U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   FORM 10QSB


            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                       SECURITIES AND EXCHANGE ACT OF 1934


                       For the period ended July 31, 2006


                        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)




         State the number of shares outstanding of each of the issuer's
          classes of common equity, as of the latest practicable date:
  159,602,478 shares of Common Stock ($.001 par value) as of September 14, 2005.

         Transitional small business disclosure format: Yes     No  X
                                                           ---     ---

<PAGE>


                                TABLE OF CONTENTS


PART I:  FINANCIAL INFORMATION

ITEM I:  FINANCIAL STATEMENTS (UNAUDITED)                                      2

               CONDENSED CONSOLIDATED BALANCE SHEETS:
               JULY 31, 2006 AND APRIL 30, 2006                              2-3

               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS:
               FOR THE THREE MONTHS ENDED JULY 31, 2006 AND 2005               4

               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS:
               FOR THE THREE MONTHS ENDED JULY 31, 2006 AND 2005               5

               NOTES TO UNAUDITED CONSOLIDATED FINANCIAL INFORMATION:
               JULY 31, 2006                                                6-14

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS                          14

ITEM 3. CONTROLS AND PROCEDURES                                               18

PART II:  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

ITEM 2.  UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS           18

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                      18

ITEM 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS                    18

ITEM 5.  OTHER INFORMATION                                                    18

ITEM 6:  EXHIBITS                                                             18




<PAGE>




ITEM I.  FINANCIAL STATEMENTS (UNAUDITED)

                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                           (Unaudited)
                                                                          July 31, 2006   April 30, 2006
                                                                           ------------    ------------
<S>                                                                        <C>            <C>
Current assets:

Cash and cash equivalents                                                  $    402,259    $    557,100
Accounts receivable, net of allowance for doubtful
accounts of $ 0 at July 31, 2006 and April 30, 2006                           2,109,292       3,100,040
Inventories                                                                   4,106,433       3,113,804
Advance to employees                                                             38,206          15,081
Prepaid expenses and deposits                                                    27,070          84,124
                                                                           ------------    ------------
Total current assets                                                       $  6,683,260    $  6,870,149

Property, plant and equipment:

Property, plant and equipment, at cost                                        2,612,417       2,582,142
Less: Accumulated depreciation                                                 (859,342)       (802,777)
                                                                           ------------    ------------
Total property, plant and equipment, net                                      1,753,075       1,779,365

Other assets:

Deposit and others                                                               30,279          30,279

Non Current deferred tax asset ( Note G)                                        169,000          21,000

Intellectual Properties, net of accumulated amortization
of $151,117 and $130,954 at July 31, 2006 and April 30,
2006, respectively (Note F)                                                   1,014,949       1,015,166
                                                                           ------------    ------------
Total other assets                                                            1,214,228       1,066,445

Total Assets                                                                  9,650,563    $  9,715,959
                                                                           ============    ============


 See accompanying notes to the unaudited condensed consolidated financial information

</TABLE>




                                       2
<PAGE>







                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

<TABLE>
<CAPTION>

                                                                           (Unaudited)
                                                                          July 31, 2006   April 30, 2006
                                                                           ------------    ------------
<S>                                                                        <C>            <C>

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued liabilities                                   $  1,747,047    $  1,281,522
Notes payable to related parties, current portion (Note B)                      120,500         140,500
Notes payable, current portion (Note B)                                       1,426,160       2,199,227
                                                                           ------------    ------------
Total current liabilities                                                     3,293,707       3,621,249

Long-term liabilities:

Notes payable, long term portion, net of debt discount (Note B)                 254,612         246,484
Notes payable to related parties, long-term portion (Note B)                    594,815         588,815
                                                                           ------------    ------------
Total long-term liabilities                                                     849,427         835,299

Commitment 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             667

Common stock, par value $ .001 per share; 400,000,000 shares
authorized; 158,947,478 and 149,447,478  shares issued and
outstanding at July  31, 2006 and April 30, 2006,
respectively (Note C)                                                           158,946         149,446
Additional paid-in capital                                                    6,167,723       5,323,334
Preferred stock subscription                                                    733,374         733,374
Common stock subscription                                                       746,939       1,596,939
Treasury stock (Note C)                                                             (50)            (50)
Accumulated deficit                                                          (2,300,170)     (2,544,299)
                                                                           ------------    ------------
Total stockholders' equity                                                    5,507,429       5,259,411

Total liabilities and stockholders' equity                                 $  9,650,563    $  9,715,959
                                                                           ============    ============


 See accompanying notes to the unaudited condensed consolidated financial information

</TABLE>



                                       3
<PAGE>





                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

                                    For The Three Months Ended July 31,
                                         2006              2005
                                     -------------    -------------


Revenues                             $   2,822,718    $   4,940,023
Cost of goods sold                       1,876,331        3,581,301
                                     -------------    -------------
Gross profit                               946,387        1,358,722

Operating expenses:
Selling, general and
administrative expenses                    664,803          817,728
Depreciation and amortization               76,729           68,357
                                     -------------    -------------
Total operating expense                    741,532          886,085


Income from operations                     204,855          472,637


Interest (expense), net                   (107,926)        (122,783)

Income before provision for income
taxes                                       96,929          349,854


Income (taxes) benefit (Note G)            147,200             (800)
                                     -------------    -------------

Net income                           $     244,129    $     349,054
                                     =============    =============

Earnings per common share:
Basic                                $        0.00    $        0.00
                                     =============    =============
Diluted                              $        0.00    $       (0.00)
                                     =============    =============
Weighted average shares
outstanding:
Basic                                  150,619,634      138,922,838
                                     =============    =============
Diluted                                158,857,732      149,047,842
                                     =============    =============

                     See accompanying notes to the unaudited
                  condensed consolidated financial information



                                       4
<PAGE>



                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                               For the Three months ended July 31,
                                                                      2006           2005
                                                                  -----------    -----------
<S>                                                              <C>             <C>
Cash flows from operating activities:
Net income from operations                                        $   244,129    $   349,054
Adjustment to reconcile net income to net cash:

Depreciation and amortization                                          76,729         68,357
Common stock issued in exchange for services rendered (Note C)          3,889         11,670
Amortization of debt discount (Note B)                                  8,128         14,405
Deferred taxes (Note G)                                              (148,000)          --
Change in assets and liabilities:

(Increase)/decrease in accounts receivable                            990,748     (1,059,936)
(Increase)/decrease in inventory                                     (992,629)      (370,970)
(Increase)/decrease in prepaid expense and others                      57,053         40,345
(Increase)/decrease in employee advances                              (23,125)       (24,842)
Increase/(decrease) in accounts payable and accrued liabilities       465,525        552,641
Increase/(decrease) in deferred revenue                                  --           36,249
                                                                  -----------    -----------
Net cash provided by (used in) operating activities:                  682,447       (383,027)

Cash flows from investing activities:
Capital expenditure                                                   (50,222)      (138,476)
                                                                  -----------    -----------
Net cash (used in) investing activities                               (50,222)      (138,476)

Cash flows from financing activities:
Proceeds from sale of common stock and stock subscription,
net of costs and fees                                                    --           50,000
Proceeds from (repayments of) notes payable, net                     (767,066)       841,260
Repayments of note payable to related parties, net                    (20,000)          --
                                                                  -----------    -----------
Net cash provided by financing activities                            (787,066)       891,260


Net increase (decrease) in cash and cash equivalents                 (154,841)       369,757
Cash and cash equivalents at beginning of period                      557,100        446,082
                                                                  -----------    -----------
Cash and cash equivalents at end of period                        $   402,259    $   815,839
                                                                  ===========    ===========

Supplemental Disclosures of Cash Flow Information:

Cash paid during the period for interest                          $    85,893    $   114,587
Common stock issued to consultants for services rendered                3,889         11,670
Amortization of debt discount-beneficial conversion (Note B)            8,128         14,405


 See accompanying notes to the unaudited condensed consolidated financial information

</TABLE>



                                       5
<PAGE>


                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
               NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
                                  JULY 31, 2006
                                   (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-month  period ended July
31, 2006, are not necessarily indicative of the results that may be expected for
the year ended April 30, 2007. The unaudited  condensed  consolidated  financial
statements  should be read in conjunction with the  consolidated  April 30, 2006
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  April  30,  2006  and  2005  are  $0  and  $71,228,  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:




                                       6
<PAGE>




                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
                                  JULY 31, 2006
                                   (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
------------------------

Prior to the January 1, 2006  adoption  of the  Financial  Accounting  Standards
Board ("FASB")  Statement No. 123(R),  "Share-Based  Payment" ("SFAS 123R"), the
Company accounted for stock-based  compensation using the intrinsic value method
prescribed in Accounting  Principles  Board ("APB") Opinion No. 25,  "Accounting
for Stock Issued to  Employees,"  and related  interpretations.  As permitted by
SFAS  No.  123,   "Accounting  for  Stock-Based   Compensation"   ("SFAS  123"),
stock-based  compensation was included as a pro forma disclosure in the notes to
the consolidated financial statements.

Effective  January 1,  2006,  the  Company  adopted  the fair value  recognition
provisions of SFAS 123R, using the modified-prospective transition method. Under
this transition method,  stock-based  compensation  expense is recognized in the
consolidated  financial  statements  for  granted,  modified,  or settled  stock
options.  Compensation  expense  recognized  included the estimated  expense for
stock options  granted on and subsequent to January 1, 2006,  based on the grant
date fair value  estimated in accordance  with the  provisions of SFAS 123R, and
the estimated  expense for the portion vesting in the period for options granted
prior to, but not  vested as of  January  1, 2006,  based on the grant date fair
value estimated in accordance with the original  provisions of SFAS 123. Results
for  prior  periods  have  not  been   restated,   as  provided  for  under  the
modified-prospective method.

The following  table shows the effect on net earnings and earnings per share had
compensation  cost been  recognized  based upon the estimated  fair value on the
grant date of stock options for quarter ended July 31, 2005, in accordance  with
SFAS 123, as amended by SFAS No. 148 "Accounting for Stock-Based  Compensation -
Transition and Disclosure":

Quarter ended:                                                    July 31, 2005
                                                                 ---------------

Net income                                         As reported   $     349,054
Less: Total stock-based employee
compensation expense determined under
fair value based  method for all awards,
net of related tax effects                                                   -
                                                                 ---------------

Net income attributable to
common shareholders                                Pro forma     $     349,054
                                                                 ===============


Basic and diluted net income per share:            As reported   $        0.00
                                                   Pro forma     $        0.00

The  Company  has no awards of  stock-based  employee  compensation  issued  and
outstanding at July 31, 2006.



                                       7
<PAGE>



                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
                                  JULY 31, 2006
                                   (Unaudited)

NOTE B - NOTES PAYABLE

<TABLE>
<CAPTION>

A summary of notes payable at July 31, 2006 and April 30, 2006 is as follows:

                                                                                        July 31, 2006      April 30, 2006
                                                                                        -------------      --------------
<S>                                                                                     <C>                <C>
Note payable to Company shareholder in monthly  installments of interest only at
10.0% per annum; unsecured;  maturity date was in November 30, 2003. The Company
re-signed the note with the shareholder in April 2004; extended maturity date is
on May 1, 2009,  and the note has a conversion  option to convert the  principal
balance of the loan to the Company's preferred stock. (a)
                                                                                              389,465         $   389,465

Note payable to Company shareholders in monthly installments of interest only at
8.0% per annum;  unsecured;  maturity date extended to May 15, 2007.  Noteholder
has the option to convert  the  principal  balance of the loan to the  Company's
preferred stock. (a)                                                                            3,500               3,500

Note payable to Company shareholders in monthly installments of interest only at
6.0% per annum; unsecured; maturity date is on May 1, 2009.                                   199,350             199,350


Note payable to Company shareholders in monthly installments of interest only at
5.0% per  annum;  unsecured;  maturity  date is on  August  31,  2005,  maturity
extended to August 31, 2007  Noteholder  has the option to convert the principal
balance of the loan to the Company's preferred stock. (a).                                      6,000               6,000

Note payable in 24 monthly installments beginning March 15, 2006; unsecured;
maturity date is March 2008. (b)                                                               42,447              51,384

Note payable to Company shareholder in monthly  installments of interest only at
8% per annum,  unsecured,  maturity date is on January 31,  2006.,maturity  date
extended  to January 31, 2007                                                                 111,000             131,000





                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JULY 31, 2006

NOTE H - NOTES PAYABLE (Continued)

(Continued)                                                                             July 31, 2006      April 30, 2006
                                                                                        -------------      --------------
Note 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)                                                                                  16,810              25,388

Note payable in 12 installments beginning April 15, 2006 with interest at 9% per
annum, unsecured, maturity date is March 15, 2007                                              29,623              50,875

Note payable in five annual payments  beginning December 31, 2006, with interest
payable monthly at 10% per annum. Lender has an option at the end of each twelve
months ("anniversary date") to receive restricted shares of the Company's common
stock in lieu of the annual cash payment of $100,000. The conversion price is
equal to 75% of the closing price for the day that is twelve months prior to each
anniversary date. The minimum conversion price shall be $0.05 per share. (c)                  354,612             346,484

Note 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 October 2006. Maximum borrowing capacity of $3,000,000.                               1,243,280           1,971,580
                                                                                        -------------      --------------

                                                                                            2,396,087           3,175,026
Less: current portion                                                                      (1,546,660)         (2,339,727)
                                                                                        -------------      --------------
Total - notes payable - long term                                                             849,427         $   835,299
                                                                                        =============      ==============

</TABLE>


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









                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JULY 31, 2006

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 July 31, 2006,  the company was in compliance
     the term of the Updated  Agreement.

     (c) The Company  granted  the  noteholder  an option to receive  restricted
     shares of the Company's  common stock in lieu of the annual cash payment of
     $100,000  at the  end of  each  twelve  months  ("anniversary  date").  The
     conversion  price is equal to 75% of the closing  price for the day that is
     twelve months prior to each anniversary date. The minimum  conversion price
     shall be $0.05  per  share.  The  Company  has  sufficient  authorized  and
     unissued  shares  available to settle the debt, and has reserved 10 million
     shares of common stock to settle the debt in the event that the  noteholder
     converts at the minimum  conversion  price of $0.05 per share.  The Company
     accounted for the convertible in accordance with Emerging Issues Task Force
     Issue  98-5,  Accounting  for  Convertible  Securities  with  a  Beneficial
     Conversion  Features or Contingently  Adjustable  Conversion  Ratios ("EITF
     98-5"), and recognized an imbedded beneficial conversion feature present in
     the convertible  note. The Company  recognized and measured an aggregate of
     $166,667 of the proceeds as the imbedded beneficial  conversion feature, to
     additional paid in capital and a discount against the convertible note. The
     debt discount attributed to the beneficial  conversion feature is amortized
     over the  maturity  period (five  years) as interest  expense.  The Company
     amortized the debt discount attributed to the beneficial conversion feature
     and  recorded  non-cash  interest  expense of $8,128 and $0 for the quarter
     ended July 31, 2006 and 2005, respectively.

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 July 31, 2006 and April 30, 2006, the
Company has issued and outstanding  666,667 shares of Series A preferred  stock.
The Company has 158,947,478  and  149,447,478  shares of common stock issued and
outstanding at July 31, 2006 and April 30, 2006,  respectively.  The Company has
50,000 shares of treasury stock at July 31, 2006 and April 30, 2006.

During the three months  period ended July 31, 2006,  the Company  issued 55,556
shares of common stock to a consultant in exchange for $3,889 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.  The
Company also issued 9,444,444 shares of its commons stock, valued at $850,000 to
a  shareholder.  These shares were  accounted for in the prior year ending April
30, 2006, as common stock subscription payable.



                                       8
<PAGE>


                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
                                  JULY 31, 2006
                                   (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.

<TABLE>
<CAPTION>

                                Options Outstanding                                     Options Exercisable
                                -------------------                                     -------------------
                                            Weighted Average          Weighed                        Weighted
                           Number        Remaining Contractual        Average         Number         Average
    Exercise Prices     Outstanding           Life (Years)        Exercise Price    Exercisable   Exercise Price
    ---------------     -----------           ------------        --------------    -----------   --------------
<S>                     <C>                   <C>                 <C>               <C>           <C>
              $ 0.05         4,000,000                      0.50           $ 0.05      4,000,000         $  0.05
                             ---------                      ----           ------      ---------         -------
</TABLE>

Transactions involving options are summarized as follows:

                                                                Weighted Average
                                            Number of Shares    Price Per Share
                                            ----------------    ----------------
   Outstanding at April 30, 2004                  5,500,000           $  1.40
                                                  =========           =======
      Granted                                             -                 -
      Exercised                                           -                 -
      Canceled or expired                                 -                 -
                                                  ---------           -------
   Outstanding at April 30, 2005                  5,500,000           $  1.40
                                                  =========           =======

      Granted                                             -                 -
      Exercised                                           -                 -
      Canceled or expired                        (1,500,000)             5.00
   Outstanding at April 30, 2006                  4,000,000           $  0.05
      Granted                                             -                 -
      Exercised                                           -                 -
      Canceled or expired                                 -                 -
                                                  ---------           -------
   Outstanding at July  31, 2006                  4,000,000           $  1.40
                                                  =========           =======



During the period  ended July 31,  2006 and 2005,  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 July 31, 2006 and 2005. 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, 2007.

Non-Compensatory Warrants
-------------------------

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

<TABLE>
<CAPTION>

                                Warrants Outstanding                                   Warrants Exercisable
                                --------------------                                   --------------------
                                            Weighted Average          Weighed                        Weighted
                           Number        Remaining Contractual        Average         Number         Average
    Exercise Prices     Outstanding           Life (Years)        Exercise Price    Exercisable   Exercise Price
    ---------------     -----------           ------------        --------------    -----------   --------------
<S>                     <C>                   <C>                 <C>               <C>           <C>
               $0.03           750,000                 0.75                $ 0.03        750,000         $  0.03
                               =======                 =========           ======        =======         =======
</TABLE>


                                       9
<PAGE>





                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
                                  July 31, 2005
                                   (Unaudited)

NOTE D - STOCK OPTIONS AND WARRANTS (Continued)

Non-Compensatory Warrants (Continued)
-------------------------------------

Transactions involving warrants are summarized as follows:

                                                                Weighted Average
                                            Number of Shares    Price Per Share
                                            ----------------    ----------------
   Outstanding at April 30, 2004                  1,500,000           $  0.03
                                                  =========           =======
      Granted                                             -                 -
      Exercised                                           -                 -
      Canceled or expired                                 -                 -
                                                  ---------           -------
   Outstanding at April 30, 2005                  1,500,000           $  0.03
                                                  =========           =======

      Granted                                             -                 -
      Exercised                                           -                 -
      Canceled or expired                                 -                 -
                                                  ---------           -------
   Outstanding at April 30, 2006                  1,500,000           $  0.03
                                                  =========           =======

      Granted                                             -                 -
      Exercised                                           -                 -
      Canceled or expired                          (750,000)            (0.03)
                                                  ---------           -------
   Outstanding at July  31, 2006                    750,000           $  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,  750,000 of the warrants
were extended to and expired on July 31, 2006,  the remaining  750,000  warrants
were extended to April 30, 2007.

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 for the period ended July 31,
2006.



                                       10
<PAGE>



                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
                                  JULY 31, 2006
                                   (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                                        $ 350,000
Building engineering and architectural plans        150,000
                                               --------------
Total                                             $ 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, 2006 are:

<TABLE>
<CAPTION>

                                                                                             Weighted Average
                                    Gross        Accumulated                     Residual      Amortization
                                   Carrying      Amortization       Net           Value       Period (Years)
                                    Amount
                                 -------------  --------------- -------------  ------------- ------------------
<S>                             <C>             <C>             <C>            <C>           <C>
Amortized Identifiable
Intangible Assets:

Building engineering and
architectural plans                $  796,120     $ (130,954)     $   665,166     $      -               10.0
                                    ---------     -----------     -----------     -----------   -------------


Total Amortized Identifiable
Intangible Assets                     796,120     $ (130,954)     $   665,166     $      -               10.0

Unamortized Identifiable
Intangible Assets:

Trade Name                            350,000              -          350,000       350,000
                                    ---------     -----------     -----------     -----------

Total Unamortized Identifiable
Intangible Assets                     350,000              -          350,000       350,000


Total                              $1,146,120     $ (130,954)     $ 1,015,166     $ 350,000
                                   ==========      ==========     ============    ===========
</TABLE>



                                       11
<PAGE>





                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
                                  JULY 31, 2006
                                   (Unaudited)

NOTE F- ACQUISITION OF INTANGIBLE ASSETS (Continued)

Total  identifiable  intangible assets acquired and their carrying value at July
31, 2006 are:

<TABLE>
<CAPTION>

                                                                                             Weighted Average
                                    Gross        Accumulated                     Residual      Amortization
                                   Carrying      Amortization       Net           Value       Period (Years)
                                    Amount
                                 -------------  --------------- -------------  ------------- ------------------
<S>                             <C>             <C>             <C>            <C>           <C>
Amortized Identifiable
Intangible Assets:

Building engineering and
architectural plans                $  816,066     $ (151,117)     $   664,949     $       -              10.0
                                    ---------     -----------     -----------     -----------   -------------


Total Amortized Identifiable
Intangible Assets                     816,066       (151,117)         664,949     $       -              10.0

Unamortized Identifiable
Intangible Assets:

Trade Name                            350,000              -          350,000       350,000
                                    ---------     -----------     -----------     -----------

Total Unamortized Identifiable
Intangible Assets                     350,000              -          350,000       350,000
                                    ---------     -----------     -----------     -----------

Total                              $1,166,066     $ (151,117)     $ 1,014,949     $ 350,000
                                   ==========      ==========     ============    ===========
</TABLE>



Total  amortization  expense  charged to operations  for the three months period
ended July 31, 2006 and 2005 were $20,164 and $15,985, respectively.

Estimated amortization expense as of July 31, 2006 is as follows:

For the period from August 1, 2006 through July 31, 2007           $  80,656
For the period from August 1, 2007 through July 31, 2008              80,656
For the period from August 1, 2008 through July 31, 2009              80,656
For the period from August 1, 2009 through July 31, 2010              80,656
August 1, 2010 and after                                             342,325
                                                                   ---------
Total                                                              $ 664,949
                                                                   =========


NOTE G - 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,  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 $1,320,337, which will expire beginning in 2024,
and a Federal net operating loss  carryforward of $1,320,337,  which will expire
beginning 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 July 31, 2006, we have provided a valuation  allowance  reducing the net
realizable  benefits of these  deductible  differences  to $ 592,543 at July 31,
2006.  The net  change in the  valuation  allowance  from  April 30,  2006 was a
decrease of $407,400. 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.


                                       12
<PAGE>



                       GLOBAL DIVERSIFIED INDUSTRIES, INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
                                  JULY 31, 2006
                                   (Unaudited)

NOTE G - INCOME TAXES (Continued)

The income tax provision  (benefit) for the three months ended July 31, 2006 and
2005 consists of the following:

                              July 31, 2006    July 31, 2005
                              --------------   --------------

Current
Federal                       $         --     $         --
State                                  800              800
                              --------------   --------------
                                       800              800
                              --------------   --------------

Deferred
Federal                           (117,000)              --
State                              (31,000)              --
                              --------------   --------------
                                  (148,000)              --
                              --------------   --------------


                              $   (147,200)    $        800
                              --------------   --------------

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:

                                            July 31, 2006     July 31, 2005
                                            --------------   --------------

Computed "expected" income tax expense
at approximately 34%                        $     33,000     $    140,000

Use of NOL carryforwards                         (32,200)              --

Discretionary change in valuation
allowances of deferred income taxes             (148,000)        (139,200)

 Net                                        $   (147,200)    $        800
                                            --------------   --------------

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 July 31, 2006 and April 30, 2006
are as follows:

<TABLE>
<CAPTION>
                                                                         July 31, 2006     April 30, 2006
                                                                        ---------------   ---------------
<S>                                                                     <C>               <C>
 Deferred tax assets:
 Federal and state net operating loss                                     $  528,000        $  567,000
 Allowance and accruals not recognized for income tax purposes                     -                 -
                                                                            ---------         ---------
 Total gross deferred tax assets                                             528,000           567,000
 Less : Valuation allowance                                                 (291,000)         (480,000)
                                                                            ---------         ---------
 Net deferred tax assets                                                  $  237,000        $   87,000

 Deferred tax liabilities:

 Total gross deferred tax liabilities:
 Depreciation and amortization, net                                          (65,000)          (65,000)
 Deferred state tax liability                                                 (3,000)           (1,000)
                                                                            ---------         ---------
 Total net deferred tax liabilities                                       $  (68,000)       $  (66,000)
</TABLE>



                                       13
<PAGE>


                       GLOBAL DIVERSIFIED INDUSTRIES, INC
                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
                                  JULY 31, 2006
                                   (Unaudited)

NOTE G - INCOME TAXES (Continued)

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


                                             July 31, 2006     April 30, 2006
                                             --------------   ---------------
 Current deferred tax asset                   $        -        $        -
 Non current deferred tax asset                  169,000            21,000
 Non current deferred tax liability                    -                 -
                                             --------------   ---------------
 Total net deferred tax asset                 $  169,000        $   21,000


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS FOR THE THREE MONTHS ENDED JULY 31, 2006

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.

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

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

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

The Company is a holding  company for 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.


                                       14
<PAGE>


The Company was issued a Manufacturer's  License by the California Department of
Housing (DOH) on July 13, 2006. This opens up a new market comprising 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 2006, Global Modular will focus its attention on the new
DOH market along with its 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 2006 and
into 2007.

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 July 31, 2006 TO THE THREE MONTHS ENDED
JULY 31, 2005

Results of Operations
---------------------

Revenues from the sale of modular  structures  were to $2,822,718 in the quarter
ended July 31,  2006 as  compared to  $4,940,023  in the quarter  ended July 31,
2005.  The decrease of $2,117,305  is attributed to the Company's  main focus on
completing  four major  projects,  so that,  the  building  could be occupied by
students for the new school year.  This was a commitment made to the four school
districts  so there  would  be new  classrooms  for  their  overcrowded  student
population.

Cost of revenues was  $1,876,331 and  $3,581,301  respectively  for the quarters
ended July 31, 2006 and 2005.  Gross profit for the quarter  ended July 31, 2006
was  $946,387,  or 33.5% of sales as  compared to  $1,358,722,  or 27.5% for the
quarter ended July 31, 2005. Total operating  expenses  decreased to $741,532 in
the  quarter  ended July 31, 2006 from  $886,085  in the quarter  ended July 31,
2005.

The Company  recorded a net income tax benefit of $147,200  for the quarter July
31, 2006 as compared to income tax  provision of $800 in the quarter  ended July
31, 2005.

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

As of July 31, 2006, the Company had a working capital surplus of $3,389,353 and
an income from  operations  of $204,855.  The Company  generated a positive cash
flow from operations of $682,461 for the three-month period ended July 31, 2006.
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 $76,729, common stock issued in exchange for services of $3,889,
amortization of debt discount of $8,128,  deferred taxes of $148,000, a decrease
in accounts  receivable  of $990,748,  an increase in inventory of $992,629,  an
increase in employee  advances of $23,125,  an decrease in prepaid  expenses and
other  assets of  $57,053,  and an  increase  in  accounts  payable  and  accrue
liabilities $465,525.

                                       15
<PAGE>


Cash flows used in investing  activities for the  three-month  period ended July
31, 2006 consisted of the acquisition of $50,222 of equipment and  architectural
plans used in operations.

The Company reduced notes payable to third parties by $767,066 and reduced notes
payable to related  parties by $20,000  during the three  months  ended July 31,
2006

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  requirements  for  operations  and
development.  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 deficits 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.

Employees
---------

As of July 31, 2006 the Company had 103 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 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,  2006 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.


                                       16
<PAGE>

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  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..  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 September  14, 2006,  there
were  approximately  159,602,478  shares of common stock  outstanding,  of which
approximately  61,550,440 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.

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.


                                       17
<PAGE>

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.

ITEM 3. CONTROLS AND PROCEDURES

The Company's  management  including the President,  Chief Executive Officer and
Chief Financial Officer,  have evaluated,  within 90 days prior to the filing of
this  quarterly  report,  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 2.  UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS

          During the three months period ended July 31, 2006, the Company issued
          55,556  shares of common stock to a consultant  in exchange for $3,889
          of service.  The Company also issued  9,444,444  shares of its commons
          stock,  valued at $850,000  to a  shareholder  in exchange  for common
          stock subscribed in prior years.  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.

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

          None during this reporting period.

ITEM 5.  OTHER INFORMATION

          None during this reporting period

ITEM 6.  EXHIBITS

Exhibits

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

                              31.1      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.


                                       18
<PAGE>


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: September 19, 2006               By: /s/  Phillip Hamilton
                                       --------------------------
                                       President and Chief Executive Officer
                                       (Principal Executive Officer)


Date: September 19, 2006               By: /s/  Adam DeBard
                                       --------------------
                                       Chief Operating Officer (Principal
                                       Accounting and Financial Officer)