FORM 10-Q

FORM 10-Q QUARTERLY REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2010.

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

For the transition period from _______________________ to ___________________________

Commission File Number: 000-51529

S2C GLOBAL SYSTEMS, INC.

(Exact name of registrant as specified in its charter)


Nevada	13-4226299
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

105-5119 Beckwith Blvd, San Antonio, TX, USA	78249
(Address of principal executive offices)	(Zip Code)

210-561-6015

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No .

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes . No X .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes . No X .

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes . No .

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of March 31, 2010 there were 100,436,320 shares of common stock, $0.001 par value issued and outstanding.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at March 31, 2010 and 2009 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2009 audited financial statements. The results of operations for the periods ended March 31, 2010 and 2009 are not necessarily indicative of the operating results for the full year.

FINANCIAL STATEMENTS

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Condensed Consolidated Financial Statements

(Presented in US dollars)

(Unaudited – Prepared by Management)

March 31, 2010

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Condensed Consolidated Financial Statements

(Presented in US dollars) (Unaudited – Prepared by Management)

March 31, 2010


Condensed Consolidated Balance Sheets	5

Condensed Consolidated Statements of Operations	6

Condensed Consolidated Statements of Cash Flows	7

Notes to the Condensed Consolidated Financial Statements	8


S2C GLOBAL SYSTEMS, INC.
(A Development Stage Enterprise)
Condensed Consolidated Balance Sheets
(Presented in US dollars)
(Unaudited - Prepared by Management)

			(Unaudited)
			March 31,		December 31,
			2010		2009

ASSETS
Current
	Cash	$	234	$	4,417
	Accounts receivable		12,759		11,609
	Due from government agency		1,261		906
	Prepaid expenses		1,500		1,500

			15,754		18,432

Equipment			9,925		10,458

		$	25,679	$	28,890

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current
	Accounts payable and accrued liabilities	$	247,419	$	262,975
	Accounts payable and accrued liabilities - Related party		146,152		137,891
	Loans payable		15,000		15,000
	Loans payable - Related party		26,234		20,992
	Demand promissory notes - Related party		9,046		8,803
	Convertible promissory notes		12,283		12,016
	Sale of future earnings		199,000		199,000

			659,917		661,460

Stockholders' Equity (Deficit)
	Preferred stock, 25,000,000 shares authorized, $0.001 par value
	no shares issued		-		-
	Common stock, 200,000,000 shares authorized, $0.001 par value
	100,146,320 (2009 – 97,646,320) shares outstanding		100,146		97,646
	Additional paid-in capital		4,537,864		4,490,364
	Deficit accumulated during the development stage		(5,272,248)		(5,220,580)

			(634,238)		(632,570)

		$	25,679	$	28,890

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


S2C GLOBAL SYSTEMS, INC.
(A Development Stage Enterprise)
Condensed Consolidated Statements Of Operations
(Presented in US dollars)
(Unaudited - Prepared by Management)

			Cumulative
			from inception
			May 6, 2004 to		Three months ended
			March 31,		March 31,
			2010		2010		2009

Sales		$	1,848	$	-	$	0

Cost of sales			692		-		-

Gross profit			1,156		-		0

General and administrative expenses			5,199,845		56,408		43,134

Loss on impairment of property and equipment			282,520		-		-

Loss before other income (expense)			(5,481,209)		(56,408)		(43,134)

Other income (expense)
	Forgiveness of debt		275,564		-
	Interest earned		1,342		-		-
	Interest expense		(5,670)		(1,260)		(1,256)
	Loss from conversion of debt		(13,492)				-
	Loss from joint venture		(54,783)				(15,479)
			202,961		(1,260)		(16,735)

Net and comprehensive loss		$	(5,272,248)	$	(57,668)	$	(59,869)

Weighted average number of shares outstanding - basic and diluted					98,368,543		77,520,988

Loss per share - basic and diluted				$	(0.00)	$	(0.00)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


S2C GLOBAL SYSTEMS, INC.
(A Development Stage Enterprise)
Condensed Consolidated Statements of Cash Flows
(Presented in US dollars)
(Unaudited - Prepared by Management)
				Cumulative
				from inception
				May 6, 2004 to		Three months ended
				March 31,		March 31,
				2010		2010		2009
Operating Activities
	Net loss for the period		$	(5,272,248)	$	(57,668)	$	(59,869)
	Adjustments to reconcile net loss to cash used by
	operating activities
		Depreciation		93,938		533		676
		Shares issued for management and consulting		2,857,481		50,000		67,250
		Forgiveness of debt		(275,564)		-
		Unrealized foreign exchange loss (gain)		73,914		460		(205)
		Interest accrued		8,605		1,260		1,276
		Loss from debt conversion		13,492		-		-
		Loss on impairment of property and equipment		282,520		-		-
		Loss from joint venture		54,783		-		15,479
	Changes in operating assets and liabilities
		Receivables		(14,020)		(1,505)		13,519
		Prepaid expenses		(1,500)		-		4,516
		Accounts payable and accrued liabilities		540,490		(7,295)		(49,109)
Net cash used by operating activities				(1,638,109)		(8,215)		(6,467)

Investing Activities
	Advances to joint venture			(50,000)				(24,000)
	Purchase of equipment			(239,050)		-		-
	Advances from related party			-		-		-
Net cash used by investing activities				(289,050)		-		(23,015)

Financing Activities
	Loan proceeds			100,908		4,032		5,000
	Demand promissory notes issued (repaid)			2,529		-		(5,673)
	Convertible notes issued			233,785		-		-
	Sale of future earnings			199,000		-		24,000
	Shares issued for cash			1,391,171		-		-
Net cash provided by investing activities				1,927,393		4,032		23,327

Increase (decrease) in cash during the development stage				234		(4,183)		(6,155)

Cash, beginning of period				-		4,417		8,077

Cash, end of period			$	234	$	234	$	1,922

Supplemental cash flow information
	Interest paid		$	4,598	$	-	$	-
	Income taxes paid		$	-	$	-	$	-

Non-cash financing and investing activities
	Shares issued for accounts payable		$	22,125	$	-	$	46,000
	Shares issued upon conversion of convertible debt		$	31,230	$	-	$	0
	Shares issued for promissory notes			98,166		-		-
	Shares issued for services		$	1,150,231	$	50,000	$	21,250

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

(Presented in US dollars) (Unaudited – Prepared by Management)

March 31, 2010

Nature of Operations

The Company was organized by filing articles of incorporation with the Secretary of State of the State of Nevada on March 19, 2001 as Sun Vacation Club, Inc. There were no operations as Sun Vacation Club, Inc. and on November 21, 2002 the Company changed its name to United Athletes, Inc. Although numerous attempts were made to find funding for the Company substantial enough to support operations, in late 2003 management decided to suspend operations and discontinue attempts to raise equity capital. Effective February 2, 2005, the Company changed its name to S2C Global Systems, Inc.

S2C Global Systems Inc. (“S2C Canada”) was incorporated on May 6, 2004 in the Province of British Columbia under certificate BC0694405. The main business is the development, manufacture, and marketing of a water dispensing and recycling system for sales in Canada.

S2C Global Systems USA, Inc. (“S2C USA”) was incorporated on November 27, 2006 in the State of Nevada. The main business of S2C USA is the marketing globally of the bulk water the Company owns through its partially owned subsidiary Alaska Resource Management. Along with these efforts S2C USA promotes the Company’s water distribution technology.

The accompanying consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern; accordingly, they do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and retire its liabilities in other than the normal course of business and at amounts different from those in the accompanying consolidated financial statements. The Company’s ability to continue as a going concern is dependent upon achieving profitable operations and/or upon obtaining additional financing. The outcome of these matters cannot be predicted at this time.

The Company has historically maintained its ability to finance its operation through attracting private investment. The Company believes it can continue to raise the necessary capital for operational growth from private individuals and corporations known to the Company. The Company further intends on utilizing whatever rights it may have to do a public offering of its common stock to raise additional funds for market expansion.

Basis of Presentation

These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim consolidated financial information. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the periods ended March 31, 2010 and 2009 are not necessarily indicative of the results that may be expected for any interim period or the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2009. The Company applies the same accounting policies and methods in these condensed consolidated financial statements as those in the audited annual consolidated financial statements, except as described in Note 3.

Recently Adopted Accounting Pronouncements

In June 2009 the FASB established the Accounting Standards Codification (“Codification” or “ASC”) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) issued under authority of federal securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is organized and presented.

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

(Presented in US dollars) (Unaudited – Prepared by Management)

March 31, 2010

Statement of Financial Accounting Standards (“SFAS”) SFAS No. 165 (ASC Topic 855), “Subsequent Events”, SFAS No. 166 (ASC Topic 810), “Accounting for Transfers of Financial Assets—an Amendment of FASB Statement No. 140”, SFAS No. 167 (ASC Topic 810), “Amendments to FASB Interpretation No. 46(R)”, and SFAS No. 168 (ASC Topic 105), “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162” were recently issued. SFAS No. 165, 166, 167, and 168 have no current applicability to the Company or their effect on the financial statements would not have been significant.

Accounting Standards Update (“ASU”) ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures – Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU’s No. 2009-2 through ASU No. 2009-18 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

Investment in joint venture

During the 2008 fiscal year, the Company formed a 50% owned joint venture, Alaska Resources & Management LLC, (“ARM”) a limited liability company pursuant to the Alaska Limited Liability Company Law. True Alaska Bottling Corporation (“TAB”) holds 42.5% of ARM, and has contributed a Bulk Water Agreement with the City of Sitka, Alaska. The Company has agreed to use its best efforts to sell the Bulk Water available under this agreement.

As of March 31, 2010, the Company has advanced $50,000 to ARM. The Company accounts for the joint venture using the equity method. The Company recognized its 50% share of the loss during the three months ended March 31, 2010 and 2009, which was Nil and $15,479 respectively. ARM had no sales, no gross profit and a loss of Nil and $30,958 for the three months ended March 31, 2010 and 2009.

Equipment


		March 31, 2010
				Accumulated		Net Book
		Cost		Amortization		Value

Computer equipment	$	2,610	$	2,473	$	137
Bottles		21,929		12,141		9,788

	$	24,539	$	14,614	$	9,925


		December 31, 2009
				Accumulated		Net Book
		Cost		Amortization		Value

Computer equipment	$	2,610	$	2,456	$	154
Bottles		21,929		11,625		10,304

	$	24,539	$	14,081	$	10,458

Loans Payable

The Company is indebted to various parties for short-term loans amounting to $41,234 (2009 – $35,992), which are due on demand, unsecured, and with interest accrued annually. Two of the loans totaling $23,238 are due to current and former officers. The amount reported for related party loans includes accrued interest of $2,995.

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

(Presented in US dollars) (Unaudited – Prepared by Management)

March 31, 2010

Demand Promissory Notes


		March 31		December 31,
		2010		2009

Demand promissory note, due to a company controlled by the
president of S2C Canada, bearing interest at 12% per annum	$	6,500	$	6,500

Accrued interest		2,546		2,303

	$	9,046	$	8,803

Convertible Promissory Notes

During the year ended December 31, 2008, the Company issued an unsecured convertible promissory note for $5,000, bearing interest at a rate of 15% per annum and due on August 31, 2009. As the market price of the shares was less than the conversion price on the date of issuance, no value was allocated to the conversion feature. On July 21, 2009 the noteholder converted the principal amount of the note into 125,000 shares of common stock of the Company. At March 31, 2010 accrued interest is $727.

During the year ended December 31, 2008, the Company issued an unsecured convertible promissory note for $9,853, bearing interest at a rate of 10% per annum and due on August 1, 2009. The note is convertible at a rate of one common share for each $0.04 of principal and accrued interest. As the market price of the shares was less than the conversion price on the date of issuance, no value was allocated to the conversion feature. As of March 31, 2010 accrued interest was $1,704. The Company has not paid the principal and interest as it has come due and the note is in default.

Sale of Future Earnings

The Company has entered into five agreements whereby the Company has agreed to sell an aggregate 19.9% interest in the future net earnings from the sale of bulk water, which is subject to the agreement with Alaska Resource and Management, LLC (note 4), in exchange for aggregate cash proceeds of $199,000. The amount payable by the Company under these agreements is limited to $3,980,000. Details of each agreement are as follows:


Proceeds		Interest	Minimum Payment		Maximum Payment
$	50,000	5%	$	50,000	$	1,000,000
	50,000	5%		50,000		1,000,000
	50,000	5%		50,000		1,000,000
	25,000	2.5%		25,000		500,000
	24,000	2.4%		24,000		480,000
$	199,000	19.9%	$	199,000	$	3,980,000

The term of each agreement ends upon one of the following events:

The buyer receiving the maximum payment;

ii.

The Water License being terminated and the buyer having received at least the minimum payment; or

iii.

The Water License being terminated; the buyer having received less than the minimum payment, and the Company issuing common stock, equal to the minimum payment less any payments made to date, valued using the closing price of the Company’s stock on the date of termination of the Water License.

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

(Presented in US dollars) (Unaudited – Prepared by Management)

March 31, 2010

10.

Financial Instruments

Currency risk is the risk to the Company's earnings that arises from fluctuations of foreign exchange rates and the degree of volatility of these rates. The Company does not use derivative instruments to reduce its exposure to foreign currency risk.

As of March 31, 2010 the Company had the following financial assets and liabilities denominated in Canadian dollars:


		USD equivalent		CDN dollars

Cash	$	125	$	127
Accounts payable	$	171,724	$	174,445
Loans payable	$	13,782	$	14,000

As of March 31, 2010 CDN dollar amounts were converted at a rate of $1.0158 Canadian dollars to $1.00 US dollar.

11.

Commitments

The Company is committed to the following:

Effective January 1, 2009 and renewed on January 1, 2010 through December 31, 2010, the Company entered into an executive compensation agreement with the President and Managing partner of the Company’s subsidiaries and joint venture for cash consideration of $150,000 per year.

Effective July 1, 2009 through June 30, 2010, the Company entered into an executive compensation agreement with the Chief Financial Officer of the Company for consideration of 1,200,000 common shares of the Company.

Effective September 1, 2009 through August 31, 2010, the Company entered into an executive compensation agreement with the Chief Executive Officer of the Company for consideration of 1,200,000 common shares of the Company.

Effective October 1, 2009 through September 30, 2011, the Company entered into an executive compensation agreement with the Senior Vice President Business Development Asia of the Company for consideration of 800,000 common shares of the Company.

12.

Related Party Transactions

The related party transactions are as described in Notes 5, 6 and 10. As of March 31, 2010 there was a total of $146,152 (December 31, 2009 - $137,597) included in accounts payable for amounts owing to officers and companies controlled by current and former directors of the Company.

At March 31, 2010 there was a total of $12,759 and (December 31, 2009 - $11,609), for accounts receivable for rent from companies controlled by current and former directors of the Company.

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

(Presented in US dollars) (Unaudited – Prepared by Management)

March 31, 2010

13.

Segmented Information

Details on a geographic basis are as follows:


		March 31, 2010		December 31, 2009
Total Assets
USA	$	17,642	$	19,233
Canada		8,037		9,657

Total	$	25,679	$	28,890

Equipment
USA	$	3,274	$	3,447
Canada		6,651		7,011

Total	$	9,925	$	10,458

		Three months ended March 31,
		2010		2009
Net and Comprehensive Loss
USA	$	30,347	$	1,011,827
Canada		27,321		136,279

Total	$	57,668	$	1,148,106

14.

Common Stock Issuances

During the period ended March 31, 2010, the Company issued 2,500,000 shares of common stock as compensation to directors and officers of the Company.

15.

Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no events to disclose.

ITEM 2. PLAN OF OPERATIONS

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

FORWARD-LOOKING STATEMENT NOTICE

This Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include but are not limited to economic conditions generally and in the industries in which we may participate; competition within our chosen industry, including competition from much larger competitors; technological advances and failure to successfully develop business relationships.

OUR BUSINESS

HISTORICAL.

We were formed as a Nevada corporation on March 19, 2001; originally under the name of Sun Vacation Club, Inc.; on November 21, 2002 the name was changed to United Athletes, Inc. On February 8, 2005, after a reverse merger with S2C Global Systems, Inc. (a private British Columbia, Canada corporation) we changed our name to S2C Global Systems, Inc. with the intent to focus on developing, marketing, and distributing “supplier to consumer” technologies related to water that reduced the cost and carbon footprint of water distribution. As the company has matured, its focus has shifted to the global distribution of water from locations that have abundance to locations that do not, using modern logistics and its distribution technologies.

S2C Global Systems acquired the intellectual property rights from Will Benedikt for his early version of a 5-gallon water vending system. The Company continued with the development of the system and market preparation calling the system the “AquaDuct”. By the fall of 2008 while designing the machines for mass production, S2C completed and tested with consumers four (4) of the three-lane AquaDucts. As the AquaDuct system is capital intensive to launch in numbers, its dissemination was put on hold pending the outcome of the global economic recession. Licensing opportunities for the AquaDuct system have now come available in the United States and West Asia making it potentially viable to reconsider mass production.

In 2008 the Company also initiated its bulk water division forming and retaining 50% of Alaska Resource Management, LLC(“ARM”) a company established to sell and distribute bulk water globally from its source in Sitka , Alaska, USA. S2C earned its 50% position by contracting to bring its existing bulk water clients and develop sales channels for new ones.

S2C promotes itself through its website at www.s2cglobal.com and a series of corporate/sales packages available through the Company. To date the company has little or no revenues.

Employees

S2C’s employees are its CEO, President Alejandro Bautista, its Chief Financial Officer, Joe F. Dickson, Senior Vice President of Business Development Shahhid Vohra and its office administrator Ms Jenny Chen. As required, the Company hires independent contractors or out sources to appropriate companies. Roderick Bartlett is the President of the Company’s two subsidiaries and managing partner of the company’s joint venture in ARM.

PLAN OF OPERATION

For the past year we have been working to develop a revised business plan and execute the same where we cause the establishment of three water hubs around the planet , These hubs will best serve the global markets that need water by being located on or near the Arabian Sea, the East China Sea and the Caribbean sea. Each hub will be required to receive a “Very Large Water Carrier (“VLWC”) a ship that can carry in the realm of eighty million gallons (80,000,000 USG) of water per load, receive and process the same, Through the first quarter of 2010 we worked to secure the first of these hubs for the Arabian Sea in order to serve potential clients in the GCC and India. Through a process of elimination we have settled on one of two ports in India. In the second quarter of 2010 we will travel to India to finalize our selection, contract the necessary land, incorporate a subsidiary with the appropriate tax status in India, finalize investments from strategic partners in the subsidiary, finalize the financing component, contract the build out of the first hub and complete pre-sales or distribution agreements of the Alaska water to two of our identified markets (Saudi Arabia, Iraq, India, Cyprus).

Product Development:

The AquaDuct system in a two lane format with self contained power is needed in the Indian market. We are ready to establish manufacturing for these machines now in order to fulfill these first requests. A strategic partner in India is being sought for this development to coincide with our water distribution plans.

Sales & Marketing:

System Distribution. With the establishment of the first hub and ongoing manufacturing for the AquaDuct we will place our machines into strategic markets where it will provide a cost benefit. In many of the Asian markets where labor is cheap a machine does not create financial benefits, however in these same markets Governments are starting to enforce the reduction of Carbon emissions. This will create additional opportunities for the AquaDuct over and above coat benefits.

Water Sales The sale cycle for the first water sales is nearing completion as the Company gets into a position to commit to its first delivery dates. The memorandum originally signed with private parties in Iraq can now enter formal stages identifying the exact quantities, pricing and frequencies. In India and Saudi Arabia we have entered discussions with parties that already have distribution when we are able to commit to our pricing structure and frequency of delivery formal agreements will be negotiated.

Corporate Sales. The Company previously looked to enter the US market with the AquaDuct through strategic relationships with established companies. As recently as the first quarter 2010 we had discussions with an east coast bottler with large market share that resulted in an offer for the complete US market for pennies on our investment to date.

During the same period we found a global participant in both shipping and water packaging industry that is interested in entering the US market. Provided S2C can provide proof of concept on the hubs and distribution technology they are willing to invest capital to see our business strategies implemented. They have committed to fund the first voyage from Sitka to the first hub in India.

Finance and Administration. The Company received operating funds by borrowing throughout the first quarter and has maintained most of its accounts payable in good standing; however there are some accounts that remain unpaid to date. Management has continued a dialogue with its account payables to insure orderly conditions.

The first world water hub as proposed will cost approximately forty-five million ($45 million USD) dollars, we have had initial discussions with lenders to secure sixty to six-five percent of these funds with chattel mortgages and security over sales contracts, these details will be discussed as we move forward. The equity will be raised through the strategic partners in the new subsidiary. All of these transactions will be completed subject to board of director’s approval.

Overall administration of the company has been maintained and at a modest level however as we move forward a consolidated office on the east coast of the United States will be formed to bring our management team under one roof, expand our capabilities and bring us closer to our operating time zones.

Conclusion. With the signing of the documents on the first water hub in the second quarter of 2010 the company will move from development to operations. The sailing of the first vessel with 80 million gallons on board will not happen over night from signing, but rather take four to six (6) months to complete all infrastructure to both fill and unload that ship. We do expect this first sailing this year and look forward to announcing the same.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2010 Compared with Three Months Ended March 31, 2010

Revenues. The Company generated $0 in sales revenue for the three months ended March 31, 2010 compared to $0 for the same period in 2009.

Total Operating Expenses

General and Administrative. General and administrative expenses consist primarily of salaries and related costs for our executive, administrative, finance and management personnel, as well as support services and professional service fees. These expenses increased from $ 43,134 in the three months ended March 31, 2009 to $56,408 in the three months ended March 31, 2010. The increase in general and administrative expenses primarily was driven by increased management and consulting expense.

Loss from Operations

Total Loss from Operations. Our loss from operations was ($57,668) for the three months ended March 31, 2010 while our loss from operations was ($59,869) for the three months ended March 31, 2009.

LIQUIDITY AND CAPITAL RESOURCES

We have financed our operations to date primarily through the sale of equity and debt securities as we generated negative cash flow from operations prior to fiscal 2009 and for the three months ended March 31, 2010. Our principal liabilities at March 31, 2010 consisted of accounts payable, loans payable, sale of future earnings, demand promissory notes and convertible promissory notes.

Net cash used in operating activities was ($8,215) for the three months ended March 31, 2010 compared with net cash used in operating activities of ($6,467) for the three months ended March 31, 2009.

Net cash provided by financing activities was $23,327 in the three months ended March 31, 2009 compared with $4,032 of cash provided by financing activities in the three months ended March 31, 2010. The cash provided by financing activities in the three months ended March 31, 2010 was $4,032 from a loan payable, $0 from shares issued for cash, and $0 from the sale of future earnings while repaying a demand note of $0. In the three months ended March 31, 2009, financing activities raised $5,000 from a loan payable and $0 from the sale of shares, $24,000 from sales of future earning and ($5,673) from note issuance. As of March 31, 2010, the Company has advanced $50,000 to ARM. The Company accounts for the joint venture using the equity method. The Company recognized its 50% share of the loss during the three months ended March 31, 2010 and 2009, which was Nil and $15,479 respectively.

We expect our future liquidity position to meet our anticipated cash needs for working capital and capital expenditures, for at least the next six to twelve months to be met by raising capital. Since the cash generated from our operations is insufficient to satisfy our cash needs, we are required to raise additional capital. The company has and will continue to secure funding for its operations through debt and equity financings either from existing shareholders or external sources. Existing loans that mature or are past due will be renegotiated to postpone their present maturity date or convert the same to equity in the company where practical.

Because we will raise additional funds through the issuance of equity securities, our stockholders may experience significant dilution. Furthermore, additional financing may not be available when we need it or, if available, financing may not be on terms favorable to us or to our stockholders. If financing is not available when required or is not available on acceptable terms, we may be unable to develop or enhance our products or services. In addition, we may be unable to take advantage of business opportunities or respond to competitive pressures. Any of these events could have a material and adverse effect on our business, results of operations and financial condition.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required by smaller reporting companies.

ITEM 4T. CONTROLS AND PROCEDURES.

(a)

Evaluation of Disclosure Controls and Procedures. We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2010. The evaluation was conducted under the supervision and with the participation of management, including our chief executive officer and chief financial officer. Disclosure controls and procedures mean our controls and other procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure controls and procedures are also designed to provide reasonable assurance that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our quarterly evaluation of disclosure controls and procedures includes an evaluation of some components of our internal control over financial reporting, and internal control over financial reporting is also separately evaluated on an annual basis for purposes of providing the management report. We did not make any changes in our internal controls over financial reporting during our recent fiscal quarter.

The evaluation of our disclosure controls and procedures included a review of their objectives and design, our implementation of the controls, and the effect of the controls on the information generated for use in this Form 10-Q. In the course of the controls evaluation, we sought to identify any past instances of data errors, control problems, or acts of fraud and sought to confirm that appropriate corrective actions, including process improvements, were being undertaken. This evaluation is performed on a quarterly basis so that the conclusions of management, including the chief executive officer and chief financial officer, concerning the effectiveness of our disclosure controls and procedures can be reported in our periodic reports.

Our chief executive officer and chief financial officer have concluded, based on the evaluation of the effectiveness of the disclosure controls and procedures by our management, that as of March 31, 2010, our disclosure controls and procedures were not effective due to the material weaknesses described in Management’s Report on Internal Control over Financial Reporting as noted in our annual report on Form 10-K for the year ended December 31, 2009.

(b)

Changes in Internal Control over Financial Reporting. There were no changes in the Company's internal controls over financial reporting, known to the chief executive officer or the chief financial officer, that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

No legal proceedings are threatened or pending against S2C Global Systems, Inc. or any of our officers or directors. Further, none of our officers, directors or affiliates are parties against S2C Global Systems, Inc., or have any material interests in actions that are adverse to our own.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Unless otherwise noted all Securities were sold or offered without registration in reliance on the exemption provided by Section 4(2) and/or Rule 506, Regulation D and/or Regulation S of the Securities Act. No broker was involved and no commissions were paid in any transaction.

During the period ended March 31, 2010, the Company issued 2,500,000 shares of common stock as compensation to directors and officers of the Company.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION.

None

ITEM 6. EXHIBITS

Copies of the following documents are included as exhibits to this report pursuant to Item 601 of Regulation S-K.


Exhibit No.	Title of Document	Location

31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Attached
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Attached
32.1	Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*	Attached
32.2	Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*	Attached