**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**








**FORM
      10-QSB/A**





**AMENDMENT
      NUMBER ONE TO**


**QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE**


**SECURITIES
      AND EXCHANGE ACT OF 1934**





**For
      the period ended October 31, 2005**





**Commission
      file number 333-83231**








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC**


**(Exact
      Name of Registrant as specified in its charter)**








**NEVADA**
            **95-4741485****(State
                of Incorporation)**
            **(IRS
                Employer Identification
                Number)**





**1200
                Airport Drive, Chowchilla, CA**
            **93610****(Address
                of Principal Executive Offices)**
            **(Zip
                Code)**





**Telephone:
      559-665-5800**


**(Registrant's
      telephone number, including area code)**





**Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).**


**Yes
      [ ] No [X]**





**State
      the number of shares outstanding of each of the issuer's classes of common
      equity,:**


**148,866,114
      shares of Common Stock ($.001 par value) as of December 15,
      2005.**





**Transitional
      small business disclosure format: Yes [] No [X]**








**EXPLANATORY
      NOTE**


**This
      Quarterly Report on Form 10-QSB/A amends our previously filed Quarterly Report
      on Form 10-QSB for the fiscal quarter ended October 31, 2005. This amendment
      is
      being filed to correct the net income amount for the six months ended October
      31, 2005 shown in the Condensed Statement of Operations on page 4. The amount
      was erroneously shown as $99,133 and the correct amount is
      $399,113.**













**TABLE
      OF CONTENTS**








PART
                I
            FINANCIAL
                INFORMATIONITEM
                I
            FINANCIAL
                STATEMENTS (UNAUDITED)
            2CONDENSED
                CONSOLIDATED BALANCE SHEETS:
            2OCTOBER
                31, 2005 AND APRIL 30, 2005CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS:FOR
                THE THREE MONTHS AND SIX MONHTS ENDED OCTOBER 31, 2005 AND
                2004
            4CONDENSED
                CONSOLIDATED STATEMENTS OF CASH FLOWS:FOR
                THE SIX MONTHS ENDED OCTOBER 31, 2005 AND 2004
            5NOTES
                TO UNAUDITED CONSOLIDATED FINANCIAL INFORMATION:OCTOBER
                31, 2005
            6ITEM
                2
            MANAGEMENT'S
                DISCUSSION AND ANALYSIS OF FINANCIALCONDITION
                AND RESULTS OF OPERATIONS
            15ITEM
                3
            CONTROLS
                AND PROCEDURES
            21PART
                II
            OTHER
                INFORMATION
            21ITEM
                1
            LEGAL
                PROCEEDINGS
            21ITEM
                2
            CHANGES
                IN SECURITIES
            21ITEM
                3
            DEFAULTS
                UPON SENIOR SECURITIES
            21ITEM
                4
            SUBMISSION
                OF MATTERS TO VOTE OF SECURITY HOLDERS
            22ITEM
                5
            OTHER
                INFORMATION
            22ITEM
                6
            EXHIBITS
            22








**ITEM
      I. FINANCIAL STATEMENTS (UNAUDITED)**





**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS**





(Unaudited)October
                31, 2005
            April
                30, 2005ASSETS:Current
                assets:Cash
                and cash equivalents
            $
                126,933
            $
                446,082Accounts
                receivable, net of allowance for doubtful accounts of $19,590 at
                October
                31, 2005 and April 30, 2005, respectively
            1,816,111
            1,632,395Inventories
            3,530,513
            2,523,693Advance
                to employees
            66,983
            49,993Deferred
                tax asset
            8,000
            78,000Prepaid
                expenses
            33,413
            55,548Total
                current assets
            5,581,953
            $
                4,785,711Property,
                plant and equipment:Property,
                plant and equipment, at cost
            2,527,330
            2,274,882Less:
                Accumulated depreciation
            (652,197)
            (584,716)Total
                property, plant and equipment, net
            1,875,133
            1,690,166Other
                assets:Deposit
                and others
            30,279
            35,579Non
                Current deferred tax asset
            13,000
            -Intellectual
                Properties , net of accumulated amortization of $94,946 and $61,407
                at
                October 31, 2005 and April 30, 2005, respectively (Note F)
            963,837
            955,757Total
                other assets
            1,007,116
            991,336Total
                Assets
            $
                8,464,202
            $
                7,467,213





See
      accompanying notes to the unaudited condensed consolidated financial
      information





2








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**CONDENSED
      CONSOLIDATED BALANCE SHEETS (Continued)**





(Unaudited)October
                31, 2005
            April
                30, 2005LIABILITIES
                AND STOCKHOLDERS' EQUITYCurrent
                liabilities:Accounts
                payable and accrued liabilities
            $
                1,721,674
            $
                988,435Deferred
                revenue
            -
            71,228Notes
                payable to related parties, current portion (Note B)
            140,500
            149,000Notes
                payable, current portion (Note B)
            1,214,231
            1,520,369Total
                current liabilities
            3,076,405
            2,729,032**Long-term
                liabilities**:Deferred
                tax liability
            
            57,000Notes
                payable, long term portion, net of debt discount (Note B)
            
            154,167Notes
                payable to related parties, long-term portion (Note B)
            588,815
            588,815Total
                long-term liabilities
            588,815
            799,982Commitment
                and contingencies
            -
            -Stockholders'
                equity:Series
                A Preferred stock, par value $.001 per share; 10,000,000 shares
                authorized; 666,667 shares issued and outstanding at July 31, 2005
                and
                April 30, 2005 (Note C)
            667
            667Common
                stock, par value $ .001 per share; 400,000,000 shares authorized;
                143,430,819 and 138,615,314 shares issued and outstanding at July
                31, 2005
                and April 30, 2005, respectively (Note C)
            143,430
            138,615Additional
                paid-in capital
            4,896,830
            4,527,475Preferred
                stock subscription
            733,374
            733,374Common
                stock subscription
            1,766,600
            1,679,100Treasury
                stock (Note C)
            (50)
            (50)Accumulated
                deficit
            (2,741,869)
            (3,140,982)Total
                stockholders' equity
            4,798,982
            3,938,199Total
                liabilities and stockholders' equity
            $
                8,464,202
            $
                7,467,213





See
      accompanying notes to the unaudited condensed consolidated financial
      information





3








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


**(UNAUDITED)**





For
                The Three Months Ended October 31,
            For
                the Six Months Ended October 312005
            2004
            2005
            2004(As
                restated - Note G)
            
            (As
                restated - Note G)Revenues
            $4,455,368
            $
                1,632,796
            $
                9,395,391
            $
                3,569,158Cost
                of goods sold
            3,342,756
            920,266
            6,924,057
            2,199,995Gross
                profit
            1,112,612
            712,530
            2,471,334
            1,369,163Operating
                expenses:Selling,
                general and administrative expenses
            824,181
            503,995
            1,641,909
            993,039Depreciation
                and amortization
            32,663
            57,461
            101,020
            115,830Total
                operating expense
            856,844
            561,456
            1,742,929
            1,108,869Income
                from operations
            255,768
            151,074
            728,405
            260,294Interest
                expense, net
            (205,709)
            (123,327)
            (328,492)
            (149,798)Income
                before provision for income taxes
            50,059
            27,747
            399,913
            110,496Provision
                for income taxes
            -
            -
            (800)
            -Net
                income
            $50,059
            $
                27,747
            $
                399,113
            $
                110,496Earnings
                per common share:Basic
            $
                0.00
            $
                0.00
            $
                0.01
            $
                0.00Diluted
            $
                0.00
            $
                0.00
            $
                0.00
            $
                (0.00)Weighted
                average shares outstanding:Basic
            143,166,930
            134,718,629
            141,044,884
            134,292,460Diluted
            152,611,378
            143,385,299
            150,984,282
            143,736,907








See
      accompanying notes to the unaudited condensed consolidated financial
      information





4








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(UNAUDITED)**





For
                the Six months ended October 31,2005
            2004Cash
                flows from operating activities:Net
                income from operations
            $
                399,113
            $
                110,496Adjustment
                to reconcile net income to net cash:Depreciation
                and amortization
            101,020
            115,830Common
                stock issued in exchange for services rendered
            11,670
            70,000Amortization
                and write-off of debt discount
            45,833
            -Common
                stock issued in exchange for compensation
            -
            60,176Change
                in assets and liabilities:(Increase)/decrease
                in accounts receivable
            (183,716)
            (490,517)(Increase)/decrease
                in inventory
            (1,006,820)
            (1,057,073)(Increase)/decrease
                in prepaid expense and others
            27,435
            (158,055)(Increase)/decrease
                in employee advances
            (16,990)
            (43,286)Increase/(decrease)
                in accounts payable and accrued liabilities
            733,239
            400,194Increase/(decrease)
                in deferred revenue
            71,228)
            (34,877)Net
                cash provided by (used in) operating activities:
            39,556
            (1,027,112)Cash
                flows from investing activities:Capital
                expenditure
            (294,067)
            (59,712)Net
                cash used in investing activities
            (294,067)
            (59,712)Cash
                flows from financing activities:Proceeds
                from sale of common stock and stock subscription, net of costs and
                fees
            50,000
            65,745Proceeds
                from (repayments of) notes payable, net
            (106,138)
            592,700Repayments
                of payable to related parties, net
            (8,500)
            (186,000)Net
                cash (used in) provided by financing activities
            (64,638)
            472,445Net
                decrease in cash and cash equivalents
            (319,149)
            (614,379)Cash
                and cash equivalents at beginning of period
            46,082
            693,194Cash
                and cash equivalents at end of period
            $
                126,933
            $
                78,815Supplemental
                Disclosures of Cash Flow Information:Cash
                paid during the period for interest
            $
                155,407
            $
                19,934Common
                stock issued to consultants for services rendered
            11,670
            70,000Common
                stock issued for employees for compensation
            -
            60,176Common
                stock issued in exchange for prepaid service fees
            -
            11,000Common
                stock issued in exchange for engineering plans
            -
            22,800





See
      accompanying notes to the unaudited condensed consolidated financial
      information





5








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**


**October
      31, 2005**


**(Unaudited)**





**NOTE
      A - SUMMARY OF ACCOUNTING POLICIES**





General





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America for interim financial information and with the
      instructions to Form 10-QSB. Accordingly, they do not include all of the
      information and footnotes required by generally accepted accounting principles
      for complete financial statements.





In
      the
      opinion of management, all adjustments (consisting of normal recurring accruals)
      considered necessary for a fair presentation have been included. Accordingly,
      the results from operations for the three and six-month period ended October
      31,
      2005, are not necessarily indicative of the results that may be expected for
      the
      year ended April 30, 2006. The unaudited condensed consolidated financial
      statements should be read in conjunction with the consolidated April 30, 2005
      financial statements and footnotes thereto included in the Company's SEC Form
      10-KSB.





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.





Reclassification





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





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 October 31, 2005 and April 30, 2005 are
      $0
      and $71,228, respectively. In
      the
      event that the Company’s arrangements with its customers include more than one
      product or service, the Company determines whether the individual revenue
      elements can be recognized separately in accordance with Financial Accounting
      Standards Board (FASB) Emerging Issues Task Force No. 00-21 (EITF
      00-21), *Revenue Arrangements with Multiple Deliverables* .
      EITF
      00-21 addresses the determination of whether an arrangement involving more
      than
      one deliverable contains more than one unit of accounting and how the
      arrangement consideration should be measured and allocated to the separate
      units
      of accounting.





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:





6








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**


**October
      31, 2005**


**(Unaudited)**





**NOTE
      A - SUMMARY OF ACCOUNTING POLICIES**





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.





Stock
      Based Compensation





In
      December 2002, the FASB issued 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 has adopted the interim disclosure provisions for its financial reports
      for
      the subsequent periods. The Company has no awards of stock-based employee
      compensation outstanding at October 31, 2005.





7





GLOBAL
      DIVERSIFIED INDUSTRIES, INC.


NOTES
      TO
      CONDENSED CONSOLIDATED FINANCIAL INFORMATION


**October
      31, 2005**


**(Unaudited)**


**NOTE
      B - NOTES PAYABLE**


A
      summary
      of notes payable at October 31, 2005 and April 30, 2005 is as
      follows:




October
                31, 2005
            April
                30, 2005Note
                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 amended the note with the shareholder in April 2004, extending
                the
                maturity date to May 1, 2009; the noteholder has an option to convert
                the
                unpaid principal balance of the loan, together with any accrued and
                unpaid
                interest 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. The Company amended the note with the
                shareholder in May 2005, extending the maturity date to May 31, 2006.
                Noteholder has the option to convert the principal balance of the
                loan to
                the Company’s preferred stock.
            8,500
            8,500Note
                payable to Company shareholders in monthly installments of interest
                only
                at 6.0% per annum; unsecured; maturity date is on February 2,
                2009.
            199,350
            199,350Note
                payable to Company shareholders in monthly installments of interest
                only
                at 5.0% per annum; unsecured. The Company amended the note with the
                shareholder in May 2005, extending the maturity date to May 31, 2006.
                (a)
            1,000
            6,000Note
                payable in 24 installments beginning February 28, 2005 with interest
                at 6%
                per annum, unsecured, maturity date February 1, 2007
            11,052
            16,104Note
                payable in 24 monthly installments beginning January 28, 2005, with
                interest at 8% per annum; unsecured; maturity date is in December
                2006.
                (b)
            40,884
            56,961Note
                payable to Company shareholder in monthly installments of interest
                only at
                8% per annum, unsecured, maturity date is on January 31,
                2006.
            131,000
            131,000Note
                payable revolving agreement secured by receivable and property with
                interest and administrative fees payable monthly; interest rate is
                at
                2.75% per annum over and above the Prime Rate or Deemed Prime Rate
                whichever is higher; maturity Date is on November 1, 2005.maximum
                borrowing capacity of $2,500,000.
            1,162,294
            1,147,304Note
                payable to Company shareholder in monthly installments of interest
                only at
                10% per annum, unsecured, maturity date is October 2005.
                (a)
            -
            3,500Note
                payable in 3 installments, the first on May 2, 2005 for $100,000,
                the
                second on January 25, 2006 for $200,000, principal only, and the
                third 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 $200,000
                in principal to receive five million shares of the company’s unregistered
                common stock.. During the period ended October 31, 2005, the Company
                repaid $100,000 in cash. The Company also issued an aggregate of
                2,857,143
                shares of common stock in exchange for repayment of $200,000 in principal.
                Additionally, the noteholder exercised the option in lieu of receiving
                $200,000 in principal to receive five million shares of the company’s
                unregistered common stock. The five million of shares were issued
                subsequent to the date of financial statements. (c)
            -
            454,1671,943,545
            2,412,351Less:
                current portion
            (1,354,730)
            (1,669,369)Total
                - notes payable - long term
            $
                588,815
            $
                742,982





(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, no imbedded
      beneficial conversion feature was accounted in connection with the option to
      convert notes payable.


8








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**


**October
      31, 2005**


**(Unaudited)**





**NOTE
      B - 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 October 31, 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. During
      the
      period ended October 31, 2005, the Company repaid principal of $100,000 in
      cash.
      The Company also issued an aggregate of 2,857,143 shares of common stock in
      exchange for repayment of $200,000 in principal. Additionally, the noteholder
      exercised the option in lieu of receiving $200,000 in principal to receive
      5
      million shares of the company’s unregistered common stock. The five million of
      shares were issued subsequent to the date of financial statements. During the
      period ended October 31, 2005, the Company amortized the debt discount
      attributed to the beneficial conversion feature and recorded non-cash interest
      expense of $5,238, and unamortized debt discount of $40,595 in connection with
      the note was charged to operations upon repayment and conversion of the note.





**NOTE
      C - 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 October 31, 2005 and April 30, 2005,
      the Company has issued and outstanding 666,667 shares of Series A preferred
      stock. The Company has 143,430,819 and 138,615,314 shares of common stock issued
      and outstanding at October 31, 2005 and April 30, 2005, respectively. The
      Company has 50,000 shares of treasury stock at October 31, 2005 and April 30,
      2005.





During
      the six months period ended October 31, 2005, the Company issued 97,250 shares
      of common stock to a consultant in exchange for $11,670 of services fees. 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 are rendered.
      Additionally, the Company received $50,000 of cash, net of costs and fees for
      611,112 shares of common stock subscribed. The Company also issued 1,250,000
      of
      its commons stock, valued at $112,500, to Langley Park Investments PLC
      (“Langley”) pursuant to an agreement the Company and Langley entered into in
      April 2005. These shares were accounted for in the prior year ending April
      30,
      2005, as common stock subscription payable. The Company also issued an aggregate
      of 2,857,143 shares of common stock in exchange for repayment of notes payable
      in the amount of $200,000 (Note B). Additionally, the noteholder exercised
      the
      option in lieu of receiving $200,000 in principal to receive five million shares
      of the company’s unregistered common stock. The five million of shares were
      issued subsequent to the date of financial statements and were accounted for
      as
      stock subscription payable at October 31, 2005.





9








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**


**October
      31, 2005**


**(Unaudited)**





**NOTE
      D - STOCK OPTIONS AND WARRANTS**





Non-Compensatory
      Stock Options





The
      following table summarizes the changes in non-compensatory options outstanding
      and the related prices for the shares of the Company’s common 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
            1.50
            $
                5.00
            1,500,000
            $
                5.00$
                0.05
            4,000,000
            0.25
            $
                0.05
            4,000,000
            $
                0.055,500,000
            0.59
            1.40
            5,500,000
            $
                1.40





Transactions
      involving options are summarized as follows:





Number
                of Shares
            Weighted
                AveragePrice
                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




Granted
            -
            -Exercised
            -
            -Canceled
                or expired
            -
            -Outstanding
                at October 31, 2005
            5,500,000
            $
                1.40







During
      the period ended October 31, 2005 and 2004, the Company did not grant any
      compensatory stock options to consultants or shareholders, and all previously
      granted stock options were fully vested at the time the stock options were
      granted. Accordingly, no compensation costs were charged to operations during
      the period ended October 31, 2005 and 2004. The
      4,000,000 warrants granted during the year ended April 30, 2004 had an original
      expiration date on January 25, 2005 and was extended to January 31, 2006.





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
            $
                0.03





10








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**


**October
      31, 2005**


**(Unaudited)**





**NOTE
      D - STOCK OPTIONS AND WARRANTS (Continued)**





Non-Compensatory
      Warrants (Continued)





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




Granted
            -
            -Exercised
            -
            -Canceled
                or expired
            -
            -Outstanding
                at October 31, 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 Construction, Inc. The warrants granted
      have
      an original expiration date on January 31, 2005 and was extended to July 31,
      2006.




**NOTE
      E - EMPLOYEE STOCK INCENTIVE PLAN**







In
      Septmeber 2001, the Board of Directors of the Company implemented an Employee
      Stock Incnetive 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 exerciable 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 optiosn are granted.





In
      February 2004, the Board of Directors of the Company implemented another
      Employee Stock Incnetive 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 optiosn are granted.





There
      are
      no stock options issued and outstanding during the three months period ended
      October 31, 2005.





11








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**


**October
      31, 2005**


**(Unaudited)**





**NOTE
      F- 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.





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. 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. 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
            350,000Total
                Amortized Identifiable Intangible Assets
            350,000
            -
            350,000
            350,000Total
            $1,017,164
            $
                (61,407)
            $955,757
            $
                350,000





12








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**


**October
      31, 2005**


**(Unaudited)**





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





Total
      identifiable intangible assets acquired and their carrying value at October
      31,
      2005 are:





Gross
                Carrying Amount
            Accumulated
                Amortization
            Net
            Residual
                Value
            Weighted
                Average Amortization Period (Years)Amortized
                Identifiable Intangible Assets:Building
                engineering and architectural plans
            $
                708,783
            $
                (94,946)
            $
                613,837
            $
                -
            10.0Total
                Amortized Identifiable Intangible Assets
            708,783
            (94,946)
            613,837
            $
                -
            10.0Unamortized
                Identifiable Intangible Assets:Trade
                Name
            350,000
            -
            350,000
            350,000Total
                Amortized Identifiable Intangible Assets
            350,000
            -
            350,000
            350,000Total
            $1,058,783
            $
                (94,946)
            $
                963,837
            $
                350,000





Total
      amortization expense charged to operations for the six months period ended
      October 31, 2005 and 2004 were $33,539 and $20,143, respectively.





Estimated
      amortization expense as of October 31, 2005 is as follows:





2006
            $
                68,0562007
            68,0562008
            68,0562009
            68,0562010
                and after
            332,967Total
            $
                605,191





**NOTE
      G - RESTATEMENT OF FINANCIAL STATEMENTS**





The
      Company has restated its condensed consolidated statement of operations for
      the
      period ended October 31, 2004 to correct the following errors in the financial
      statements previously filed.





ཉ  The
      Company erroneously recorded as revenues the value of its work-in-process and
      finished goods     inventories
      as of October 31, 2004.





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





ཉ  Decrease
      the Company’s reported revenues for the period ended October 31, 2004 by
      $757,621 from     $4,326,779
      to $3,569,158.





ཉ  Decrease
      the Company’s reported cost of sales for the period ended October 31, 2004 by
      $757,621 from    $2,957,616
      to $2,199,995.





13








**GLOBAL
      DIVERSIFIED INDUSTRIES, INC.**


**NOTES
      TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION**


**October
      31, 2005**


**(Unaudited)**





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





The
      correction of the error has resulted in no change in the Company’s reported
      Condensed Consolidated Balance Sheet as of October 31, 2004 and Condensed
      Consolidated Statement of Cash Flows for the period ended October 31, 2004.
      However, the restatement did affect the individual components of the Company’s
      revenues and cost of sales as reported on its Condensed Consolidated Statement
      of Operations for the period ended October 31, 2004.





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





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 and 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








14





**ITEM
      2.**  **MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR
      THE
      THREE AND NINE MONTHS ENDED JANUARY 31, 2005**





This
      report on Form 10-QSB contains forward-looking statements within the meaning
      of
      Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the
      Securities Act of 1934, as amended, that involve substantial risks and
      uncertainties. These forward-looking statements are not historical facts, but
      rather are based on current expectations, estimates and projections about our
      industry, our beliefs and our assumptions. Words such as “anticipate”,
“expects”, “intends”, “plans”, “believes”, “seeks” and “estimates” and
      variations of these words and similar expressions are intended to identify
      forward-looking statements. These statements are not guarantees of future
      performance and are subject to risks, uncertainties and other factors, some
      of
      which are beyond our control and difficult to predict and could cause actual
      results to differ materially from those expressed or forecasted in the
      forward-looking statements. You should not place undue reliance on these
      forward-looking statements, which apply only as of the date of this Form 10-QSB.
      Investors should carefully consider all of such risks before making an
      investment decision with respect to the Company’s stock. The following
      discussion and analysis should be read in conjunction with our financial
      statements and summary of selected financial data for Global Diversified
      Industries, Inc. Such discussion represents only the best present assessment
      from our Management.





**DESCRIPTION
      OF COMPANY:**





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 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).





15








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.





The
      following Management Discussion and Analysis should be read in conjunction
      with
      the financial statements and accompanying notes included in this Form
      10-QSB.





**COMPARISON
      OF THE THREE MONTHS ENDED OCTOBER 31, 2005 TO THE THREE MONTHS ENDED OCTOBER
      31,
      2004**





**Results
      of Operations**




Total
      revenues increased to $4,455,368 in the quarter ended of October 31, 2005 from
      $1,632,796 in the quarter ended October 31, 2004. The increase is attributed
      to
      three major contracts with a school districts in Southern California. The school
      districts wanted to use the building design, which was acquired through the
      Aurora bankruptcy. The intellectual properties acquired from the Aurora
      bankruptcy, provides Global Modular with a complete line of new products.





Cost
      of
      revenues was $3,342,756 and $920,266, respectively for the quarters ended
      October 31, 2005 and 2004. Gross profit was $1,112,612 and $712,530,
      respectively for the quarters ended October 31, 2005 and 2004. The cost of
      revenue increased due to the increased sales generated by the products offered
      from the purchase of the Aurora intellectual property.





Total
      operating expenses increased to $856,844 in the quarter ended October 31, 2005
      from $561,456 in the quarter ended October 31, 2004. This is mainly attributable
      to the sales generated from the contracts with school districts in Southern
      California











**COMPARISON
      OF THE SIX MONTHS ENDED OCTOBER 31, 2005 TO THE SIX MONTHS ENDED OCTOBER 31,
      2004**





**Results
      of Operations**




Total
      revenues increased to $9,395,391 in the six months ended October 31, 2005 from
      $3,569,158 in the six months ended October 31, 2004. The increase is attributed
      to four major contracts with a school districts in Southern California. The
      school districts wanted to use the building design, which was acquired through
      the Aurora bankruptcy. The intellectual properties acquired from the Aurora
      bankruptcy, provides Global Modular with a complete line of new products.





16








Cost
      of
      revenues was $6,924,057 and $2,199,995, respectively for the six months ended
      October 31, 2005 and 2004. Gross profit was $2,471,334 and $1,369,163,
      respectively for the six months ended October 31, 2005 and 2004. The cost of
      revenue increased due to the increased sales generated by the products offered
      from the purchase of the Aurora intellectual property.





Total
      operating expenses increased to $1,742,929 in the six months ended October
      31,
      2005 from $1,108,869 in the six months ended October 31, 2004. This is mainly
      attributable to the sales generated from the contracts with school districts
      in
      Southern California





**Liquidity
      and Capital Resources**




As
      of
      October 31, 2005, the Company had a working capital surplus of $2,505,548 and
      a
      gain from operations of $399,113. The Company generated a positive cash flow
      from operations of $39,556 for the six-month period ended October 31, 2005.
      The
      positive cash flow from operating activities for the period is primarily
      attributable to the Company's net income adjusted for depreciation and
      amortization of $101,020, common stock issued in exchange for services of
      $11,670, amortization and write-off of debt discount of $45,833, an increase
      in
      accounts receivable of $183,716 an increase in inventory of $1,006,820, an
      increase in employee advances of $16,990, a decrease in other assets of $27,435,
      a decrease in deferred revenue of $71,228 and an increase in accounts payable
      of
      $733,239,





Cash
      flows used in investing activities for the six-month period ended October 31,
      2005 consisted of the acquisition of $294,067 of equipment and architectural
      plans used in operations.





The
      Company disbursed cash during the six months ended October 31, 2005 to reduce
      debt to lenders by $106,138 and the reduction of debt to related parties by
      $8,500. The Company raised $ 50,000 of cash by the sale of common stock and
      stock subscriptions, net of costs and fees.





As
      a
      result of limited capital resources and revenues from operations, the Company
      has relied on the issuance of equity securities to non-employees in exchange
      for
      services. The Company's management enters into equity compensation agreements
      with non-employees if it is in the best interest of the Company under terms
      and
      conditions consistent with the requirements of Financial Accounting Standards
      No. 123, "Accounting for Stock Based Compensation." In order conserve its
      limited operating capital resources, the Company anticipates continuing to
      compensate non-employees for services during the next twelve months. This policy
      may have a material effect on the Company's results of operations during the
      next twelve months.





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 needs for operations and development. The
      Company generated a positive cash flow for the six months ended October 31,
      2005. The Company is presently seeking financing in the form of debt or equity
      in order to provide the necessary working capital. Such financing may be upon
      terms that are dilutive or potentially dilutive to our stockholders. The Company
      currently has no commitments for financing. 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 belives it has suffucient capital resources to meet projected cash
      flow needs through the next twelve months. However, if thereafter, we are not
      successful in generating sufficient liquidity from 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.





The
      effect of inflation on the Company's revenue and operating results was not
      significant. The Company's operations are located in North America and there
      are
      no seasonal aspects that would have a material effect on the Company's financial
      condition or results of operations.








17








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:





ཉའའ  Revenue
      Recognition





ཉའའ  Inventories





ཉའའ  Allowance
      for doubtful accounts





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.





In
      the
      event that the Company’s arrangements with its customers include more than one
      product or service, the Company determines whether the individual revenue
      elements can be recognized separately in accordance with Financial Accounting
      Standards Board (FASB) Emerging Issues Task Force No. 00-21 (EITF 00-21), *Revenue
      Arrangements with Multiple*  *Deliverables* ,
      EITF
      00-21 addresses the determination of whether an arrangement involving more
      than
      one deliverable contains more than one unit of accounting and how the
      arrangement consideration should be measured and allocated to the separate
      units
      of accounting.





Product
      Warranty Reserve





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.





18








Allowance
      for Uncollectible Accounts





We
      are
      required to estimate the collectibility of our trade receivables. A considerable
      amount of judgment is required in assessing the realization of these receivables
      including the current creditworthiness of each customer and related aging of
      the
      past due balances. In order to assess the collectibility of these receivables,
      we perform ongoing credit evaluations of our customers' financial condition.
      Through these evaluations we may become aware of a situation where a customer
      may not be able to meet its financial obligations due to deterioration of its
      financial viability, credit ratings or bankruptcy. The reserve requirements
      are
      based on the best facts available to us and are reevaluated and adjusted as
      additional information is received. Our reserves are also based on amounts
      determined by using percentages applied to certain aged receivable categories.
      These percentages are determined by a variety of factors including, but are
      not
      limited to, current economic trends, historical payment and bad debt write-off
      experience. We are not able to predict changes in the financial condition of
      our
      customers and if circumstances related to our customers deteriorate, our
      estimates of the recoverability of our receivables could be materially affected
      and we may be required to record additional allowances. Alternatively, if we
      provided more allowances than are ultimately required, we may reverse a portion
      of such provisions in future periods based on our actual collection experience.
      As of October 31, 2005, we determined there was a reserve required against
      our
      account receivables of $19,590.







**Employees**







As
      of
      October 31, 2005 the Company had 158 employees. The Company anticipates that
      the
      number of employees will satisfy its production backlog during the next six
      months. The Company does not expect to have any collective bargaining agreements
      covering any of its employees.





**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 $16,125 per month for the remaining of the current fiscal
      year with moderate increases for each year thereafter. The Company believes
      that
      the current facilities are suitable for its current needs.





**Trends,
      Risks and Uncertainties**





We
      have
      sought to identify what we believe to be the most significant risks to our
      business, but we cannot predict whether, or to what extent, any of such risks
      may be realized nor can we guarantee that we have identified all possible risks
      that might arise.  Investors should carefully consider all of such risk
      factors before making an investment decision with respect to our Common Stock.





**Cautionary
      Factors that May Affect Future Results and Market Price of
      Stock**





Our
      annual report on April 30, 2005 Form 10-KSB includes a detailed list of
      cautionary factors that may affect future results.  Management believes
      that there have been no material changes to those factors listed, however other
      factors besides those listed could adversely affect us.  That annual report
      can be accessed on EDGAR.





**LIMITED
      OPERATING HISTORY; ANTICIPATED LOSSES; UNCERTAINTY OF**


**FUTURE
      RESULTS.**





The
      Company has only a limited operating history upon which an evaluation of its
      operations and its prospects can be based. The Company's prospects must be
      evaluated with a view to the risks encountered by a company in an early stage
      of
      development, particularly in light of the uncertainties relating to the new
      and
      evolving manufacturing methods with which the Company intends to operate and
      the
      acceptance of the Company's business model. The Company will be incurring costs
      to develop, introduce and enhance its products, to establish marketing
      relationships, to acquire and develop product lines that will compliment each
      other and to build an administrative organization. To the extent that such
      expenses are not subsequently followed by commensurate





19





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 December4 15, 2005, there were
      approximately 148,866,114 shares of common stock outstanding, of which
      approximately 49,510,000 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 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.





20








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.





**Off-Balance
      Sheet Arrangements**





**The
      Company does not have any off-balance sheet arrangements**





**ITEM
      3. CONTROLS AND PROCEDURES**





The
      Company’s management including the President, Chief Executive Officer and Chief
      Financial Officer, have evaluated, as of October 31, 2005, the effectiveness
      of
      the design, maintenance and operation of the Company’s disclosure controls and
      procedures. Management determined that the Company’s disclosure controls and
      procedures were effective in ensuring that the information required to be
      disclosed by the Company in the reports that it files under the Exchange Act
      is
      accurate and is recorded, processed, summarized and reported within the time
      periods specified in the Commission’s rules and regulations.





Disclosure
      controls and procedures, no matter how well designed and implemented, can
      provide only reasonable assurance of achieving an entity’s disclosure
      objectives. The likelihood of achieving such objectives is affected by
      limitations inherent in disclosure controls and procedures. These include the
      fact that human judgment in decision making can be fully faulty and that
      breakdowns in internal control can occur because of human failures such as
      errors or mistakes or intentional circumvention of the established
      process.





There
      have been no changes in internal controls or in other factors that could
      significantly affect these controls subsequent to the date of the evaluation
      thereof, including any corrective actions with regard to significant
      deficiencies and material weaknesses.








**PART
      II.**  **OTHER
      INFORMATION**





**ITEM
      1 LEGAL PROCEEDINGS**





None





**ITEM
      2.**  **CHANGES
      IN SECURITIES AND USE OF PROCEEDS**





During
      the quarter ended October 31, 2005, we issued an aggregate of 611,112 shares
      of
      common stock to two investors for $50,000 of common stock subscribed in prior
      quarter. We also issued an aggregate of 2,857,143 shares of common stock in
      exchange for repayments of notes payable in the amount of $200,000. These
      transactions were exempt from registration pursuant to Section 4(2) of the
      Securities Act of 1933.





**ITEM
      3.**  **DEFAULTS
      UPON SENIOR SECURITIES**





None
      during this reporting period.





21





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





None
      during this reporting period.





**ITEM
      5.**  **OTHER
      INFORMATION**







**ITEM
      6.**  **EXHIBITS**





Exhibits





No.
            Description31.1
            Certification
                of Phillip Hamilton Pursuant to Section 302 of the Sarbanes-Oxley
                Act of
                2002.31.2
            Certification
                of E. Adam DeBard to Section 302 of the Sarbanes-Oxley Act of
                2002.32.1
            Certification
                of Phillip Hamilton Pursuant to Section 906 of the Sarbanes-Oxley
                Act of
                2002.32.2
            Certification
                of E. Adam DeBard Pursuant to Section 906 of the Sarbanes-Oxley Act
                of
                2002.





**SIGNATURES**





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





Global
      Diversified Industries, Inc.





Date:
      December 16, 2005


By:
      /s/
      Phillip Hamilton


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


President
      and Chief Executive Officer


(Principal
      Executive Officer)








Date:
      December 16, 2005


By:
      /s/
      Adam DeBard


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


Chief
      Operating Officer (Principal


Accounting
      and Financial Officer)





22