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 1934For the period ended December 31, 2001

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.(Exact name of registrant as specified in its
charter)

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

Suite 9 - 1818 Cornwall AvenueVancouver, BC, Canada V6J 1C7

Registrant's Telephone No., including area code: (800) 201-1848

_________________________________

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 14, 2002, there were 27,565,000 shares of the issuer's Common Stock
outstanding.

INDEX

|PART I   | FINANCIAL INFORMATION                                                                                         | 
|-------- | ------------------------------------------------------------------------------------------------------------- | 
|Item 1.  | Financial statements                                                                                          | 
|         | Unaudited Consolidated Balance Sheets - December 31, 2001 and June 30, 2001                                   | 
|         | Unaudited Consolidated Statement of Operations - Three Months and Six Months Ended December 31, 2001 and 2000 | 
|         | Unaudited Consolidated Statement of Cash Flows - Six Months Ended December 31, 2001 and 2000                  | 
|         | Notes to Unaudited Consolidated Financial Statements                                                          | 
|Item 2.  | Management's Discussion and Analysis of Financial Condition and Results of Operations                         | 
|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 I   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

XML-Global Technologies, Inc. and SubsidiariesUnaudited Consolidated Balance Sheet
At December 31, 2001 and June 30, 2001

|                                           | December 31, 2001                                                                                                                              |               | June 30,
2001 
|------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | --------------
|Assets                                     |                                                                                                                                                |               |               
|Current Assets                             |                                                                                                                                                |               |               
|                                           | Cash                                                                                                                                           | $     421,877 |               
|                                           | Investments in securities available for sale                                                                                                   | 865,000       |               
|                                           | Trade accounts receivable                                                                                                                      | 373,362       |               
|                                           | Other receivable                                                                                                                               | 27,987        |               
|                                           | Prepaid expenses                                                                                                                               | 247,719       |               
|                                           | Deferred income taxes                                                                                                                          | 10,176        |               
|                                           |                                                                                                                                                | 1,946,121     |               
|                                           |                                                                                                                                                |               |               
|Property and Equipment, Net                | 264,671                                                                                                                                        |               | 349,328       
|                                           |                                                                                                                                                |               |               
|Intangible Assets                          |                                                                                                                                                |               |               
|Intellectual property rights, net          | 963,765                                                                                                                                        |               | 1,165,245     
|Trademarks and patents, net                | 111,706                                                                                                                                        |               | 106,226       
|Total Assets                               | $  3,286,263                                                                                                                                   |               | $   5,752,160 
|                                           |                                                                                                                                                |               |               
|Liabilities and Stockholders' Equity       |                                                                                                                                                |               |               
|Current Liabilities                        |                                                                                                                                                |               |               
|Accounts payable and accrued liabilities   | $      116,817                                                                                                                                 |               | $      126,530
|Unearned revenue                           | 66,702                                                                                                                                         |               | 12,332        
|Foreign income taxes payable               | 84,242                                                                                                                                         |               | 167,594       
|Total Current Liabilities                  | 267,761                                                                                                                                        |               | 306,456       
|                                           |                                                                                                                                                |               |               
|Deferred Income Taxes                      | 24,691                                                                                                                                         |               | 24,691        
|                                           |                                                                                                                                                |               |               
|Minority Interest                          | 100,000                                                                                                                                        |               | 100,000       
|                                           | 392,452                                                                                                                                        |               | 431,147       
|Stockholders' Equity                       |                                                                                                                                                |               |               
|                                           | Preferred stock, $0.01 par value, 100,000,000 shares authorized, none
    issued and outstanding at December 31, 2001 and June 30, 2001        | -             |               
|                                           | Common stock, $.0001 par value, 500,000,000 shares authorized, 27,565,000 shares issued and outstanding at
December 31, 2001 and June 30, 2001 | 2,757         |               
|                                           | Additional paid-in capital                                                                                                                     | 11,912,748    |               
|                                           | Accumulated other comprehensive income (loss)                                                                                                  | (19,755)      |               
|                                           | Accumulated deficit                                                                                                                            | (9,001,939)   |               
|Total Stockholders' Equity                 | 2,893,811                                                                                                                                      |               | 5,321,013     
|Total Liabilities and Stockholders' Equity | $   3,286,263                                                                                                                                  |               | $    5,752,160
|                                           |                                                                                                                                                |               |               
|See accompanying notes                    

XML-Global Technologies, Inc. and Subsidiaries

|                                           |                                              | Three Months Ended |                  | Six Months Ended
|------------------------------------------ | -------------------------------------------- | ------------------ | ---------------- | ----------------
|December 31,2001                           | December 31,2000                             | December 31,2001   | December 31,2000
|Revenue                                    | $       238,106                              | $     327,242      |                  | $     406,392   
|Cost of revenue                            | 56,440                                       | 401,035            |                  | 152,729         
|Gross profit (loss)                        | 181,666                                      | (73,793)           |                  | 253,663         
|Operating expenses                         |                                              |                    |                  |                 
|                                           | Research and development                     | 466,351            |                  | 502,060         
|                                           | Marketing and selling                        | 265,992            |                  | 185,589         
|                                           | Consulting                                   | 79,501             |                  | -               
|                                           | General and administrative                   | 346,676            |                  | 250,082         
|                                           | Depreciation and amortization                | 137,137            |                  | 112,373         
|                                           | Fair value of stock option repricing         | 143,000            |                  | -               
|                                           | Fair value of options granted to consultants | -                  |                  | 20,356          
|                                           | Total operating expenses                     | 1,438,657          |                  | 1,070,460       
|Operating loss                             | (1,256,991)                                  |                    | (1,144,253)      |                 
|Interest income                            | 13,006                                       |                    | 88,987           |                 
|Loss on disposal of fixed assets           | -                                            |                    | -                |                 
|Net loss before provision for income taxes | (1,243,985)                                  |                    | (1,055,266)      |                 
|Provision for income taxes                 | 40,077                                       |                    | 89,812           |                 
|Net loss                                   | (1,284,062)                                  |                    | (1,145,078)      |                 
|Accumulated deficit, beginning of period   | (7,717,877)                                  |                    | (2,074,840)      |                 
|Accumulated deficit, end of period         | $(9,001,939)                                 | $(3,219,918)       |                  | $(9,001,939)    
|Net loss per share - basic and diluted     | $         (0.05)                             | $         (0.04)   |                  | $         (0.09)
|Weighted average number of shares          | 27,565,000                                   |                    | 27,505,000       |                 
|See accompanying notes.                   

XML-Global Technologies, Inc. and SubsidiariesUnaudited Consolidated Statement of Cash Flow
For the Six Months Ended December 31, 2001 and 2000

|                                                                           |                                              |                                          | Six Months Ended December 31,
2001 | Six Months Ended
December 31, 2000
|-------------------------------------------------------------------------- | -------------------------------------------- | ---------------------------------------- | ---------------------------------- | ----------------------------------
|Cash flows from operating activities                                       |                                              |                                          |                                    |                                   
|Net loss                                                                   | $     (2,577,281)                            | $    (1,525,828)                        
|Adjustments to reconcile net loss to net cash used in operating activities |                                              |                                         
|                                                                           | Depreciation and amortization                | 275,584                                  | 211,935                           
|                                                                           | Fair value of options granted to consultants | 19,000                                   | 20,356                            
|                                                                           | Fair value of stock option repricing         | 143,000                                  | -                                 
|                                                                           | Loss on disposal of fixed assets             | 195                                      | -                                 
|                                                                           | Changes in assets and liabilities            |                                          |                                   
|                                                                           |                                              | Accounts receivable                      | (190,163)                          | 16,492                            
|                                                                           |                                              | Other receivable                         | 9,519                              | (3,036)                           
|                                                                           |                                              | Prepaid expenses                         | 100,075                            | (21,240)                          
|                                                                           |                                              | Accounts payable and accrued liabilities | (5,754)                            | 167,856                           
|                                                                           |                                              | Unearned revenue                         | 55,693                             | 12,000                            
|                                                                           |                                              | Foreign income taxes payable             | (77,415)                           |                                   
|Net cash used in operating activities                                      | (2,247,547)                                  |                                          | (1,063,274)                       
|Cash flows from investing activities                                       |                                              |                                         
|                                                                           | Proceeds from sale of investments            | 115,000                                  | 10,000                            
|                                                                           | Purchases of property and equipment          | (17,292)                                 | (167,389)                         
|                                                                           | Acquisition of trademarks and patents        | (8,097)                                  | (51,484)                          
|                                                                           | Acquisition of intellectual property         | -                                        | (218,008)                         
|Net cash used in investing activities                                      | 89,611                                       |                                          | (426,881)                         
|Cash flows from financing activities                                       |                                              |                                         
|Deferred issue costs                                                       | -                                            | -                                       
|Issuance of capital stock net of issue costs                               | -                                            | -                                       
|Repayment of note payable                                                  | -                                            | -                                       
|Net cash provided from financing activities                                | -                                            | -                                       
|Effect of changes in exchange rates                                        | 5,208                                        |                                          | 568                               
|Increase (decrease) in cash                                                | (2,152,728)                                  | (1,489,587)                             
|Cash, beginning of period                                                  |                                              | 2,574,605                                |                                    | 7,535,852                         
|                                                                           | $       421,877                              | $  6,046,265                            
|Supplemental disclosure of cash information                                |                                              |                                          |                                    |                                   
|Interest paid                                                              | $                  -                         |                                          | $                 -               
|Income taxes paid                                                          | $      153,836                               | $                 -                     
|See accompanying notes.                                                   

XML-Global technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financing Statements
December 31, 2001 and 2000(Unaudited)

Note 1 - Organization

Organization

The Company, which is a Colorado corporation, has three active subsidiaries, XML-Technologies, Inc. (a Nevada corporation), XML-Global Research, Inc. (a British Columbia, Canada corporation) and LE Informatics, Inc. (a Delaware corporation). The Company conducts most of its business activities through these corporations.

Going Concern

The Company has incurred net losses since inception.  Accordingly, the Company's ability to fulfill its business strategy and to ultimately achieve profitable operations is dependent on its capacity to execute its business plan and, if necessary, obtain additional financing or explore merger opportunities.

In an effort to generate revenues sufficient to fund future operations, the Company is not only actively marketing various software applications and consulting services, but is also developing new products and forming strategic business alliances.

The Company's current focus on product development includes two primary areas, the market for business-to-business information exchanges and intra-enterprise application-to-application integration software. The Company has identified six discrete product offerings focusing on meeting the marketplace needs expected to emerge as a result of perceived growth in the market for the benefits associated with using the XML protocol for communication. However, success is dependent on the extent to which XML-based technologies are adopted by the business community, and there is no assurance that the Company will realize increased revenues.

In the event that future operating cash flows do not meet all the Company's cash requirements, it will need additional financing. Success in raising additional financing is dependent on the Company's ability to demonstrate that it can fulfill its business strategy to sell XML-based e-business and law enforcement solutions.  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. The financial statements are prepared on a going concern basis.  No adjustments or presentation modifications have been made for potential effects on financial position or results of operations, should the Company not be able to continue as a going concern.

Currently, the Company is engaged in discussions with a number of parties to secure financing, but no agreements have yet been reached.

Note 2 - New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141,  Business Combinations, and No. 142, Goodwill and Other Intangible Assets.The new standards are effective for fiscal years beginning after December 15, 2001; as such, the Company
will apply the new rules beginning in the first quarter of fiscal 2003.  Under the new rules, goodwill, as well as intangible assets deemed to have indefinite lives, will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements.  Other intangible assets will continue to be amortized over their useful lives.  Currently, the Company has no intangible assets that are categorized as having indefinite lives and is unable to assess the future financial statement effects, if any, of the application of the provisions of these Statements.

In June 2001, the FASB issued Statement of Financial Accounting Standard No. 143, Accounting for Asset Retirement Obligations. SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. It applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and (or) the normal operation of a long-lived asset, except for certain obligations of lessees. As used in SFAS No. 143, a legal obligation is an obligation that a party is required to settle as a result of an existing or enacted law, statute, ordinance, or written or oral contract or by legal construction of a contract under the doctrine of promissory estoppel. The Company is currently assessing the impact of SFAS No. 143 on its operating results and financial condition.

In October 2001, the FASB issued Statement of Financial Accounting Standard No.144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 establishes a single accounting model, based on the framework established in Statement of Financial Accounting Standard No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, for long-lived assets to be disposed of by sale, and resolves significant implementation issues related to SFAS No. 121. The Company is currently assessing the impact of SFAS No. 144 on its operating results and financial condition.

Note 3 - 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, 2001 and notes thereto included in our 10-KSB as filed with the Securities and Exchange Commission on September 28, 2001.

Note 4 - Income Taxes

Although the Company has incurred losses to date, it has been subject to income taxes. Taxes are payable by the Company's Canadian subsidiary on its operating profits, which cannot be offset against losses incurred by the Company.

Note 5 - 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. 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.

| |                                          | Number ofOptions |  | Weighted
Average Exercise Price
| | ---------------------------------------- | ---------------- |  | -------------------------------
| | Options outstanding at June 30, 2001     | 3,173,000        |  | 1.04                           
| | Granted during the period                | 526,800          |  | 0.35                           
| | Exercised during the period              | -                |  | -                              
| | Forfeited during the period              | (165,500)        |  | 0.34                           
| | Options outstanding at December 31, 2001 | 3,534,300        |  | 0.36                           
| | Options exercisable at December 31, 2001 | 2,838,550        |  | 0.35                           

On September 5, 2001, the Board of Directors unanimously voted in favor of repricing substantially all stock options granted prior to that date.   Stock options granted at prices of between $0.37 and $3.00 were repriced to between $0.35 and $1.50. The trading price at that date was $0.31 per
share.

The reduction in the exercise price of these options will
have the following effect on the Company's results of operations for the three
and six months ended December 31, 2001:

| | * | The Company has recognized a one-time expense of
      $19,000 relating to the increase in the fair value of options granted to
      contractors and non-elected advisory board members for which an expense
      was recognized in prior periods.                           
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | * | The Company has recognized an expense of $143,000,
      which represents the aggregate, for all repriced stock options, of the
      amount by which $0.40 (which was the closing price of the Company's stock
      on December 31, 2001) exceeds the revised exercise price.

Note 6 - Lease Commitment

The Company leases its Vancouver, British Columbia operating facility under lease agreements that run through June 30, 2005.  The Company also leases office space in New York City under an agreement expiring December 31, 2002.  The Company was required to deposit $198,000 into an interest-bearing trust account from which the monthly lease payments for the New York offices are drawn; $148,000 of this amount remained in trust at December 31, 2001.  The lease agreements for both locations require that the Company pay its proportional share of operating costs and property taxes.

Future minimum lease payments required under the leases, excluding the Company's share of operating costs and property taxes, are as follows:

| | Period EndingJune 30, |  |          
| | --------------------- |  | ---------
| | 2002                  |  | $ 127,200
| | 2003                  |  | 118,500  
| | 2004                  |  | 70,900   
| | 2005                  |  | 64,900   
| |                       |  | $ 381,500

The effect of scheduled rent increases and "rent holidays" included in the Company's leases are recognized on a straight-line basis over the term of the leases.  During the six months ended December 2001 and 2000, rent expense was $113,300 and $54,300, respectively.

ITEM 2   MANAGEMENT'SPLAN OF OPERATION AND DISCUSSION AND ANALYSIS OF
                
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

REVENUE.  Revenue consists of fees received from the sale of
e-business and XML-related consulting services.  Revenue was $238,100 for the three months ended December 31, 2001, compared to $327,200 for the three months ended December 31, 2000.  For the six months ended December 31, 2001 and 2000, revenue was $406,400 and $813,000 respectively.  Software and on-line service sales accounted for about 60% of revenues in the three months ended December 31, 2001 and about 35% of revenues for the six months ended December 31, 2001. In the corresponding prior period, all sales were of consulting services.

COST OF REVENUE.  Cost of revenue includes salaries to employees and contractor fees that can be directly attributable to project revenue earned in the period.  For the three months ended December 31, 2001 and 2000, these costs were $ 56,400 and $401,000 respectively.  For the six months ended December 31, 2001,  $152,700 was included in the cost of revenue, compared to $674,700 for the six months ended December 31, 2000.  The proportionate decline in the cost of revenue in the current fiscal year, relative to revenues, reflects the greater proportion of software and on-line service revenues in the current period. Our software and on-line service have only a nominal cost of revenue.

RESEARCH AND DEVELOPMENT EXPENSES.  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 $466,400 for the three months ended December 31, 2001, compared to $502,100 for the three months ended December 31, 2000.  For the six months ended December 31, 2001 and 2000, these costs were $974,500 and $730,600 respectively. The decreased expenditures in the past three months are mainly due to reduced staffing levels following completion of the main development cycle. 
We expect that future development efforts will be of a more incremental nature
as we refine our product offerings to address market requirements.S

SALES AND MARKETING EXPENSES.  Marketing, sales and client services costs include expenses we incur to obtain and maintain client relationships.  These costs include fees paid to contractors and consultants, related travel and incidental costs and advertising and promotion costs. For the three and six months ended December 31, 2001, sales and marketing expenses were $266,000 and $555,900 respectively. Sales and marketing expenses in the three and six months ended December 31, 2000 were $185,600 and $289,600 respectively. The increase is due to the addition of staff and sales initiatives undertaken in the current year.

CONSULTING EXPENSES.  Consulting expenses include salaries and travel costs that relate to consulting services, but are not directly attributable to the consulting revenue earned.  For the three and six months ended December 31, 2001, consulting expenses were $79,500 and $144,400 respectively.  There were no consulting expenses incurred in the same periods ended December 31, 2000, as our consulting activities were not material.

GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses consist primarily of salaries, contractor fees and related costs for general corporate functions, including travel, occupancy, accounting and legal expenses. For the three months ended December 31, 2001, general and administrative expenses were $346,700, up from $250,100 in the three months ended December 31, 2000.  For the six months ended December 31, 2001 and 2000, these costs were $678,400 and $463,900 respectively.  The increase reflects increased staff, travel costs and opening the New York office.

DEPRECIATION AND AMORTIZATION EXPENSE. Depreciation and amortization expense reflects depreciation of computer hardware, software, equipment, leasehold improvements and amortization of intellectual property over estimated useful lives of between two and five years. Depreciation and amortization expense was $137,100 and $112,400 respectively for the quarters ended December 31, 2001 and 2000.  For the six months ended December 31, 2001, this expense was $275,000, compared to $211,900 for the same period in 2000.

FAIR VALUE OF STOCK OPTION REPRICING.  On September 5, 2001, the Board of Directors unanimously voted in favor of repricing substantially all stock options granted prior to that date.   Stock options granted at prices of between $0.37 and $3.00 were repriced to between $0.35 and $1.50. The trading price at that date was $0.31 per share.  At December 31, 2001, the closing price of the Company's stock was $0.40, and a compensation expense has been recorded in respect of those options repriced to below $0.40.  For the three and six months ended December 31, 2001, this expense was $143,000.  There was no expense relating to the repricing of options in prior periods.

INTEREST INCOME. During the three months ended December 31, 2001 and 2000, the company earned interest income of $13,000 and $89,000 respectively.  $38,900 was earned for the six months ended December 31, 2001, compared to $244,600 for the six months ended December 31, 2000.  Changes in interest income generally reflect the balance of funds on hand which has varied depending on fundraising initiatives and spending patterns.  Interest income has been earned on funds received from private equity placements which have exceeded operating expenditures to date.

PROVISION FOR INCOME TAXES.  Although the Company incurred a consolidated loss during the three and six months ended December 31, 2001, it recorded $40,100 and $79,500 respectively of income tax expense relating to certain income attributable to taxing jurisdictions in Canada, compared to $89,800 and $192,300 for the same periods ended December 31, 2000.  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.

LIQUIDITY AND CAPITAL RESOURCES

Since inception, we have financed our operations primarily through the placement of equity securities, as well as advances from our principal stockholder.  As of December 31, 2001 we had $421,900 in cash and cash equivalents and $865,000 in short term investments.

We have incurred costs to design, develop and implement search engine and electronic commerce applications and to grow our business. As a result, we have incurred operating losses and negative cash flows from operations in each quarter since we commenced operations. As of December 31, 2001, we had an accumulated deficit of $9,001,900. These losses have been primarily funded through private placement of equity securities.

To date, we have experienced negative cash flows from operating activities.  For the six months ended December 31, 2001, net cash used in operating activities was primarily attributable to our net loss of $2,577,300. The net loss for the six month period was partially offset by non-cash depreciation and amortization of $275,600, non-cash fair value of options granted to consultants of $19,000, non-cash fair value of stock option repricing of $143,000, a loss on the write off of fixed assets of $200 and a net cash outflow of $108,100 with respect to working capital changes. For the six months ended December 31, 2001, net cash used in operating activities was therefore $2,247,600. In the six months ended December 31, 2000, we used $1,063,300 to fund operating activities, primarily relating to our operating loss.  The increase in cash used by operating activities reflects increased staffing activities and sales initiatives.

For the six months ended December 31, 2001, net cash from investing activities was
$89,600. We received $115,000 from the sale of investments, and spent $17,300 on computer hardware, software, equipment and leasehold improvements and $8,100 on patent and trademarks.  In the six months ended December 31, 2000, we used $426,900 in investing activities, which related mostly to the purchase of leasehold improvements and computer hardware as we expanded our staff and 
facilities, as well as a large investment in intellectual property.

For the six months ended December 31, 2001 and 2000, no cash was provided by or used in financing activities.

Changes in exchange rates had a net effect of increasing our cash balance by $5,200.

As of December 31, 2001, we had no contractual capital commitments outstanding.

Our ability to generate significant revenue is uncertain. We incurred net losses of approximately $1,284,100 and $2,577,300 during the three and six months ended December 31, 2001 respectively. We expect losses from operations and negative cash flow to continue for the foreseeable future, at least through fiscal 2002, as a result of our expansion plans and our expectation that operating expenses will increase significantly in the next several years. The rate at which these losses will be incurred may increase from current levels. Although we have experienced revenue growth, revenues have been substantially less than expenses and may not increase in the future. If our revenue does not increase and if our spending levels are not adjusted accordingly, we may not generate sufficient revenue to achieve profitability, which would have a materially adverse effect on our business, financial condition and results of operations. Even if we achieve profitability, we may not sustain or increase profitability on a quarterly or annual basis in the future.

Our working capital requirements depend on numerous factors. We have experienced increased expenditures since inception, consistent with growth in our operations and staffing, and expect that this trend will continue for the foreseeable future. We anticipate incurring additional expenses to increase our marketing and sales efforts, for software and infrastructure development. Additionally, we will continue to evaluate possible investments in businesses, products and technologies, the expansion of our marketing and sales programs and brand promotions. If we experience a shortfall in revenue in relation to expenses, or if our expenses precede increased revenue, our business, financial condition and results of operations could be materially and adversely affected.

We currently estimate that available cash resources at December 31, 2001 will be sufficient to meet our anticipated needs for working capital and capital expenditures through May 2002. We may need to raise additional funds, however, in order to fund more rapid expansion, to develop new or enhance existing services or products, to respond to competitive pressures or to acquire complementary products, businesses or technologies. There can be no assurance that any required additional financing will be available on terms favorable to us, or at all. 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 fund our expansion, successfully promote our brand name, take advantage of acquisition opportunities, develop or enhance services or respond to competitive pressures, any of which could have a materially adverse effect on our business, financial condition and results of operations.

Some of our revenues are earned and a substantial portion of our payroll and other 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.

FRANKFURT STOCK EXCHANGE

In August 2001, we listed our shares on the Frankfurt Stock Exchange. To date, our shares have not traded pending coordination of our German communications activities. We expect that trading of our shares on the Frankfurt Stock Exchange will commence in the first calendar quarter of 2002, although there can be no assurances that we will be successful in establishing trading of our stock in Germany in that period or at all.

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 anticipated in our forward-looking statements, including the following factors: (a) our products and services may not be accepted in the market place; (b) XML may be adopted by the Internet community more slowly than projected; (c) our products may not be appropriately positioned within market segments; (d) the market which we serve is subject to rapid technological change and quick product obsolescence; (e) we are dependent on a limited number of products; (f) there are, and competitors may develop, functionally similar competitive products; (g) there is extreme competition in the software industry; and (h) 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.

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:                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has been named as a party
      defendant in a civil action filed on February 5, 2002, in the Federal
      Court of Canada, Toronto, Ontario, by Datamirror Corporation, as
      plaintiff, alleging a claim of trademark infringement over the Company's
      use of the trademark "GoXML Transform Server." The Company
      believes the claim is without merit and plans to vigorously defend the
      action.

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

There were no matters submitted for the vote of security holders.

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

There are no Exhibits filed with this current report on Form 10-QSB and the Company did not file any Reports on Form 8-K in the quarter ended December 31, 2001.

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 14, 2002 |  | Signature: | /s/Peter ShandroPeter Shandro
Chairman of the Board, Chief Executive Officer and President
|Date:February 14, 2002 |  | Signature: | /s/Simon Anderson
Simon Anderson
Chief Financial Officer