**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, 2005





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.
                Employerincorporation
                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 August 10, 2005, Common Stock, par value $0.001 per share was
      $8,998,757.00. As of August 10, 2005, the Company had 139,962,564 shares of
      common stock issued and outstanding, of which 92,984,564 were held by
      non-affiliates








GLOBAL
      DIVERSIFIED INDUSTRIES, INC.





FORM
      10-KSB





TABLE
      OF
      CONTENTS





PART
                I
            PageITEM
                1.
            Description
                of Business
            3ITEM
                2.
            Description
                of Property
            5ITEM
                3.
            Legal
                Proceedings
            5ITEM
                4.
            Submission
                of Matters to a Vote of Security Holders
            5PART
                IIITEM
                5.
            Market
                for Common Equity and Other Shareholder Matters
            5ITEM
                6.
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            7ITEM
                7.
            Financial
                Statements
            F-1ITEM
                8.
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure
            18ITEM
                8 (A)
            Controls
                and Procedures
            18PART
                IIIITEM
                9.
            Directors,
                Executive Officers, Promoters and Control Persons;Compliance
                with Section 16(a) of the Exchange Act
            18ITEM
                10.
            Executive
                Compensation
            19ITEM
                11.
            Security
                Ownership of Certain Beneficial Owners and Management
            20ITEM
                12.
            Certain
                Relationships and Related Transactions
            21ITEM
                13.
            Exhibits
            21ITEM
                14.
            Principal
                Accountant's Fees and Services
            22Signatures
            23








2








**PART
      I.**





**SPECIAL
      NOTE REGARDING FORWARD-LOOKING 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. In January 2002, the Company sold
      Modular.





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. Global Modular’s 100,000 square foot factory is located on sixteen
      acres adjacent to the municipal airport at Chowchilla, California. The
      manufacturing facility has the capacity to produce approximately $50,000,000
      of
      revenue per year. 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, and designs used specifically for permanent
      modular construction, i.e., complete schools, wing additions, etc. Global
      Modular’s capabilities include single-story “slab-on-grade” construction, where
      a concrete slab is poured on site, which also serves as the floor. The
      structures are built in our factory and shipped to the site for installation
      on
      the concrete slab. The modular division has recently secured rights to
      state-of-the-art two-story designs recently owned by Aurora Modular Industries,
      Inc. All of Global Modulars’ portable/modular structures are engineered and
      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


3





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. Global Modular has recently received assignment of a second piggyback
      contract from a Southern California school district. This piggyback contract
      includes all appropriate pricing parameters pertinent to Global’s “permanent
      modular construction” designs. Global Modulars’ two piggyback contracts provides
      them the flexibility to offer California public schools and municipalities
      an
      expanded variety of design and pricing alternatives to meet virtually any design
      request by the school district and/or architect.





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 subsidiary Global Modular, Inc. has secured necessary architectural
      and engineering approvals from the State of California (Division of the State
      Architect) for their single story and two-story designs. The two-story design
      is
      desirable by school districts since individual two-story buildings can be
      installed side-by-side to form a cluster of buildings, occupying hundreds of
      students. The two-story design is fully equipped with easy access to the second
      story by stairs and balcony along with a hydraulic elevator to accommodate
      handicap students, teachers and visitors. School districts continue to turn
      to
      two-story portable classrooms to satisfy their space dilemma since they have
      little real estate to surrender. Since the recent acquisition of Aurora Modular
      Industries intellectual property; the promotion of single-story slab-on-grade
      and two-story designs will be the main focus of our sales team during the next
      several years. Global Modular now possesses adequate DSA approved designs that
      can meet virtually any type configuration and aesthetic alternatives a school
      district may desire.





During
      the remainder of 2005, the Global Modular will continue to focus its attention
      on the sales and marketing of portable classrooms and modular buildings to
      the
      California public and private school sectors including California
      municipalities. Since the state of California has been experiencing an influx
      in
      student enrollment over the past several years, and the forecast for the next
      ten years is for continual increasing enrollments, the portable classroom
      manufacturing industry has become more successful. In an effort to keep up
      with
      demand for additional classroom space, modular manufactures are expecting
      increased production backlogs throughout the remainder of 2005 and into
      2006.





Employees





As
      of
      April 30, 2005, the Company had 150 employees. The Company anticipates that
      the
      number of employees will increase over the next twelve months. The Company
      does
      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
      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.


4





**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
      2004-2005 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.





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, 2005


HIGH
            LOWQuarter
                Ended April 30, 2005
            .11
            .05Quarter
                Ended January 31, 2005
            .10
            .05Quarter
                Ended October 31, 2004
            .10
            .06Quarter
                Ended July 31, 2004
            .16
            .09





Per
      Share
      Common Stock Bid Prices by Quarter


For
      the
      Fiscal Year Ended on April 30, 2004


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





5





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
      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.





6





**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.





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 to 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:





|· | revenue
              recognition
|- | ---------------------------------

|· | inventories
|- | -----------

|· | allowance
              for doubtful accounts
|- | ---------------------------------------------

|· | stock-based
              compensation
|- | --------------------------------------







7





Revenue
      Recognition





The
      Company recognizes revenue when persuasive evidence of an arrangement exists,
      the price to the customer is fixed, collectibility is reasonably assured and
      title and risk of ownership is passed to the customer, which is usually upon
      delivery.  However, in limited circumstances, certain customers
      traditionally have requested to take title and risk of ownership prior to
      shipment.  Revenue for these transactions is recognized only
      when:





(1)
      Title
      and risk of ownership have passed to the customer;


(2)
      The
      Company has obtained a written fixed purchase commitment;


(3)
      The
      customer has requested in writing the transaction be on a bill and hold
      basis;


(4)
      The
      customer has provided a delivery schedule;


(5)
      All
      performance obligations related to the sale have been completed;


(6)
      The
      modular unit has been processed to the customer’s specifications, accepted by
      the customer and  made
      ready for shipment; and


(7)The
      modular unit is segregated and is not available to fill other
      orders.





The
      remittance terms for these “bill and hold” transactions are consistent with all
      other sales by the Company.





Currently,
      there are no warranties provided with the purchase of the Company’s products.
      The cost of replacing defective products and product returns have been
      immaterial and within management’s expectations. In the future, when the company
      deems warranty reserves are appropriate that such costs will be accrued to
      reflect anticipated warranty costs.





Inventories





We
      value
      our inventories, which consists of raw materials, work in progress, finished
      goods, 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





8





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, 2005, we determined there was a reserve required against our account
      receivables of $19,590.





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.





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, 2005 and 2004 and will adopt the interim
      disclosure provisions for its financial reports for the subsequent
      periods.





Comparison
      of Years Ended April 30, 2005 and 2004 Revenues





The
      Company's total revenues were $9,206,445 for the year ended April 30, 2005
      compared to $3,407,585 (as restated) for the same time period in 2004, an
      increase of $5,798,860 or approximately 170%. The increase is a result of the
      California school market accepting the Company as a viable manufacturer of
      classrooms with an impressive number of different designs. The acquisition
      of
      the Aurora designs have created a new product line for the company, which has
      increased revenue. The Company acquired nine (9) new modular building designs
      that are approved by the Division of State Architect. The acquisition also
      included the trade name of Aurora Modular Industries, which was the second
      largest modular manufacturer in California and was well known for their award
      winning designs.





Gross
      Profit





For
      the
      year ended April 30, 2005, the Company's gross profit margin was 34.4 % compared
      to a 37.1% gross margin in 2004. The gross profit margin has decreased in the
      year ended April 30, 2005 due to the Company being awarded larger projects
      that
      are more competitive than the smaller projects that were produced in the year
      ended April 30, 2004.





Costs
      and Expenses





The
      Company's general and administrative expenses for the year ended April 30,
      2005
      was $2,066,555 compared to $1,417,098 for the same period in 2004, an increase
      of $649,457. This increase is mainly attributable to the general and
      administrative costs in connection with the increased sales and operations
      of
      Global Modular and MBS Construction. The Company’s general and administrative
      expenses for year ended April 30, 2005, increased approximately 46% with
      revenues increasing approximately 170% as compared to the year ended April
      30,
      2004.





The
      Company's interest cost for the year ended April 30, 2005 was $264,909 compared
      to $98,739 for the same period in 2004, an increase of $166,170. The change
      is
      due to the Company's increased borrowings to fund increased production during
      the year ended April 30, 2005.





9





Liquidity
      and Capital Resources





As
      reflected in the accompanying financial statements, the Company incurred a
      net
      profit of $ 501,956 for the year ended April 30, 2005. We generated a cash
      flow
      deficit of $826,730 from operating activities. Cash flows used in investing
      activities was $333,003 during this period. We met our cash flow requirements
      during the year primarily through the issuance of notes payable of $934,875,
      primarily from the line of credit established during this fiscal year, and
      sale
      of common stock in connection with employee stock options exercised.





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.





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, 2005, the Company recognized approximately $6,094,633,
      or 66% of its revenues from sales of its products to six (6) 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.





10





**NEW
      ACCOUNTING PRONOUNCEMENTS**





In
      March
      2005, the FASB issued FASB Interpretation (FIN) No. 47, “Accounting for
      Conditional Asset Retirement Obligations, an interpretation of FASB Statement
      No. 143,” which requires an entity to recognize a liability for the fair value
      of a conditional asset retirement obligation when incurred if the liability’s
      fair value can be reasonably estimated. The Company is required to adopt the
      provisions of FIN 47 no later than its last quarter of fiscal 2006. The Company
      does not expect the adoption of this Interpretation to have a material impact
      on
      its consolidated financial position, results of operations or cash
      flows.





In
      May
      2005 the FASB issued Statement of Financial Accounting Standards (SFAS) No.
      154,
“Accounting Changes and Error Corrections, a replacement of APB Opinion No.
      20
      and FASB Statement No. 3.” SFAS 154 requires retrospective application to prior
      periods’ financial statements for changes in accounting principle, unless it is
      impracticable to determine either the period-specific effects or the cumulative
      effect of the change. SFAS 154 also requires that retrospective application
      of a
      change in accounting principle be limited to the direct effects of the change.
      Indirect effects of a change in accounting principle, such as a change in
      non-discretionary profit-sharing payments resulting from an accounting change,
      should be recognized in the period of the accounting change. SFAS 154 also
      requires that a change in depreciation, amortization, or depletion method for
      long-lived, non-financial assets be accounted for as a change in accounting
      estimate effected by a change in accounting principle. SFAS 154 is effective
      for
      accounting changes and corrections of errors made in fiscal years beginning
      after December 15, 2005. Early adoption is permitted for accounting changes
      and
      corrections of errors made in fiscal years beginning after the date this
      Statement is issued. The Company does not expect the adoption of this SFAS
      to
      have a material impact on its consolidated financial position, results of
      operations or cash flows.








**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.**





11





**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.





**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:





|· | manage
              our business and our subsidiaries as a cohesive
              enterprise;
|- | ----------------------------------------------------------------------------------------------

|· | manage
              expansion through the timely implementation and maintenance of appropriate
              administrative, operational, financial and management information systems,
              controls and procedures;
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|· | add
              internal capacity, facilities and third-party sourcing arrangements
              as and
              when needed;
|- | -------------------------------------------------------------------------------------------------------------------------------------

|· | maintain
              service quality controls; and
|- | ----------------------------------------------------

|· | 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.


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.





12





**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:





|· | the
              volume, timing of, and ability to fulfill customer
              orders;
|- | ------------------------------------------------------------------------------------------

|· | the
              demand for our products;
|- | ------------------------------------------

|· | the
              number, timing and significance of product enhancements and new product
              introductions by us and our competitors;
|- | ------------------------------------------------------------------------------------------------------------------------------------------------

|· | changes
              in pricing policies by us or our
              competitors;
|- | ---------------------------------------------------------------------------------

|· | changes
              in the level of operating expenses;
|- | ---------------------------------------------------------

|· | expenses
              incurred in connection with our plans to fund greater levels of sales
              and
              marketing activities and operations, and broaden our customer support
              capabilities ;
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|· | personnel
              changes;
|- | --------------------------------

|· | product
              defects and other product or service quality problems;
              and
|- | ----------------------------------------------------------------------------------------------

|· | 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
      operations.





**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.





**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





13





organization.
      To the extent that such 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, 2005, there were
      approximately 139,965,564 shares of common stock outstanding, of which
      approximately 53,995,193 were tradable without restriction under the Securities
      Act. 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
      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





14





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.





**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."





15





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.





**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:





|· | Variations
              in anticipated or actual results of
              operations;
|- | --------------------------------------------------------------------------------------




|· | Announcements
              of new products or technological innovations by us or our
              competitors;
|- | ----------------------------------------------------------------------------------------------------------------




|· | Changes
              in earnings estimates of operational results by
              analysts;
|- | ---------------------------------------------------------------------------------------------




|· | Results
              of product demonstrations.
|- | ------------------------------------------------




|· | Inability
              of market makers to combat short positions on the
              stock;
|- | ----------------------------------------------------------------------------------------------




|· | Inability
              of the market to absorb large blocks of stock sold into the
              market;
|- | ---------------------------------------------------------------------------------------------------------




|· | Developments
              or disputes concerning our licensed patents, trademarks or proprietary
              rights; and
|- | ---------------------------------------------------------------------------------------------------------------------------




|· | 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 157,156,097 shares of
      Common Stock. In the event that such holders of Preferred Stock, warrants and
      options 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.





16





**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.



















































































17





**ITEM
      7. FINANCIAL STATEMENTS**
















**SECURITIES
      AND EXCHANGE COMMISSION**





**WASHINGTON,
      D.C. 20549**











**FINANCIAL
      STATEMENTS AND SCHEDULES**





**APRIL
      30, 2005 AND 2004**








**FORMING
      A PART OF ANNUAL REPORT**


**PURSUANT
      TO THE SECURITIES EXCHANGE ACT OF 1934**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**














**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**





**Index
      to Financial Statements**














PageReport
                of Registered Independent Certified Public Accounting Firm
            **F-3**Consolidated
                Balance Sheets at April 30, 2005 and 2004
            **F-4~ F-5**Consolidated
                Statements of Operations for the years
              ended
                April 30, 2005 and 2004
            **F-6**Consolidated
                Statements of Stockholders’ Equity for
              the
                years ended April 30, 2005 and 2004
            **F-7
                ~ F-8**Consolidated
                Statements of Cash Flows for the
              years
                ended April 30, 2005 and 2004
            **F-9
                ~ F-10**Notes
                to Consolidated Financial Statements
            **F-11
                ~ F-33**




















**RUSSELL
      BEDFORD STEFANOU MIRCHANDANI LLP**


**Certified
      Public Accountants**








**REPORT
      OF REGISTERED INDEPENDENT CERTIFIED PUBLIC ACCOUNTING
      FIRM**








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, 2005 and
      2004 and the related consolidated statements of operations, 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 audits.




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,
      2005 and 2004, 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.





As
      discussed in Note P, the Company restated its consolidated statements of
      operations for the year ended April 30, 2004.








/S/
      RUSSELL BEDFORD STEFANOU MIRCHANDANI LLP


Russell
      Bedford Stefanou Mirchandani LLP


Certified
      Public Accountants ****


McLean,
      Virginia


July
      25,
      2005








**F-3**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**CONSOLIDATED
      BALANCE SHEETS**


**APRIL
      30, 2005 AND 2004**





**2005**
            **2004****ASSETS:****Current
                assets:**Cash
                and cash equivalents
            $
                446,082
            $
                693,194Accounts
                receivable, net of allowance for doubtful accounts of $19,590 and
                $0 for
                April 30, 2005 and 2004, respectively
            1,632,395
            286,142Inventories
                (Note C)
            2,523,693
            1,396,699Advance
                to employees
            49,993
            1,086Deferred
                tax asset ( Note M)
            78,000Prepaid
                expenses
            55,548
            93,665Total
                current assets
            4,785,711
            2,470,786**Property,
                plant and equipment (Note D):**Property,
                plant and equipment, at cost
            2,274,882
            2,053,729Less:
                accumulated depreciation
            (584,716)
            (384,723)Total
                property, plant and equipment, net
            1,690,166
            1,669,006**Other
                assets:**Deposit
                and other assets
            35,579
            15,625Intangible
                assets, net of accumulated amortization of $61,407 and $18,724 at
                April
                30, 2005 and 2004, respectively (Note B)
            955,757
            363,790Total
                other assets
            991,336
            379,415**Total
                Assets**
            $
                7,467,213
            $
                4,519,207








See
      accompanying notes to consolidated financial statements


























**F-4**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**CONSOLIDATED
      BALANCE SHEETS (Continued)**


**APRIL
      30, 2005 AND 2004**





**2005**
            **2004****LIABILITIES
                AND STOCKHOLDERS' EQUITY****Current
                liabilities:**Accounts
                payable and accrued liabilities (Note F)
            $
                988,435
            $
                290,210Deferred
                revenue (Note A)
            71,228
            143,067Notes
                payable to related parties, current portion (Note H)
            149,000
            237,000Notes
                payable, current portion (Note H)
            1,520,369
            285,494Total
                current liabilities
            2,729,032
            955,771**Long-term
                liabilities:**Deferred
                tax liability (Note M)
            57,000
            -Notes
                payable, long term portion, net of debt discount (Note H)
            154,167
            -Notes
                payable to related parties, long-term portion (Note H)
            588,815
            588,815Total
                long-term liabilities
            799,982
            588,815Commitment
                and contingencies (Note O)
            -
            -**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, 2005
                and
                2004 (Note J)
            667
            667Common
                stock, par value $ .001 per share; 400,000,000 shares authorized;
                138,615,314 and 131,863,806 shares issued and outstanding at April
                30,
                2005 and 2004, respectively (Note J)
            138,615
            131,864Additional
                paid-in capital
            4,527,475
            4,025,104Preferred
                stock subscription (Note J)
            733,374
            733,374Common
                stock subscription (Note J)
            1,679,100
            1,726,600Treasury
                stock (Note J)
            (50)
            (50)Accumulated
                deficit
            (3,140,982)
            (3,642,938)Total
                stockholders' equity
            3,938,199
            2,974,621**Total
                liabilities and stockholders' equity**
            $
                7,467,213
            $
                4,519,207





See
      accompanying notes to consolidated financial statements











**F-5**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**CONSOLIDATED
      STATEMENTS OF LOSSES**


**FOR
      THE YEARS ENDED APRIL 30, 2005 AND 2004**







(As
                restated - Note P)2005
            2004Revenues
            $
                9,206,445
            $
                3,407,585Cost
                of goods sold
            6,038,049
            2,140,854Gross
                profit
            3,168,396
            1,266,731Operating
                expenses:Selling,
                general and administrative expenses
            2,066,555
            1,417,098Depreciation
                and amortization (Notes B and D)
            242,676
            178,961Total
                operating expense
            2,309,231
            1,596,059Income
                (loss) from operations
            859,165
            (329,328)Other
                income (expense):Other
                (expense) (Note J)
            (112,500)
            -Interest
                (expense), net
            (264,909)
            (98,739)Total
                other income (expense)
            (377,409)
            (98,739)Income/(loss)
                before income tax provision
            481,756
            (428,067)Income
                taxes provision (benefit) (Note M)
            (20,200)
            -Net
                income (loss)
            $
                501,956
            $
                (428,067)Earnings
                (losses) per common share (Note N):Basic
            $
                0.00
            $
                (0.00)Diluted
                and assuming diluted
            $
                0.00
            $
                (0.00)Weighted
                average shares outstanding:Basic
            135,913,683
            124,045,785Diluted
                and assuming diluted
            145,630,353
            124,045,785











See
      accompanying notes to consolidated financial statements

















**F-6**


**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITY**


**FOR
      THE YEARS ENDED APRIL 30, 2005 AND 2004**





Preferred
                Shares
            Stock
                Amount
            Preferred
                Stock Subscription
            Common
                Shares
            Stock
                Amount
            Additional
                Paid in Capital
            Treasury
                Stock
            Common
                Stock Subscription
            Accumulated
                Deficit
            Total**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
            -
            -
            -
            427,200Shares
                issued in exchange for debt
            -
            -
            -
            375,000
            375
            14,625
            -
            -
            -
            15,000Shares
                issued in exchange for engineering plans
            -
            -
            -
            1,107,190
            1,108
            23,586
            -
            -
            -
            24,694Shares
                issued in exchange for cash, net of costs and fees
            -
            -
            -
            944,444
            944
            44,056
            -
            -
            -
            45,000Shares
                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
            -
            -
            198,845Preferred
                stock subscription (Note I)
            -
            -
            300,000
            -
            -
            -
            -
            -
            -
            300,000Common
                stock subscription
            -
            -
            -
            -
            -
            -
            -
            1,010,000
            -
            1,010,000Net
                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**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**CONSOLIDATED
      STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)**


**FOR
      THE YEARS ENDED APRIL 30, 2005 AND 2004**





Preferred
                Shares
            Stock
                Amount
            Preferred
                Stock Subscription
            Common
                Shares
            Stock
                Amount
            Additional
                Paid in Capital
            Treasury
                Stock
            Common
                Stock Subscription
            Accumulated
                Deficit
            TotalBalance
                carry forward
            **666,667**
            **$
                667**
            **$
                733,374**
            **131,863,806**
            **$
                131,864**
            **$
                4,025,104**
            **$
                (50)**
            **$
                1,726,600**
            **$
                (3,642,938)**
            **$
                2,974,621**Adjustment
                of accumulated fractional shares from prior years
            -
            -
            -
            (54)
            -
            -
            -
            -
            -
            -Common
                stock issued in exchange for services rendered
            -
            -
            -
            4,622,222
            4,622
            145,778
            -
            -
            -
            150,400Common
                stock issued in connection with employee stock options
                exercised
            -
            -
            -
            986,840
            987
            124,935
            -
            -
            -
            125,922Common
                stock issued in exchange for intellectual property
            -
            -
            -
            142,500
            142
            22,658
            
            -
            -
            22,800Shares
                issued in exchange for common stock subscribed
            -
            -
            -
            1,000,000
            1,000
            159,000
            
            (160,000)
            -
            -Common
                Stock Subscription
            -
            -
            -
            -
            -
            -
            -
            112,500
            -
            112,500Beneficial
                conversion feature of notes payable (Note H)
            -
            -
            -
            -
            -
            50,000
            -
            -
            -
            50,000Net
                income
            -
            -
            -
            -
            -
            -
            -
            -
            501,956
            501,956**Balance
                at April 30, 2005**
            **666,667**
            **$667**
            **$
                733,374**
            **138,615,314**
            **$
                138,615**
            **$
                4,527,475**
            **$
                (50)**
            **$1,679,100**
            **$
                (3,140,982)**
            **$
                3,938,199**





See
      accompanying notes to consolidated financial statements


**F-8**





**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE YEARS ENDED APRIL 30, 2005 AND 2004**





2005
            2004Cash
                flows from operating activities:Net
                income (loss)
            $
                501,956
            $
                (428,067)Adjustment
                to reconcile net income (loss) to net cash used in operating
                activities:Depreciation
                and amortization (Note B and D)
            242,676
            178,961Common
                stock issued in exchange for services rendered (Note J)
            150,400
            427,200Common
                stock issued to employees for compensation (Note J)
            60,176
            -Common
                stock subscribed in exchange for payment of cancellation of Stock
                Purchase
                Agreement (Note J)
            112,500
            -Write-off
                of advances to employees
            -
            3,600Deferred
                taxes
            (21,000)
            -Amortization
                of debt discount (Note H)
            4,167
            -Change
                in assets and liabilities:(Increase)
                in accounts receivable
            (1,346,253)
            (272,163)(Increase)
                in inventory
            (1,126,994)
            (681,007)(Increase)/decrease
                in prepaid expense and others
            18,163
            (82,388)(Increase)
                in employee advances
            (48,907)
            (4,685)(Decrease)
                in cash disbursed in excess of available fund
            -
            (2,268)Increase
                in accounts payable and accrued expenses
            698,225
            112,370Increase/(decrease)
                in deferred revenue (Note A)
            (71,839)
            143,067Net
                cash (used in) operating activities:
            (826,730)
            (605,380)Cash
                flows from investing activities:Capital
                expenditure, net
            (333,003)
            (413,923)Net
                cash (used in) investing activities
            (333,003)
            (413,923)Cash
                flows from financing activities:Proceeds
                from sale of common stock and stock subscription, net of costs and
                fees
                (Note J)
            65,746
            895,000Proceeds
                from sale of treasury stock, net of costs and fees (Note
                J)
            -
            198,845Proceeds
                from notes payable, net of repayments
            934,875
            277,205Proceeds
                from note payable to related parties, net of repayments
            (88,000)
            327,350Net
                cash provided by financing activities
            912,621
            1,698,400Net
                increase (decrease) in cash and cash equivalents
            (247,112)
            679,097Cash
                and cash equivalents at beginning of year
            693,194
            14,097Cash
                and cash equivalents at end of year
            $
                446,082
            $
                693,194





See
      accompanying notes to consolidated financial statements






















**F-9**












**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS (Continued)**


**FOR
      THE YEARS ENDED APRIL 30, 2005 AND 2004**







2005
            2004Supplemental
                Disclosures of Cash Flow Information:Cash
                paid during the period for interest
            $
                101,293
            $
                86,974Cash
                paid during the period for income taxes
            -
            -Common
                stock issued for services (Note J)
            150,400
            427,200Common
                stock issued to employees for compensation (Note J and K)
            60,176
            -Common
                stock subscribed in exchange for payment of cancellation of Stock
                Purchase
                Agreement (Note J)
            112,500
            -Common
                stock issued in exchange for debt (Note J)
            -
            15,000Common
                stock issued in exchange for engineering plans (Note J)
            22,800
            24,694Common
                stock subscribed in exchange for property and equipment (Note
                J)
            -
            160,000Preferred
                stock subscribed in exchange for debt (Note I and J)
            -
            300,000Note
                payable issued in exchange for accrued liabilities
            -
            100,000Notes
                payable issued in exchange for intellectual property (Note
                H)
            500,000
            -Beneficial
                conversion feature of notes payable, convertible portion (Note
                H)
            50,000
            -Amortization
                of debt discount - beneficial conversion feature (Note H)
            4,167
            -












See
      accompanying notes to consolidated financial statements










































**F-10** **GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**









**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**APRIL
      30, 2005 AND 2004**







**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.





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).







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).























**F-11**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





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/contract 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, 2005 and 2004 are $71,228 and
      $143,067, respectively. 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.





The
      Company recognizes revenue when persuasive evidence of an arrangement exists,
      the price to the customer is fixed, collectibility is reasonably assured and
      title and risk of ownership is passed to the customer, which is usually upon
      shipment.  However, in limited circumstances, certain customers
      traditionally have requested to take title and risk of ownership prior to
      shipment.  Revenue for these transactions is recognized only
      when:




















**F-12**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





Revenue
      Recognition (Continued)





(1)
      Title
      and risk of ownership have passed to the customer;


(2)
      The
      Company has obtained a written fixed purchase commitment;


(3)
      The
      customer has requested in writing the transaction be on a bill and hold
      basis;


(4)
      The
      customer has provided a delivery schedule;


(5)
      All
      performance obligations related to the sale have been completed;


(6)
      The
      modular unit has been processed to the customer’s specifications, accepted by
      the customer and made ready for shipment; and


(7)The
      modular unit is segregated and is not available to fill other
      orders.





The
      remittance terms for these “bill and hold” transactions are consistent with all
      other sales by the Company.





Currently,
      there are no warranties provided with the purchase of the Company’s products.
      The cost of replacing defective products and product returns have been
      immaterial and within management’s expectations. In the future, when the company
      deems warranty reserves are appropriate that such costs will be accrued to
      reflect anticipated warranty costs.





Advertising





The
      Company follows the policy of charging the costs of advertising to expenses
      as
      incurred. Advertising costs as of April 30, 2005 and 2004 are $7,277 and $0
      respectively.





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,
      2005 and 2004.























**F-13**





**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**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.






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, 2005 and 2004 and will adopt the interim
      disclosure provisions for its financial reports for the subsequent periods.
      The
      Company granted an aggregate of 986,840 stock options to employees and all
      were
      exercised at the same date the options were granted (Note K).The Company has
      no
      awards of stock-based employee compensation outstanding at April 30,
      2005.


















**F-14**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





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.





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 $19,590 and $0 at April 30, 2005 and 2004,
      respectively.














**F-15**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





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.







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
      March
      2005, the FASB issued FASB Interpretation (FIN) No. 47, “Accounting for
      Conditional Asset Retirement Obligations, an interpretation of FASB Statement
      No. 143,” which requires an entity to recognize a liability for the fair value
      of a conditional asset retirement obligation when incurred if the liability’s
      fair value can be reasonably estimated. The Company is required to adopt the
      provisions of FIN 47 no later than its last quarter of fiscal 2006. The Company
      does not expect the adoption of this Interpretation to have a material impact
      on
      its consolidated financial position, results of operations or cash flows.

























**F-16**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**





New
      Accounting Pronouncements (Continued)





In
      May
      2005 the FASB issued Statement of Financial Accounting Standards (SFAS) No.
      154,
“Accounting Changes and Error Corrections, a replacement of APB Opinion No.
      20
      and FASB Statement No. 3.” SFAS 154 requires retrospective application to prior
      periods’ financial statements for changes in accounting principle, unless it is
      impracticable to determine either the period-specific effects or the cumulative
      effect of the change. SFAS 154 also requires that retrospective application
      of a
      change in accounting principle be limited to the direct effects of the change.
      Indirect effects of a change in accounting principle, such as a change in
      non-discretionary profit-sharing payments resulting from an accounting change,
      should be recognized in the period of the accounting change. SFAS 154 also
      requires that a change in depreciation, amortization, or depletion method for
      long-lived, non-financial assets be accounted for as a change in accounting
      estimate effected by a change in accounting principle. SFAS 154 is effective
      for
      accounting changes and corrections of errors made in fiscal years beginning
      after December 15, 2005. Early adoption is permitted for accounting changes
      and
      corrections of errors made in fiscal years beginning after the date this
      Statement is issued. The Company does not expect the adoption of this SFAS
      to
      have a material impact on its consolidated financial position, results of
      operations or cash flows.





**NOTE
      B- ACQUISITION OF INTANGIBLE ASSETS**





The
      Company has adopted SFAS No. 142, Goodwill and Other Intangible Assets, whereby
      the Company periodically test its intangible assets for impairment. On an annual
      basis, and when there is reason to suspect that their values have been
      diminished or impaired, these assets are tested for impairment, and write-downs
      will be included in results from operations.





The
      identifiable intangible assets acquired and their carrying value at April 30,
      2004 are:





Gross
                Carrying Amount
            Accumulated
                Amortization
            Net
            Residual
                Value
            Weighted
                Average Amortization Period (Years)Amortized
                Identifiable Intangible Assets:Building
                engineering and architectural plans
            $
                382,514
            $
                (18,724)
            $
                363,790
            $
                -
            10.0Total
            $
                382,514
            $
                (18,724)
            $
                363,790
            $
                -
            10.0

















**F-17**





**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      B- ACQUISITION OF INTANGIBLE ASSETS (Continued)**





On
      March
      11, 2005, the Company acquired certain intellectual properties from Impact
      Modular Leasing (“Impact”) through an Asset Purchase Agreement (“Agreement”).
      Impact had acquired the assets from a bankruptcy auction of Aurora Modular
      Industries, Inc. As consideration, the Company issued to Impact a secured
      promissory note (the “Note”) for Five Hundred Thousand Dollars ($500,000)
      bearing interest at five (5) percent per annum (Note H). The total purchase
      price was allocated to the assets acquired as follows:





Trade
                name
            $
                350,000Building
                engineering and architectural plans
            150,000Total
            $
                500,000





The
      trade
      name acquired is considered to have an undeterminable life, and as such will
      not
      be amortized. Instead, the trade name is tested annually for impairment, with
      any impairment charged against earnings in the Company’s consolidated statement
      of earnings. An independent appraiser assessed the value of the trade name
      acquired and determined that the fair value of the trade name exceeded its
      recorded book value at April 30, 2005. The building engineering and
      architectural plans acquired have estimated useful lives of ten years.





Total
      identifiable intangible assets acquired and their carrying value at April 30,
      2005 are:





Gross
                Carrying Amount
            Accumulated
                Amortization
            Net
            Residual
                Value
            Weighted
                Average Amortization Period (Years)Amortized
                Identifiable Intangible Assets:Building
                engineering and architectural plans
            $
                667,164
            $
                (61,407)
            $
                605,757
            $
                -
            10.0Total
                Amortized Identifiable Intangible Assets
            667,164
            $
                (61,407)
            $
                605,757
            $
                -
            10.0Unamortized
                Identifiable Intangible Assets:Trade
                Name
            350,000
            -
            350,000
            350,000
            -Total
                Amortized Identifiable Intangible Assets
            350,000
            -
            350,000
            350,000
            -Total
            $1,017,164
            $
                (61,407)
            $955,757
            $
                350,000
            10.0







**F-18**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      B- ACQUISITION OF INTANGIBLE ASSETS (Continued)**





Total
      amortization expense charged to operations for the year ended April 30, 2005
      and
      2004 were $42,683 and $17,698.





Estimated
      amortization expense as of April 30, 2005 is as follows:





2006
            $
                87,2012007
            87,2012008
            87,2012009
            87,2012010
                and after
            256,953Total
            $605,757








**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, 2005 and 2004 are
      as
      follows:





2005
            2004Finished
                Goods
            $
                224,307
            $
                102,130Work
                in Progress
            672,895
            317,893Raw
                Materials
            1,626,491
            976,676$
                2,523,693
            $1,396,,699





**NOTE
      D - PROPERTY, PLANT AND EQUIPMENT**





The
      Company’s property and equipment at April 30, 2005 and 2004 consists of the
      following:





2005
            2004Plant
                Equipment
            $
                1,853,703
            $
                1,673,292Furniture
                and Fixture
            2,933
            2,933Building
                and Leasehold Improvement
            418,246
            377,504Total
            2,274,882
            2,053,729Accumulated
                Depreciation
            (584,716)
            (384,723)$
                1,690,166
            $
                1,669,006





Depreciation
      expense included as a charge to income amounted to $199,993 and $161,263 for
      the
      year ended April 30, 2005 and 2004, respectively.

















**F-19**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**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, 2005 and 2004 are as
      follows:





2005
            2004Accounts
                payable
            $
                767,422
            $
                235,293Accrued
                interest
            84,790
            50,476Accrued
                payroll and payroll taxes
            108,817
            4,441Other
                accrued expenses
            27,406
            -Total
            $
                988,435
            $
                290,210





**NOTE
      G - ECONOMIC DEPENDENCY**





During
      the year ended April 30, 2005, approximately $6,094,633, or 66%, of total
      revenues were derived from and $1,032,310 (63%) of the total accounts receivable
      at April 30, 2005 were due from six (6) major customers.
































**F-20**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**








**NOTE
      H - NOTES PAYABLE**





A
      summary
      of notes payable at April 30, 2005 and 2004 is as follows:





2005
            2004Note
                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
            $
                389,465Note
                payable to Company shareholders in monthly installments of interest
                only
                at 8.0% per annum; unsecured; maturity date extended to May 15, 2005.
                Noteholder has the option to convert the principal balance of the
                loan to
                the Company’s preferred stock. (a)
            8,500
            62,000Note
                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
            199,350Note
                payable to Company shareholders in monthly installments of interest
                only
                at 5.0% per annum; unsecured; maturity date is on August 31, 2005.
                Noteholder has the option to convert the principal balance of the
                loan to
                the Company’s preferred stock. (a).
            6,000
            100,000Note
                payable to Company shareholder in monthly installments of interest
                only at
                8% per annum; unsecured; maturity date is May 15, 2004.
            -
            75,000Note
                payable to Company shareholder in monthly installments of interest
                only at
                10% per annum, unsecured, maturity date is May 1, 2009.
                (a)
            3,500
            -Note
                payable in 24 monthly installments beginning October 15, 2004, with
                interest at 6% per annum; unsecured; maturity date is October 2005.
                (b)
            -
            53,861Note
                payable to Company shareholder in monthly installments of interest
                only at
                8% per annum, unsecured, maturity date is on January 31, 2006.
            131,000
            -














**F-21**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      H - NOTES PAYABLE (Continued)**





(Continued)
            2005
            2004Note
                payable in 24 monthly installments beginning December 27, 2004, with
                interest at 8% per annum beginning January 28, 2005, unsecured; maturity
                date is December 26, 2006. (b)
            56,961
            -Note
                payable in 24 installments beginning February 28, 2005 with interest
                at 6%
                per annum, unsecured, maturity date is February 1, 2007
            16,104
            -Note
                payable, net of debt discount of $45,833, in 2 installments, the
                first on
                January 25, 2006 for $300,000, principal only, and the second on
                January
                25, 2007, for $200,000 principal plus accrued interest at 5% per
                annum,
                unsecured, the lender has an option in lieu of receiving the second
                payment of $200,000 in cash, to receive five million shares of the
                company’s unregistered common stock. (c)
            454,167
            -Note
                payable revolving agreement secured by accounts receivable and property
                with interest payable monthly at 5% over Prime Interest Rate, maximum
                borrowing capacity of $2,500,000.
            -
            231,633Note
                payable revolving agreement secured by accounts receivable and property
                with interest payable monthly at 2.75% over Prime Interest Rate,
                maximum
                borrowing capacity of $2,250,000.
            1,147,304
            -2,412,351
            1,111,309Less:
                current portion
            (1,669,369)
            (522,494)Total
                - notes payable - long term
            $742,982
            $
                588,815





(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.























**F-22**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**




**NOTE
      H - NOTES PAYABLE (Continued)**





(b)
      Original note agreement was entered into in September 2003, in 24 monthly
      installments beginning October 15, 2003, with interest at 6% per annum;
      unsecured; maturity date is October 2005. The Company was in default under
      the
      terms of the note agreement. On December 28, 2004, the Company and the
      noteholder entered into an updated Promissory Note Agreement (“Updated
      Agreement”). Pursuant to the Updated Agreement, the principal amount together
      with interest accrued at 8% per annum are payable in 24 monthly installments
      beginning January 28, 2005. The Company also transferred into an escrow account
      an aggregate of 3,223,421 shares of its restricted common stock as collateral
      for this note. If the note is in default after one year or any time thereafter,
      the noteholder has the option to cash in the restricted stock to pay off the
      balance of the note plus any unpaid interest and penalties. The 3,223,421 shares
      of common stock were held in escrow so as not be considered outstanding unless
      the Company is in default. As of April 30, 2005, the Company was in compliance
      with the terms of the Update Agreement.







(c)
      The
      Company granted the noteholder an option to convert the second installment
      of
      $200,000 of principal to five million shares of the company’s unregistered
      common stock at maturity date. 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 $250,000. The Company recognized an imbedded
      beneficial conversion feature present in the convertible note. The Company
      recognized and measured an aggregate of $50,000 of the proceeds, which is equal
      to the intrinsic value of the imbedded beneficial conversion feature, to
      additional paid in capital and a discount against the convertible portion of
      the
      note. The debt discount attributed to the beneficial conversion feature is
      amortized over the maturity period (two years) as interest expense. The Company
      amortized the debt discount attributed to the beneficial conversion feature
      and
      recorded non-cash interest expense of $4,167 for the year ended April 30, 2005.





**NOTE
      I - RELATED PARTY TRANSACTIONS**





In
      addition to convertible notes payable to related parties described in Note
      H, 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-23**





**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**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, 2005 and 2004, the Company
      has issued and outstanding 666,667 shares of preferred stock. The Company has
      138,615,314 and 131,863,806 shares of common stock issued and outstanding at
      April 30, 2005 and 2004, respectively. The Company had 50,000 shares of treasury
      stock at April 30, 2005 and 2004.





During
      the year ended April 30, 2004, the Company issued a total of 9,44,444 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. The Company also issued 5,000,000 shares of common stock,
      valued at $90,000, to the Majestic shareholders in connection with a settlement
      agreement the Company entered into in October 2002. 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-24**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**




**NOTE
      J - CAPITAL STOCK (Continued)**





In
      May
      2004, the Company issued 1,000,000 shares of common stock to Grossman in
      exchange for the $160,000 of stock subscription at April 30, 2004. All
      obligations pursuant to the agreement have been fulfilled as of April 30,
      2005.





During
      the year ended April 30, 2005, the Company issued an aggregate of 986,840 shares
      of common stock to officers and employees for stock options exercised at 50%
      of
      the fair market value of the common stock on the date of exercise (Note K).
      The
      Company received $65,745 of proceeds, net of costs and fees, and compensation
      costs of $60,176 were charged to operations during the year ended April 30,
      2005. Additionally, the Company issued an aggregate of 4,622,222 shares of
      common stock to consultants in exchange for services in the amount of $150,400.
      The Company also issued 142,500 shares of common stock in exchange for
      intellectual property valued at $22,800. 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.





In
      July
      2004, the Company entered into a Stock Purchase Agreement and an Escrow
      Agreement (collectively “Agreement”) with Langley Park Investments PLC
      (“Langley”), a corporation organized under the laws of England and Wales.
      Pursuant to the terms of the Agreement, the Company issued 25,000,000 shares
      of
      its restricted common stock (“Consideration Stock”) to be held in escrow, in
      exchange for Langley Shares (“Langley Consideration Shares”) equal to the same
      value of the Consideration Stock. The Consideration Stock was released, however
      the Company did not receive the Langley Consideration Shares. In December 2004,
      the Company filed an action in the United States District Court for the Eastern
      District of California Fresno Division, against Langley for, among other cause
      of action, securities fraud, breach of contract and rescission in relation
      to
      the Agreement. The Company has demanded the 25,000,000 shares of Consideration
      Stock wrongfully transferred to Langley being return to the Company and the
      Consideration Stock has been coded so as not be considered issued. In April
      2005, the Company entered into an agreement with Langley to cancel the Stock
      Purchase Agreement. The Company agreed to issue Langley 1,250,000 shares of
      its
      common stock, valued at $112,500, and Langley agreed to return 23,750,000 of
      the
      Company’s common stock to the treasury of the Company. As of April 30, 2005, the
      company has accounted for these shares as common stock subscription payable
      in
      the accompanying financial statements.





**NOTE
      K - EMPLOYEE STOCK INCENTIVE PLAN**





In
      September 2001, the Board of Directors of the Company implemented an Employee
      Stock Incentive Plan (“2001 Stock Option Plan”) for officers, employees and
      certain non-employees (collectively referred to as "Employees") in an amount
      equal to 15,000,000 shares of common stock. The 2001 Stock Option Plan provides
      for the issuance of stock options exercisable at fifty percent (50%) of the
      fair
      market value of the common stock on the date of exercise. For an employee
      holding greater than ten percent(10%) of the total voting power of all stock
      of
      the Company, the exercise price of an incentive stock option shall be at least
      one hundred and ten percent (110%) of the fair market value of the common stock
      on the date of the grant of the option. The maximum life of the options is
      ten
      years from the date the stock options are granted.





**F-25**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      K - EMPLOYEE STOCK INCENTIVE PLAN (Continued)**





In
      February 2004, the Board of Directors of the Company implemented another
      Employee Stock Incentive Plan (“2004 Stock Option Plan”) for officers, employees
      and certain non-employees (collectively referred to as "Employees") in an amount
      equal to 2,000,000 shares of common stock. The 2004 Stock Option Plan provides
      for the issuance of stock options at an exercise price of $0.05 per share (or
      110% of the fair market value of the common stock on the date of the grant
      of
      the option, for employees holding greater than ten percent (10%) of the total
      voting power of all stock of the Company). The maximum life of the options
      is
      ten years from the date the stock options are granted.





During
      the year ended April 30, 2005, the Company granted an aggregate of 986,840
      options to Employees pursuant to 2001 Stock Option Plan, and all options were
      exercised on the grant date (Note J). There are no stock options outstanding
      at
      April 30, 2005.





**NOTE
      L - NON-EMPLOYEE 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.





Options
                Outstanding
            Options
                ExercisableExercise
                Prices
            NumberOutstanding
            Weighted
                Average Remaining ContractualLife
                (Years)
            Weighed
                AverageExercise
                Price
            NumberExercisable
            Weighted
                AverageExercise
                Price$
                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
            $
                0.055,500,000
            1.09
            1.40
            5,500,000
            $
                1.40





Transactions
      involving options are summarized as follows:





Number
                of Shares
            Weighted
                Average Price Per ShareOutstanding
                at April 30, 2003
            1,500,000
            $
                5.00Granted
            4,000,000
            0.05Exercised
            -
            -Canceled
                or expired
            -
            -Outstanding
                at April 30, 2004
            5,500,000
            $
                1.40Granted
            -
            -Exercised
            -
            -Canceled
                or expired
            -
            -Outstanding
                at April 30, 2005
            5,500,000
            $
                1.40





**F-26**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      L - NON-EMPLOYEE STOCK OPTIONS AND WARRANTS**





Non-Compensatory
      Stock Options (Continued)





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 common stock. The exercise price
      of the stock options was approximately the fair market value of the Company’s
      common stock at the time the stock options were granted.





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.





Warrants
                Outstanding
            Warrants
                ExercisableExercise
                Prices
            NumberOutstanding
            Weighted
                Average Remaining ContractualLife
                (Years)
            Weighed
                AverageExercise
                Price
            NumberExercisable
            Weighted
                AverageExercise
                Price$
                0.03
            1,500,000
            0.75
            $
                0.03
            1,500,000
            $
                0.031,500,000
            0.75
            
            1,500,000
            $
                0.03





Transactions
      involving warrants are summarized as follows:





Number
                of Shares
            Weighted
                AveragePrice
                Per ShareOutstanding
                at April 30, 2003
            1,500,000
            $
                0.03Granted
            -
            -Exercised
            -
            -Canceled
                or expired
            -
            -Outstanding
                at April 30, 2004
            1,500,000
            $
                0.03Granted
            -
            -Exercised
            -
            -Canceled
                or expired
            -
            -Outstanding
                at April 30, 2005
            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 in February 2003. The warrants granted have
      an original expiration date on January 31, 2004. During the year ended April
      30,
      2005, the Company has extended the expiration date to January 31, 2006.














**F-27**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      M - INCOME TAXES**





Deferred
      income taxes result from the temporary differences arising from the use of
      accelerated depreciation methods for income tax purposes and the straight-line
      method for financial statement purposes, from differences in the timing of
      recognition of the state income tax provision for book and tax reporting
      purposes, from the use of the reserve method of uncollectible receivables
      financial statement purposes while the direct write-off method is used for
      tax
      purposes, and an accumulation of Net Operating Loss carryforwards for income
      tax
      purposes with a fully reserved valuation allowance against the carryforwards
      for
      book purposes. ****





In
      assessing the realizability of deferred tax assets, management considers whether
      it is more likely than not that some portion or all of the deferred tax assets
      will not be realized. Included in deferred tax assets are State net operating
      loss carryforwards of $2,013,900, which will expire in 2024, and a Federal
      net
      operating loss carryforward of $2,013,900, which will expire in 2024. The
      ultimate realization of deferred tax assets is dependent upon the generation
      of
      future taxable income during the periods in which those temporary differences
      become deductible. Management considers the scheduled reversal of deferred
      tax
      liabilities, projected future taxable income, and tax planning strategies in
      making this assessment. Based upon our cumulative losses through April 30,
      2005,
      we have provided a valuation allowance reducing the net realizable benefits
      of
      these deductible differences to zero at April 30, 2005. The net change in the
      valuation allowance from 2004 was a decrease of $ 213,400. The amount of the
      deferred tax asset considered realizable could change in the near term if
      projected future taxable income is realized.  .
      Due to
      significant changes in the Company’s ownership, the Company’s future use of its
      existing net operating losses may be limited.










The
      income tax provision for the years ended April 30, 2005 and 2004 consists of
      the
      following:





**2005**
            
            **2004**CurrentFederal
            $
            --
            $
            --State
            
            800
            
            --800
            
            --DeferredFederal
            
            (16,000)
            
            --State
            
            (5,000)
            
            --(21,000)
            
            --$
            (20,200)
            $
            --

















**F-28**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      M - INCOME TAXES (Continued)**





A
      reconciliation between the actual income tax expense and income taxes computed
      by applying the statutory Federal and state income tax rates to income from
      continuing operations before income taxes is as follows:





**2005**
            
            **2004**Computed
                “expected” income tax expense at
              approximately
                34%
            $
            193,200
            $
            (171,200)Change
                in valuation allowances of deferred income taxes
            
            (213,400)
            
            171,200$
            (20,200)
            $
            --





Deferred
      income taxes reflect the net tax effects of temporary differences between the
      carrying amounts of assets and liabilities for financial reporting purposes
      and
      the amounts used for income tax purposes. Significant components of our deferred
      tax assets and liabilities as of April 30, 2005 and 2004 are as
      follows:





2005
            2004Deferred
                tax assets:Federal
                and state net operating loss
            $
                855,900
            $
                1,069,300Allowance
                and accruals not recognized for income tax purposes
            78,000
            -Total
                gross deferred tax assets
            933,900
            1,069,300Less
                : Valuation allowance
            (855,900)
            (1,069,300)Net
                deferred tax assets
            $
                78,000
            $
                -Deferred
                tax liabilities:Total
                gross deferred tax liabilities:Depreciation
                and amortization, net
            52,900
            -Deferred
                state tax liability
            4,100
            -Total
                net deferred tax assets
            $
                57,000
            $
                -





These
      amounts have been presented in the consolidated balance sheets as
      follows:





2005
            2004Current
                deferred tax asset
            $
                78,000
            $
                -Non
                current deferred tax liability
            57,000
            -Total
                net deferred tax asset
            $
                21,000
            $
                -

























F-29











**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**








**NOTE
      N - EARNINGS (LOSS) PER SHARE**





Basic
      and
      fully diluted earnings (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 following table sets forth the computation
      of
      basic and diluted earnings (losses) per share:







2005
            2004Net
                income (loss) available to
              common
                stockholders
            $
                501,956
            $
                (428,067)Earnings
                (losses) per share:Basic
            $
                0.00
            $
                (0.00)Diluted
                and assuming diluted
            $
                0.00
            $
                (0.00)Weighted
                average number of
              common
                shares outstanding:Basic
            135,913,683
            124,045,785Diluted
                and assuming diluted
            145,630,353
            124,045,785





**NOTE
      O - 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, 2005 are as
      follows:





Fiscal
                Year
            Amount2006
            $
                89,323Total
            $
                89,323





Rental
      expenses charged to operations for the year ended April 30, 2005 and 2004 are
      $196,244 and $196,741, respectively.





Litigation




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-30**





**GLOBAL
      DIVERSIFIED INDUSTRIES, INC** .


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      P -** **RESTATEMENT
      OF FINANCIAL STATEMENTS**





The
      Company has restated its statement of operations for the year ended April 30,
      2004 to correct the following errors in the financial statements previously
      filed:





|· | The
              Company erroneously recorded as revenues the value of its work-in-process
              and finished goods inventories as of April 30, 2004.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------




The
      net
      effect of the correction of this error was to:





|· | Decrease
              the Company’s reported revenues for the year ended April 30, 2004 by $
              420,023 from $ 3,827,608 to $ 3,407,585.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------




|· | Decrease
              the Company’s reported cost of sales for the year ended April 30, 2004 by
              $ 420,023 from $ 2,560,877_to $
              2,140,854.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------




The
      correction of the error has resulted in no change in the Company’s reported
      Consolidated Balance Sheet as of April 30, 2004 and Consolidated Statement
      of
      Cash Flows for the year ended April 30, 2004.





However,
      the restatement did affect the individual components of the Company’s revenues
      and cost of sales as reported on its Consolidated Statement of Operations for
      the year ended April 30, 2004.





Following
      are reconciliations of the Company’s restatement of the Consolidated Statement
      of Operations for the year ended April 30, 2004.








Year
                Ended April 30, 2004(As
                Restated)
            (As
                Reported)Revenues
            $
                3,407,585
            $
                3,827,608Cost
                of Goods Sold
            2,140,854
            2,560,877Gross
                Profit
            1,266,731
            1,266,731Operating
                Expenses:Selling,
                General & Administrative
            1,417,098
            1,417,098Depreciation
                and Amortization
            178,961
            178,961Total
                Operating Expenses
            1,596,059
            1,596,059Loss
                from Operations
            (329,328)
            (329,328)Interest
                Expense, net
            (98,739)
            (
                98,739)Income
                Taxes Provision
            -
            -Net
                loss
            $
                (428,067)
            $
                (428,067)Loss
                per common share (basic and diluted)
            $
                0.00
            $
                0.00








**F-31**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      P - RESTATEMENT OF FINANCIAL STATEMENTS (Continued)**








**Quarterly
      financial data (Unaudited)**





The
      Company’s unaudited quarterly Condensed Consolidated Statements of Operations
      are also restated to correct the error in recording as revenues the value of
      its
      work-in-process and finished goods inventories as of July 31, 2004, October
      31,
      2004 and January 31, 2005. The correction of the error has resulted in no change
      in the Company’s reported Condensed Consolidated Balance Sheets as of July 31,
      2004, October 31, 2004 and January 31, 2005 and Condensed Consolidated Statement
      of Cash Flows for the periods then ended.





Following
      are reconciliations of the Company’s restatement of the Condensed Consolidated
      Statement of Operations for the periods ended July 31, 2004, October 31, 2004
      and January 31, 2005 .





Quarter
                Ended July 31, 2004(As
                Restated)
            (As
                Reported)Revenues
            $
                1,936,362
            $
                2,105,845Cost
                of Goods Sold
            1,279,729
            1,449,212Gross
                Profit
            656,633
            656,633Operating
                Expenses:Selling,
                General & Administrative
            489,044
            489,044Depreciation
                and Amortization
            58,369
            58,369Total
                Operating expenses
            547,416
            547,413Income
                from Operations
            109,220
            109,220Interest
                Expense, net
            (26,471)
            (26,471)Income
                Taxes Provision
            -
            -Net
                Income
            $
                82,749
            $
                82,749Earnings
                per common share (basic and diluted)
            $
                0.00
            $
                0.00














**F-32**





**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**APRIL
      30, 2005 AND 2004**





**NOTE
      P - RESTATEMENT OF FINANCIAL STATEMENTS (Continued)**





Three
                Months Ended October 31, 2004
            Six
                Months Ended October 31, 2004(As
                Restated)
            (As
                Reported)
            (As
                Restated)
            (As
                Reported)Revenues
            $1,632,796
            $2,220,934
            $3,569,158
            $4,326,779Cost
                of Goods Sold
            920,266
            1,508,404
            2,199,995
            2,957,616Gross
                Profit
            712,530
            712,530
            1,369,163
            1,369,163Operating
                Expenses:Selling,
                General & Administrative
            503,995
            503,995
            993,039
            993,039Depreciation
                and Amortization
            57,461
            57,461
            115,830
            115,830Total
                Operating expenses
            561,456
            561,456
            1,108,869
            1,108,869Income
                from Operations
            151,074
            151,074
            260,294
            260,294Interest
                Expense, net
            (123,327)
            (123,327)
            (149,798)
            (149,798)Income
                Taxes Provision
            -
            -
            -
            -Net
                Income
            $27,747
            $27,747
            $110,496
            $110,496Earnings
                per common share (basic and diluted)
            $
                0.00
            $
                0.00
            $
                0.00
            $
                0.00








Three
                Months Ended January 31, 2005
            Nine
                Months Ended January 31, 2005(As
                Restated)
            (As
                Reported)
            (As
                Restated)
            (As
                Reported)Revenues
            $
                2,267,076
            $2,028,714
            $5,836,234
            $
                6,355,493Cost
                of Goods Sold
            1,338,495
            1,100,133
            3,538,490
            4,057,749Gross
                Profit
            928,581
            928,581
            2,297,744
            2,297,744Operating
                Expenses:Selling,
                General & Administrative
            770,448
            770,448
            1,763,487
            1,763,487Depreciation
                and Amortization
            61,485
            61,485
            177,315
            177,315Total
                Operating expenses
            831,933
            831,933
            1,940,802
            1,940,802Income
                from Operations
            96,648
            96,648
            356,942
            356,942Interest
                Expense, net
            (39,634)
            (39,634)
            (189,432)
            (189,432)Income
                Taxes Provision
            -
            -
            -
            -Net
                Income
            $
                57,014
            $
                57,014
            $
                167,510
            $167,510Earnings
                per common share (basic and diluted)
            $
                0.00
            $
                0.00
            $
                0.00
            $
                0.00








**F-33**










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






None.






**ITEM
      8A. CONTROLS AND PROCEDURES**






|(a) | EVALUATION
              OF DISCLOSURE CONTROLS AND PROCEDURES. Regulation s 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 Treasurer/Chief Accounting Officer 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 Treasurer/ Chief Accounting
              Officer
              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 disclosure; and
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





|(ii) | that
              our disclosure and procedures are
              effective.
|---- | -----------------------------------------------------------------------------





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






**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.









18









**Phil
      Hamilton, President/Chairman**




Phillip
      Hamilton, age 57 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.





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




**Adam
      Debard, Secretary/Treasurer/Director**




Adam
      N.
      DeBard ,
      age 37,
      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




**(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 Forms 5 with respect to the fiscal year ended April
      30, 2002 and subsequently, the Company is unaware that any required reports
      were
      not timely filed. The Company is currently conducting an internal audit
      to
      ensure that the Company's Officers and/or Directors, as well as persons holding
      more than 10% of the Company's outstanding common stock, are in Compliance
      with
      Section 16(a) of the Securities and Exchange Act of 1934. It is the Company's
      intention to ensure, where possible, from the date of this filing forward,
      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, 2005 and prior.





19








Summary
      Compensation Table





Annual
                compensation
            Long-term
                compensationAwards
            PayoutsName
                and principal position
              (a)
            Year
              (b)
            Salary
              ($)
              (c)
            Bonus
              ($)
              (d)
            Other
              annual
                compen-sation
              ($)
              (e)
            Restricted
              stock
              award(s)
              ($)
              (f)
            Securities
              under-
              lying
              options/
              SARs
              (#)
              (g)
            LTIP
              payouts
              ($)
              (h)
            All
                other
              compen-
              sation
              ($)
              (i)Phil
                Hamilton, President
            2005
              2004
              2003
            42,000
              0
            0
            0
            
            0
            0
            0





Executive
      Compensation





The
      Company has not paid any compensation to its officers and/or directors since
      its
      inception, and the Company does not expect to pay any compensation in any amount
      or of any kind to its executive officers or 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, 2003 (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:




Title
                of Class
            Name
                and Address of Beneficial Owner
            Amount
                of Beneficial Ownership (2)
            Percent
                of ClassCommon
                Stock
            Hamilton
                Trust (1), 1200 Airport Drive, Chowchilla, CA
            5,000,000
            3.61%Common
                Stock
            Adam
                Debard(1), 1200 Airport Drive, Chowchilla, CA
            6,200,000
            4.47%Common
                Stock
            Rebecca
                Manadic(3), 611 West Main Street, Merced, CA
            35,775,000
            25.81%Common
                Stock
            Shares
                of all directors and executive officers as a group (3
                persons)
            46,975,000
            33.89%





(1)
      Each
      person has sole voting power and sole dispositive power as to all of the shares
      shown as beneficially owned by them.





(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.





20





**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 at total of $407,465 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
      the 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 the acquisition of MMI, 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 due to a 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**




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





Exhibit
                No.
            
            Description3
            *
            Articles
                of Incorporation incorporated by reference to Form SB-2, file no.
                333-83231, incorporated by reference to Exhibit 3 filed on July 6,
                20013.2
            *
            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,
                20013.3
            *
            Bylaws
                incorporated by reference to Form SB-2, file no. 333-83231, incorporated
                by reference to Exhibit 3.3 filed on July 6, 20013.4
            *
            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, 20014
            *
            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,
                20014.1
            *
            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





21








10.1
            *
            Consulting
                Agreement with Moody's Financial Services incorporated by reference
                to
                Form SB-2, file no. 333-8323110.2
            *
            Consulting
                Agreement with Joel Shine incorporated by reference to Form SB-2,
                file no.
                333-8323110.3
            *
            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, 200110.4
            *
            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, 200110.5
            *
            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,
                200110.6
            *
            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,
                200110.7
            *
            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, 200110.8
            *
            Agreement
                and Plan of Exchange between Global Diversified Industries and MBS,
                filed
                on March 17, 200310.9
            *
            Agreement
                and Plan of Exchange between Global Diversified Industries and Modular
                Modernization, Inc. filed on March 19, 200323.1
            **
            Consent
                of Russell Bedford Stefanou Mirchandani LLP , 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.





**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, 2005 and 2004 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, 2005
            April
                30, 2004(i)
            Audit
                Fees
            $
                57,995
            $
                41,450(ii)
            Audit
                Related Fees
            --
            --(iii)
            Tax
                Fees
            7,050
            5,550(iv)
            All
                Other Fees
            --
            --------------
            ------------Total
                fees
            $
                65,045
            $
                47,000===========
            ============





22





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 2005 or 2004.





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
      2005 or 2004.








**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 15, 2005





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
                15, 2005Phil
                Hamilton/s/Adam
                Debard
            Secretary/Treasurer/Director
            August
                15, 2005Adam
                Debard











23