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 quarterly period ended December 31, 2004

OR

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



Commission file number: 0-23391

XFORMITY TECHNOLOGIES, INC.(Exact name of small business issuer as specified in its charter)

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

14333 Proton Road, Dallas, Texas 75244                                 (Address of principal executive offices, including zip code)
Issuer's Telephone No., including area code: (972) 661-1200

________________________________________________________

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

Common stock, $0.0001 par value, at February 11, 2005: 35,911,646

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



INDEX

|PART I.  | FINANCIAL INFORMATION                                                                                          | Page 
|-------- | -------------------------------------------------------------------------------------------------------------- | -----
|Item 1.  | Financial statements                                                                                           |      
|         | Consolidated Balance Sheets - December 31, 2004 (unaudited) and June 30, 2004                                  | 3    
|         | Unaudited Consolidated Statements of Operations - Three Months and Six Months Ended December 31, 2004 and 2003 | 4    
|         | Unaudited Consolidated Statements of Cash Flows - Three Months and Six Months Ended December 31, 2004 and 2003 | 5    
|         | Notes to Unaudited Condensed Consolidated Financial Statements                                                 | 6-9  
|Item 2.  | Management's Discussion and Analysis or Plan of Operations                                                     | 10-12
|Item 3.  | Controls and Procedures                                                                                        | 12   
|PART II. | OTHER INFORMATION                                                                                              |      
|Item 1.  | Legal Proceedings                                                                                              | 13   
|Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                                                    | 13   
|Item 3.  | Defaults upon Senior Securities                                                                                | 13   
|Item 4.  | Submission of Matters to a Vote of Security Holders                                                            | 13   
|Item 5.  | Other Information                                                                                              | 14   
|Item 6.  | Exhibits                                                                                                       | 14   

PART I.     FINANCIAL INFORMATION
ITEM 1.     FINANCIAL STATEMENTS

XFormity Technologies, Inc. and Subsidiaries
Consolidated Balance Sheets

|                                                                                                                                                                                    | (Unaudited)
December 31, 2004 |              | June 30, 2004
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ------------ | -------------
|Assets                                                                                                                                                                              |                               |              |              
|Current Assets                                                                                                                                                                      |                               |              |              
|                                                                                                                                                                                    | Cash and cash equivalents     | $    848,888 |              
|                                                                                                                                                                                    | Accounts receivable           | 10,820       |              
|                                                                                                                                                                                    | Other current assets          | 2,588        |              
|                                                                                                                                                                                    | Prepaid expenses              | 33,322       |              
|                                                                                                                                                                                    | Total current assets          | 895,618      |              
|Property and equipment, net                                                                                                                                                         | 46,295                        |              | 36,117       
|Other assets                                                                                                                                                                        | 2,100                         |              | 8,633        
|Total Assets                                                                                                                                                                        | $   944,013                   |              | $      91,383
|Liabilities and Stockholders' Equity (Deficit)                                                                                                                                      |                               |              |              
|Current Liabilities                                                                                                                                                                 |                               |              |              
|Accounts payable                                                                                                                                                                    | $     221,609                 |              | $     99,412 
|Accrued expenses                                                                                                                                                                    | 8,207                         |              | 63,400       
|Due to XML Global Technologies, Inc.                                                                                                                                                | -                             |              | 186,762      
|Due to stockholders and other liabilities                                                                                                                                           | 50,000                        |              | 529,666      
|Total Current Liabilities                                                                                                                                                           | 279,816                       |              | 879,240      
|Stockholders' Equity (Deficit)                                                                                                                                                      |                               |              |              
|Preferred stock, $0.01 par value, 100,000,000 shares authorized, none issued and outstanding at December 31, 2004 and June 30, 2004                                                 | -                             |              | -            
|Common stock, $.0001 par value, 125,000,000 shares authorized, 35,895,968 shares issued and outstanding at December 31, 2004 and 17,947,984 issued and outstanding at June 30, 2004 | 3,590                         |              | 1,795        
|Additional paid-in capital                                                                                                                                                          | 3,091,754                     |              | 840,355      
|Subscription receivable                                                                                                                                                             | -                             |              | (45,000)     
|Accumulated deficit                                                                                                                                                                 | (2,431,147)                   |              | (1,585,007)  
|Total Stockholders' Equity (Deficit)                                                                                                                                                | 664,197                       |              | (787,857)    
|Total Liabilities and Stockholders' Equity (Deficit)                                                                                                                                | $    994,013                  |              | $    91,383  
|                                                                                                                                                                                    |                               |              |              
|The accompanying notes are an integral part of these consolidated financial statements                                                                                             

XFormity Technologies, Inc. and Subsidiaries
Consolidated Statement of Operations

|                                          |                 | (Unaudited)
Six Months EndedDecember 31, |                | (Unaudited)
Three Months EndedDecember 31,
|----------------------------------------- | --------------- | ---------------------------------------- | -------------- | ------------------------------------------
|                                          |                 | 2004                                     |                | 2003                                      
|Revenue                                   | $  171,375      |                                          | $   77,000     |                                           
|Cost of revenue                           | 191,704         |                                          | 78,726         |                                           
|Research and development                  | 288,014         |                                          | 136,763        |                                           
|Marketing and selling                     | 70,089          |                                          | 4,204          |                                           
|General and administrative                | 469,760         |                                          | 167,944        |                                           
|Total operating expenses                  | 1,019,567       |                                          | 387,637        |                                           
|Loss from operations                      | (848,192)       |                                          | (310,637)      |                                           
|Interest Income                           | 2,052           |                                          | -              |                                           
|Loss before provision for income taxes    | (846,140)       |                                          | (310,637)      |                                           
|Provision for income taxes                | -               |                                          | -              |                                           
|Net loss                                  | $  (846,140)    |                                          | $ (310,637)    |                                           
|Net loss per share - basic                | $        (0.03) |                                          | $       (0.02) |                                           
|Weighted average number of shares - basic | 27,214,606      |                                          | 17,947,984     |                                           

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

XFormity Technologies, Inc. and Subsidiaries
Consolidated Statement of Cash Flows

|                                                                                       |                                                                            |                  | (Unaudited)                   
|-------------------------------------------------------------------------------------- | -------------------------------------------------------------------------- | ---------------- | ------------------------------
|                                                                                       |                                                                            |                  | Six Months Ended 
December 31,
|                                                                                       |                                                                            |                  | 2004                          
|Operating activities:                                                                  |                                                                            |                 
|Net loss                                                                               | $  (846,140)                                                               | $      (310,637)
|Depreciation                                                                           | 8,779                                                                      | 8,672           
|Changes in:                                                                            |                                                                            |                 
|                                                                                       | Accounts receivable                                                        | (4,140)          | -                             
|                                                                                       | Prepaid expenses                                                           | (23,875)         | -                             
|                                                                                       | Accounts payable                                                           | (44,348)         | 13,488                        
|                                                                                       | Accrued expenses                                                           | (62,784)         | (35,000)                      
|                                                                                       | Other                                                                      | 37,394           | -                             
|Net cash used in operating activities                                                  | (935,114)                                                                  | (323,477)       
|Investing activities:                                                                  |                                                                            |                 
|                                                                                       | Cash proceeds received upon acquisition                                    | 1,226,854        | -                             
|                                                                                       | Purchase of property and equipment                                         | (18,957)         | (4,481)                       
|Net cash provided by (used in) investing activities                                    | 1,207,897                                                                  | (4,481)         
|Financing activities:                                                                  |                                                                            |                 
|                                                                                       | Proceeds (retirement) of stockholders loans                                | (529,666)        | 59,063                        
|                                                                                       | Deposits                                                                   | 50,000           | 285,900                       
|                                                                                       | Collection of subscriptions receivable for common 
     stock              | 45,000           | -                             
|                                                                                       | Advances from XML Global Technologies, Inc.                                | 970,818          | -                             
|Net cash provided by financing activities                                              | 536,152                                                                    | 344,963         
|Increase in cash and cash equivalents                                                  | 808,935                                                                    | 17,005          
|Cash and cash equivalents, beginning of period                                         | 39,953                                                                     | 12,969          
|Cash and cash equivalents, end of period                                               | $    848,888                                                               | $        29,974 
|Supplemental disclosure of non-cash financing and investing activities                 |                                                                            |                 
|                                                                                       | Acquisition legal fees payable, charged to
     additional paid in capital | $     62,607     |                               
|Net assets received (liabilities assumed) upon acquisition:                            |                                                                            |                 
|Other accounts receivable                                                              | $      33,449                                                              |                 
|Advances due from XFormity, Inc.                                                       | 1,157,580                                                                  |                 
|Prepaid expenses                                                                       | 9,447                                                                      |                 
|Accounts payable                                                                       | (103,938)                                                                  |                 
|Accrued expenses                                                                       | (7,591)                                                                    |                 
|                                                                                       | $ 1,088,947                                                                |                 
|                                                                                       |                                                                            |                 
|The accompanying notes are an integral part of these consolidated financial statements

XFormity Technologies, Inc. and Subsidiaries

Note 1 - Organization and Nature of Business

On September 27, 2004, XML-Global Technologies, Inc. (a Colorado Corporation) ("XML") acquired all of the outstanding stock of XFormity, Inc

XFormity was a private enterprise prior to the acquisition and no public documents are available. The former XML Global Technologies, Inc. disclosed this transaction in its June 30, 2004 consolidated financial statements and the notes thereto in its Annual Report on Form 10-KSB as filed with the Securities and Exchange Commission on October 14, 2004.

XFormity based in Dallas, Texas, designs and implements business intelligence software for large and mid-size companies, with a focus in the quick service restaurant industry.  XFormity, along with a strategic partner, is able to rapidly roll out flexible, extensible solutions to help their clients streamline the flow of business information.

Note 2 - Basis of Presentation

These consolidated financial statements are unaudited and reflect all adjustments that, in the opinion of management, 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.

Note 3 - Summary of Significant Accounting Principles

Revenue Recognition

The Company contracts with clients for development and sale of business intelligence software products.  Revenue derived from the sales of these products, that is billed on a monthly usage basis, is recognized in accordance with Statement of Position 97-2 (as amended), Software Revenue Recognition, over the term of the agreement or at specific acceptance points.

Consolidation

All inter-company balances and transactions have been eliminated in consolidation including balances due from XFormity to XML.

Cash and Cash Equivalents

All highly liquid investments with a maturity of three months or less at the time of purchase are considered to be cash equivalents.  Cash equivalents include cash on deposit with banks and money market funds.  The Company maintains its cash balances in bank accounts that, at times, may exceed federally insured limits.  The Company has not experienced any losses in such accounts.  Management believes that the Company is not exposed to any significant credit risk on cash.

Property and Equipment

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

Software Development Costs

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

Due to Stockholders and Other Liabilities

Due to stockholders and other liabilities consist of a $50,000 customer deposit at December 31, 2004 and $529,666 due to stockholders at June 30, 2004.

Loss Per Share

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

Stock Compensation

The Company has elected to apply Accounting Principles Board ("APB") Opinion No.25, Accounting for Stock Issued to Employees, and related interpretations in accounting for its stock options issued to employees (intrinsic value) and has adopted the disclosure-only provisions of SFAS No. 123, Accounting for Stock-Based Compensation. There were no options issued during this period.  No compensation expense was recorded under SFAS 123; therefore, no pro forma disclosures are made.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Note 4 - 1999 Equity Incentive Plan

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

| |                                          | 2004            
| | ---------------------------------------- | ----------------
| |                                          | Number ofOptions
| | Options outstanding at June 30, 2004     | 106,250         
| | Granted                                  | -               
| | Exercised                                | -               
| | Forfeited                                | (31,250)        
| | Options outstanding at December 31, 2004 | 75,000          
| | Options exercisable at December 31, 2004 | 75,000          

In January 2005, a former director exercised options to purchase 15,678 shares of common stock.  Under terms of the Plan, 50,000 options were exercised pursuant to a cashless exercise by delivery to the Company of 50,000 options valued at the difference between the exercise price and the closing market price on the date of exercise of the Company's common stock.

Note 5 - Income Taxes

At December 31, 2004, the Company had net operating loss carry-forwards totaling approximately $2,200,000 that begin to expire in 2022. No tax benefit has been reported in the December 31, 2004 financial statements because the Company believes a portion or all of the carry-forward may expire unused. Accordingly, the $726,000 tax benefit of the loss carry-forward has been offset by a valuation allowance of the same amount. The following are the components of the income tax provision.

| | Statement of Operations                    |      |              |             |  | Six Months EndedDecember 31,
| | ------------------------------------------ | ---- | ------------ | ----------- |  | ----------------------------
| |                                            | 2004 | 2003        
| | Federal income tax provision (benefit)     |      | $  (288,000) | $ (106,000)
| | Total provision (benefit) for income taxes |      | (288,000)    | (106,000)  
| | Valuation allowance                        |      |              |             |  | 288,000                     
| | Provision for income tax                   |      |              |             |  | $              -            



| | Balance Sheet                                                     |                 
| | ----------------------------------------------------------------- | ----------------
| | Deferred tax asset arising from Net Operating Loss Carry-forwards | $  726,000      
| | Valuation allowance                                               | (726,000)       
| | Net deferred tax asset                                            | $              -

Note 6 - Related Party Transactions

In the six months and three months ended December 31, 2004, the Company paid or accrued rent of $6,000 and $3,000

Note 7 - Lease Commitments

As of December 31, 2004, the Company is obligated under the terms of an operating lease agreement for space at its Dallas location through September 2005 in the amount of $10,800

Note 8 - Contingencies

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

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

The Company believes its critical accounting policies for the period July 1, 2004 to December 31, 2004 are revenue recognition and accounting for research and development expenses and that they are adhered to under generally accepted accounting principles in the accompanying consolidated financial statements.

FORWARD LOOKING STATEMENTS

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

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

RESULTS OF OPERATIONS

REVENUES.  The Company contracts with its clients for development and sale of business intelligence software, primarily its QSRx software product that is billed on a monthly basis to its customer respective franchise locations. For the six months ended December 31, 2004, the Company generated $171,375 in revenues compared to $77,000 in the comparative period in the prior year. In the current quarter, the Company generated $90,575 in revenues compared to $43,950 in the comparative quarter of the prior year.  The increase in revenue in the current quarter and year to date is attributable to an increase in its customer base and related billing locations.

COST OF REVENUES.   The cost of revenue for the six months and three months ended December 31, 2004 consists primarily of personnel, related payroll costs and our outside strategic business partner that provides the on-going technical support to our customers after the installation of our products.  As we add additional franchisees to our customer base, the technical support costs increase proportionately.  Other costs include travel, data hosting service costs and depreciation of computer equipment used in the maintenance and processing of customers' data.  The costs in the six month period ended December 31, 2004 were $191,704 compared to $78,726 in the comparative period of the prior year. The costs in the three month period ended December 31, 2004 were $96,364 compared to $60,156 in the comparative period of the prior year.  The increases are attributable to the Company's early stage of revenue development and related support for that revenue.

RESEARCH AND DEVELOPMENT.   Research and development costs are charged to operations as incurred and consist primarily of personnel and related human resource benefits. The costs in the six month period ended December 31, 2004 were $288,014 compared to $136,763 in the comparative period of the prior year primarily increased due to higher payroll costs and additional personnel. The costs in the three month period ended December 31, 2004 were $149,449 compared to $81,855 in the comparative period of the prior year.  This increase was also primarily due to additional personnel and related human resource benefits.  Our research and development is part of the strategic plan to provide a complete enterprise system encompassing business intelligence, store operations and financial services in the quick service restaurant market. The Company has developed its financial office product that effectively moves data bi-directionally between the stores and the franchisee enterprise system, dramatically reducing the intervention required to manage finance, human resources and operations and the Company began to market this product in the current quarter.

MARKETING AND SELLING.  The marketing and selling expenses incurred by the Company consist of marketing services provided by our strategic partner, various trade shows where we exhibit our software programs and direct selling expenses related to business development.  The costs in the six month period ended December 31, 2004 were $70,089 compared to $4,204 in the comparative period of the prior year. The costs in the three month period ended December 31, 2004 were $31,386 compared to $4,204 in the comparative period of the prior year.  In the prior year, during its initial stages of development, the Company relied on its relationship with existing clients to expand its market share, thus incurring minimal costs within this category.

GENERAL AND ADMINISTRATIVE.  Our general and administrative costs consist primarily of executive salaries and related human resource benefits, professional fees for attorneys and our independent auditor, rent, expenses related to being a public company and other operating costs.     The costs in the six month period ended December 31, 2004 were $469,760 compared to $167,944 in the comparative period of the prior year. The costs in the three month period ended December 31, 2004 were $279,488 compared to $75,261 in the comparative period of the prior year. The increases were primarily attributable to additional personnel, certain professional fees, patent litigation and other legal matters, expense relating to new board members, and an overall increase in operating costs resulting from the growth of the business.  Prior year costs reflected fewer personnel, lower costs attributable to them and reduced operating expenses.

NET LOSS.  The net loss for the six-month and three-month periods ended December 31, 2004 were $846,140 and $464,059 respectively, compared with a net loss of $310,637 and $177,526 for the comparative periods in 2003. The increases in the net losses were primarily the result of additional technical support costs attributable to new customers, expanded research and development costs to develop the potential market for business intelligence in the quick service restaurant industry, additional executive and technical personnel at higher costs and their related fringe benefits, professional fees attributable to the acquisition and other legal matters and expanded costs required to operate the business.

The net loss applicable to common stockholders for the six months and three months ended December 31, 2004 was $846,140 and $464,05

LIQUIDITY AND CAPITAL RESOURCES

The Company has incurred operating losses and negative cash flows from operations in each quarter since it commenced operations.  As of December 31, 2004, there was an accumulated deficit of $2,431,14

Management, after review of the current operational costs of the Company, and based on current revenues, have waived the provisions of their employment contracts, and along with several other employees, have accepted payroll reductions between 17%-25%. This, along with other cost cutting measures, represents an approximate annual savings of $250,000.

In January 2005, the Company announced a cross-licensing agreement with MenuLink Computer Solutions, Inc. (MenuLink).  MenuLink has successfully designed, developed and marketed its Back Office software since 1994 and the two companies have now joined in supporting Microsoft's Smarter Hospitality program to provide comprehensive solutions within the Quick Serve Restaurant industry.  This combination of the standards-based software into a single suite of products utilizing the Microsoft .NET Framework provides a complete and simplified solution including cash management, inventory, purchasing and labor controls. The Company believes benefits resulting from this agreement will include an increase in its customer base along with creation of additional revenues resulting from the total enterprise system provided to its existing customer base representing over 1,000 stores.  The Company will shift its focus from its current research and development to integrating the MenuLink software into its QSRx suite of business intelligence, store operations and financial services.  Additionally, the Company is in discussions with other major franchisors that would add to its customer base if the total enterprise suite, or a portion thereof, becomes viable for their operations.

In February 2005, the Company entered into an agreement to support Domino's point-of-sale computer system, Domino's Pulse, with PulseConnect, a web-based business intelligence software.  The Company will begin providing its services during the first calendar quarter of 2005.  Over a period of months, the Company will migrate PulseConnect onto its proprietary technology platform.

The Company continues to vigorously defend the patent infringement suit filed by b-50.com, LLC.

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



ITEM 3.  INTERNAL CONTROLS AND PROCEDURES

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

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

PART II- OTHER INFORMATION

Item 1.       Legal Proceedings

Our wholly-owned subsidiary, XFormity, Inc., is a defendant in a civil action brought by b-50.com, LLC, as Plaintiff, in the United States District Court for the Northern District of Texas, Dallas Division, Civil Action No. 304CV-542-D (the "Litigation").  In the Litigation, the Plaintiff claims that XFormity has infringed upon a patent owned by b-50.com, LLC.  XFormity denies liability and continues to vigorously defend the matter.

As part of our acquisition of XFormity, of the common stock issued to the XFormity shareholders, shares having a market value of $500,000 have been withheld in escrow to cover any potential liability arising from the Litigation.

Item 2.      Unregistered Sales of Securities and Use of Proceeds

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

ITEM 3.      DEFAULT UPON SENIOR SECURITIES

Not applicable.

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

The Company did not submit any matters to a vote of security holders in the six months ended December 31, 2004.

ITEM 5.     OTHER INFORMATION

None

ITEM 6.      EXHIBITS



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



SIGNATURES

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

|                       | XFormity Technologies, Inc.                               
|---------------------- | ----------------------------------------------------------
|Date:February 11, 2005 | /s/ Mark HaugejordeMark Haugejorde
Chief Executive Officer
|Date:February 11, 2005 | /s/ Jack Rabin
Jack Rabin
Chief Financial Officer