U.S.
      SECURITIES AND EXCHANGE COMMISSION


Washington,
      D.C. 20549







FORM
      10-QSB











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


SECURITIES
      AND EXCHANGE ACT OF 1934





For
      the
      period ended October
      31, 2007





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
                EmployerIdentification
                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
o No x





State
      the
      number of shares outstanding of each of the issuer's classes of common
      equity ,:
      172,739,425 shares of Common Stock ($.001 par value) as of December 15, 2007.





Transitional
      small business disclosure format: Yes o No x


Table
          of Contents


TABLE
      OF CONTENTS


PART
                  I
              FINANCIAL
                  INFORMATIONITEM
                  I
              FINANCIAL
                  STATEMENTS (UNAUDITED)
              2CONDENSED
                  CONSOLIDATED BALANCE SHEET: OCTOBER 31,
                  2007
              2CONDENSED
                  CONSOLIDATED STATEMENTS OF
                  OPERATIONS:FOR
                  THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 31, 2007 AND
                  2006
              4CONDENSED
                  CONSOLIDATED STATEMENTS OF CASH
                  FLOWS:FOR
                  THE SIX MONTHS ENDED OCTOBER 31, 2007 AND
                  2006
              5NOTES
                  TO UNAUDITED CONSOLIDATED FINANCIAL
                  INFORMATION:OCTOBER
                  31, 2007
              6ITEM
                  2
              MANAGEMENT'S
                  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                  RESULTS OF OPERATIONS
              17ITEM
                  3
              CONTROLS
                  AND PROCEDURES
              22PART
                  II
              OTHER
                  INFORMATION
              23ITEM
                  1
              LEGAL
                  PROCEEDINGS
              23ITEM
                  2
              UNREGISTERED
                  SALE OF EQUITY SECURITIES AND USE OF
                  PROCEEDS
              23ITEM
                  3
              DEFAULTS
                  UPON SENIOR SECURITIES
              23ITEM
                  4
              SUBMISSION
                  OF MATTERS TO VOTE OF SECURITY
                  HOLDERS
              23ITEM
                  5
              OTHER
                  INFORMATION
              23ITEM
                  6
              EXHIBITS
              23
  Table
            of Contents
  ITEMI.  FINANCIAL
        STATEMENTS (UNAUDITED)
  GLOBALDIVERSIFIED
          INDUSTRIES, INC.
 CONDENSED
          CONSOLIDATED BALANCE SHEET
  (Unaudited)October
                      31, 2007ASSETS:Current
                      assets:Cash
                      and cash equivalents
                  
                  $
                  55,141Accounts
                      receivable, net of allowance for doubtfulaccounts
                      of $0 at October 31, 2007
                  
                  
                  1,628,885Inventories
                  
                  
                  3,736,979Advance
                      to employees
                  
                  
                  10,303Prepaid
                      expenses and other
                  
                  
                  92,356Total
                      current assets
                  
                  
                  5,523,664Property,
                      plant and equipment:Property,
                      plant and equipment, at cost
                  
                  
                  3,081,437Less:
                      Accumulated depreciation
                  
                  
                  (1,150,631
                  )Total
                      property, plant and equipment, net
                  
                  
                  1,930,806Other
                      assets:Deposit
                      and others
                  
                  
                  86,130Non
                      current deferred tax asset
                  
                  
                  96,000Intangible
                      assets, net of accumulated amortizationof
                      $240,233at October 31, 2007 (Note F)
                  
                  
                  943,505Total
                      other assets
                  
                  
                  1,125,635Total
                      Assets
                  
                  $
                  8,580,105




See
        accompanying notes to the unaudited condensed consolidated financial
        information
   2
 Table
            of Contents




GLOBAL
        DIVERSIFIED INDUSTRIES, INC.
 CONDENSED
        CONSOLIDATED BALANCE SHEET (Continued)
 
 (Unaudited)October
                  31,
                  2007LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  liabilities:Accounts
                  payable and accrued liabilities
              
              $
              1,128,964Notes
                  payable to related parties,current portion (Note B)
              
              
              318,786Notes
                  payable, current portion, net of discount (Note B)
              
              
              1,296,452Total
                  current liabilities
              
              
              2,744,202Long-term
                  liabilities:Notes
                  payable, long term portion,net of debt discount (Note B)
              
              
              237,020Notes
                  payable to related parties,long-term
                  portion (Note B)
              
              
              588,815Total
                  long-term liabilities
              
              
              825,835Commitment
                  and contingencies
              
              
              --Stockholders'
                  equity:Series
                  A Preferred stock, par value $.001Per share; 10,000,000 shares authorized; 413,092shares issued and outstanding at October 31, 2007 (Note C)
              
              
              413Common
                  stock, par value $.001 per share;400,000,000 shares authorized; 172,739,425 shares
                  issuedand outstanding at October 31, 2007 (Note C)
              
              
              172,739Additional
                  paid-in capital
              
              
              6,625,908Preferred
                  stock subscription
              
              
              733,374Common
                  stock subscription
              
              
              1,453,882Treasury
                  stock (Note C)
              
              
              (50
              )Accumulated
                  deficit
              
              
              (3,976,198
              )Total
                  stockholders' equity
              
              
              5,010,068Total
                  liabilities and stockholders' equity
              
              $
              8,580,105
 
 See
        accompanying notes to the unaudited condensed
        consolidated financial information
  3
 Table
            of Contents




GLOBALDIVERSIFIED
        INDUSTRIES, INC.
 CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 
 For
                  The Three Months Ended
                October
                  31,
              
              
              For
                  the Six Months Ended
                October
                  31,2007
              
              
              2006
              
              
              2007
              
              
              2006Revenues
              
              $
              2,326,166
              
              
              $
              1,761,358
              
              
              $
              4,915,566
              
              
              $
              4,584,076Cost
                  of goods sold
              
              
              2,077,156
              
              
              
              1,700,993
              
              
              
              4,035,693
              
              
              
              3,577,258Gross
                  profit
              
              
              249,010
              
              
              
              60,365
              
              
              
              879,873
              
              
              
              1,006,818Operating
                  expenses:Selling,
                  general and administrative expenses
              
              
              190,904
              
              
              
              494,394
              
              
              
              597,463
              
              
              
              1,142,520Depreciation
                  and amortization
              
              
              80,383
              
              
              
              76,990
              
              
              
              160,765
              
              
              
              152,688Total
                  operating expense
              
              
              271,287
              
              
              
              571,384
              
              
              
              758,228
              
              
              
              1,295,208Income
                    (loss)from
                    operations
              
              
              (
                22,277
              )
              
              
              (511,019
              )
              
              
              121,645
              
              
              
              (288,390
              )Interest
                  expense, net
              
              
              (117,228
              )
              
              
              (156,553
              )
              
              
              (209,767
              )
              
              
              (264,358
              )Loss
                    from continuing operations, before incometaxes
                    and discontinued
                    operations
              
              
              (139,505
              )
              
              
              (667,572
              )
              
              
              (88,122
              )
              
              
              (552,748
              )Provision
                  for income taxes
              
              
              --
              
              
              
              32,000
              
              
              
              --
              
              
              
              179,200Loss
                    from continuing operations, before discontinued
                    operations
              
              
              (139,505
              )
              
              
              (635,572
              )
              
              
              (
                88,122
              )
              
              
              (373,548
              )Loss
                    from discontinued  operations
              
              
              --
              
              
              
              (
                11,649
              )
              
              
              --
              
              
              
              (
                29,543
              )Gain
                  from disposal of discontinued operations
              
              
              --
              
              
              
              328,286
              
              
              
              --
              
              
              
              328,286Net
                  (loss)
              
              $
              (139,505
              )
              
              $
              (318,935
              )
              
              $
              (88,122
              )
              
              $
              (74,805
              )Earnings
                  per common share:Basic
              
              $
              (0.00
              )
              
              $
              (0.00
              )
              
              $
              (0.00
              )
              
              $
              (0.00
              )Continuing
                  operations
              
              
              (0.00
              )
              
              
              (0.00
              )
              
              
              (0.00
              )
              
              
              (0.00
              )Discontinued
                  operations
              
              
              0.00
              
              
              
              0.00
              
              
              
              0.00
              
              
              
              0.00Diluted
              
              $
              (0.00
              )
              
              $
              0.00
              
              
              $
              (0.00
              )
              
              $
              (0.00
              )Continuing
                  operations
              
              
              (0.00
              )
              
              
              (0.00
              )
              
              
              (0.00
              )
              
              
              (0.00
              )Discontinued
                  operations
              
              
              0.00
              
              
              
              0.00
              
              
              
              0.00
              
              
              
              0.00Weighted
                    average sharesoutstanding:Basic
              
              
              171,281,187
              
              
              
              159,502,858
              
              
              
              169,256,069
              
              
              
              155,009,615Diluted
              
              
              204,078,787
              
              
              
              167,952,861
              
              
              
              202,053,669
              
              
              
              163,459,619
 
 See
        accompanying notes to the unaudited condensed consolidated financial
        information
 
 4
 Table
            of Contents




GLOBALDIVERSIFIED
        INDUSTRIES, INC.
 CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 
 For
                  the Six months ended October 31,2007
              
              
              2006Cash
                  flows from operating activities:Net(loss)
              
              $
              (88,122
              )
              
              $
              (74,805
              )Add
                  (deduct):Loss
                  from discontinued operations
              
              
              --
              
              
              
              29,543Gain
                  from disposal of discontinued operation
              
              
              --
              
              
              
              (328,286
              )Net
                  loss from continuing operations
              
              
              (
                88,122
              )
              
              
              (373,548
              )Adjustment
                  to reconcile net loss to net cash provide by(used
                  in) operating activities:Depreciation
                  and amortization
              
              
              160,765
              
              
              
              153,719Deferred
                  Taxes
              
              
              --
              
              
              
              (180,000
              )Common
                  stock issued in exchange for services rendered
              
              
              18,000
              
              
              
              3,889Amortization
                  and write-off of debt discount
              
              
              9,690
              
              
              
              71,156Common
                  stock issued in exchange for rent
              
              
              87,288
              
              
              
              --Change
                  in assets and liabilities:(Increase)/decrease
                  in accounts receivable
              
              
              (946,522
              )
              
              
              1,963,670(Increase)
                  in inventory
              
              
              (763,439
              )
              
              
              (911,155
              )Decrease
                  / (increase) in prepaid expense and others
              
              
              99,014
              
              
              
              (188,234
              )(Increase)
                  in employee advances
              
              
              (8,558
              )
              
              
              (61,073
              )Increase
                  in accounts payable and accrued liabilities
              
              
              10,095
              
              
              
              699,655Net
                  cash (used in) provided by continuing operations
              
              
              (1,421,789
              )
              
              
              1,178,079Net
                  cash provided by discontinued operations
              
              
              --
              
              
              
              25,243Net
                  cash (used in) provided by operating activities:
              
              
              (1,421,789
              )
              
              
              1,203,322Cash
                  flows from investing activities:Cash
                  receivable in connection with disposition of MBS (Note G)
              
              
              -
              
              
              
              (1,000
              )Capital
                  expenditure
              
              
              (
                26,850
              )
              
              
              (322,775
              )Net
                  cash (used in) investing activities
              
              
              (
                26,850
              )
              
              
              (323,775
              )Cash
                  flows from financing activities:Proceeds
                  from sale of common stock and stock subscription,net
                  of costs and fees
              
              
              630,000
              
              
              
              --Proceeds
                  from (repayments of) notes payable, net
              
              
              449,925
              
              
              
              (1,159,984
              )Repayments
                  of payable to related parties, net
              
              
              67,286
              
              
              
              (20,000
              )Net
                  cash provided by(used in) financing activities
              
              
              1,147,211
              
              
              
              (1,179,984
              )Net
                  decrease in cash and cash equivalents
              
              $
              (301,428
              )
              
              $
              (300,437
              )Cash
                  and cash equivalents at beginning of period
              
              
              356,569
              
              
              
              557,100Cash
                  and cash equivalents at end of period
              
              $
              55,141
              
              
              $
              256,663Supplemental
                  Disclosures of Cash Flow Information:Cash
                  paid during the period for interest
              
              $
              238,100
              
              
              $
              159,257Common
                  stock issued for rent
              
              
              87,288
              
              
              
              --Common
                  stock issued to consultants for services rendered
              
              
              18,000
              
              
              
              3,889Common
                  stock issue for accrued interest
              
              
              20,000Amortization
                  of beneficial conversion feature of convertible notes
              
              
              9,690
              
              
              
              71,156
 
 See
        accompanying notes to the unaudited condensed consolidated financial
        information
   5
 Table
            of Contents






GLOBALDIVERSIFIED
        INDUSTRIES, INC.
 NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 October
        31, 2007
 (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,
        2007, are not necessarily indicative of the results that may be expected
        for the
        year ended April 30, 2008. The unaudited condensed consolidated financial
        statements should be read in conjunction with the consolidated April 30,
        2007
        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.
 
 The
        Company sold its MBS subsidiary in October 2006. The MBS business segment
        is
        accounted for as discontinued operations, and accordingly, amounts in the
        financial statements, and related notes for all periods shown have been restated
        to reflect discontinued operations accounting. Summarized results of the
        discontinued business and information relating to the sale of this subsidiary
        are further described in Note G.
 
 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
 
 The
        Company recognizes revenues, except for several construction-type fixed-price
        contracts, 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. 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.






6
 Table
          of Contents




GLOBAL
        DIVERSIFIED INDUSTRIES, INC.
 NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 October
        31, 2007
 (Unaudited)
 
 NOTE
        A - SUMMARY OF ACCOUNTING POLICIES (Continued)
 
 Revenue
        Recognition
        (Continued)
 
 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:
 
 (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
        fiscal
        2007, the Company entered into several fixed-price arrangements whereby the
        Company is to construct and install several modular units for a school district.
        Revenue from these construction-type fixed-price contracts is recognized
        in
        accordance with SOP No. 81-1, "Accounting for Performance of Construction-Type
        and Certain Production-Type Contracts", on the basis of the estimated percentage
        of completion.
 
 Under
        the
        percentage-of-completion method, progress toward completion is measured by
        the
        ratio of costs incurred to total estimated costs. Revenue and gross profit
        may
        be adjusted prospectively for revisions in estimated total contract costs.
        If
        the current estimates of total contract revenue and contract cost indicate
        a
        loss, a provision for the entire loss on the contract is recorded in the
        period
        in which it becomes evident. The total estimated loss includes all costs
        allocable to the specific contract. Each construction contract is reviewed
        individually to determine the appropriate basis of recognizing revenue.
        Revisions to the estimates at completion are reflected in results of operations
        as a change in accounting estimate in the period in which the facts that
        give
        rise to the revision become known by management.
 
 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.
 
 Use
        of
        Estimates
 
 The
        preparation of financial statements and related disclosures in conformity
        with
        accounting principles generally accepted in the United States requires
        management to make estimates and assumptions that affect the reported amounts
        of
        assets, liabilities, revenues and expenses, and related disclosure of contingent
        assets and liabilities. The Company evaluates, on an on-going basis, its
        estimates and judgments, including those related to revenue recognition,
        bad
        debts, excess inventory, impairment of intangible assets, income taxes,
        contingencies and litigation. Its estimates are based on historical experience
        and assumptions that the Company believe to be reasonable under the
        circumstances, the results of which form the basis for making judgments about
        the carrying values of assets and liabilities that are not readily apparent
        from
        other sources. Actual results may differ from these estimates under different
        assumptions or conditions.
 
 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.
   7
 Table
            of Contents




GLOBAL
        DIVERSIFIED INDUSTRIES, INC.
 NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 October
        31, 2007
 (Unaudited)
 
 NOTE
        A - SUMMARY OF ACCOUNTING POLICIES (Continued)
 
 Stock
        Based Compensation
        (Continued)
 
 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
        Company did not issue awards of stock-based employee compensation during
        the
        six-month period ended October 31, 2007. All previously issued stock based
        awards were vested at grant and charged to operations in prior
        periods.
 
 New
        Accounting
        Pronouncements
 
 In
        September 2006, the FASB issued SFAS 157, Fair Value Measurements, which
        defines
        fair value, establishes a framework for measuring fair value in generally
        accepted accounting principles ("GAAP"), and expands disclosures about fair
        value measurements. The Company will be required to adopt SFAS 157 effective
        for
        the fiscal year beginning January 1, 2008. The requirements of SFAS 157 will
        be
        applied prospectively except for certain derivative instruments that would
        be
        adjusted through the opening balance of retained earnings in the period of
        adoption. The Company is currently evaluating the impact of the adoption
        of SFAS
        157 on the Company's consolidated financial statements and the management
        believes that the adoption of SFAS 157 will not have a significant impact
        on its
        consolidated results of operations or financial position.
 
 In
        September 2006, the FASB issued Statement of Financial Accounting Standards
        No.
        158, Employers' Accounting for Defined Benefit Pension and Other Postretirement
        Plans - an amendment of FASB Statements No. 87, 88, 106, and 132R (`SFAS
        158').
        SFAS 158 changes current practice by requiring employers to recognize the
        overfunded or underfunded positions of defined benefit postretirement plans,
        including pension plans, on the balance sheet. The funded status is defined
        as
        the difference between the projected benefit obligation and the fair value
        of
        plan assets. SFAS 158 also requires employers to recognize the change in
        funded
        status in other comprehensive income (a component of shareholders' equity).
        SFAS
        158 does not change the requirements for the measurement and recognition
        of
        pension expense in the statement of income. SFAS 158 is effective for fiscal
        years ending after December 15, 2006. The Company does not anticipate any
        material impact to its financial condition or results of operations as a
        result
        of the adoption of SFAS 158.
 
 In
        September 2006, the SEC issued Staff Accounting Bulletin 108, Considering
        the
        Effects of Prior Year Misstatements When Quantifying Misstatements in Current
        Year Financial Statements (`SAB 108'). SAB 108 provides interpretive guidance
        on
        how the effects of the carryover or reversal of prior year financial statement
        misstatements should be considered in quantifying a current year misstatement.
        SAB 108 is effective for financial statements covering the first fiscal year
        ending after November 15, 2006. The Company does not anticipate any material
        impact to its financial condition or results of operations as a result of
        the
        adoption of SAB 108.
 
 In
        February 2007, the FASB issued SFAS
        No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities.”
SFAS 159 permits entities to choose to measure many financial instruments,
        and
        certain other items, at fair value. SFAS 159 applies to reporting periods
        beginning after November 15, 2007. The adoption of SFAS 159 is not expected
        to
        have a material impact on the Company’s financial condition or results of
        operations.






8
 Table
          of Contents


GLOBAL
      DIVERSIFIED INDUSTRIES, INC.


NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 October
        31, 2007
 (Unaudited)
 NOTE
        B - NOTES PAYABLE
 A
        summary of notes payable at October 31, 2007 and April 30, 2007 is as
        follows:
 October
                  31, 2007
              
              
              April
                  30, 2007Note
                  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; maturity date extended to May 15,
                  2008.   Noteholder has the option to convert the principal
                  balance of the loan to the Company’s preferred stock.  (a)
              
              
              68,500
              
              
              
              78,500Note
                  payable to Company shareholders in monthly installments of interest
                  only
                  at 6.0% per annum; unsecured; maturity date is on May 1, 2009 (Note
                  I).
              
              
              199,350
              
              
              
              199,350Note
                  payable to Company shareholders in monthly installments of interest
                  only
                  at 5.0% per annum; unsecured; maturity date is on August 31, 2005,
                  maturity extended to August 31, 2008 Noteholder has the option
                  to convert
                  the principal balance of the loan to the Company’s preferred stock. (a).
              
              
              6,000
              
              
              
              6,000Note
                  payable to Company shareholders in monthly installments of interest
                  only
                  at 8% per annum; unsecured; maturity dated
                August
                  2007, which has been extended to August 2008. Noteholder has the
                  option to
                  convert the principal balance of the loan to the Company’s preferred
                  stock. (a)
              
              
              98,286
              
              
              
              56,000Note
                  payable in 24 monthly installments beginning March 15, 2006; unsecured;
                  maturity date is March 2008.
              
              
              22,547
              
              
              
              23,720Note
                  payable in 4 monthly installments beginning April 1, 2007, unsecured;
                  maturity date July 1, 2007. This note was paid in full as of July
                  31,
                  2007.
              
              
              -
              
              
              
              31,447Note
                  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, 2008 .
              
              
              111,000
              
              
              
              111,000Note
                  payable in 24 monthly installments beginning December 27, 2004,
                  with
                  interest at 8% per annum beginning January 31, 2005, secured by
                  company
                  stock; maturity date was March 19, 2007. The Company paid in full
                  as of
                  July 31, 2007 . (b)
              
              
              -
              
              
              
              15,743Note
                  Payable, interest only monthly beginning December 14, 2006 at 8%
                  per
                  annum, unsecured, maturity date is April 30, 2008
              
              
              28,000
              
              
              
              28,000Note
                  payable in 12 installments beginning April 15, 2006 with interest
                  at 9%
                  per annum, unsecured, maturity date is March 15, 2007. paid in
                  full as of
                  July 31, 2007
              
              
              -
              
              
              
              6,327Note
                  Payable in 24 monthly installments beginning January 28, 2007,
                  interest
                  only first six months at 7.5 % per annum, unsecured, maturity is
                  December
                  2008
              
              
              40,000
              
              
              
              40,000Note
                  Payable with monthly interest only payment at 8% per annum beginning
                  July
                  23, 2007, unsecured, maturity is July 31, 2009
              
              
              35,000
              
              
              
              -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)
              
              
              237,020
              
              
              
              227,330Note
                  payable revolving agreement secured by receivable and property
                  with
                  interest and administrative fees payable monthly; balance due for
                  the term
                  note was $125,000 and $250,000 at October 31, 2007 and April 30,2007
                  respectively, balance due for the revolver was $1,080,905 and $451,290
                  at
                  October 31, 2007 and April 30, 2007 respectively. Interest rate
                  is at
                  1.75% and 2.75% per annum over and above the Prime Rate or Deemed
                  Prime
                  Rate whichever is higher for the revolver and term note, respectively.
                  The
                  maturity dates are November 1, 2007 and April 8, 2008 for the revolver
                  and
                  term note, respectively. The revolver has a maximum borrowing capacity
                  of
                  $3,000,000.
              
              
              1,205,905
              
              
              
              701,2902,441,073
              
              
              
              1,914,172Less:
                  current portion
              
              
              (1,615,238
              )
              
              
              (1,098,027
              )Total
                  - notes payable – long term
              
              $
              825,835
              
              
              $
              816,145




(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.


9
 Table
          of Contents




GLOBAL
        DIVERSIFIED INDUSTRIES, INC.
 NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 October
        31, 2007
 (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. The note was paid in full June 18, 2007.
 
 (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, which is equal to the intrinsic value of 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. On October 31, 2006, the noteholder agreed to convert $200,000
        of principal into 2,353,356 shares of the Company's common stock . These
        shares
        were issued on September 9, 2007. The Company wrote off the unamortized debt
        discount in connection with the converted portion of principal, and non-cash
        interest expense of $54,900 was charged to operations in connection with
        the
        conversion of notes. Total non-cash interest expense the Company charged
        to
        operations in connection with amortization of debt discount attributed to
        the
        beneficial conversion feature amounted $4,845 and $ 71,156 for the three
        months
        ended October 31, 2007 and 2006, respective
 
 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, 2007 and April 30,
        2007,
        the Company has issued and outstanding 413,092 shares of Series A preferred
        stock. The Company has 172,739,425 and 167,209,211 shares of common stock
        issued
        and outstanding at October 31, 2007 and April 30, 2007, respectively. The
        Company has 50,000 shares of treasury stock at October 31, 2007 and April
        30,
        2007.
 
 During
        the six months period ended October 31, 2007, the Company issued 2,000,000
        shares of common stock to a consultant in exchange for $18,000 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 agreed to issue 5,819,200 shares of common stock in exchange for
        $87,288
        of rent expenses. The Company received $630,000 of cash, net of costs and
        fees
        for 34,833,333 shares of common stock subscribed. In addition, the Company
        agreed to issue to a related party an aggregate of 1,000,000 shares of common
        stock in exchange for $20,000 of accrued interest in connection with a
        promissory note. These shares have not been issued as of July 31, 2007, and
        the
        Company has accounted for the shares subscribed as common stock subscription
        at
        July 31, 2007. The Company issued an aggregate of 3,530,034 shares of common
        stock in exchange for $200,000 of common stock subscribed during the quarter
        ended October 31, 2007.
   10
 Table
            of Contents
  GLOBAL
          DIVERSIFIED INDUSTRIES, INC.
 NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 October
          31, 2007
 (Unaudited)
  NOTE
          D
          - STOCK OPTIONS AND WARRANTS
 Non-Compensatory
                Stock
                Options
  Transactions
              involving options are summarized as follows
 Number
                      of
                      Shares
                  
                  
                  Weighted
                      Average Price Per ShareOutstanding
                      at April 30,
                      2006
                  
                  
                  4,000,000
                  
                  
                  $
                  0.05Granted
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Canceled
                      or
                      expired
                  
                  
                  (4,000,000
                  )
                  
                  
                  0.05Outstanding
                      at April 30,
                      2007
                  
                  
                  -
                  
                  
                  $
                  -Granted
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Canceled
                      or
                      expired
                  
                  
                  -
                  
                  
                  
                  -Outstanding
                      atJuly
                      31, 2007
                  
                  
                  -
                  
                  
                  $
                  -Granted
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Canceled
                      or
                      expired
                  
                  
                  -
                  
                  
                  
                  -Outstanding
                      atOctober
                      31, 2007
                  
                  
                  -
                  
                  
                  $
                  -
 During
              the period ended October 31, 2007 and 2006, 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, 2007 and 2006. All previously granted
              stock options
              expired as of April 30, 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.
  Warrants
                      Outstanding
                  
                  
                  Warrants
                      ExercisableExercise
                      Prices
                  
                  
                  Number
                      Outstanding
                  
                  
                  Weighted
                      Average Remaining Contractual Life
                      (Years)
                  
                  
                  Weighed
                      Average Exercise
                      Price
                  
                  
                  Number
                      Exercisable
                  
                  
                  Weighted
                      Average Exercise
                      Price$
                  0.03
                  
                  
                  
                  750,000
                  
                  
                  
                  0.58
                  
                  
                  $
                  0.03
                  
                  
                  
                  750,000
                  
                  
                  $
                  0.03
  Transactions
            involving warrants are summarized as follows:
 Number
                      of
                      Shares
                  
                  
                  Weighted
                      AveragePrice
                      Per ShareOutstanding
                      at April 30,
                      2006
                  
                  
                  1,500,000
                  
                  
                  $
                  0.03Granted
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Canceled
                      or
                      expired
                  
                  
                  (750,000
                  )
                  
                  
                  0.03Outstanding
                      at April 30,
                      2007
                  
                  
                  750,000
                  
                  
                  $
                  0.03Granted
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Canceled
                      or
                      expired
                  
                  
                  -
                  
                  
                  
                  0.03Outstanding
                      at July 31,
                      2007
                  
                  
                  750,000
                  
                  
                  $
                  0.03Granted
                  
                  
                  -
                  
                  
                  
                  -Exercised
                  
                  
                  -
                  
                  
                  
                  -Canceled
                      or
                      expired
                  
                  
                  -
                  
                  
                  
                  -Outstanding
                      at October31, 2007
                  
                  
                  750,000
                  
                  
                  $
                  0.03
  The
            Company granted 750,000 of warrants during the year ended April 30, 2003
            in
            connection with acquisition of MBS in February 2003.  The warrants
            granted have an original expiration date on January 31, 2004, 750,000
            of the
            warrants were extended to and expired on July 31, 2006, and the remaining
            750,000 warrants were extended to February 28, 2008.
  11
 Table
                of Contents
 GLOBAL
              DIVERSIFIED INDUSTRIES, INC.
 NOTES
              TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 October
              31, 2007
 (Unaudited)
 NOTE
              E - EMPLOYEE STOCK INCENTIVE PLAN
  In
              September 2001, the Board of Directors of the Company implemented an
              Employee
              Stock Incentive Plan ("2001 Stock Option Plan") for officers, employees
              and
              certain non-employees (collectively referred to as "Employees") in
              an amount
              equal to 15,000,000 shares of common stock. The 2001 Stock Option Plan
              provides
              for the issuance of stock options exercisable at fifty percent (50%)
              of the fair
              market value of the common stock on the date of exercise. For an employee
              holding greater than ten percent(10%) of the total voting power of
              all stock of
              the Company, the exercise price of an incentive stock option shall
              be at least
              one hundred and ten percent (110%) of the fair market value of the
              common stock
              on the date of the grant of the option. The maximum life of the options
              is ten
              years from the date the stock options are granted.
 
 In
              February 2004, the Board of Directors of the Company implemented another
              Employee Stock Incentive Plan ("2004 Stock Option Plan") for officers,
              employees
              and certain non-employees (collectively referred to as "Employees")
              in an amount
              equal to 2,000,000 shares of common stock. The 2004 Stock Option Plan
              provides
              for the issuance of stock options at an exercise price of $0.05 per
              share (or
              110% of the fair market value of the common stock on the date of the
              grant of
              the option, for employees holding greater than ten percent (10%) of
              the total
              voting power of all stock of the Company). The maximum life of the
              options is
              ten years from the date the stock options are granted.
 
 There
              are
              no stock options issued and outstanding during the six month period
              ending
              October 31, 2007.
  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.
 
 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.
  12
 Table
                    of Contents
 GLOBAL
                  DIVERSIFIED INDUSTRIES, INC.
 NOTES
                  TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 October
                  31, 2007
 (Unaudited)
  NOTE
                  F- ACQUISITION OF INTANGIBLE ASSETS(Continued)
 Total
                identifiable intangible assets acquired and their carrying value
                at October 31,
                2007 are:
  Gross
                            Carrying Amount
                        
                        
                        Accumulated
                            Amortization
                        
                        
                        Net
                        
                        
                        Residual
                            Value
                        
                        
                        Weighted
                            Average Amortization Period (Years)Amortized
                            Identifiable Intangible Assets:Building
                            engineering and architectural plans
                        
                        $
                        833,738
                        
                        
                        $
                        (240,233
                        )
                        
                        $
                        593,505
                        
                        
                        $
                        -
                        
                        
                        
                        10.0Total
                            Amortized Identifiable Intangible Assets
                        
                        $
                        833,738
                        
                        
                        $
                        (240,233
                        )
                        
                        $
                        593,505
                        
                        
                        $
                        -
                        
                        
                        
                        10.0Unamortized
                            Identifiable Intangible Assets:Trade
                            Name
                        
                        
                        350,000
                        
                        
                        
                        -
                        
                        
                        
                        350,000
                        
                        
                        
                        350,000Total
                            Unamortized Identifiable Intangible Assets
                        
                        
                        350,000
                        
                        
                        
                        -
                        
                        
                        
                        350,000
                        
                        
                        
                        350,000Total
                        
                        $
                        1,183,738
                        
                        
                        $
                        (240,233
                        )
                        
                        $
                        943,505
                        
                        
                        $
                        350,000
 Total
                amortization expense charged to operations for the six months  period
                ended October 31, 2007 and 2006 were $43,935 and $39,001
                respectively.
  Estimated
                amortization expense as of October 31, 2007 is as follows:
  For
                            the twelve months ended October 31,2008
                        
                        $
                        83,3742009
                        
                        
                        83,3742010
                        
                        
                        83,3742011
                        
                        
                        83,3742012
                            and after
                        
                        
                        260,009Total
                        
                        $
                        593,505
 13
 Table
                  of Contents
 GLOBAL
                DIVERSIFIED INDUSTRIES, INC.
 NOTES
                TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 October
                31, 2007
 (Unaudited)
 
 NOTE
                G - DIVESTITURES AND DISCONTINUED OPERATIONS
  In
                October 2006, the Company sold one of its subsidiaries, MBS Construction,
                Inc.
                ("MBS") to Paragon Modular, Inc ("PMI") through a Stock Purchase
                Agreement
                ("Purchase Agreement"). Pursuant to the Purchase Agreement, PMI acquired
                certain
                assets and assumed certain liabilities of MBS and agreed to pay $1,000
                in cash.
                As a result of the sale of the MBS business segment, the Company
                accounted for
                the segment as a discontinued operation, and accordingly, the amounts
                in the
                financial statements and related notes for all period presented have
                been
                restated to reflect discontinued operations accounting.
 
 The
                following summarizes the disposition of the MBS business segment:
  Cash
                            consideration
                        
                        $
                        1,000Debts
                            assumed by PMI
                        
                        
                        372,819Net
                            assets disposed of
                        
                        
                        (45,533
                        )Net
                            gain on disposal of MBS
                        
                        $
                        328,286
  The
                    financial statements reflect the operating results and balance
                    sheet items of
                    the discontinued operations separately from continuing operations.
                    Prior years
                    have been restated. Operating results for the MBS discontinued
                    operations for
                    the six months ended October 31, 2007 and 2006 were:
  2007
                            
                            
                            2006Revenues
                            
                            $
                            --
                            
                            
                            $
                            --Costs
                                and Expenses
                            
                            
                            --
                            
                            
                            
                            29,543Net
                                loss before tax
                            
                            
                            --
                            
                            
                            
                            (
                              29,543
                            )Income
                                tax provision (benefit)
                            
                            
                            --
                            
                            
                            
                            --Net
                                loss
                            
                            
                            --
                            
                            
                            
                            (
                              29,543
                            )Net
                                gain on sale of MBS, before tax
                            
                            
                            --
                            
                            
                            
                            328,286Income
                                tax provision (benefit)
                            
                            
                            --
                            
                            
                            
                            --Gain
                                on sale, net of tax
                            
                            
                            --
                            
                            
                            
                            328,286Gain
                                (Loss) on discontinued operations,net
                                of tax
                            
                            $
                            --
                            
                            
                            $
                            298,743
 14
 Table
                            of Contents
 GLOBAL
                          DIVERSIFIED INDUSTRIES, INC.
 NOTES
                          TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 October
                          31, 2007
 (Unaudited)
 NOTE
                        H  - 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 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
                        $3,181,348, which will expire beginning in 2024, and a Federal
                        net operating
                        loss carryforward of $3,181,348, 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 October 31,
                        2007, we have provided a valuation allowance reducing the
                        net realizable
                        benefits of these deductible differences to $ 444,401 at
                        October 31, 2007. The
                        net change in the valuation allowance from April 30, 2007
                        was
                        none.  The amount of the deferred tax asset considered realizable
                        could change in the near term if projected future taxable
                        income is
                        realized. . Due to significant changes in the Company's ownership,
                        the
                        Company's future use of its existing net operating losses
                        may be
                        limited.
 
 The
                        income tax provision (benefit) for
                        the six months ended October 31, 2007 and the six months
                        ended October 31, 2006
                        consists of the following:
  October
                                    31,
                                    2007
                                
                                
                                October
                                    31,
                                    2006Continuing
                                    OperationsCurrentFederal
                                
                                $
                                --
                                
                                
                                $
                                --State
                                
                                
                                --
                                
                                
                                
                                800--
                                
                                
                                
                                800DeferredFederal
                                
                                
                                --
                                
                                
                                
                                (152,000
                                )State
                                
                                
                                --
                                
                                
                                
                                (38,000
                                )--
                                
                                
                                
                                (190,000
                                )$
                                --
                                
                                
                                $
                                (189,200
                                )Discontinued
                                  Operations
 Federal
                                
                                
                                --
                                
                                
                                
                                10,000State
                                
                                
                                --
                                
                                
                                
                                ----
                                
                                
                                
                                10,000$
                                --
                                
                                
                                $
                                (179,200
                                )
 
 15
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  GLOBAL
                              DIVERSIFIED INDUSTRIES, INC.
 NOTES
                              TO CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 October
                              31, 2007
 (Unaudited)
  NOTE
                              H  - INCOME TAXES (Continued)
 A
                            reconciliation between the actual
                            income tax expense and income taxes computed by applying
                            the statutory Federal
                            and state income tax rates to income from continuing
                            operations before income
                            taxes is as follows:
  Six
                                        Months Ended October 31,
                                        2007
                                    
                                    
                                    Six
                                        Months Ended October 31,
                                        2006Computed
“expected”
income
                                        tax
                                        expense atapproximately
                                        34%
                                    
                                    $
                                    (227,000
                                    )
                                    
                                    $
                                    36,000Increase
                                        (decrease) in NOL
                                        carryforwards
                                    
                                    
                                    119,000
                                    
                                    
                                    
                                    36,000Discontinued
                                        Operations
                                    
                                    
                                    108,000
                                    
                                    
                                    
                                    --Discretionary
                                        change in valuation
                                        allowances of deferred income taxes
                                    
                                    
                                    --
                                    
                                    
                                    
                                    (154,400
                                    )Various
                                        other
                                    
                                    
                                    --
                                    
                                    
                                    
                                    (24,800
                                    )--
                                    
                                    
                                    
                                    (179,200
                                    )
   Deferred
                              income taxes reflect the net
                              tax effects of temporary differences between the carrying
                              amounts of assets and
                              liabilities for financial reporting purposes and the
                              amounts used for income tax
                              purposes. Significant components of our deferred tax
                              assets and liabilities as
                              of October 31, 2007 and October 31, 2006 are as follows:
  October
                                          31,
                                          2007
                                      
                                      
                                      October
                                          31,
                                          2006Deferred
                                          tax
                                          assets:Federal
                                          and state net operating
                                          loss
                                      
                                      $
                                      1,273,000
                                      
                                      
                                      $
                                      610,000Allowance
                                          and accruals not
                                          recognized for income tax purposes
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Total
                                          gross deferred tax
                                          assets
                                      
                                      
                                      1,273,000
                                      
                                      
                                      
                                      610,000Less
                                          : Valuation
                                          allowance
                                      
                                      
                                      (1,095,000
                                      )
                                      
                                      
                                      (330,000
                                      )Net
                                          deferred tax
                                          assets
                                      
                                      $
                                      178,000
                                      
                                      
                                      $
                                      280,000Deferred
                                          tax
                                          liabilities:Total
                                          gross deferred tax
                                          liabilities:Depreciation
                                          and amortization,
                                          net
                                      
                                      
                                      (80,000
                                      )
                                      
                                      
                                      (76,000
                                      )Deferred
                                          state tax
                                          liability
                                      
                                      
                                      (2,000
                                      )
                                      
                                      
                                      (3,000
                                      )Total
                                          net deferred tax
                                          liabilities
                                      
                                      $
                                      (82,000
                                      )
                                      
                                      $
                                      (79,000
                                      )
 These
                              amounts have been presented in the
                              consolidated balance sheets as follows:
 
 October
                                        31,
                                        2007
                                    
                                    
                                    October
                                        31,
                                        2006Current
                                        deferred tax
                                        asset
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    -Non
                                        current deferred tax
                                        asset
                                    
                                    
                                    96,000
                                    
                                    
                                    
                                    201,000Non
                                        current deferred tax
                                        liability
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Total
                                        net deferred tax
                                        asset
                                    
                                    $
                                    96,000
                                    
                                    
                                    $
                                    201,000
  16
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ITEM2.
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED OCTOBER 31, 2007
 
 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
        was 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 two wholly owned subsidiaries, Lutrex
        Enterprises, Inc., an entity, which holds equipment and inventory for the
        registrant, and Global Modular, Inc., a sales, marketing, manufacturing and
        construction site work 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.
 
 In
        the
        quarter ending October 31, 2006, Global Modular was awarded a five year contract
        with Victor Valley School District that contained a "piggyback clause". This
        allows Global Modular to provide 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. This piggyback contract
        includes all appropriate pricing parameters pertinent to Global's "permanent
        modular construction" designs. Global Modulars' new piggyback contract 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.
 
 
 17
 Table
            of Contents
  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 2007, 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 2007 and into
        2008.
 
 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, 2007 TO THE THREE MONTHS ENDED OCTOBER
        31,
        2006
 
 Results
        of
        Operations
 
 Total
        revenues from continuing operations increased to $2,326,166 in the quarter
        ended
        of October 31, 2007 from $1,761,358 in the quarter ended October 31, 2006.Global
        has completed the majority of the field construction and site work activities
        for all of the projects. The Company is increasing its manufacturing output
        but
        still has not reached its minimum production goal of generating quarterly
        revenues of $3,000,000. During the last month of the quarter ended October
        31,
        2007, the Company was required to devote most of its efforts to completing
        a
        project in the field to meet the project schedule. The shifting of the Company’s
        resources to the field for this project reduced the manufacturing output
        for
        this month.
 
 Cost
        of
        revenues from continuing operations was $2,077,156 and $1,700,993, respectively
        for the quarters ended October 31, 2007 and 2006. The cost of revenue from
        continuing operations increased because of a 32% increase in revenue from
        the
        quarter ended October 31, 2007 as compared to the quarter ended October 31,
        2006. Gross profit from continuing operations was $249,010 and $60,365,
        respectively for the quarters ended October 31, 2007 and 2006. The gross
        profit
        from continuing operations increased because of the significant increase
        in
        revenue. The gross margin increased from 3.4% for the quarter ended October
        31,
        2006 to 10.7% for the quarter ended October 31, 2007, because the Company
        had
        completed the projects in the field which had substantial cost overruns by
        the
        end of the quarter ended October 31, 2006.
 
 Total
        operating expenses decreased to $271,287 in the three months ended October
        31,
        2007 from $571,384 in the three months ended October 31, 2006. The decrease
        in
        operating expense was due to general and administrative cost being reduced
        by
        the consolidating the manangement activities into Global and selling MBS
        Construction on October 31, 2006.
 
 The
        Company sold their stock in MBS to a third party and recorded a gain on the
        sale
        of MBS for $328,286 during the quarter ended October 31, 2006.
 
 COMPARISON
        OF THE SIX MONTHS ENDED OCTOBER 31, 2007 TO THE SIX MONTHS ENDED OCTOBER
        31,
        2006
 
 18
 Table
            of Contents
  Results
        of
        Operations
 
 Global
        Modular completed field construction for all of its projects and focused
        on
        increasing its manufacturing production.
 
 Total
        revenues from continuing operations increased to $4,915,566 for the six month
        ended of October 31, 2007 from $4,584,076 for the six months ended October
        31,
        2006. However, the Company did not meet its minimum goal of $6,000,000 sales
        because two of the projects were not put on the production line as scheduled
        due
        to extended negotiations with the clients during the six months. Also, during
        the last month in the quarter ended October 31, 2007, the Company was required
        to devote the majority of its resources to completing a project in the field,
        which slowed the manufacturing production drastically for that
        month.
 
 Cost
        of
        revenues from continuing operations was $4,035,693 and $3,577,258, respectively
        for the six months ended October 31, 2007 and 2006. The cost of revenue from
        continuing operations increased because of a 7.2% increase in revenue from
        the
        quarter ended October 31, 2007 as compared to the six months ended October
        31,
        2006. Gross profit from continuing operation was 879,873 and $1,006,818,
        respectively for the six months ended October 31, 2007 and 2006. The gross
        profit from continuing operations decreased due to inefficiencies in ramping
        up
        production in the plant for the
        six
        months ended October 31, 2007, as compared to the six months
        ended October
        31, 2006. The gross margin decreased from 21.9% for the six-months
        ended October
        31, 2006 to 17.9% for the six months ended October 31, 2007, because the
        Company
        incurred cost in ramping up production during the six months ended October
        31,
        2007 and devoting the majority of its resources to closing out a project
        in the
        field during the last month of the quarter ending October 31, 2007.
 
 Total
        operating expenses decreased to $758,228 in the six months ended October
        31,
        2007 from $1,295,208 in the six months ended October 31, 2006. The operating
        expenses decreased due to the management being consolidated into Global Modular
        and selling MBS.
 
 The
        Company sold their stock in MBS to a third party and recorded a gain on the
        sale
        of MBS for $328,286 during the quarter ended October 31, 2006.
 
 Currently,
        the Company has  signed backlog and projects being negotiated in
        excess of $8,000,000 with California school districts.
 
 Liquidity
        and Capital
        Resources
 As
        of
        October 31, 2007, the Company had a working capital surplus of $2,779,462
        and a
        net loss of ($88,122) for the six months ended October 31, 2007. The Company
        generated a negative cash flow from operations
        of $(1,421,789) for the six-month period ended October 31, 2007.
        The negative
        cash flow from operating activities for the period is
        primarily attributable
        to the Company's net loss from continuing operations adjusted for depreciation
        and amortization of $160,765, common stock issued in exchange for services
        and
        rent of $105,288, amortization and write-off of debt discount of $9,690,
        an
        increase in accounts receivable
        of $946,522 an increase in inventory of $763,439, an increase
        in employee
        advances of $8,558, a decrease in other assets of $99,014, and an increase
        in
        accounts payable of $10,095.
 
 Cash
        flows used in investing activities for the six-month period ended October
        31,
        2007 consisted of the acquisition of $ 26,850 of equipment, leasehold
        improvements and architectural plans used in operations.
 
 The
        Company funded operations during the six months ended October 31, 2007 by
        increasing debt to stockholders by 449,925, increasing debt to related parties
        by $67,286 and by the sale of common stock of $200,000 and common stock
        subscriptions of $430,000.
 
 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 (R), "Share Based Payment" 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.
 
 19
 Table
            of Contents
  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 negative cash flow for the six months ended October 31,
        2007. 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 believes it has sufficient 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.
 
 Employees
 
 As
        of
        October 31,2007, the company had 75 employees. The Company anticipates the
        number of employees will increase over the next six months. The Company does
        not
        expect to have any collective bargaining agreements covering 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
        $24,012 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, 2007 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.
 
 20
 Table
            of Contents
  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 December 15, 2007, there were
        approximately 172,739,425 shares of common stock outstanding, of which
        approximately 49,630,000 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.
  21
 Table
            of Contents
  The
        Company's future success will be highly dependent upon its ability to
        successfully manage the expansion of its operations. The Company's ability
        to
        manage and support its growth effectively will be substantially dependent
        on its
        ability to implement adequate improvements to financial and management controls,
        reporting and order entry systems, and other procedures and hire sufficient
        numbers of financial, accounting, administrative, and management personnel.
        The
        Company's expansion and the resulting growth in the number of its employees
        have
        resulted in increased responsibility for both existing and new management
        personnel. The Company is in the process of establishing and upgrading its
        financial accounting and procedures. There can be no assurance that the Company
        will be able to identify, attract, and retain experienced accounting and
        financial personnel. The Company's future operating results will depend on
        the
        ability of its management and other key employees to implement and improve
        its
        systems for operations, financial control, and information management, and
        to
        recruit, train, and manage its employee base. There can be no assurance that
        the
        Company will be able to achieve or manage any such growth successfully or
        to
        implement and maintain adequate financial and management controls and
        procedures, and any inability to do so would have a material adverse effect
        on
        the Company's business, results of operations, and financial
        condition.
 
 The
        Company's future success depends upon its ability to address potential market
        opportunities while managing its expenses to match its ability to finance
        its
        operations. This need to manage its expenses will place a significant strain
        on
        the Company's management and operational resources. If the Company is unable
        to
        manage its expenses effectively, the Company's business, results of operations,
        and financial condition will be materially adversely affected.
 
 RISKS
        ASSOCIATED WITH ACQUISITIONS
 
 As
        part
        of its business strategy, the Company expects to acquire assets and businesses
        relating to or complementary to its operations. These acquisitions by the
        Company will involve risks commonly encountered in acquisitions of companies.
        These risks include, among other things, the following: the Company may be
        exposed to unknown liabilities of the acquired companies; the Company may
        incur
        acquisition costs and expenses higher than it anticipated; fluctuations in
        the
        Company's quarterly and annual operating results may occur due to the costs
        and
        expenses of acquiring and integrating new businesses or technologies; the
        Company may experience difficulties and expenses in assimilating the operations
        and personnel of the acquired businesses; the Company's ongoing business
        may be
        disrupted and its management's time and attention diverted; the Company may
        be
        unable to integrate successfully.
  We
        may not be able to implement Section
        404 of the Sarbanes-Oxley Act on a timely basis.
 
 The
        SEC, as directed by Section 404 of
        the Sarbanes-Oxley Act, adopted rules generally requiring each public company
        to
        include a report of management on the company’s internal controls over financial
        reporting in its annual report on Form 10-KSB that contains an assessment
        by
        management of the effectiveness of the company’s internal controls over
        financial reporting.This
        requirement will first apply to our
        annual report on Form 10-KSB for the year ending April 30,
        2008.In
        addition, commencing with our annual
        report for the year ending April 30, 2009 our independent registered accounting
        firm must attest to and report on management’s assessment of the effectiveness
        of our internal controls over financial reporting.
 
 We
        have not yet developed a Section 404
        implementation plan.We
        have in the past discovered, and may
        in the future discover, areas of our internal controls that need
        improvement.How
        companies should be implementing
        these new requirements including internal control reforms to comply with
        Section
        404’s requirements and how independent auditors will apply these requirements
        and test companies’ internal controls, is still reasonably
        uncertain.
 
 We
        expect that we will need to hire
        and/or engage additional personnel and incur incremental costs in order to
        complete the work required by Section 404.We
        can not assure you that we will be
        able to complete a Section 404 plan on a timely basis.Additionally,
        upon completion of a
        Section 404 plan, we may not be able to conclude that our internal controls
        are
        effective, or in the event that we conclude that our internal controls are
        effective, our independent accountants may disagree with our assessment and
        may
        issue a report that is qualified.Any
        failure to implement required new or
        improved controls, or difficulties encountered in their implementation, could
        negatively affect our operating results or cause us to fail to meet our
        reporting obligations.
  ITEM3.
        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.
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  PARTII.
        OTHER INFORMATION
 
 ITEM
        2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS
 
 During
        the quarter ended October 31, 2007 the company issued an aggregate of 3,530,034
        shares of its common stock in exchange for converting $200,000 of notes payable
        to common stock, which was in subscribed during the quarter ended July 31,
        2007.
        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
 
 On
        December 13, 2007, the company filed a lawsuit against Financial Pacific
        Insurance Company, Inc and Salmeri Insurance Agency, Inc. for terminating
        the
        company’s bonding line of credit during the quarter ended January 31, 2006,
        without good cause and in contravention of its past dealings. The lawsuit
        seeks
        reimbursement for damages in excess of $10 million.
 
 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.






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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 21,
        2007           By: /s/  Phillip
        Hamilton
 President
        and Chief Executive Officer
 (Principal
        Executive Officer)
 
 
 Date:
        December 21,
        2007           By: /s/  Adam DeBard
 Chief
        Operating Officer
                                                      
(Principal Accounting
        and Financial Officer)
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