982,377 shares voting in favour, 1,328,186 voting against and 32,805 abstaining. The proposal was therefore approved.

The fifth proposal was to approve a reverse stock split by a ratio determined by our board of directors of up to 1-for-20 of the issued and outstanding shares of our common stock and issued and outstanding option, warrants and other rights convertible into shares of our common stock, all at the discretion of our board of directors to be implemented in the future as and when determined by our board of directors. There were proxies representing 46,157,468 shares voting in favour, 3,558,920 voting against and 861,000 abstaining. The proposal was therefore approved.

The sixth proposal was to approve an increase in the number of shares of common stock issuable under our 1999 Equity Incentive Plan. There were proxies representing 32,237,945 shares voting in favour, 1,901,573 voting against and 203,850 abstaining. The proposal was therefore approved.

ITEM 6.     EXHIBITS AND REPORTS FILED
ON FORM 8-K

On November 24, 2003 we filed a Report on Form 8-K, pursuant to Item 5 of that form, regarding a news release that we issued announcing the consummation of the sale of substantially all of our assets to Xenos Group Inc.

On December 11, 2003 we filed a Report on Form 8-K, pursuant to Items 2 and 7 of that form, regarding the sale of substantially all of our business assets to Xenos Group Inc. and related pro forma financial information.

On December 24, 2003 we filed a Report on Form 8-K, pursuant to Items 6 and 7 of that form, regarding the resignation of Mr. Peter Shandro as director.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

|                       |            | XML-Global Technologies, Inc.                                                        
|---------------------- | ---------- | -------------------------------------------------------------------------------------
|Date:February 20, 2004 | Signature: | /s/Simon Anderson
Simon Anderson
Chief Financial Officer, Principal Executive Officer