<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED APRIL 30, 2004

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________

                        COMMISSION FILE NUMBER: 333-83231

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
                       -----------------------------------
               (Exact name of Company as specified in its charter)

                  Nevada                                95-4741485
                  ------                                ----------
        (State or jurisdiction of                    (I.R.S. Employer
      incorporation or organization)                Identification No.)

                1200 Airport Drive, Chowchilla, California 93610
                ------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                   Company's telephone number: (559) 665-5800
                                               --------------

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                         Common Stock, $0.001 Par Value

Indicate by check mark whether the Company (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 Company was
required to file such reports), and (2) been subject to such filing requirements
for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Company's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB [ ].

The aggregate market value of the voting stock held by non-affiliates of the
Company as of April 30, 2004, Common Stock, par value $0.001 per share was
$18,206,278. As of August 10, 2004, the Company had 142,415,531 shares of common
stock issued and outstanding, of which 93,361,531 were held by non-affiliates



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                                   FORM 10-KSB

                                TABLE OF CONTENTS

                                     PART I

ITEM 1.     Description of Business.........................................  3

ITEM 2.     Description of Property.........................................  5

ITEM 3.     Legal Proceedings...............................................  5

ITEM 4.     Submission of Matters to a Vote of Security
            Holders.........................................................  5

                                     PART II

ITEM 5.     Market for Common Equity and Other Shareholder
            Matters.........................................................  5

ITEM 6.     Management's Discussion and Analysis of Financial
            Condition and Results of Operations.............................  7

ITEM 7.     Financial Statements............................................F-1

ITEM 8.     Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure............................. 22

ITEM 8 (A)  Controls and Procedures ........................................ 22

                                    PART III

ITEM 9.     Directors, Executive Officers, Promoters
            and Control Persons; Compliance with Section
            16(a) of the Exchange Act....................................... 23

ITEM 10.    Executive Compensation.......................................... 24

ITEM 11.    Security Ownership of Certain Beneficial
            Owners and Management........................................... 25

ITEM 12.    Certain Relationships and Related Transactions.................. 26

ITEM 13.    Exhibits and Reports on Form 8-K................................ 26

ITEM 14.    Principal Accountant's Fees and Services........................ 28

Signatures.................................................................. 29

                                       2



<PAGE>

PART I.

RISK FACTORS AND CAUTIONARY STATEMENTS

Forward-looking statements in this report are made pursuant to the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. The Company
wishes to advise readers that actual results may differ substantially from such
forward-looking statements. Forward-looking statements include statements
concerning underlying assumptions and other statements that are other than
statements of historical facts. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied by the statements, including, but not limited to, the
following: the ability of the Company to provide for its obligations, to provide
working capital needs from operating revenues, to obtain additional financing
needed for any future acquisitions, to meet competitive challenges and
technological changes, and other risks detailed in the Company's periodic report
filings with the Securities and Exchange Commission.

ITEM 1. BUSINESS.

Introduction
------------

The Company is a Nevada company with a limited operating history. On December
11, 2001, Global Diversified Industries, Inc., formerly Global Foods Online,
Inc. (the "Company") acquired two wholly-owned subsidiaries, Majestic Modular
Buildings, Ltd. ("Modular"), and, Lutrex Enterprises, Inc. "Lutrex", an entity
controlled by the Company's President and Chief Executive Officer

Modular is engaged in the business of designing, manufacturing and marketing
re-locatable modular structures such as classrooms and office buildings and was
under contract to build multiple single story classrooms for two school
districts in southern California.

The Company is a holding company that currently operates three wholly owned
subsidiaries, Lutrex Enterprises, Inc., an entity, which holds equipment and
inventory for the registrant, MBS Construction Inc., a modular contractor
specializing in modular construction site work and renovation, and Global
Modular, Inc., a sales, marketing and manufacturing of modular type structures.

OVERVIEW

The Company's subsidiary, Global Modular, Inc. ("Global Modular") is in the
business of designing, manufacturing and marketing pre-fabricated, modular type
structures. Its principal customer base during the current fiscal year will be
educational (public and private schools, universities, etc.), child-care and
municipality sectors. Its product lines consist of a variety of relocatable
(portable) classroom designs, including both single-story and two-story floor
plans. Global Modular's portable classroom structures are engineered and

                                       3



<PAGE>

constructed in accordance with pre-approved building plans, commonly referred to
as "P.C.'s" or "pre-checked" plans, that conform to structural and seismic
safety specifications administered by the California Department of State
Architects (DSA). The DSA regulates all California school construction on public
real estate and the DSA's standards are considered to be more rigorous than the
standards that typically regulate other classes of commercial portable
structures.

Global Modular also enjoys the benefit of providing educational customers with
product contracted under a "piggyback clause". The State of California allows
school districts to canvass proposals from modular classroom vendors under a
bidding process where the successful bidder can provide other public school
districts and municipalities portable classrooms under a "piggyback contract"
issued by the originating school district. This process saves school districts
valuable time and resources from the necessity of soliciting bids. A modular
vendor who possesses a "piggybackable contract" containing competitive pricing
and a variety of design options may have access to future business for up to
five years, depending on the term of the piggyback contract.

At some point during the current or successive fiscal year, Global Modular
intends to expand its product line to serve the commercial/business sector. This
sector consists of retail, industrial and institutional (including educational
institutions that reside on private property). This sector adheres to building
designs and specifications administered by the Department of Housing (DOH).

Among Global Modular's asset base is its integrated, state-of-the-art, automated
manufacturing process which includes equipment, raw material and marketing
collateral that are specifically designed for the high capacity fabrication of
modular structures. Future revenue generation and growth partially depends on
the success of marketing efforts to the educational sector for single-story and
two-story designs.

The Company's total revenues were $3,827,608 for the year ended April 30, 2004,
compared to $2,140 for the year ended April 30, 2003. The increase in revenue is
due to Global Modular starting operations in May 2003, at their new plant in
Chowchilla.

The Company has a piggybackable contract with a public school district in the
Los Angeles, California. On January 20, 2003, the school district extended the
duration of the contract through March 20, 2006. The contract contains an
expanded variety of single-story and two-story floor plans with many add-on
options to meet the typical school district design specifications.

Employees
---------

As of April 30, 2004, the Company had 75 employees. The Company anticipates that
the number of employees will increase over the next twelve months. The Company
Fdoes not expect to have any collective bargaining agreements covering any of
its employees.

The Company has recently hired two seasoned sales professionals from the modular
building industry. The two employees have over 35 years of combined modular
building/portable classrooms direct sales experience. Both have spent most of

                                       4



<PAGE>

their employment tenure with companies who have been providing school districts
with modular structures for over 30 years each. The two employees possess and
exceptional reputation for reliability and customer service throughout the
industry and are expected to capture a significant portion of market share over
the next 12 months and beyond.

ITEM 2. PROPERTIES.

The Company's principal executive offices are located at 1200 Airport Drive,
Chowchilla, California. The property consists of sixteen acres of real estate
including a 100,000 square foot structure of usable space. The structure will be
utilized by the Company's executive management team, as well as housing the
operating entities of Lutrex, MBS Construction and Global Modular. The Company
has entered into a three-year lease (including options for renewals) for the
property at a rate of $15,225 per month for the first year and moderate
increases for each year thereafter. The Company believes that the current
facilities are suitable for its current needs.

ITEM 3. LEGAL PROCEEDINGS.

Other than as set forth below, the Company is not a party to any material
pending legal proceedings and, to the best of its knowledge, no such action by
or against the Company has been threatened. The Company is subject to legal
proceedings and claims that arise in the ordinary course of its business.
Although occasional adverse decisions or settlements may occur, the Company
believes that the final disposition of such matters will not have material
adverse effect on its financial position, results of operations or liquidity.

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

There were not any matters that were submitted during the fourth quarter of the
2003-2004 fiscal year end to a vote of the security holders.

PART II.

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market Information
------------------

(a) The Company's Common Stock has been and is currently traded on the
over-the-counter market and quotations are published on the OTC Bulletin Board
under the symbol "GDVI". The Company began trading under this symbol on January
3, 2002. The Company previously traded under the symbol "GFDO" and commenced in
October 2000.

                                       5



<PAGE>

The following table sets forth the range of high and low bid prices of the
Common Stock for each fiscal quarterly period. Prices reported represent prices
between dealers, do not include retail markups, markdowns or commissions and do
not represent actual transactions.

Per Share Common Stock Bid Prices by Quarter

For the Fiscal Year Ended on April 30, 2004
-------------------------------------------

                                      HIGH   LOW

Quarter Ended April 30, 2004          .32    .09
Quarter Ended January 31, 2004        .16    .07
Quarter Ended October 31, 2003        .11    .02
Quarter Ended July 31, 2003           .07    .01

Per Share Common Stock Bid Prices by Quarter

For the Fiscal Year Ended on April 30, 2003
-------------------------------------------

                                      HIGH   LOW

Quarter Ended April 30, 2003          .03    .007
Quarter Ended January 31, 2003        .06    .004
Quarter Ended October 31, 2002        .015   .003
Quarter Ended July 31, 2002          0.02   0.005

The ability of individual stockholders to trade their shares in a particular
state may be subject to various rules and regulations of that state. A number of
states require that an issuer's securities be registered in their state or
appropriately exempted from registration before the securities are permitted to
trade in that state. Presently, the Company has no plans to register its
securities in any particular state. Further, most likely the Company's shares
will be subject to the provisions of Section 15(g) and Rule 15g-9 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly
referred to as the "penny stock" rule. Section 15(g) sets forth certain
requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates
the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.

The Commission generally defines penny stock to be any equity security that has
a market price less than $5.00 per share, subject to certain exceptions. Rule
3a51-1 provides that any equity security is considered to be a penny stock
unless that security is: registered and traded on a national securities exchange
meeting specified criteria set by the Commission; authorized for quotation on

                                       6



<PAGE>

The NASDAQ Stock Market; issued by a registered investment company; excluded
from the definition on the basis of price (at least $5.00 per share) or the
issuer's net tangible assets (at least $2 million); or exempted from the
definition by the Commission. If the Company's shares are deemed to be a penny
stock, trading in the shares will be subject to additional sales practice
requirements of broker-dealers who sell penny stocks to persons other than
established customers and accredited investors, generally persons with assets in
excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together
with their spouse.

For transactions covered by these rules, broker-dealers must make a special
suitability determination for the purchase of such securities and must have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the first transaction, of a
risk disclosure document relating to the penny stock market. A broker-dealer
also must disclose the commissions payable to both the broker-dealer and the
registered representative, and current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price information for the
penny stocks held in the account and information on the limited market in penny
stocks. Consequently, these rules may restrict the ability of broker-dealers to
trade and/or maintain a market in the Company's Common Stock and may affect the
ability of stockholders to sell their shares.

Dividend Information
--------------------

The Company has not declared or paid cash dividends on its Common Stock or made
distributions in the past, and the Company does not anticipate that it will pay
cash dividends or make cash distributions in the foreseeable future, other than
non cash dividends described below. The Company currently intends to retain and
invest future earnings, if any, to finance its operations.

Transfer Agent
--------------

The transfer agent and registrar for our common stock is Fidelity Transfer
Company, 1800 South West Temple, Suite 301, Salt Lake City, Utah 84115.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

The following discussion contains forward-looking statements that are subject to
significant risks and uncertainties about us, our current and planned products,
our current and proposed marketing and sales, and our projected results of
operations. There are several important factors that could cause actual results
to differ materially from historical results and percentages and results
anticipated by the forward-looking statements. The Company has sought to
identify the most significant risks to its business, but cannot predict whether
or to what extent any of such risks may be realized nor can there be any
assurance that the Company has identified all possible risks that might arise.

                                       7



<PAGE>

Investors should carefully consider all of such risks before making an
investment decision with respect to the Company's stock. In particular,
investors should refer to the section entitled, Risk Factors that May Affect
Future Results and Market Price of Stock.

The following discussion and analysis should be read in conjunction with our
financial statements and summary of selected financial data for the Company.
This discussion should not be construed to imply that the results discussed
herein will necessarily continue into the future, or that any conclusion reached
herein will necessarily be indicative of actual operating results in the future.
Such discussion represents only the best present assessment from our Management.

General Overview
----------------

The Company generates revenue from the sale of pre-fabricated, modular type
structures. educational institutions , such as public and private schools,
universities, etc., child-care providers and municipalities. Our product lines
consist of a variety of re-locatable (portable) classroom designs, including
both single-story and two-story floor plans

Critical Accounting Policies
----------------------------

The preparation of our financial statements in conformity with accounting
principles generally accepted in the United States requires us to make estimates
and judgments that affect our reported assets, liabilities, revenues, and
expenses, and the disclosure of contingent assets and liabilities. We base our
estimates and judgments on historical experience and on various other
assumptions we believe to be reasonable under the circumstances. Future events,
however, may differ markedly from our current expectations and assumptions.
While there are a number of significant accounting policies affecting our
consolidated financial statements; we believe the following critical accounting
policies involve the most complex, difficult and subjective estimates and
judgments:

         o   revenue recognition
         o   inventories
         o   allowance for doubtful accounts
         o   stock-based compensation

Revenue Recognition
-------------------

Revenues on the sale of products, net of estimated costs of returns and
allowance, are recognized at the time products are shipped to customers, legal
title has passed, and all significant contractual obligations of the Company
have been satisfied. Products are generally sold under stipulated contractual
terms under credit terms customary to the geographic region of distribution. The
Company performs ongoing credit evaluations of the customers and generally does
not require collateral to secure the accounts receivable.

                                       8



<PAGE>

Inventories
-----------

We value our inventories, which consist primarily of raw materials,
work-in-process and finished modular structures, at the lower of cost or market.
Cost is determined on the first-in, first-out method (FIFO) and includes the
cost of merchandise and freight. A periodic review of inventory quantities on
hand is performed in order to determine if inventory is properly positioned at
the lower of cost or market. Factors related to current inventories such as
future consumer demand and trends in the Company's core business, current aging,
current and anticipated wholesale discounts, and class or type of inventory is
analyzed to determine estimated net realizable values. A provision is recorded
to reduce the cost of inventories to the estimated net realizable values, if
required. Any significant unanticipated changes in the factors noted above could
have a significant impact on the value of our inventories and our reported
operating results.

Allowance for Uncollectible Accounts
------------------------------------

We are required to estimate the collectibility of our trade receivables. A
considerable amount of judgment is required in assessing the realization of
these receivables including the current creditworthiness of each customer and
related aging of the past due balances. In order to assess the collectibility of
these receivables, we perform ongoing credit evaluations of our customers'
financial condition. Through these evaluations we may become aware of a
situation where a customer may not be able to meet its financial obligations due
to deterioration of its financial viability, credit ratings or bankruptcy. The
reserve requirements are based on the best facts available to us and are
reevaluated and adjusted as additional information is received. Our reserves are
also based on amounts determined by using percentages applied to certain aged
receivable categories. These percentages are determined by a variety of factors
including, but are not limited to, current economic trends, historical payment
and bad debt write-off experience. We are not able to predict changes in the
financial condition of our customers and if circumstances related to our
customers deteriorate, our estimates of the recoverability of our receivables
could be materially affected and we may be required to record additional
allowances. Alternatively, if we provided more allowances than are ultimately
required, we may reverse a portion of such provisions in future periods based on
our actual collection experience. As of April 30, 2004, we determined there was
no reserve required against our account receivables.

Stock-Based Compensation
------------------------

In December 2002, the FASB issued SFAS No. 148 - Accounting for Stock-Based
Compensation - Transition and Disclosure. This statement amends SFAS No. 123 -
Accounting for Stock-Based Compensation, providing alternative methods of
voluntarily transitioning to the fair market value based method of accounting
for stock based employee compensation. FAS 148 also requires disclosure of the
method used to account for stock-based employee compensation and the effect of
the method in both the annual and interim financial statements. The provisions
of this statement related to transition methods are effective for fiscal years
ending after December 15, 2002, while provisions related to disclosure
requirements are effective in financial reports for interim periods beginning
after December 31, 2002. The Company elected to continue to account for

                                       9



<PAGE>

stock-based compensation plans using the intrinsic value-based method of
accounting prescribed by APB No. 25, "Accounting for Stock Issued to Employees,"
and related interpretations. Under the provisions of APB No. 25, compensation
expense is measured at the grant date for the difference between the fair value
of the stock and the exercise price.

Comparison of Years Ended April 30, 2004 and 2003

Revenues
--------

The Company's total revenues were $3,827,608 for the year ended April 30, 2004
compared to $2,140 for the same time period in 2003, an increase of $3,825,468.
The increase is a result of starting production in May 2003 in the new facility.

The Company recognized $ 62,098 of other income in 2003 as compared to no other
income in 2004. The other income in 2003 represents Global Modular selling
excess equipment not utilized in the new factory located in Chowchilla, CA.

Gross Profit
------------

For the year ended April 30, 2004, the Company's gross profit margin was 33.1 %
compared to a negative gross margin in 2003. The change is a result of starting
production in May 2003 in the new facility.

Costs and Expenses
------------------

The Company's general and administrative expenses for the year ended April 30,
2004 was $ 1,417,098 compared to $283,991 for the same period in 2003, an
increase of $1,133,107. This increase was due to production starting in May 2003
which required general and administrative cost to rise along with the revenue.

The Company's interest cost for the year ended April 30, 2004 was $ 98,739
compared to $27,649 for the same period in 2003, an increase of $71,090. The
change is due to the Company's increased borrowings due to starting production
in May 2003 during the year ended April 30, 2004.

Liquidity and Capital Resources
-------------------------------

As reflected in the accompanying financial statements, the Company incurred a
net loss of $ 428,067 for the year ended April 30, 2004. As a result of our
operating loss in 2004, we generated a cash flow deficit of $ 605,380 from
operating activities. Cash flows used in investing activities was $ 413,923
during this period. We met our cash flow requirements during primarily through
the issuance of notes payable of $ 277,205, advances in the form of notes
payable from related parties of $ 327,350 and sale of company stock of
$1,093,845.

                                       10



<PAGE>

While the Company has raised capital to meet its working capital and financing
needs in the past, additional financing is required in order to meet the
Company's current and projected cash flow deficits from operations and
development. The Company is presently seeking financing in the form of debt or
equity in order to provide he necessary working capital. Such financing may be
upon terms that are dilutive or potentially dilutive to our stockholders. There
are no assurances the Company will be successful in raising the funds required.

By adjusting its operations and development to the level of capitalization,
management believes it has sufficient capital resources to meet projected cash
flow deficits through the next twelve months. However, if thereafter, we are not
successful in generating sufficient liquidity form operations or in raising
sufficient capital resources, on terms acceptable to us, this could have a
material adverse effect, on our business, results of operations, liquidity and
financial condition.

In prior periods, the Company has borrowed funds from significant shareholders
of the Company to satisfy certain obligations. There are no assurances that the
Company will be able to borrow funds from significant shareholders of the
Company in the future.

As the Company continues to expand, the Company will incur additional costs for
personnel. In order for the Company to attract and retain quality personnel,
management anticipates it will have to offer competitive salaries, issue common
stock to consultants and employees, and grant Company stock options to current
and future employees.

The effect of inflation on the Company's revenue and operating results was not
significant.

The company's operations are in the western United States and there are no
seasonal aspects that would have a material adverse effect on the Company's
financial condition or results of operations.

The independent auditors report on the Company's April 30, 2004 financial
statements included in this Form states that the Company's recurring losses
raise substantial doubt about the Company's ability to continue as a going
concern.

Off-Balance Sheet Arrangements
------------------------------

The Company does not maintain off-balance sheet arrangements nor does it
participate in non-exchange traded contracts requiring fair value accounting
treatment.

Business Concentration
----------------------

During the year ended April 30, 2004, the Company recognized approximately
2,384,600, or 62% of its revenues from sales of its products to three (3)
customers. While the Company's management considers its relationships with the
customers to be satisfactory, given the concentration of its sales to a few key
customers, its continued relationships may be subject to the policies and
practices of the customers. The Company management continues to concentrate its
efforts on expanding its customer base in order to reduce its reliance on its
current customers.

                                       11



<PAGE>

NEW ACCOUNTING PRONOUNCEMENTS
-----------------------------

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities." Interpretation 46 changes the criteria by which one
company includes another entity in its consolidated financial statements.
Previously, the criteria were based on control through voting interest.
Interpretation 46 requires a variable interest entity to be consolidated by a
company if that company is subject to a majority of the risk of loss from the
variable interest entity's activities or entitled to receive a majority of the
entity's residual returns or both. A company that consolidates a variable
interest entity is called the primary beneficiary of that entity. The
consolidation requirements of Interpretation 46 apply immediately to variable
interest entities created after January 31, 2003. The consolidation requirements
apply to older entities in the first fiscal year or interim period beginning
after June 15, 2003. Certain of the disclosure requirements apply in all
financial statements issued after January 31, 2003, regardless of when the
variable interest entity was established. The adoption of FASB issued
Interpretation No. 46 did not have a material impact to the Company's financial
position or results of operations.

In April 2003, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 149, AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES. SFAS 149 amends SFAS No. 133 to provide clarification on the
financial accounting and reporting of derivative instruments and hedging
activities and requires that contracts with similar characteristics be accounted
for on a comparable basis. The provisions of SFAS 149 are effective for
contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. The adoption of SFAS 149 did not
have a material impact on the Company's results of operations or financial
position.

In May 2003, the FASB issued SFAS No. 150, ACCOUNTING FOR CERTAIN FINANCIAL
INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY. SFAS 150
establishes standards on the classification and measurement of certain financial
instruments with characteristics of both liabilities and equity. The provisions
of SFAS 150 are effective for financial instruments entered into or modified
after May 31, 2003 and to all other instruments that exist as of the beginning
of the first interim financial reporting period beginning after June 15, 2003.
The adoption of SFAS 150 did not have a material impact on the Company's
results of operations or financial position.

In December 2003, the FASB issued SFAS No. 132 (revised), EMPLOYERS' DISCLOSURES
ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS - AN AMENDMENT OF FASB
STATEMENTS NO. 87, 88, AND 106. This statement retains the disclosure
requirements contained in FASB statement no. 132, Employers' Disclosures about
Pensions and Other Postretirement Benefits, which it replaces. It requires
additional disclosures to those in the original statement 132 about the assets,
obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other defined benefit postretirement plans. The required
information should be provided separately for pension plans and for other
postretirement benefit plans. The revision applies for the first fiscal or
annual interim period ending after December 15, 2003 for domestic pension plans
and June 15, 2004 for foreign pension plans and requires certain new disclosures
related to such plans. The adoption of this statement will not have a material
impact on the Company's results of operations or financial positions.

                                       12



<PAGE>

RISKS AND UNCERTAINTIES

AN INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. IN ADDITION TO
THE OTHER INFORMATION IN THIS REPORT, THE FOLLOWING RISK FACTORS SHOULD BE
CONSIDERED CAREFULLY IN EVALUATING THE COMPANY AND ITS BUSINESS. THIS REPORT
CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED. ALL FORWARD-LOOKING STATEMENTS ARE INHERENTLY UNCERTAIN
AS THEY ARE BASED ON CURRENT EXPECTATIONS AND ASSUMPTIONS CONCERNING FUTURE
EVENTS OR FUTURE PERFORMANCE OF THE COMPANY. READERS ARE CAUTIONED NOT TO PLACE
UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH ARE ONLY PREDICTIONS
AND SPEAK ONLY AS OF THE DATE HEREOF. FORWARD-LOOKING STATEMENTS USUALLY CONTAIN
THE WORDS "ESTIMATE," "ANTICIPATE," "BELIEVE," "PLAN," "EXPECT," OR SIMILAR
EXPRESSIONS, AND ARE SUBJECT TO NUMEROUS KNOWN AND UNKNOWN RISKS AND
UNCERTAINTIES. IN EVALUATING SUCH STATEMENTS, PROSPECTIVE INVESTORS SHOULD
REVIEW CAREFULLY VARIOUS RISKS AND UNCERTAINTIES IDENTIFIED IN THIS REPORT,
INCLUDING THE MATTERS SET BELOW AND IN THE COMPANY'S OTHER SEC FILINGS. THESE
RISKS AND UNCERTAINTIES COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE INDICATED IN THE FORWARD-LOOKING STATEMENTS. THE COMPANY
UNDERTAKES NO OBLIGATION TO UPDATE OR PUBLICLY ANNOUNCE REVISIONS TO ANY
FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE EVENTS OR DEVELOPMENTS.

WE WILL NEED ADDITIONAL FINANCING TO FULLY IMPLEMENT OUR BUSINESS PLAN, AND WE
CANNOT ASSURE YOU THAT WE WILL BE SUCCESSFUL IN OBTAINING SUCH FINANCING OR IN
CONTINUING OUR OPERATIONS.

         We have focused our efforts on developing our business in the
construction and sale of modular building structures. We will need to raise
additional capital to continue to implement fully our business plan and continue
to establish adequate manufacturing, marketing, and sales operations. There can
be no assurance that additional public or private financing, including debt or
equity financing, will be available as needed, or, if available, on terms
favorable to us. Any additional equity financing may be dilutive to our
stockholders and such additional equity securities may have rights, preferences
or privileges that are senior to those of our existing common or preferred
stock. Furthermore, debt financing, if available, will require payment of
interest and may involve restrictive covenants that could impose limitations on
our operating flexibility. Our failure to successfully obtain additional future
funding may jeopardize our ability to continue our business and operations.

                                       13



<PAGE>

IF WE ARE UNABLE TO MANAGE FUTURE GROWTH, OUR BUSINESS MAY BE NEGATIVELY
AFFECTED.

         We are continuing to pursue a strategy of rapid growth, and plan to
expand significantly our manufacturing capability and devote substantial
resources to our marketing, sales, administrative, operational, financial and
other systems and resources. Such expansion will place significant demands on
our marketing, sales, administrative, operational, financial and management
information systems, controls and procedures. Accordingly, our performance and
profitability will depend on the ability of our officers and key employees to:

         o        manage our business and our subsidiaries as a cohesive
                  enterprise;
         o        manage expansion through the timely implementation and
                  maintenance of appropriate administrative, operational,
                  financial and management information systems, controls and
                  procedures;
         o        add internal capacity, facilities and third-party sourcing
                  arrangements as and when needed;
         o        maintain service quality controls; and
         o        attract, train, retain, motivate and manage effectively our
                  employees.

         There can be no assurance that we will integrate and manage
successfully new systems, controls and procedures for our business, or that our
systems, controls, procedures, facilities and personnel, even if successfully
integrated, will be adequate to support our projected future operations. Any
failure to implement and maintain such systems, controls and procedures, add
internal capacity, facilities and third-party sourcing arrangements or attract,
train, retain, motivate and manage effectively our employees could have a
material adverse effect on our business, financial condition and results of
operations.

WE MAY FACE STRONG COMPETITION FROM LARGER, ESTABLISHED COMPANIES.

         We likely will face intense competition from other builders of modular
structures , virtually all of which can be expected to have longer operating
histories, greater name recognition, larger installed customer bases and
significantly more financial resources, facilities and manufacturing and
marketing experience than the Company.

                                       14



<PAGE>

         In addition, we expect to face additional competition from new entrants
into our targeted industry segments. As the demand for modular products grows
and new markets are exploited, we expect that competition will become more
intense, as current and future competitors begin to offer an increasing number
of diversified products and services.

         Increased competition could result in price reductions, fewer product
orders, and reduced operating margins, any of which could materially and
adversely affect our business, financial condition and results of operations.

OUR SUCCESS DEPENDS IN LARGE PART ON OUR ABILITY TO ATTRACT AND RETAIN KEY
EMPLOYEES AND MANAGEMENT.

         Our success and execution of our business strategy will depend
significantly upon the continuing contributions of, and on our ability to
attract, train and retain qualified management, marketing, sales, operational,
production, administrative and technical personnel. In this regard, we are
particularly dependent upon the services of Phil Hamilton, our President and
Chief Executive. The loss of the services of Mr. Hamilton and the failure to
attract, train and retain additional qualified personnel in a timely manner
could have a material adverse effect on our business, financial condition and
results of operations.

OUR RESULTS OF OPERATIONS MAY HIGHLY FLUCTUATE FROM QUARTER TO QUARTER AS WE
CONTINUE TO GROW, THEREFORE YOU CANNOT USE THESE RESULTS TO PREDICT HOW WE MAY
PERFORM IN THE FUTURE.

         As a result of our limited operating history, we do not have historical
financial data for a significant number of periods in which to base our planned
operating expenses. In addition our revenues have not met our expectations. Our
expense levels are based in part on our projections as to future revenues that
are expected to increase. It is anticipated that as we mature, our sales and
operating results may fluctuate from quarter to quarter and from year to year
due to a combination of factors, including, among others:

         o        the volume, timing of, and ability to fulfill customer orders;
         o        the demand for our products;
         o        the number, timing and significance of product enhancements
                  and new product introductions by us and our competitors;
         o        changes in pricing policies by us or our competitors;
         o        changes in the level of operating expenses;
         o        expenses incurred in connection with our plans to fund greater
                  levels of sales and marketing activities and operations, and
                  broaden our customer  support capabilities ;
         o        personnel changes;

                                       15



<PAGE>

         o        product defects and other product or service quality problems;
                  and
         o        general domestic and international legal, economic and
                  political conditions.

Any unfavorable changes in these or other factors could have a material adverse
effect on our business, financial condition and results of operation.

WE MAY NOT BE ABLE TO OBTAIN SUFFICIENT CONTRACT BONDING

The sale of our products to certain government and/or private customers may
require contract performance bonding. The availability of contract bonding in
the remediation market has been curtailed since the September 11, 2001 World
Trade Center disaster. Insurance bonding requirements often require collateral
of 100% of the contract amount. The collateral and bonding requirements could
limit the number and size of projects requiring bonds undertaken by the Company.
In the event contract bonding cannot be obtained at an economical price or
collateral requirements are beyond the Company's financial capability the
failure to obtain contract bonding could have a material adverse effect on the
Company's business, financial condition and results of operations.

DOUBT ABOUT OUR ABILITY TO CONTINUE OPERATIONS AS A "GOING CONCERN". YOU MAY
LOSE ALL OF YOUR INVESTMENT IF WE ARE UNABLE TO CONTINUE OPERATIONS

The Company's ability to continue as a going concern is subject to substantial
doubt given its current financial condition and requirements for additional
funding. There can be no assurance that we will be able to generate sufficient
revenues from continuing operations to meet our obligations . As a result of the
foregoing, our auditors have expressed substantial doubt about our ability to
continue as a going concern. If we cannot continue as a going concern, then you
may lose all of your investment.

If we raise additional funds by issuing equity securities, existing stockholders
may experience a dilution in their ownership. In addition, as a condition to
giving additional funds to us, future investors may demand, and may be granted,
rights superior to those of existing stockholders.

LIMITED OPERATING HISTORY; ANTICIPATED LOSSES; UNCERTAINTY OF FUTURE RESULTS.

The Company has only a limited operating history upon which an evaluation of its
operations and its prospects can be based. The Company's prospects must be
evaluated with a view to the risks encountered by a company in an early stage of
development, particularly in light of the uncertainties relating to the new and
evolving manufacturing methods with which the Company intends to operate and the
acceptance of the Company's business model. The Company will be incurring costs
to develop, introduce and enhance its products, to establish marketing
relationships, to acquire and develop product lines that will compliment each
other and to build an administrative organization. To the extent that such

                                       16



<PAGE>

expenses are not subsequently followed by commensurate revenues, the Company's
business, results of operations and financial condition will be materially
adversely affected. There can be no assurance that the Company will be able to
generate sufficient revenues from the sale of their modular buildings and
related products. The Company may have negative cash flow from operations to
continue for the next four (4) quarters as it continues to develop and market
its business. If cash generated by operations is insufficient to satisfy the
Company's liquidity requirements, the Company may be required to sell additional
equity or debt securities. The sale of additional equity or convertible debt
securities would result in additional dilution to the Company's stockholders.

POTENTIAL FLUCTUATIONS IN ANNUAL OPERATING RESULTS.

The Company's annual operating results may fluctuate significantly in the future
as a result of a variety of factors, most of which are outside the Company's
control, including: the demand for manufactured modular buildings; seasonal
trends; introduction of new government regulations and building standards;
local, state and federal government procurement delays; general economic
conditions, and economic conditions specific to the modular building industry.
The Company's annual results may also be significantly impacted by the impact of
the accounting treatment of acquisitions, financing transactions or other
matters. Particularly at the Company's early stage of development, such
accounting treatment can have a material impact on the results for any quarter.
Due to the foregoing factors, among others, it is likely that the Company's
operating results will fall below the expectations of the Company or investors
in some future quarter.

LIMITED PUBLIC MARKET, POSSIBLE VOLATILITY OF SHARE PRICE.

The Company's common stock is currently quoted on the NASD OTC Electronic
Bulletin Board under the ticker symbol GDVI. As of August 10, 2004, there were
approximately 142,415,314 shares of common stock outstanding There can be no
assurance that a trading market will be sustained in the future. Factors such
as, but not limited to, technological innovations, new products, acquisitions or
strategic alliances entered into by the Company or its competitors, failure to
meet security analysts' expectations, government regulatory action, patent or
proprietary rights developments, and market conditions for manufacturing stocks
in general could have a material effect on the volatility of the Company's stock
price.

MANAGEMENT OF GROWTH

The Company expects to experience significant growth in the number of employees
and the scope of its operations. In particular, the Company intends to hire
additional engineering, sales, marketing, and administrative personnel.
Additionally, acquisitions could result in an increase in the number of
employees and business activity. Such activities could result in increased
responsibilities for management. The Company believes that its ability to
increase its customer support capability and to attract, train, and retain
qualified engineering, sales, marketing, and management personnel, will be a
critical factor to its future success. In particular, the availability of
qualified sales engineering and management personnel is quite limited, and

                                       17



<PAGE>

competition among companies to attract and retain such personnel is intense.
During strong business cycles, the Company may experience difficulty in filling
its needs for qualified sales, engineering and other personnel.

The Company's future success will be highly dependent upon its ability to
successfully manage the expansion of its operations. The Company's ability to
manage and support its growth effectively will be substantially dependent on its
ability to implement adequate improvements to financial and management controls,
reporting and order entry systems, and other procedures and hire sufficient
numbers of financial, accounting, administrative, and management personnel. The
Company's expansion and the resulting growth in the number of its employees have
resulted in increased responsibility for both existing and new management
personnel. The Company is in the process of establishing and upgrading its
financial accounting and procedures. There can be no assurance that the Company
will be able to identify, attract, and retain experienced accounting and
financial personnel. The Company's future operating results will depend on the
ability of its management and other key employees to implement and improve its
systems for operations, financial control, and information management, and to
recruit, train, and manage its employee base. There can be no assurance that the
Company will be able to achieve or manage any such growth successfully or to
implement and maintain adequate financial and management controls and
procedures, and any inability to do so would have a material adverse effect on
the Company's business, results of operations, and financial condition.

The Company's future success depends upon its ability to address potential
market opportunities while managing its expenses to match its ability to finance
its operations. This need to manage its expenses will place a significant strain
on the Company's management and operational resources. If the Company is unable
to manage its expenses effectively, the Company's business, results of
operations, and financial condition will be materially adversely affected.

RISKS ASSOCIATED WITH ACQUISITIONS.

As part of its business strategy, the Company expects to acquire assets and
businesses relating to or complementary to its operations. These acquisitions by
the Company will involve risks commonly encountered in acquisitions of
companies. These risks include, among other things, the following: the Company
may be exposed to unknown liabilities of the acquired companies; the Company may
incur acquisition costs and expenses higher than it anticipated; fluctuations in
the Company's quarterly and annual operating results may occur due to the costs
and expenses of acquiring and integrating new businesses or technologies; the
Company may experience difficulties and expenses in assimilating the operations
and personnel of the acquired businesses; the Company's ongoing business may be
disrupted and its management's time and attention diverted; the Company may be
unable to integrate successfully.

WE PAY NO DIVIDENDS

We have never declared nor paid cash dividends on our capital stock. We
currently intend to retain any earnings for funding growth however these plans
may change depending upon capital raising requirements.

                                       18



<PAGE>

RISK OF PENNY STOCK.

         Our common stock is deemed to be a "penny stock" as that term is
defined in Rule 3a51-1 of the Exchange Act of 1934. Penny stocks are stocks (i)
with a price of less than five dollars per share; (ii) that are not traded on a
"recognized" national exchange; (iii) whose prices are not quoted on the NASDAQ
automated quotation system (NASDAQ-listed stocks must still meet requirement (i)
above); or (iv) of an issuer with net tangible assets less than US$2,000,000 (if
the issuer has been in continuous operation for at least three years) or
US$5,000,000 (if in continuous operation for less than three years), or with
average annual revenues of less than US$6,000,000 for the last three years.

         A principal exclusion from the definition of a penny stock is an equity
security that has a price of $5.00 or more, excluding any broker or dealer
commissions, markups or markdowns. As of the date of this Annual Report the
Company's common stock is not listed or traded.

         If the Company's common stock were deemed a penny stock, section 15(g)
and Rule 3a51-1 of the Exchange Act of 1934 would require broker-dealers dealing
in the Company's common stock to provide potential investors with a document
disclosing the risks of penny stocks and to obtain a manually signed and dated
written receipt of the document before effecting any transaction in a penny
stock for the investor's account. Potential investors in the Company's common
stock are urged to obtain and read such disclosure carefully before purchasing
any shares that are deemed to be "penny stock."

         Moreover, Rule 15g-9 of the Exchange Act of 1934 Commission requires
broker-dealers in penny stocks to approve the account of any investor for
transactions in such stocks before selling any penny stock to that investor.
This procedure requires the broker-dealer to (i) obtain from the investor
information concerning his or her financial situation, investment experience and
investment objectives; (ii) reasonably determine, based on that information,
that transactions in penny stocks are suitable for the investor and that the
investor has sufficient knowledge and experience as to be reasonably capable of
evaluating the risks of penny stock transactions; (iii) provide the investor
with a written statement setting forth the basis on which the broker-dealer made
the determination in (ii) above; and (iv) receive a signed and dated copy of
such statement from the investor, confirming that it accurately reflects the
investor's financial situation, investment experience and investment objectives.
Compliance with these requirements may make it more difficult for investors in
the Company's common stock to resell their shares to third parties or to
otherwise dispose of them.

                                       19



<PAGE>

THE TRADING PRICE OF OUR COMMON STOCK MAY DECREASE DUE TO FACTORS BEYOND OUR
CONTROL.

         The trading price of the common stock is subject to significant
fluctuations in response to numerous factors, including:

         o        Variations in anticipated or actual results of operations;

         o        Announcements of new products or technological innovations by
                  us or our competitors;

         o        Changes in earnings estimates of operational results by
                  analysts;

         o        Results of product demonstrations.

         o        Inability of market makers to combat short positions on the
                  stock;

         o        Inability of the market to absorb large blocks of stock sold
                  into the market;

         o        Developments or disputes concerning our licensed patents,
                  trademarks or proprietary rights; and

         o        Comments about us or our markets posted on the Internet.

         Moreover, the stock market from time to time has experienced extreme
price and volume fluctuations, which have particularly affected the market
prices for emerging growth companies and which often have been unrelated to the
operating performance of the companies. These broad market fluctuations may
adversely affect the market price of our Common Stock. If our shareholders sell
substantial amounts of their common stock in the public market, the price of our
common stock could fall. These sales also might make it more difficult for us to
sell equity or equity related securities in the future at a price we deem
appropriate.

THE UNCERTAINTY OF CONVERSION EFFECTS OF THE PREFERRED STOCK MAY CAUSE DILUTION
OF CURRENT COMMON SHAREHOLDERS.

Within the next 24 months from the date of this report the holders of a majority
of our Preferred Stock and certain warrant and option holders will have the
right to convert their respective interests into approximately shares of Common
Stock. In the event that such holders of Preferred Stock, warrants and options

                                       20



<PAGE>

exercise their conversion rights, the holders of the Common Stock then issued
and outstanding may experience immediate and substantial dilution in the net
tangible book value of their shares if earnings and other factors do not
compensate for the increased number of shares of such Common Stock.

THE LIQUIDITY OF OUR STOCK COULD BECOME IMPAIRED

         Our common stock currently is traded on the OTC Bulletin Board, which
is generally considered to be a less efficient market than national exchanges
such as NASDAQ. Consequently, the liquidity of our securities could be impaired,
not only in the number of securities which could be bought and sold, but also
through delays in the timing of transactions, difficulties in obtaining price
quotations, reduction in security analysts' and the media's coverage of ours, if
any, and lower prices for our securities than might otherwise be attained. This
circumstance could have an adverse effect on the ability of an investor to sell
any shares of our Common Stock as well as on the selling price for such shares.
In addition, the market price of our Common Stock may be significantly affected
by various additional factors, including, but not limited to, our business
performance, industry dynamics or changes in general economic conditions.

                                       21



<PAGE>

ITEM 7. FINANCIAL STATEMENTS.

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                       FINANCIAL STATEMENTS AND SCHEDULES

                             APRIL 30, 2004 AND 2003

                         FORMING A PART OF ANNUAL REPORT
                 PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                                      F-1



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                          INDEX TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------

                                                                        Page

Report of Independent Certified Public Accountants                       F-3

Consolidated Balance Sheets at April 30, 2004 and 2003                F-4~ F-5

Consolidated Statements of Losses for the years
  ended April 30, 2004 and 2003                                          F-6

Consolidated Statements of  Stockholders' Equity for
  the years ended April 30, 2004 and 2003                                F-7

Consolidated Statements of Cash Flows for the
  years ended April 30, 2004 and 2003                                 F-8 ~ F-9

Notes to Consolidated Financial Statements                           F-10 ~ F-27

                                      F-2



<PAGE>

                    RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                          CERTIFIED PUBLIC ACCOUNTANTS

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
               --------------------------------------------------

To the Board of Directors
Global Diversified Industries, Inc.
Chowchilla, California

We have audited the accompanying consolidated balance sheets of Global
Diversified Industries, Inc., and its subsidiaries (the "Company") as of April
30, 2004 and 2003 and the related consolidated statements of losses,
stockholders' equity, and cash flows for the two years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based upon
our audit.

We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatements. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
April 30, 2004 and 2003, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note O to the
financial statements, the Company has suffered recurring losses from operations
and is experiencing difficulty in generating cash flow to meet its obligations
and sustain operations which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note O. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

                                    /S/ RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP
                                    --------------------------------------------
                                      Russell Bedford Stefanou Mirchandani LLP
                                             Certified Public Accountants
McLean, Virginia
July 15, 2004

                                      F-3



<PAGE>
<TABLE>
                            GLOBAL DIVERSIFIED INDUSTRIES, INC.
                                CONSOLIDATED BALANCE SHEETS
                             APRIL 30, 2004 AND APRIL 30, 2003
<CAPTION>

                                                                 2004             2003
                                                             ------------     ------------
<S>                                                          <C>              <C>
ASSETS:

CURRENT ASSETS:

Cash and cash equivalents                                    $   693,194      $    14,097
Accounts receivable, net of allowance for doubtful
  accounts of $0 and $89,990 at April 30, 2004 and
  April 30, 2003, respectively                                   286,142           13,979
Inventories (Note C)                                           1,396,699          715,692
Advance to employees                                               1,086               --
Prepaid expenses                                                  93,665            6,000
                                                             ------------     ------------
Total current assets                                           2,470,786          749,768

PROPERTY, PLANT AND EQUIPMENT (NOTE D):
Property, plant and equipment, at cost                         2,053,729        1,603,264
Less: Accumulated depreciation                                  (384,723)        (223,460)
                                                             ------------     ------------
Total property, plant and equipment, net                       1,669,006        1,379,804

OTHER ASSETS:
Deposit and others                                                15,625           20,902
Engineering and architectural plans, net of accumulated
  amortization of $18,724 and $1,026 at April 30, 2004 and
  April 30, 2003, respectively                                   363,790          233,337
                                                             ------------     ------------
Total other assets                                               379,415          254,239

TOTAL ASSETS                                                 $ 4,519,207      $ 2,383,811
                                                             ============     ============

                See accompanying notes to consolidated financial statements

                                           F-4
</TABLE>



<PAGE>
<TABLE>
                            GLOBAL DIVERSIFIED INDUSTRIES, INC.
                          CONSOLIDATED BALANCE SHEETS (CONTINUED)
                             APRIL 30, 2004 AND APRIL 30, 2003
<CAPTION>

                                                                                 2004             2003
                                                                             ------------     ------------
<S>                                                                          <C>              <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Cash disbursed in excess of available fund                                   $        --      $     2,268
Accounts payable and accrued liabilities (Note F)                                290,210          277,840
Deferred revenue (Note A)                                                        143,067               --
Notes payable to related parties, current portion (Note H)                       237,000          413,465
Notes payable, current portion (Note H)                                          285,494          308,289
                                                                             ------------     ------------
Total current liabilities                                                        955,771        1,001,862

LONG-TERM LIABILITIES:
Notes payable to related parties, long-term portion (Note H)                     588,815               --
                                                                             ------------     ------------
Total long-term liabilities                                                      588,815               --

Commitment and contingencies (Note N)                                                 --               --

STOCKHOLDERS' EQUITY:
Series A Preferred stock, par value $.001 per share; 10,000,000 shares
  authorized; 666,667 shares issued and outstanding at April 30, 2004 and
  April 30, 2003 (Note J)                                                            667              667

Common stock, par value $ .001 per share; 400,000,000 shares authorized;
  131,863,806 and 112,343,945 shares issued and outstanding at April 30,
  2004 and April 30, 2003, respectively (Note J)                                 131,864          112,344
Additional paid-in capital                                                     4,025,104        3,183,835
Preferred stock subscription (Note J)                                            733,374          433,374
Common stock subscription (Note J)                                             1,726,600          866,600
Treasury stock (Note J)                                                              (50)              --
Accumulated deficit                                                           (3,642,938)      (3,214,871)
                                                                             ------------     ------------
Total stockholders' equity                                                     2,974,621        1,381,949

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                   $ 4,519,207      $ 2,383,811
                                                                             ============     ============

                        See accompanying notes to consolidated financial statements

                                                   F-5
</TABLE>



<PAGE>
<TABLE>
                           GLOBAL DIVERSIFIED INDUSTRIES, INC.
                            CONSOLIDATED STATEMENTS OF LOSSES
                       FOR THE YEARS ENDED APRIL 30, 2004 AND 2003
<CAPTION>

                                                             2004               2003
                                                        --------------     --------------
<S>                                                     <C>                <C>
Revenues                                                $   3,827,608      $       2,140
Cost of goods sold                                          2,560,877            156,881
                                                        --------------     --------------
Gross profit (loss)                                         1,266,731           (154,741)

Operating expenses:
Selling, general and administrative expenses                1,417,098            283,991
Depreciation and amortization                                 178,961            124,553
                                                        --------------     --------------
Total operating expense                                     1,596,059            408,544

(Loss) from operations                                       (329,328)          (563,285)

Other income (expense):
Other income (expense)                                             --             62,098
Interest income (expense)                                     (98,739)           (27,649)
                                                        --------------     --------------
Total other income (expense)                                  (98,739)            34,449

Loss before income tax provision                             (428,067)          (528,836)

Provision for income taxes                                         --                 --
                                                        --------------     --------------

Net loss                                                $    (428,067)     $    (528,836)
                                                        ==============     ==============

Loss per common share (basic and assuming dilution)
(Note M)                                                $       (0.00)     $       (0.00)
                                                        ==============     ==============

Weighted average shares outstanding (Note M)              124,045,785        110,828,603

               See accompanying notes to consolidated financial statements

                                           F-6
</TABLE>



<PAGE>
<TABLE>
                                                 GLOBAL DIVERSIFIED INDUSTRIES, INC.
                                           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                             FOR THE YEARS ENDED APRIL 30, 2004 AND 2003
<CAPTION>
                                        Preferred                                               Common
                                          Stock                          Additional             Stock
                     Preferred  Stock   Subscrip-  Common       Stock     Paid in    Treasury  Subscrip-   Accumulated
                       Shares   Amount    tion     Shares       Amount    Capital     Stock      tion         Deficit      Total
                      -------- ------- --------- ------------ --------- ----------- --------- ------------ ------------ ------------
<S>                   <C>      <C>     <C>       <C>          <C>       <C>         <C>       <C>          <C>          <C>
BALANCE AT
  APRIL 30, 2002           --  $   --  $     --  109,443,945  $109,444  $3,038,402  $     --  $    16,600  $(2,686,035) $   478,411
Shares issued in
  exchange for
  services rendered        --      --        --    2,900,000     2,900      21,100        --           --           --       24,000
Shares issued in
  exchange for debt   666,667     667        --           --        --      99,333        --           --           --      100,000
Contributed capital
  from Company
  shareholder              --      --        --           --        --      25,000        --           --           --       25,000
Common stock
  subscription             --      --        --           --        --          --        --      850,000           --      850,000
Preferred stock
  subscription             --      --   433,374           --        --          --        --           --           --      433,374
Net loss                   --      --        --           --        --          --        --           --     (528,836)    (528,836)
                      -------- ------- --------- ------------ --------- ----------- --------- ------------ ------------ ------------
BALANCE AT
  APRIL 30, 2003      666,667  $  667  $433,374  112,343,945  $112,344  $3,183,835  $     --  $   866,600  $(3,214,871) $ 1,381,949
                      ======== ======= ========= ============ ========= =========== ========= ============ ============ ============
Shares issued in
  exchange for
  services rendered        --      --        --    8,093,227     8,093     419,107        --           --           --      427,200
Shares issued in
  exchange for debt        --      --        --      375,000       375      14,625        --           --           --       15,000
Shares issued in
  exchange for
  engineering plans        --      --        --    1,107,190     1,108      23,586        --           --           --       24,694
Shares issued in
  exchange for
  cash, net of
  costs and fees           --      --        --      944,444       944      44,056        --           --           --       45,000
Shares issued in
  exchange for
  common stock
  subscribed               --      --        --    4,000,000     4,000      56,000        --      (60,000)          --           --
Shares issued in
  exchange for
  common stock
  subscribed               --      --        --    5,000,000     5,000      85,000        --      (90,000)          --           --
Treasury stock
  donated by
  shareholders             --      --        --           --        --       1,000    (1,000)          --           --           --
Resale of treasury
  stock                    --      --        --           --        --     197,895       950           --           --      198,845
Preferred stock
  subscription
  (Note I)                 --      --   300,000           --        --          --        --           --           --      300,000
Common stock
  subscription             --      --        --           --        --          --        --    1,010,000           --    1,010,000
Net loss                   --      --        --           --        --          --        --           --     (428,067)    (428,067)
                      -------- ------- --------- ------------ --------- ----------- --------- ------------ ------------ ------------
BALANCE AT
  APRIL 30, 2004      666,667  $  667  $733,374  131,863,806  $131,864  $4,025,104  $    (50) $ 1,726,600  $(3,642,938) $ 2,974,621
                      ======== ======= ========= ============ ========= =========== ========= ============ ============ ============

                                     See accompanying notes to consolidated financial statements

                                                                F-7
</TABLE>



<PAGE>
<TABLE>
                                GLOBAL DIVERSIFIED INDUSTRIES, INC.
                               CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE YEARS ENDED APRIL 30, 2004 AND 2003
<CAPTION>

                                                                          2004             2003
                                                                      ------------     ------------
<S>                                                                   <C>              <C>
Cash flows from operating activities:
Net loss from operations                                              $  (428,067)     $  (528,836)

Adjustment to reconcile net (loss) to net cash:
Depreciation and amortization                                             178,961          124,553
Common stock issued in exchange for services rendered (Note J)            427,200           24,000
Write-off of advances to employees                                          3,600            9,096

Change in assets and liabilities:
(Increase)/decrease in accounts receivable                               (272,163)         (13,979)
(Increase)/decrease in inventory                                         (681,007)         (12,210)
(Increase)/decrease in prepaid expense and others                         (82,388)        (261,265)
(Increase)/decrease in employee advances                                   (4,685)              --
Increase/(decrease) in cash disbursed in excess of available fund          (2,268)           2,268
Increase/(decrease) in accounts payable and accrued expenses              112,370          109,820
Increase/(decrease) in deferred revenue (Note A)                          143,067               --
                                                                      ------------     ------------
Net cash (used in) operating activities:                                 (605,380)        (546,553)

Cash flows from investing activities:
Acquisition of MBS Construction, Inc. (Note B)                                 --          (10,000)
Capital expenditure                                                      (413,923)        (254,005)
                                                                      ------------     ------------
Net cash (used in) investing activities                                  (413,923)        (264,005)

Cash flows from financing activities:

Capital contributed by shareholders (Note J)                                   --           25,000
Proceeds from sale of common stock and stock subscription,
  net of costs and fees (Note J)                                          895,000               --
Proceeds from sale of treasury stock, net of costs and
  fees (Note J)                                                           198,845               --
Proceeds from notes payable, net of repayments                            277,205          308,289
Proceeds from note payable to related parties, net of
  repayments                                                              327,350          513,465
Advances from related parties, net of repayments                               --           (5,814)
Advances from third parties, net of repayments                                 --          (20,900)
                                                                      ------------     ------------
Net cash provided by financing activities                               1,698,400          820,040

Net increase in cash and cash equivalents                                 679,097            9,482
Cash and cash equivalents at beginning of year                             14,097            4,615
                                                                      ------------     ------------
Cash and cash equivalents at end of year                              $   693,194      $    14,097
                                                                      ============     ============

                    See accompanying notes to consolidated financial statements

                                                F-8
</TABLE>



<PAGE>
<TABLE>
                            GLOBAL DIVERSIFIED INDUSTRIES, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                        FOR THE YEARS ENDED APRIL 30, 2004 AND 2003
<CAPTION>

                                                                      2004          2003
                                                                   ----------    ----------
<S>                                                                <C>           <C>
Supplemental Disclosures of Cash Flow Information:
Cash paid during the period for interest                           $  86,974     $  11,494
Cash paid during the period for income taxes                              --            --
Common stock issued for services (Note J)                            427,200        24,000
Preferred stock issued for conversion of notes (Note J)                   --       100,000
Common stock subscribed in exchange for notes payable to
  related parties (Note J)                                                --       700,000
Preferred stock subscribed in exchange for inventory and
  property and equipment (Note J)                                         --       433,374
Common stock issued in exchange for debt (Note J)                     15,000            --
Common stock issued in exchange for engineering plans (Note J)        24,694            --
Common stock subscribed in exchange for property and
  equipment (Note J)                                                 160,000            --
Preferred stock subscribed in exchange for debt (Note I and J)       300,000            --
Note payable issued in exchange for accrued liabilities
  (Note F and H)                                                     100,000            --
Acquisition of MBS Construction Inc.: (Note B)
  Assets acquired                                                         --       119,550
  Liabilities assumed                                                     --       (49,550)
  Common stock to be issued                                               --       (60,000)
                                                                   ----------    ----------
  Net cash paid for acquisition                                    $      --     $  10,000
                                                                   ==========    ==========

                See accompanying notes to consolidated financial statements

                                            F-9
</TABLE>



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies applied in the preparation of
the accompanying consolidated financial statements follows.

Business and Basis of Presentation
----------------------------------

Global Diversified Industries, Inc. (the "Company"), is incorporated under the
laws of the State of Nevada, and is in the business of designing, manufacturing
and marketing re-locatable modular structures such as classrooms and office
buildings to end users as well as to third party leasing agents for use
primarily within the state of California and other Western States.

On February 28, 2003, the Company entered into an Agreement and Plan of Exchange
("Exchange") with MBS Construction, Inc. ("MBS"), a company organized under the
laws of the State of Nevada. MBS is a private-held company and is engaged in the
business of fabrication, renovation, and site installation of modular structures
in California. Pursuant to the Exchange, MBS became a wholly-owned subsidiary of
the Company (Note B).

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, Lutrex Enterprises, Inc. ("Lutrex"), Global
Modular, Inc. ("Global Modular"), and MBS Construction, Inc. ("MBS"). All
significant intercompany balances and transactions have been eliminated in
consolidation.

Cash Equivalents
----------------

For purposes of the Statements of Cash Flows, the Company considers all highly
liquid investments purchased with a maturity date of three months or less to be
cash equivalents.

Inventories
-----------

Inventories are stated at the lower of cost or market determined by the
first-in, first-out method. Inventories consist primarily of modular buildings
and raw materials for modular structures (Note C).

                                      F-10



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Property and Equipment
----------------------

Property and equipment are recorded on the basis of cost. For financial
statement purposes, property and equipment are depreciated using the
straight-line method over their estimated useful lives (Note D).

Impairment of Long Lived Assets
-------------------------------

The Company has adopted Statement of Financial Accounting Standards No. 144
("SFAS 144"). The Statement requires that long-lived assets and certain
identifiable intangibles held and used by the Company be reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. Events relating to recoverability may include
significant unfavorable changes in business conditions, recurring losses, or a
forecasted inability to achieve break-even operating results over an extended
period. The Company evaluates the recoverability of long-lived assets based upon
forecasted undiscounted cash flows. Should an impairment in value be indicated,
the carrying value of intangible assets will be adjusted, based on estimates of
future discounted cash flows resulting from the use and ultimate disposition of
the asset. SFAS No. 144 also requires assets to be disposed of be reported at
the lower of the carrying amount or the fair value less costs to sell.

Revenue Recognition
-------------------

For revenue from product sales, the Company recognizes revenue in accordance
with Staff Accounting Bulletin No. 104, REVENUE RECOGNITION ("SAB104"), which
superceded Staff Accounting Bulletin No. 101, REVENUE RECOGNITION IN FINANCIAL
STATEMENTS ("SAB101").

SAB 101 requires that four basic criteria must be met before revenue can be
recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has
occurred; (3) the selling price is fixed and determinable; and (4)
collectibility is reasonably assured. Determination of criteria (3) and (4) are
based on management's judgments regarding the fixed nature of the selling prices
of the products delivered and the collectibility of those amounts. Provisions
for discounts and rebates to customers, estimated returns and allowances, and
other adjustments are provided for in the same period the related sales are
recorded. The Company defers any revenue for which the product has not been
delivered or is subject to refund until such time that the Company and the
customer jointly determine that the product has been delivered or no refund will
be required. Deferred revenues as of April 30, 2004 and 2003 are $143,067 and
$0, respectively.

                                      F-11



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SAB 104 incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS. EITF 00-21 addresses accounting for
arrangements that may involve the delivery or performance of multiple products,
services and/or rights to use assets. The effect of implementing EITF 00-21 on
the Company's consolidated financial position and results of operations was not
significant.

Advertising
-----------

The Company follows the policy of charging the costs of advertising to expenses
as incurred. The Company incurred no advertising costs during the years ended
April 30, 2004 and 2003.

Research and Development
------------------------

The Company accounts for research and development costs in accordance with the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 2 ("SFAS 2"), "Accounting for Research and Development Costs."
Under SFAS 2, all research and development costs must be charged to expense as
incurred. Accordingly, internal research and development costs are expensed as
incurred. Third-party research and developments costs are expensed when the
contracted work has been performed or as milestone results have been achieved.
Company-sponsored research and development costs related to both present and
future products are expensed in the period incurred. The Company incurred no
expenditures on research and product development for the year ended April 30,
2004 and 2003.

                                      F-12



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes
------------

Income taxes are provided based on the liability method for financial reporting
purposes in accordance with the provisions of Statements of Financial Standards
No. 109, "Accounting for Income Taxes". Under this method deferred tax assets
and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
removed or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in the statement of operations in the period
that includes the enactment date.

Stock Based Compensation
------------------------

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148 ("SFAS No. 148"), "Accounting for Stock-Based Compensation-Transition
and Disclosure-an amendment of SFAS 123." This statement amends SFAS No. 123,
"Accounting for Stock-Based Compensation," to provide alternative methods of
transition for a voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this statement amends the
disclosure requirements of SFAS No. 123 to require prominent disclosures in both
annual and interim financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results.

                                      F-13



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Stock Based Compensation (Continued)
------------------------------------

The Company has chosen to continue to account for stock-based compensation using
the intrinsic value method prescribed in APB Opinion No. 25 and related
interpretations. Accordingly, compensation expense for stock options is measured
as the excess, if any, of the fair market value of the Company's stock at the
date of the grant over the exercise price of the related option. The Company has
adopted the annual disclosure provisions of SFAS No. 148 in its financial
reports for the year ended April 30, 2004 and 2003 and will adopt the interim
disclosure provisions for its financial reports for the subsequent periods. The
Company has no awards of stock-based employee compensation outstanding at April
30, 2004.

Segment Information
-------------------

Statement of Financial Accounting Standards No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS 131") establishes standards for
reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures about products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision-making group, in making decisions
how to allocate resources and assess performance. The information disclosed
herein materially represents all of the financial information related to the
Company's principal operating segment.

Use of Estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Actual results could differ from those estimates.

                                      F-14



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Concentration of Credit Risk
----------------------------

Financial instruments and related items, which potentially subject the Company
to concentrations of credit risk, consist primarily of cash, cash equivalents
and related party receivables. The Company places its cash and temporary cash
investments with credit quality institutions. At times, such investments may be
in excess of the FDIC insurance limit. The Company periodically reviews its
trade receivables in determining its allowance for doubtful accounts. The
allowance for doubtful accounts was $0 and $89,990 at April 30, 2004 and 2003,
respectively.

Liquidity
---------

As shown in the accompanying financial statements, the Company incurred a net
loss from operations of $428,067 and $528,836 during the year ended April 30,
2004 and 2003, respectively. The Company's current assets exceeded its current
liabilities by $1,515,015 as of April 30, 2004.

Comprehensive Income (Loss)
---------------------------

The Company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income". SFAS No. 130 establishes standards for the
reporting and displaying of comprehensive income and its components.
Comprehensive income is defined as the change in equity of a business during a
period from transactions and other events and circumstances from non-owner
sources. It includes all changes in equity during a period except those
resulting from investments by owners and distributions to owners. SFAS No. 130
requires other comprehensive income (loss) to include foreign currency
translation adjustments and unrealized gains and losses on available-for-sale
securities.

                                      F-15



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Net Earnings (Losses) Per Common Share
--------------------------------------

The Company computes earnings per share under Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" ("SFAS 128"). Net earnings (losses) per
common share is computed by dividing net income (loss) by the weighted average
number of shares of common stock and dilutive common stock equivalents
outstanding during the year. Dilutive common stock equivalents consist of shares
issuable upon conversion of convertible preferred shares and the exercise of the
Company's stock options and warrants (calculated using the treasury stock
method).

Reclassifications
-----------------

Certain reclassifications have been made to conform to prior periods' data to
the current presentation. These reclassifications had no effect on reported
losses.

New Accounting Pronouncements
-----------------------------

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities." Interpretation 46 changes the criteria by which one
company includes another entity in its consolidated financial statements.
Previously, the criteria were based on control through voting interest.
Interpretation 46 requires a variable interest entity to be consolidated by a
company if that company is subject to a majority of the risk of loss from the
variable interest entity's activities or entitled to receive a majority of the
entity's residual returns or both. A company that consolidates a variable
interest entity is called the primary beneficiary of that entity. The
consolidation requirements of Interpretation 46 apply immediately to variable
interest entities created after January 31, 2003. The consolidation requirements
apply to older entities in the first fiscal year or interim period beginning
after June 15, 2003. Certain of the disclosure requirements apply in all
financial statements issued after January 31, 2003, regardless of when the
variable interest entity was established. The adoption of FASB issued
Interpretation No. 46 did not have a material impact to the Company's financial
position or results of operations.

                                      F-16



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

New Accounting Pronouncements (Continued)
-----------------------------------------

In April 2003, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 149, AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING
ACTIVITIES. SFAS 149 amends SFAS No. 133 to provide clarification on the
financial accounting and reporting of derivative instruments and hedging
activities and requires that contracts with similar characteristics be accounted
for on a comparable basis. The provisions of SFAS 149 are effective for
contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. The adoption of SFAS 149 did not
have a material impact on the Company's results of operations or financial
position.

In May 2003, the FASB issued SFAS No. 150, ACCOUNTING FOR CERTAIN FINANCIAL
INSTRUMENTS WITH CHARACTERISTICS OF BOTH LIABILITIES AND EQUITY. SFAS 150
establishes standards on the classification and measurement of certain financial
instruments with characteristics of both liabilities and equity. The provisions
of SFAS 150 are effective for financial instruments entered into or modified
after May 31, 2003 and to all other instruments that exist as of the beginning
of the first interim financial reporting period beginning after June 15, 2003.
The adoption of SFAS 150 did not have a material impact on the Company's results
of operations or financial position.

In December 2003, the FASB issued SFAS No. 132 (revised), EMPLOYERS' DISCLOSURES
ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS - AN AMENDMENT OF FASB
STATEMENTS NO. 87, 88, AND 106. This statement retains the disclosure
requirements contained in FASB statement no. 132, Employers' Disclosures about
Pensions and Other Postretirement Benefits, which it replaces. It requires
additional disclosures to those in the original statement 132 about the assets,
obligations, cash flows, and net periodic benefit cost of defined benefit
pension plans and other defined benefit postretirement plans. The required
information should be provided separately for pension plans and for other
postretirement benefit plans. The revision applies for the first fiscal or
annual interim period ending after December 15, 2003 for domestic pension plans
and June 15, 2004 for foreign pension plans and requires certain new disclosures
related to such plans. The adoption of this statement will not have a material
impact on the Company's results of operations or financial positions.

                                      F-17



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE B - BUSINESS COMBINATIONS

MBS Construction, Inc.
----------------------

On February 28, 2003, the Company entered into an Agreement and Plan of Exchange
("Agreement") with MBS Construction, Inc. ("MBS"), a company organized under the
laws of the State of Nevada. MBS is a private-held company and is engaged in the
business of fabrication, renovation, and site installation of modular structures
in California. Pursuant to the Agreement, MBS became a wholly-owned subsidiary
of the Company.

In connection with the Agreement, MBS transferred to the Company all of its
assets and liabilities in exchange for a total of 4,000,000 shares of the
Company's restricted common stock, $10,000 of cash and 1,500,000 cashless
warrants with an exercise price of $0.03 per share that expire 12 months from
the date of the acquisition (Note K). The 4,000,000 shares of common stock were
issued to MBS shareholders in August 2003 and the Company has accounted the
shares issued at the fair market value at the date of acquisition (Note J).

The following summarizes the acquisition of MBS:

4,000,000 shares of  common  stock issued in August 2003          $ (60,000)
Assets acquired                                                      119,550
Liabilities assumed                                                 (49,550)
                                                                  ----------
Cash paid                                                         $ (10,000)
                                                                  ==========

NOTE C - INVENTORIES

Inventories are stated at the lower of cost or market determined by the
first-in, first-out (FIFO) method. Components of inventories as of April 30,
2004 and 2003 are as follows:

                                                2004            2003
                                             -----------    -----------

     Finished Goods                          $  102,130     $   16,449
     Work in Progress                           317,893             --
     Raw Materials                              976,676        699,243
                                             -----------    -----------
                                             $1,396,699     $  715,692
                                             ===========    ===========

                                      F-18



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE D - PROPERTY, PLANT AND EQUIPMENT

The Company's property and equipment at April 30, 2004 and 2003 consists of the
following:
                                                  2004             2003
                                              ------------     ------------

     Plant Equipment                          $ 1,673,292      $ 1,459,611
     Furniture and Fixture                          2,933            2,934
     Building and Leasehold Improvement                --          140,719
                                              ------------     ------------
                                                                   377,504
        Total                                   2,053,729        1,603,264
     Accumulated Depreciation                    (384,723)        (223,460)
                                              ------------     ------------
                                              $ 1,669,006      $ 1,379,804
                                              ============     ============

Depreciation expense included as a charge to income amounted to $161,263 and
$123,527 for the year ended April 30, 2004 and 2003, respectively.

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosures about Fair
Value of Financial Instruments" ("SFAS 107"), defines the fair value of a
financial instrument as the amount at which the instrument could be exchanged in
a current transaction between willing parties. The Company includes fair value
information in the notes to consolidated financial statements when the fair
value of its financial instruments is materially different from the book value.
The carrying value of the Company's cash and cash equivalents, short-term debt
securities held to maturity, time deposits, receivables, other current assets,
accounts payable, and accrued liabilities, included in the accompanying balance
sheets, approximate the estimated fair value of those instruments because of
their short-term nature. The fair value of the notes payable to banks based on
the interest rates currently available for borrowings with similar terms and
maturities approximates the carrying amount of those borrowings. The fair value
of the amounts due to and from a related party cannot be determined due to the
uncertainty as to the timing of repayment.

NOTE F - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities at April 30, 2004 and 2003 are as
follows:

                                                      2004            2003
                                                    ---------      ---------

     Accounts payable                               $235,293       $108,228
     Accrued interest                                 50,476         25,044
     Accrued payroll and payroll taxes                 4,441         44,568
     Other accrued expenses                               --        100,000
                                                    ---------      ---------
     Total                                          $290,210       $277,840
                                                    =========      =========

                                      F-19



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE F - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (CONTINUED)

In February 2003, the Company entered into an Exchange of Interest Agreement
with MMI Construction, Inc. ("Agreement with MMI"), an entity controlled by one
of the Company's significant shareholders. Pursuant to the Agreement with MMI,
MMI transferred to the Company $314,008 of raw material and $219,366 of plant
equipment in exchange for 2,666,666 shares of the Company's preferred stock and
a deferred payment of $100,000. The Company accounted the preferred shares to be
issued to MMI as preferred stock subscription payable, valued at $433,374,
during the year ended April 30, 2003. As of April 30, 2004, the preferred shares
have not been issued. The Company issued to MMI shareholders notes payable of
$100,000 in May 2003 (Note H).

NOTE G - ECONOMIC DEPENDENCY

During the year ended April 30, 2004, approximately $2,384,600 (62%) of total
2004 revenues were derived from and $153,874 (54%) of the total accounts
receivable at April 30, 2004 were due from three (3) major customers.

NOTE H - NOTES PAYABLE

A summary of notes payable at April 30, 2004 and 2003 is as follows:

<TABLE>
<CAPTION>
                                                                                                 2004             2003
                                                                                             ------------     ------------
<S>                                                                                          <C>              <C>
     Note payable to Company shareholder in monthly installments of interest only
       at 10.0% per annum; unsecured; maturity date was in November 30, 2003. The
       Company re-signed the note with the shareholder in April 2004; extended
       maturity date is on May 1, 2009, and the note has a conversion option to
       convert the principal balance of the loan to the Company's preferred stock. (a)       $   389,465      $   413,465
     Note payable to Company shareholders in monthly installments of interest only at
       8.0% per annum; unsecured; maturity date is in May 15, 2004.  Noteholder has the
       option to convert the principal balance of the loan to the Company's preferred
       stock. (a)                                                                                 62,000               --
     Note payable to Company shareholders in monthly installments of interest only at
       6.0% per annum; unsecured; maturity date is on May 1, 2009 (Note I)                       199,350               --
     Note payable to Company shareholders in monthly installments of interest only at
       5.0% per annum; unsecured; maturity date is on August 31, 2004 (Note F)                   100,000               --
     Note payable to Company shareholder in monthly installments of interest only at
       8.0% per annum; unsecured; maturity date is on May 15, 2004                                75,000               --
     Note payable to bank in monthly installments of interest only at the prime lending
       rate; unsecured and guaranteed by a Company shareholder; maturity date of the
       loan is July 19, 2003 (Note I)                                                                 --          274,350
     Note payable in 6 monthly installments beginning May 1, 2003, with interest at 6%
       per annum beginning March 1, 2003; unsecured; maturity date is October 1, 2003
       All unpaid principal balance, interest and penalties of this note were included
       in the note payable of $53,861 issued in September 2003                                        --           18,714

                                                           F-20



<PAGE>

                                            GLOBAL DIVERSIFIED INDUSTRIES, INC.

                                        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                                  APRIL 30, 2004 AND 2003

NOTE H - NOTES PAYABLE (CONTINUED)

     Note payable in 6 monthly installments beginning May 1, 2003, with interest at
       6% per annum beginning April 1, 2003; unsecured; maturity date is October 1,
       2003. All unpaid principal balance, interest and penalties of this note were
       included in the note payable of $53,861 issued in September 2003                               --           15,225
     Note payable in 24 monthly installments beginning October 15, 2004, with interest
       at 6% per annum; unsecured; maturity date is October 2005.  The Company is
       currently in default under the terms of the note                                           53,861               --
     Note payable revolving agreement secured by accounts receivable and property with
       interest payable monthly at approximately 6%, maximum borrowing capacity of
       $2,500,000                                                                                231,633               --
                                                                                             ------------     ------------
                                                                                               1,111,309          721,754
     Less: current portion                                                                      (522,494)        (721,754)
                                                                                             ------------     ------------
     Total - notes payable - long term                                                       $   588,815      $        --
                                                                                             ============     ============
</TABLE>

(a) The Company granted the noteholder an option to convert a total of $400,000
of principal balance of the notes to the Company's 2,666,666 shares of preferred
stock, and each share of the preferred stock is convertible to ten shares of the
Company's restricted common stock. The noteholder has the option to convert the
notes to the Company's securities anytime within three years from the issuance
of the notes. The Company accounted for the notes payable and stock purchase
rights in accordance with APB No. 14, "Accounting for Convertible Debt and Debt
Issued with Stock Purchase Warrants" ("APB 14"). Proceeds from the issuance of
notes payable with equity securities are allocated between the debt and the
securities based on their relative fair values. The fair value of the company's
restricted common stock at the time the conversion option was granted
approximated the value of the debt if converted. Accordingly, there was no
beneficial conversion feature in connection with the convertible notes payable.

NOTE I - RELATED PARTY TRANSACTIONS

In addition to convertible notes payable to related parties described in Note H
(a) and accrued liabilities to MMI described in Note F, two of the Company's
shareholders repaid an aggregate of $499,350 of notes payable the Company due to
bank (Note H) on behalf of the Company in April 2004. The Company issued to the
shareholders $199,350 of notes payable with a maturity date on May 1, 2009 (Note
H), and the shareholders agreed to receive the Company's preferred stock in
exchange for the remaining $300,000 due. The Company has accounted $300,000 of
preferred stock subscription at April 30, 2004 (Note J).

                                      F-21



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE J - CAPITAL STOCK

On November 7, 2001 the Company's Board of Directors approved an increase in the
Company's authorized common stock from 50,000,000 to 400,000,000 with a par
value of $.001. The Company also created a Series A Preferred class of stock,
$.001 par value, and authorized 10,000,000 shares. On February 3, 2003, the
Company's Board of Directors approved to change the conversion right of the
Series A Preferred Stock from a ratio of five common for one preferred share to
ten common for one preferred share. As of April 30, 2004 and 2003, the Company
has issued and outstanding 666,667 shares of preferred stock. The Company has
131,863,806 and 112,343,945 shares of common stock issued and outstanding at
April 30, 2004 and 2003, respectively.

During the year ended April 30, 2003, the Company issued an aggregate of
2,900,000 shares of common stock to consultants in exchange for services in the
amount of $24,000. All valuations of common stock issued for services were based
upon the value of the services rendered, which did not differ materially from
the fair value of the Company's common stock during the period the services were
rendered. The Company also issued 666,667 shares of preferred stock to a
shareholder in exchange for $100,000 of previously incurred debt.

In October 2002, the Company and The Majestic Companies, Ltd. ("Majestic")
entered into a Settlement and Release Agreement ("Settlement") that the Company
agreed to pay to Majestic $25,000 of cash and 5,000,000 restricted shares of
common stock to retire accrued liabilities of $150,000 due to Majestic. In
October and November 2002, one of the Company's shareholders paid $25,000 to
Majestic on behalf of the Company. The Company accounted the $25,000 payment by
the shareholder as a contribution to additional paid-in capital, and recorded
$90,000 of stock subscription payable for the 5,000,000 shares to be issued. The
Company recognized other income of $35,000 in connection with the Settlement.
Additionally, the Company recorded $60,000 of stock subscription payable in
connection with the acquisition of MBS in February 2003 (Note B) and $700,000 of
stock subscription payable as repayment of notes payable to the Company's
President and Chief Executive Officer in connection with acquisition of Lutrex
Enterprise Inc.'s assets in January 2002. The Company also recorded $433,373 of
preferred stock subscription payable for 2,666,666 shares of preferred stock to
be issued to MMI (Note F).

                                      F-22



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE J - CAPITAL STOCK (CONTINUED)

During the year ended April 30, 2004, the Company issued a total of 9,444,444
shares of common stock in exchange for $45,000 of cash, net of costs and fees.
The Company issued an aggregate of 8,093,227 shares of common stock to
consultants in exchange for services in the amount of $427,200. All valuations
of common stock issued for services were based upon the value of the services
rendered, which did not differ materially from the fair value of the Company's
common stock during the period the services were rendered. The Company also
issued 375,000 shares of common stock in exchange for $15,000 of previously
incurred debt. Additionally, the Company issued an aggregate of 1,107,190 shares
of common stock in exchange for $24,694 of intellectual property.

During the year ended April 30, 2004, the Company issued 4,000,000 shares of
common stock, valued at $60,000, to MBS shareholders in connection with the
acquisition in February 2003 (Note B). The Company also issued 5,000,000 shares
of common stock, valued at $90,000, to the Majestic shareholders in connection
with the "Settlement" described above. Majestic shareholders subsequently
donated 1,000,000 shares of common stock to the Company as treasury stock
intended for future resale. The Company sold 950,000 of the treasury stock in
exchange for $198,845 during the year ended April 30, 2004.

During the year ended April 30, 2004, the Company entered into a stock purchase
agreement with an investor that the investor agreed to purchase 9,444,444 shares
of the Company's common stock for $850,000. As of April 30, 2004, the Company
received $850,000 of proceeds for the shares to be issued. The Company accounted
$850,000 of proceeds received as common stock subscription payable. The Company
also entered into an agreement with Grossman Construction Company ("Grossman")
that Grossman contributed to the Company $200,000 of inventory and equipment in
exchange for $40,000 of cash and $160,000 of common stock. As of April 30, 2004,
the Company paid Grossman $20,000 in cash, accrued $20,000 of liabilities due
and accounted the remaining $160,000 as common stock subscription payable.

During the year ended April 30, 2004, two of the Company's shareholders repaid
an aggregate of $499,350 of the Company's notes payable to bank on behalf of the
Company. . The Company issued to the shareholders $199,350 of notes payable with
a maturity date on May 1, 2009 (Note H), and the shareholders agreed to receive
the Company's preferred stock in exchange for the remaining $300,000 due. The
Company has accounted $300,000 of preferred stock subscription at April 30, 2004
(Note I).

                                      F-23



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE K - STOCK OPTIONS AND WARRANTS

Non-Compensatory Stock Options
------------------------------

The following table summarizes the changes in non-compensatory option
outstanding and the related prices for the shares of the Company's preferred
stock issued to non-employees of the Company.

<TABLE>
<CAPTION>
                                  Options Outstanding                                  Options Exercisable
                                  -------------------                                  -------------------
                                              Weighted Average        Weighed                       Weighted
                              Number       Remaining Contractual      Average         Number        Average
       Exercise Prices     Outstanding          Life (Years)       Exercise Price  Exercisable   Exercise Price
       ---------------     -----------          ------------       --------------  -----------   --------------
<S>          <C>            <C>                     <C>               <C>           <C>            <C>
             $ 5.00         1,500,000               2.00              $ 5.00        1,500,000      $  5.00
             $ 0.05         4,000,000               0.75              $ 0.05        4,000,000      $  0.05
                            ---------               ----              ------        ---------      -------
                            5,500,000               1.09                1.40        1,500,000      $  1.40
                            =========               ====              ======        =========      =======
</TABLE>

Transactions involving options are summarized as follows:

                                              Number of      Weighted Average
                                               Shares        Price Per Share
                                           --------------    ----------------

         Outstanding at April 30, 2002                --     $          --
            Granted                            1,500,000              5.00
            Exercised                                 --                --
            Canceled or expired                       --                --
                                           --------------    --------------
         Outstanding at April 30, 2003         1,500,000     $        5.00
            Granted                            4,000,000              0.05
            Exercised                                 --                --
            Canceled or expired                       --                --
                                           --------------    --------------
         Outstanding at April 30, 2004         5,500,000     $        1.40
                                           ==============    ==============

During the year ended April 30, 2004, the Company granted 4,000,000 stock
options to an investor as incentive to purchase the Company's restricted common
stock. The exercise price of the stock options was approximately the fair value
of the Company's restricted common stock at the time the stock options were
granted.

                                      F-24



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE K - STOCK OPTIONS AND WARRANTS (CONTINUED)

Non-Compensatory Warrants

The following table summarizes the changes in non-compensatory warrants
outstanding and the related prices for the shares of the Company's common stock
issued to non-employees of the Company.

<TABLE>
<CAPTION>
                                  Warrants Outstanding                                 Warrants Exercisable
                                  --------------------                                 --------------------
                                              Weighted Average        Weighed                       Weighted
                              Number       Remaining Contractual      Average         Number        Average
       Exercise Prices     Outstanding          Life (Years)       Exercise Price  Exercisable   Exercise Price
       ---------------     -----------          ------------       --------------  -----------   --------------
<S>         <C>             <C>                     <C>                <C>          <C>             <C>
            $0.03           1,500,000               0.75               $ 0.03       1,500,000       $  0.03
                            ---------               ----                            ---------       -------
                            1,500,000               0.75                            1,500,000       $  0.03
                            =========               ====                            =========       =======
</TABLE>

Transactions involving warrants are summarized as follows:

                                             Number of      Weighted Average
                                               Shares       Price Per Share
                                           --------------   ----------------

         Outstanding at April 30, 2002                --     $         --
            Granted                            1,500,000             0.03
            Exercised                                 --               --
            Canceled or expired                       --               --
                                           --------------    -------------
         Outstanding at April 30, 2003         1,500,000     $       0.03
            Granted                                   --               --
            Exercised                                 --               --
            Canceled or expired                       --               --
                                           --------------    -------------
         Outstanding at April 30, 2004         1,500,000     $       0.03
                                           ==============    =============

The Company granted 1,500,000 of warrants during the year ended April 30, 2003
in connection with acquisition of MBS (Note B). The warrants granted have an
original expiration date on January 31, 2004. During the year ended April 30,
2004, the Company has extended the expiration date to January 31, 2005.

                                      F-25



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE L - INCOME TAXES

The Company has adopted Financial Accounting Standard No. 109 which requires the
recognition of deferred tax liabilities and assets for the expected future tax
consequences of events that have been included in the financial statement or tax
returns. Under this method, deferred tax liabilities and assets are determined
based on the difference between financial statements and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. Temporary differences between taxable
income reported for financial reporting purposes and income tax purposes are
insignificant.

At April 30, 2004, the Company has available for federal income tax purposes a
net operating loss carryforward of approximately $3,600,000, expiring in the
year 2024, that may be used to offset future taxable income. Operating losses
incurred by the Company prior to its emergence from bankruptcy may not be
available to the Company to offset future taxable income due to the change in
ownership of the Company. The Company has provided a valuation reserve against
the full amount of the net operating loss benefit, since in the opinion of
management based upon the earnings history of the Company, it is more likely
than not that the benefits will not be realized. Due to significant changes in
the Company's ownership, the Company's future use of its existing net operating
losses may be limited.

Components of deferred tax assets as of April 30, 2004 are as follows:

     Non Current:
     Net operating loss carryforward                          $ 1,224,000
     Valuation allowance                                       (1,224,000)
                                                              ------------
     Net deferred tax asset                                   $        --
                                                              ============

                                      F-26



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE M - EARNINGS (LOSS) PER SHARE

Basic and fully diluted losses per share are calculated by dividing net income
(loss) available to common shareholders by the weighted average of common shares
outstanding during the year. The Company has no potentially dilutive securities,
options, warrants or other rights outstanding. The following table sets forth
the computation of basic and diluted earnings (loss) per share:

                                                      2004             2003
                                                 --------------   --------------
         Net (loss) available to
            common stockholders                  $    (428,067)   $    (528,836)
                                                 ==============   ==============
         Basic and diluted (loss) per share      $       (0.00)   $       (0.00)
                                                 ==============   ==============
         Basic and diluted weighted average
           number of common shares outstanding     124,045,785      110,828,603

NOTE N - COMMITMENTS AND CONTINGENCIES

Consulting Agreement
--------------------

The Company has various consulting agreements with outside contractors to
provide business development and consultation services. The Agreements are
generally for a term of 12 months from inception and renewable automatically
from year to year unless either the Company or Consultant terminates such
agreement by written notice.

In October 2003, the Company entered into a Financial Services Agreement
("Agreement") with Merit Capital Group LLC ("Merit"). Pursuant to the agreement,
the Company agreed to pay Merit an unaccountable advance of $65,000 and 600,000
shares of the Company's common stock in exchange for financing services rendered
and to be rendered. The term of the Agreement is two years from the date the
Agreement was entered into. The service fees will be due only if the Company
obtains funding through the arrangements and assistance of Merit, solely at
terms and conditions acceptable to the Company. As of the date of the financial
statements, the Company has not obtained any funding through the Agreement with
Merit.

Lease Agreement
---------------

In October 2002, the Company entered into a three-year lease for its corporate
offices and facilities in Chowchilla, California at a rate of $15,225 per month
for the first year and moderate increases for each year thereafter. Commitments
for minimum rentals under non cancelable leases at April 30, 2004 are as
follows:

                  Fiscal year                            Amount
                  -----------                            ------
                  2005                                $   193,452
                  2006                                     80,605
                                                      ------------
                                                      $   274,057
                                                      ============

Rental expenses charged to operations for the year ended April 30, 2004 and 2003
are $196,741 and $85,125, respectively.

Litigation and Contingencies
----------------------------

The Company is subject to legal proceedings and claims which arise in the
ordinary course of its business. Although occasional adverse decisions or
settlements may occur, the Company believes that the final disposition of such
matters will not have a material adverse effect on its financial position,
results of operations or liquidity.

                                      F-27



<PAGE>

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                             APRIL 30, 2004 AND 2003

NOTE O - GOING CONCERN MATTERS

The accompanying statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. As shown in the consolidated financial statements
during the year ended April 30, 2004 and 2003, the Company incurred losses from
operations of $428,067 and $528,836, respectively. The Company has incurred
accumulated deficit of $3,642,938 as of April 30, 2004. These factors among
others may indicate that the Company will be unable to continue as a going
concern for a reasonable period of time.

The Company's existence is dependent upon management's ability to develop
profitable operations and resolve its liquidity problems. Management anticipates
the Company will attain profitable status and improve its liquidity through the
continued developing, marketing and selling of its products and additional
equity investment in the Company. The accompanying financial statements do not
include any adjustments that might result should the Company be unable to
continue as a going concern.

In order to improve the Company's liquidity, the Company is actively pursuing
additional equity financing through discussions with investment bankers and
private investors. There can be no assurance the Company will be successful in
its effort to secure additional equity financing.

If operations and cash flows continue to improve through these efforts,
management believes that the Company can continue to operate. However, no
assurance can be given that management's actions will result in profitable
operations or the resolution of its liquidity problems.

                                      F-28



<PAGE>

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None other than disclosed herein.

ITEM 8A.  CONTROLS AND PROCEDURES

         (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Regulations under
the Securities Exchange Act of 1934 require public companies to maintain
"disclosure controls and procedures," which are defined to mean a company's
controls and other procedures that are designed to ensure that information
required to be disclosed in the reports that it files or submits under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported,
within the time periods specified in the Commission's rules and forms. Our Chief
Executive Officer ("CEO"), who is also our President, and our Chief Financial
Officer ("CFO") carried out an evaluation of the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this report.
Based on those evaluations, as of the Evaluation Date, our CEO/President and CFO
believe:

                  (i) that our disclosure controls and procedures are designed
to ensure that information required to be disclosed by us in the reports we file
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms and that
such information is accumulated and communicated to our management, including
the CEO and CFO, as appropriate to allow timely decisions regarding required
disclosure; and

                  (ii) that our disclosure controls and procedures are
effective.

          (b) CHANGES IN INTERNAL CONTROLS. There were no significant changes in
our internal controls or, to our knowledge, in other factors that could
significantly affect our internal controls subsequent to the evaluation date.

                                       22



<PAGE>

PART III.

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS AND COMPLIANCE WITH SECTION 16(A) OF THE
EXCHANGE ACT. OFFICERS AND DIRECTORS.

The names, ages, and respective positions of the directors, executive officers,
and key employees of the Company are set forth below; there are no other
promoters or control persons of the Company. The directors named below will
serve until the next annual meeting of the Company's stockholders or until their
successors are duly elected and have qualified. Directors are elected for a
one-year term at the annual stockholders' meeting. Officers will hold their
positions at the will of the board of directors, absent any employment
agreement. The directors and executive officers of the Company are not a party
to any material pending legal proceedings and, to the best of their knowledge,
no such action by or against them has been threatened.

Compensation of Directors
-------------------------

Directors currently do not receive a salary for their services and are not paid
a fee for their participation in meetings, although all Directors are reimbursed
for reasonable travel and other out-of-pocket expenses incurred in attending
meetings of the Board. The Company anticipates that the Directors will be
compensated for attending meetings in the future.

PHIL HAMILTON, PRESIDENT/CHAIRMAN

         Phillip Hamilton has over thirty years entrepreneurial and senior
management experience in the manufacturing business. From 1996 to current, Mr.
Hamilton has been a consultant to Top Line Building Products. Top Line Building
Products is a truss manufacturing plants with annual revenues of approximately
$8,000,000, which provides its products to major homebuilders in Northern
California. As the CEO, Mr. Hamilton has directed the marketing, sales and
production activities of the company, as well as re-designing the original truss
plant into a modern state of the arts manufacturing plant with new production
stations.

         From 1996 to Feb 2000, Mr. Hamilton was the Chairman and CEO of
Pacesetter Industries, Inc. Pacesetter Industries was one of the largest modular
manufacturers of residential and commercial buildings in California. As Chief
Executive Officer, Mr. Hamilton was responsible for managing the marketing,
sales and production activities of the company. Pacesetter was built from
inception into one of California's largest modular manufacturers producing and
installing thousands of residential and commercial building. Pacesetter
Industries, Inc. employed a staff of over 650 employees with annual sales of
$50,000,000 in 1999. Pacesetter Industries, Inc. filed a Chapter 11 bankruptcy
on February 29, 2000 in Fresno County that was finally converted to a Chapter 7.

                                       23



<PAGE>

         Mr. Hamilton attended Pacific Union College taking courses in Business
Administration.

ADAM DEBARD, SECRETARY/TREASURER/DIRECTOR

         Adam N. DeBard has over fifteen years of experience in the
manufacturing and technology business sectors. From January 2001 to current, Mr.
DeBard has been the Chief Information Officer- Top Line Building Products. As
the CIO, Mr. DeBard was responsible for the design, implementation and
management of a corporate wide computer network, as well as preparation of
production analysis reports for senior management and equipment leases and
acquisitions.

         From 1997 to December 2000, Mr. DeBard was the Vice President and Chief
Information Officer for Pacesetter Industries, Inc. As such, Mr. DeBard was
responsible for all computer software and hardware acquisitions, installations
and maintenance for multiple branch offices, as well as responsible for
preparing a monthly analysis report of the automated production line for senior
management. Mr. DeBard was responsible for: computerizing the purchasing,
estimation, production and engineering systems for the company.

         Mr. DeBard attended Walla Walla College for four years in the Business
Administration program.

(b) COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, certain officers and persons holding 10% or more of the Company's
common stock to file reports regarding their ownership and regarding their
acquisitions and dispositions of the Company's common stock with the Securities
and Exchange Commission. Such persons are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.

Based solely on a review of the fiscal year ended April 30, 2004 and
subsequently, the Company is unaware that any required reports were not timely
filed. It is the Company's intention to ensure, where possible, complete
compliance according to this Section.

ITEM 10. EXECUTIVE COMPENSATION.

The following table sets forth certain information relating to the compensation
paid by the Company during the last three fiscal years to the Company's
President. No other executive officer of the Company received total salary and
bonus in excess of $100,000 during the fiscal year ended April 30, 2004 and
prior.

                                       24



<PAGE>

<TABLE>
 SUMMARY COMPENSATION TABLE
<CAPTION>
==========================================================================================================================
                           ANNUAL COMPENSATION                                 LONG-TERM COMPENSATION
                ============================================   ======================================================

                                                                        AWARDS             PAYOUTS
                                                               ========================  ==========
                                                  OTHER        RESTRICTED    SECURITIES
  NAME AND                                        ANNUAL         STOCK         UNDER-       LTIP
 PRINCIPAL                  SALARY      BONUS    COMPEN-        AWARD(S)       LYING       PAYOUTS         ALL OTHER
  POSITION       YEAR        ($)         ($)     SATION ($)       ($)         OPTIONS/       ($)           COMPEN-
    (A)           (b)        (c)         (d)       (e)            (f)        SAR (#)(g)      (h)         SATION($)(i)
======================================================================================================================
<S>              <C>        <C>             <C>      <C>          <C>             <C>          <C>            <C>
Phil Hamilton,   2004       42,000          0        0            0               0            0              0
                 2003          0            0        0            0               0            0              0
President        2002          0            0        0        127,200(1)          0            0              0
======================================================================================================================
</TABLE>

(1) This was pursuant to the transaction between the Company and Lutrex and the
value of the transaction is based upon the value of the assets and has been
noted as a restricted stock award to the Hamilton Family Trust.

Executive Compensation
----------------------

The Company has not paid any compensation to its directors since its inception,
and the Company does not expect to pay any compensation in any amount or of any
kind to its directors until the funds are available to pay them without
inhibiting growth of the Company.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth information regarding the beneficial ownership of
shares of the Company's common stock as of August 10, 2004 (issued and
outstanding) by (i) all stockholders known to the Company to be beneficial
owners of more than ten percent of the outstanding common stock; and (ii) all
directors and executive officers of the Company as a group:

<TABLE>
<CAPTION>
========================================================================================
  TITLE OF       NAME AND ADDRESS OF          AMOUNT OF BENEFICIAL     PERCENT OF CLASS
    CLASS         BENEFICIAL OWNER               OWNERSHIP (2)
========================================================================================
<S>            <C>                                <C>                       <C>
   Common      Hamilton Family Trust(1),           5,000,000                 3.5 %
    Stock        1200 Airport Drive,
                  Chowchilla, CA
========================================================================================
   Common           Adam Debard(1),                6,200,000                4.4%
    Stock        1200 Airport Drive,
                  Chowchilla, CA
========================================================================================
   Common         Rebecca Manadic(3),             37,600,000                26.4%
    Stock       611 West Main Street,
                     Merced, CA
========================================================================================
   Common              Total                      48,800,000                34.3%
    Stock
========================================================================================
</TABLE>

(1) Each person has sole voting power and sole dispositive power as to all of
the shares shown as beneficially owned by them except as footnoted in Note 3,
below.

(2) Other than as footnoted below, none of these security holders has the right
to acquire any amount of the shares within sixty days from options, warrants,
rights, conversion privilege, or similar obligations. The amount owned is based
on issued common stock, as well as stock options that are currently exercisable.

(3) Phil Hamilton has sole voting power as to all of the shares owned by Rebecca
Manandic.

(4) Pursuant to the terms and conditions of the acquisition of Lutrex
Enterprises, Inc., a note for $700,000 has been authorized by the Company to be
converted to common shares of the Company in an amount equal to 67,208,333
shares of common stock, hereinafter the "Shares". Those Shares are to be issued
to the former shareholders of Lutrex and are currently authorized but unissued
and do not have voting rights.

                                       25



<PAGE>

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

During the past two years, and as not otherwise disclosed of in any other
filing, there have not been any transaction that have occurred between the
Company and its officers, directors, and five percent or greater shareholders,
unless listed below.

Certain of the officers and directors of the Company are engaged in other
businesses, either individually or through partnerships and corporations in
which they have an interest, hold an office, or serve on a board of directors.
As a result, certain conflicts of interest may arise between the Company and its
officers and directors. The Company will attempt to resolve such conflicts of
interest in favor of the Company. The officers and directors of the Company are
accountable to it and its shareholders as fiduciaries, which requires that such
officers and directors exercise good faith and integrity in handling the
Company's affairs. A shareholder may be able to institute legal action on behalf
of the Company or on behalf of itself and other similarly situated shareholders
to recover damages or for other relief in cases of the resolution of conflicts
is in any manner prejudicial to the Company.

The Company issued notes payable of a total of $451,465 to a significant
shareholder. The Company granted the shareholder an option to convert a total of
$400,000 of principal balance of the notes to the Company's 2,666,666 shares of
preferred stock, and each share of the preferred stock is convertible to ten
shares of the Company's restricted common stock. The shareholder has the option
to convert the notes to the Company's securities anytime within three years from
the issuance of the notes.

In May 2003, the Company issued to MMI shareholders notes payable of $100,000 in
connection with acquisition of MMI Inc., an entity controlled by one of the
Company's significant shareholders.

In April 2004, two of the Company's shareholders repaid an aggregate of $499,350
of notes payable the Company due to bank on behalf of the Company. The Company
issued to the shareholders $199,350 of notes payable with a maturity date on May
1, 2009, and the shareholders agreed to receive the Company's preferred stock in
exchange for the remaining $300,000 due.

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

         (a) List of Exhibits attached or incorporated by reference pursuant to
Item 601 of Regulation S-B.

Exhibit No.       Description
-----------       -----------

(3)      +           Articles of Incorporation incorporated by reference to Form
                     SB-2, file no. 333-83231, incorporated by reference to
                     Exhibit 3 filed on July 6, 2001

(3.2)    +           Amendment to Articles of Incorporation incorporated by
                     reference to Form SB-2, file no. 333-83231, incorporated by
                     reference to Exhibit 3.2 filed on July 6, 2001

(3.3)    +           Bylaws incorporated by reference to Form SB-2, file no.
                     333-83231,  incorporated by reference to Exhibit 3.3 filed
                     on July 6, 2001

(3.4)    +           Articles of Merger between Global and IF&G Media
                     Corporation incorporated by reference to Form SB-2, file
                     no. 333-83231, incorporated by reference to Exhibit 3.4
                     filed on July 6, 2001

(4)      +           Specimen certificate for common stock incorporated by
                     reference to Form SB-2, file no. 333-83231, incorporated by
                     reference to Exhibit 4 filed on July 6, 2001

(4.1)    +           Specimen Warrant certificate incorporated by reference to
                     Form SB-2, file no. 333-83231, incorporated by reference to
                     Exhibit 4.1 filed on July 6, 2001

                                       26



<PAGE>

(10.1)   +           Consulting Agreement with Moody's Financial Services
                     incorporated by reference to Form SB-2, file no. 333-83231

(10.2)   +           Consulting Agreement with Joel Shine incorporated by
                     reference to Form SB-2, file no. 333-83231

(10.3)   +           Equity Line of Credit Agreement dated May2001
                     incorporated by reference to Form SB-2, file no. 333-83231
                     incorporated by reference to Exhibit 10.3 filed on July 6,
                     2001

(10.4)   +           Consulting Agreement with Persia Consulting Group, Inc.
                     dated April 12, 2001 incorporated by reference to Form
                     SB-2, file no. 333-83231 incorporated by reference to
                     Exhibit 10.4 filed on July 6, 2001

(10.5)   +           Escrow Agreement with First Union incorporated by
                     reference to Form SB-2, file no. 333-83231 incorporated by
                     reference to Exhibit 10.5 filed on July 6, 2001

(10.6)   +           Registration Rights Agreement incorporated by reference
                     to Form SB-2, file no. 333-83231 incorporated by reference
                     to Exhibit 10.6 filed on July 6, 2001

(10.7)   +           Agreement with Yorkville Advisors Management, LLC
                     incorporated by reference to Form SB-2, file no. 333-83231,
                     incorporated by reference to Exhibit 10.7 filed on July 6,
                     2001

(10.8)   +           Agreement and Plan of Exchange between Global Diversified
                     Industries and MBS, filed on March 17, 2003

(10.9)   +           Agreement and Plan of Exchange between Global Diversified
                     Industries and Modular  Modernization, Inc. filed on March
                     19, 2003

(23.1)   ++          Consent of Russell Bedford Stefanou Mirchandani, is filed
                     herein.

31.1   [+}[+]        Certification of Chief Executive Officer/President Pursuant
                     to Rule 13a-14(a) and 15d-14(a).

31.2   [+][+]        Certification of Chief Financial Officer Pursuant to Rule
                     13a-14(a) and 15d-14(a).

32.1   [+][+]        Certification Pursuant to 18 U.S.C. Section 1350, as
                     adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                     of 2002.

32.2   [+][+]        Certification Pursuant to 18 U.S.C. Section 1350, as
                     adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                     of 2002.

(+) Previously filed.
(+)(+) Filed herewith.

                                       27



<PAGE>

                  (b) REPORTS ON FORM 8-K.

                  There were no reports on Form 8-K filed during the last
quarter of the period covered by this report.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

            The following table sets forth fees billed to us by our auditors
during the fiscal years ended April 30, 2004 and 2003 for: (i) services rendered
for the audit of our annual financial statements and the review of our quarterly
financial statements, (ii) services by our auditor that are reasonably related
to the performance of the audit or review of our financial statements and that
are not reported as Audit Fees, (iii) services rendered in connection with tax
compliance, tax advice and tax planning, and (iv) all other fees for services
rendered.
                                         April 30, 2004     April 30, 2003
                                         --------------     --------------

(i)                Audit Fees             $    41,450        $    44,223
(ii)               Audit Related Fees              --                 --
(iii)              Tax Fees                     5,550                 --
(iv)               All Other Fees                  --                 --
                                          ------------       ------------
    Total fees                            $    47,000        $    44,223
                                          ============       ============

         AUDIT FEES. Consists of fees billed for professional services rendered
for the audit of Global Diversified Industries, Inc.'s consolidated financial
statements and review of the interim consolidated financial statements included
in quarterly reports and services that are normally provided by Russell Bedford
Stefanou Mirchandani LLP in connection with statutory and regulatory filings or
engagements.

         AUDIT-RELATED FEES. Consists of fees billed for assurance and related
services that are reasonably related to the performance of the audit or review
of Global Diversified Industries, Inc.,'s consolidated financial statements and
are not reported under "Audit Fees." There were no Audit-Related services
provided in fiscal 2004 or 2003.

         TAX FEES. Consists of fees billed for professional services for tax
compliance, tax advice and tax planning..

         ALL OTHER FEES. Consists of fees for products and services other than
the services reported above. There were no management consulting services
provided in fiscal 2004 or 2003.

                                       28



<PAGE>

POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES OF INDEPENDENT AUDITORS

         The Company currently does not have a designated Audit Committee, and
accordingly, the Company's Board of Directors' policy is to pre-approve all
audit and permissible non-audit services provided by the independent auditors.
These services may include audit services, audit-related services, tax services
and other services. Pre-approval is generally provided for up to one year and
any pre-approval is detailed as to the particular service or category of
services and is generally subject to a specific budget. The independent auditors
and management are required to periodically report to the Company's Board of
Directors regarding the extent of services provided by the independent auditors
in accordance with this pre-approval, and the fees for the services performed to
date. The Board of Directors may also pre-approve particular services on a
case-by-case basis.

SIGNATURES

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

                                            GLOBAL DIVERSIFIED INDUSTRIES, INC.

Dated: August 16, 2004                      By: /s/ Phil Hamilton
                                                ----------------------------
                                            Phil Hamilton, President and CEO

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Company and in
the capacities and on the date indicated:

  Signature                             Title                         Date
  ---------                             -----                         ----

/s/Phil Hamilton               CEO/Chairman of the Board         August 16, 2004
------------------------
Phil Hamilton

/s/Adam Debard                 Secretary/Treasurer/Director      August 16, 2004
------------------------
Adam Debard

                                       29