Unassociated Document

		PAGE NO.
PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements:	3
	Consolidated Balance Sheets at June 30, 2011 (unaudited) and December 31, 2010	3

	Consolidated Statements of Operations for the three and six months ended June 30, 2011 and 2010 (unaudited)	4

	Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010 (unaudited)	5

	Notes to Consolidated Financial Statements (unaudited)	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

Item 4.	Controls and Procedures	22

PART II. OTHER INFORMATION		24

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	[REMOVED AND RESERVED]	24

Item 5.	Other Information	24

Item 6.	Exhibits	25

	Signatures	25

	June 30, 2011			December 31, 2010
	(Unaudited)
ASSETS

Current assets:
Cash and cash equivalents	$	341,372		$	66,488
Accounts receivable, net		66,501			29,962
Inventory, net		194,628			87,069
Other current assets		19,505			14,220

Total current assets		622,006			197,739

Property and equipment, net		289,342			313,762
Other assets		10,972			10,972

Total assets	$	922,320		$	522,473

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable and accrued expenses	$	222,374		$	177,811
Accounts payable and accrued expenses - related parties		119,253			150,951
Deferred revenues		124,722			54,939
Loan payable		37,500			-
Convertible promissory notes payable, net		11,584			22,660
Derivative liability		13,898			74,340
Total current liabilities		529,331			480,701

Total liabilities		529,331			480,701

Commitments and contingencies

Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding		-			-
Common stock, $0.001 par value; 2,071,000,000 shares authorized; 61,568,764 and 47,353,624 shares issued and outstanding at June 30, 2011 and December 31 , 2010, respectively		61,569			47,354
Additional paid-in capital		12,382,383			11,241,121
Accumulated deficit		(12,050,963	)		(11,246,703	)

Total stockholders’ equity		392,989			41,772

Total liabilities and stockholders’ equity	$	922,320		$	522,473

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010

Revenues	$	118,320		$	142,446		$	254,568		$	217,712

Cost of goods sold		85,229			64,288			183,336			101,112

Gross profit		33,091			78,158			71,232			116,600

Operating expenses
Salaries and professional fees		322,416			320,697			719,550			872,293
Research and development		3,070			18,199			4,049			40,475
General and administrative		71,447			90,276			139,698			185,675

Total operating expenses		396,933			429,172			863,297			1,098,443

Loss from operations		(363,842	)		(351,014	)		(792,065	)		(981,843	)

Other income (expense)
Derivative income		55,596			-			60,442			-
Gain on conversion of debt		6,348			-			9,552			-
Interest income		-			91			-			636
Interest expense		(32,699	)		-			(82,190	)		-

Total other income (expense)		29,245			91			(12,196	)		636

Net loss	$	(334,597	)	$	(350,923	)	$	(804,261	)	$	(981,207	)

Weighted average number of common shares outstanding - basic and diluted		56,001,108			41,972,735			53,164,000			40,849,135

Net loss per share - basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)

	Six Months Ended June 30,
	2011			2010
Cash flows from operating activities
Net loss	$	(804,261	)	$	(981,207	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation		96,870			89,718
Discount on loan payable		10,000			-
Stock based compensation		305,787			313,150
Gain on conversion of debt		(9,552	)		-
Amortization of debt discount		29,534			-
Change in fair value of derivative liability		(14,500	)		-
Changes in operating assets and liabilities
Accounts receivable		(36,539	)		(40,351	)
Inventory		(107,559	)		(53,208	)
Other current assets		(5,285	)		(173	)
Accounts payable and accrued expenses		40,016			87,750
Accounts payable and accrued expenses-related parties		88,302			-
Deferred revenues		69,783			-

Net cash used in operating activities		(337,404	)		(584,321	)

Cash flows from investing activities
Purchase of property and equipment		(28,750	)		(114,920	)

Net cash used in investing activities		(28,750	)		(114,920	)

Cash flows from financing activities
Proceeds from loan payable, net		27,500			-
Proceeds from issuance of common stock		316,038			302,709
Proceeds from stock subscription		297,500			-

Net cash provided by financing activities		641,038			302,709

Net decrease in cash and cash equivalents		274,884			(396,532	)

Cash and cash equivalents, beginning of period		66,488			454,667

Cash and cash equivalents, end of period	$	341,372		$	58,135

Supplemental disclosure of cash flow information:
Income taxes paid	$	-		$	-
Interest paid	$	308		$	-

Supplementary disclosure of noncash activities:
Issuance of common stock for development of Apps (Property & equipment)	$	43,700		$	16,000
Issuance of common stock for accrued wages	$	120,000		$	-
Issuance of common stock for conversion of notes payable	$	77,000		$	4,874

GTX Corp and subsidiaries (the “Company” or “GTX”) develops and integrates miniaturized Global Positioning System (“GPS”) tracking and cellular location technology for consumer products and service applications. GTX Corp owns 100% of the issued and outstanding capital stock of Global Trek Xploration, LOCiMOBILE, Inc, and Code Amber News Service, Inc. (“CANS”). LOCiMOBILE, Inc. has developed and owns LOCiMobile™, a suite of mobile tracking applications that turn the iPhone, Android, BlackBerry and other GPS enabled handsets into a tracking device which can then be tracked from handset to handset or through our Location Data Center tracking portal and which allows the user to send a map to the recipient’s phone showing the user’s location. CANS is a U.S. and Canadian syndicator of all state Amber Alerts providing website tickers and news feeds to merchants, internet service providers, affiliate partners, corporate sponsors and local, state and federal agencies.

The accompanying unaudited consolidated financial statements of GTX have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and applicable regulations of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of financial position and results of operations have been included. Our operating results for the six months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. The accompanying unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2010, which are included in our Annual Report on Form 10-K, and the risk factors contained therein.

The preparation of the accompanying unaudited consolidated financial statements requires the use of estimates that affect the reported amounts of assets, liabilities, revenues, expenses and contingencies. These estimates include, but are not limited to, estimates related to revenue recognition, allowance for doubtful accounts, inventory valuation, tangible and intangible long-term asset valuation, warranty and other obligations and commitments. Estimates are updated on an ongoing basis and are evaluated based on historical experience and current circumstances. Changes in facts and circumstances in the future may give rise to changes in these estimates which may cause actual results to differ from current estimates.

In May 2011, the FASB issued Accounting Standards Update (“ASU”) No. 2011-4, which amends the Fair Value Measurements Topic of the Accounting Standards Codification to help achieve common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards. ASU No. 2011-4 does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. The ASU is effective for interim and annual periods beginning after December 15, 2011. The Company will adopt the ASU as required. The ASU may affect the Company’s fair value disclosures, but will not affect the Company’s results of operations, financial condition or liquidity.

In June 2011, the FASB issued ASU No. 2011-5, which amends the Comprehensive Income Topic of the ASU. The ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders’ equity, and instead requires consecutive presentation of the statement of net income and other comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements. ASU No. 2011-5 is effective for interim and annual periods beginning after December 15, 2011. The Company will adopt the ASU as required. The ASU will have no affect on the Company’s results of operations, financial condition or liquidity.

On December 22, 2010, we entered into an agreement (the “Aetrex Agreement”) with Aetrex Worldwide, Inc. (“Aetrex”) whereby Aetrex agreed to provide funds to the Company to pay for mold and production costs necessary to embed our GPS tracking device into certain footwear products manufactured and sold by Aetrex. Accordingly, Aetrex provided $32,500 to the Company for the sole purpose of paying for mold costs relating to the production of the devices (“Mold Funds”). The Mold Funds will be used to pay for the first 325 devices delivered to Aetrex. In addition, pursuant to the Aetrex Agreement, Aetrex paid an additional $76,250 to the Company on January 24, 2011 to cover part of the deposit necessary to produce their initial order of 3,000 devices (“Production Funds”). Both the Mold Funds and the Production Funds have been recorded as Deferred Revenue in the accompanying consolidated financial statements. The Production Funds will be used to pay for 750 devices, consisting of device numbers 326 through 1075 delivered to Aetrex. In the event that pricing of the devices is less than contemplated at the time of the Aetrex Agreement (i.e., $100/unit), Aetrex shall receive a corresponding reduction and credit for monies owed for licensed products ordered. In the event that the 1,075 devices are not delivered to Aetrex before July 24, 2011, Aetrex can give us a 10-day demand notice for the return of the Mold Funds and the Production Funds. Aetrex has not given us such notice and is preparing to receive 1,500 devices in August 2011 and an additional 1,500 devices in September 2011. On January 26, 2011, Aetrex issued a $197,000 letter of credit, originally expiring on July 30, 2011, for the benefit of the Company, and has extended the letter of credit to October 31, 2011.

On May 17, 2011, the Company entered into an original issue discount loan agreement whereby we received $40,000 and we are required to make payments of $12,500 each on June 16, July 16, August 16 and September 16, 2011 (the “Loan Payable”). The original issue discount totaling $10,000 was recorded as interest expense during the three months ended June 30, 2011. The Loan Payable is secured by the Company’s equity line financing arrangement with Dutchess Opportunity Fund, II, LP (“Dutchess”). In the event we do not have the funds available to pay the amount due on any designated pay date we are required to immediately instruct Dutchess to sell as many shares as are necessary in order to make such payment. We paid both the June 16 and July 16, 2011 payments as scheduled without using the Dutchess equity line.

On December 16, 2010 and September 14, 2010 the Company entered into two separate Convertible Promissory Notes in the principal amounts of $52,000 and $45,000, respectively (the “Notes”). The Notes bear interest at 8% per annum and mature on September 20, 2011 and June 15, 2011, respectively. Under the Convertible Promissory Note Agreements, beginning 180 days following the date of each Note, the lender has the right to convert all or any part of the outstanding and unpaid principal of the Notes into shares of the Company’s common stock; provided however, that in no event shall the lender be entitled to convert any portion of the Notes that would result in the beneficial ownership by it and its affiliates to be more than 4.99% of the outstanding shares of the Company’s common stock. The Notes are convertible at a variable conversion price which is calculated based on 60% of the average of the five closing prices of the Company’s common stock during the five trading day period ending one trading day prior to the date the conversion notice is sent by the lender.

During the six months ended June 30, 2011, the Company issued 1,050,000 shares of common stock from the 2008 Equity Compensation Plan (the “2008 Plan”) to various members of management, employees and consultants as compensation for services rendered, the grant-date fair value of which was estimated at $58,905 and is expensed as stock based compensation in the accompanying consolidated statement of operations. Additionally, 455,000 shares (valued at $27,450) and 705,000 shares (valued at $43,700) of common stock from the 2008 Plan were granted during the three and six months ended June 30, 2011 to a consultant for services related to the development of our mobile phone applications. The value of these services is capitalized as Property and Equipment in the accompanying consolidated balance sheet and will be depreciated through cost of goods sold.

During the three and six months ended June 30, 2011, the Company issued 1,988,000 shares (valued at $109,160) and 3,168,000 shares (valued at $175,358) of common stock, respectively, subject to restrictions upon transfer pursuant to Rule 144, as promulgated under the Securities Act of 1933, as amended, to various members of management, employees and consultants as compensation for services rendered and accordingly, is expensed as stock based compensation in the accompanying consolidated statement of operations. Additionally, a total of 2,400,000 shares (valued at $120,000) were issued during June 2011 to our Chief Executive Officer and Chief Operating Officer as payment for a portion of their salary that had been accrued since 2009 (See Note 4). During July 2010, 1,050,000 shares of common stock were issued to members of management and board members which contain repurchase rights whereby the Company retains the rights to acquire the shares from the stock recipients and such repurchase rights lapse ratably over twelve months at a rate of 1/12th per month beginning on July 31, 2010. At the date of issuance, the shares were valued at par ($.001 per share) and recorded as an Other Current Asset in the accompanying consolidated financial statements. The related stock based compensation expense is recorded in conjunction with the monthly vesting based on the average stock price during the respective month. Accordingly, during the three and six months ended June 30, 2011, $18,325 and $34,634, respectively, was expensed as stock based compensation expense.

During June 2011, subscription agreements were received for the sale of 5,950,000 shares of common stock at $.05 per share (a total of $297,500) to 7 investors, including the Company’s Chief Financial Officer who purchased 200,000 of the shares of common stock. As of June 30, 2011, the Company had received all of the proceeds relating to these subscription agreements. We intend to issue the 5,950,000 shares in August 2011. As of June 30, 2011, the proceeds relating to these subscription agreements is included in Additional Paid-in Capital in the accompanying consolidated financial statements.

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Grant Date Fair Value
Outstanding at December 31, 2010		2,915,500		$	0.34		2.23	$	458,201
Options granted		-			-		-		-
Options exercised		-			-		-		-
Options cancelled/ forfeited/ expired		(133,418	)		-		-		(110,309	)
Outstanding at June 30, 2011		2,782,082		$	0.27		1.99	$	347,892

Exercisable at June 30, 2011		2,726,836		$	0.27		1.68	$	344,656

From time to time, we may be involved in routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of our business. The ultimate amount of liability, if any, for any claims of any type (either alone or in the aggregate) may materially and adversely affect our financial condition, results of operations and liquidity. In addition, the ultimate outcome of any litigation is uncertain. Any outcome, whether favorable or unfavorable, may materially and adversely affect us due to legal costs and expenses, diversion of management attention and other factors. We expense legal costs in the period incurred. We cannot assure you that additional contingencies of a legal nature or contingencies having legal aspects will not be asserted against us in the future, and these matters could relate to prior, current or future transactions or events. Except as described below, we are not currently a party to any material litigation.

In January 2011, a lawsuit was filed against the Company by a former independent contractor who claims we owe him $16,250 for services rendered during 2008 and 2009. We contend that the independent contractor was paid in full for the services rendered and no additional funds are due to the former independent contractor. In February 2011 we filed a demurrer to the complaint and in June, 2011 we filed a demurrer to the amended complaint. We intend to defend this case vigorously. The outcome of the lawsuit is not expected to have a material impact on the Company’s financial condition or operations and accordingly, there has been no accrual for potential loss included in the accompanying consolidated financial statements.

A lawsuit was filed against the Company in 2009 by a former consultant who claims we owe $23,912 plus interest and attorney fees for services rendered during 2009. We contend that the services in question were not performed, not approved or not delivered and accordingly, no additional funds are due to the former consultant. We have countersued the former consultant and continue to defend this case vigorously. The outcome of the lawsuit is not expected to have a material impact on the Company’s financial condition or operations and accordingly, there has been no accrual for potential loss included in the accompanying consolidated financial statements.

Subsequent to June 30, 2011, the Company issued 750,000 shares of common stock to various contractors and consultants as compensation for services rendered, the grant-date fair value of which was estimated at $55,500. Such shares are subject to restrictions upon transfer pursuant to Rule 144, as promulgated under the Securities Act of 1933, as amended. Additionally, the Company issued 130,000 shares of common stock from the 2008 Equity Compensation Plan to a consultant for services related to the development of our mobile phone applications and accordingly, the value will be capitalized as Property and Equipment and depreciated through cost of goods sold. The grant-date fair value of the shares was estimated at $10,400.

This Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 2 of Part I of this report include forward-looking statements. These forward looking statements are based on our management’s current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "proposed," "intended," or "continue" or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other "forward-looking" information. Many factors could cause our actual results to differ materially from those projected in these forward-looking statements, including but not limited to: variability of our revenues and financial performance; risks associated with product development and technological changes; the acceptance our products in the marketplace by existing and potential future customers; general economic conditions. You should be aware that the occurrence of any of the events described in this Quarterly Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.

Our subsidiary, Global Trek Xploration (“GTX California”), offers a GPS and cellular location platform that enables subscribers to track in real time the whereabouts of people, pets or high valued assets through a miniaturized transceiver module, wireless connectivity gateway, middleware and viewing portal. On March 18, 2010, GTX California entered into a four-year agreement with Aetrex Worldwide, Inc. (“Aetrex”) pursuant to which we granted Aetrex the licensing rights to our end to end patented two way GPS platform and embed our GPS tracking device into certain footwear products manufactured and sold by Aetrex. Aetrex Worldwide, Inc. is a global leader in pedorthic footwear and foot orthotics. Aetrex has certain exclusive and non-exclusive rights under this agreement. In order to retain its exclusive rights, Aetrex must purchase 156,000 devices from us over the four-year period commencing on the date that we ship to Aetrex the first production order of devices as follows: 6,000 GPS tracking devices in the first year, 25,000 devices during the second year, 50,000 during the third year, and 75,000 devices during the fourth year. On June 30, 2010, Aetrex issued its first purchase order for 3,000 devices, which we expect to ship to Aetrex in the third quarter of 2011. The end-users of the GPS enabled Aetrex shoes, expected to be predominately seniors afflicted with dementia, will be required to pay us a monthly service fee, a portion of which will be shared with Aetrex. The Aetrex shoe is scheduled to be released in the third quarter of 2011.

On May 28, 2010, the Company entered into a three year agreement with Midnite Air Corp (“MNX”) granting MNX the exclusive rights to the GPS tracking platform for use in the transportation of high valued assets. In order to retain exclusive rights, MNX must purchase a minimum of 15,000 devices over the three year term at 5,000 per year and activate each device with a monthly monitoring subscription. Each device shipped will automatically be activated within 90 days of receipt with a monthly data monitoring and connectivity subscription fee. We have completed the integration process between the GTX tracking platform and the MNX backend customer service portal, delivered 40 devices to MNX and activated the monthly monitoring as of August 11, 2011. MNX must purchase an additional 4,960 devices before May 3, 2012 in order to retain their exclusive rights.

Our LOCiMOBILE, Inc. subsidiary has developed, and launched smart-phone mobile applications (“Apps”) for the iPhone, iPad, Android, BlackBerry and other GPS enabled handsets and tablets that permit authorized users to locate and track the movement of the holder of the handset. Our 17 Apps, that run on six different platforms (including iPhone, BlackBerry and Google Android), have experienced over 1,030,000 downloads in 117 countries with two of our Apps in the iTunes top 25 social networking category, reaching number seven on the downloads list, number two on the highest grossing list and iTunes “What’s Hot” list. There are currently several new Apps in development and scheduled for release in the third quarter of 2011. These include a series of applications that will be geared for the enterprise user, by offering “private label” versions of our popular consumer apps to companies looking for a more personalized and secure method of keeping track of their employees. In addition, the Company will expand into proximity marketing and begin to leverage its global user base. Our roadmap also consists of further development of additional applications for the iPad and other tablets and TV’s, and more applications for the iPhone, BlackBerry and Google Android operating systems, all of which are expected to further contribute to our user base community, the value of our brand, and revenue increases from App sales, monthly subscriptions and advertising. LOCiMOBILE has created 9 new videos that have been posted on YouTube, is formulating 2 new strategic alliances with signed contracts expected to close in the 3rd quarter and is entering the gaming and entertainment category looking to expand its user base and demographics.

Our Code Amber News Service, Inc. (“CANS”) subsidiary is a U.S. and Canadian syndicator and content provider of all state Amber Alerts (public notifications of child abductions) and missing person alerts. Additionally, CANS markets and sells the patent pending electronic medical Code Amber Alertag and has recently signed up dozens of online affiliates and channel partners with a current total of 290 affiliates in 61 countries and 25 active fundraising organization throughout the United States that are selling the Alertag. The Alertag comes with an annual $19.95 subscription based model and compliments the overall GTX business model of providing peace of mind and personal location solutions to the masses. Code Amber recently formed an alliance with Lifespire, Inc., a nonprofit organization dedicated to helping developmentally disabled individuals reach their life’s aspirations. LifeSpire is working on a new version of the Code Amber Alertag which will help accelerate the treatment and care of those in need, and potentially save thousands of lives. LifeSpire informed us that their initial 400 unit test order was successful and that they plan to place another order in the 3rd quarter of 2011.

GTX Corp has recognized Latin America as a growing and strategically important market and is engaging this market through partnerships, bilingual sales and technical support staff along with localized software translated into Spanish for the region. GTX Corp has commenced selling personal location solutions to Mexico, Brazil, Colombia, Peru, Chile, Venezuela and Guatemala, through hardware devices, platform licensing and smart phone Apps and Alertags. The Company expects to see significant growth in 2011 as the Company increases the number of local partnerships and marketing efforts in these international territories. For 2011 the Company is exploring partnerships in Europe, Canada and China and has signed agreements with companies operating in those territories in order to explore and evaluate expansion into those territories.

In addition, based on the successful soft launch of the MNX product, the Company is planning to expand into Europe and is securing office space in the UK to better support the global needs of MNX and Aetrex. The Company has brought on 3 advisors in the region to advance our wireless carrier relationships, expand our mobile apps presence in the European app stores and to establish licensing partners for the GTX backend monitoring platform. Australia, New Zealand, China, Canada and Israel are also being explored as potential launch markets in 2012.

	Three Months Ended June 30,												Dollar Variance			% Variance
	2011						2010
	$			% of Revenues			$			% of Revenues			Favorable (Unfavorable)

Revenues	$	118,320			100	%	$	142,446			100	%	$	(24,126	)		(17	)%
Cost of goods sold		85,229			72	%		64,288			45	%		(20,941	)		(33	)%
Net profit		33,091			28	%		78,158			55	%		(45,067	)		(58	)%

Salaries and professional fees		322,416			272	%		320,697			225	%		(1,719	)		(1	)%
Research and development		3,070			3	%		18,199			13	%		15,129			83	%
General and administrative		71,447			60	%		90,276			63	%		18,829			21	%
Operating expenses		396,933			335	%		429,172			301	%		32,239			8	%

Loss from operations		(363,842	)		(307	)%		(351,014	)		(246	)%		(12,828	)		(4	)%
Other income (expense), net		29,245			25	%		91			-	%		29,154			32,037	%
Net loss	$	(334,597	)		(282	)%	$	(350,923	)		(246	)%	$	16,326			5	%

The decrease in our revenues during the second quarter of 2011 is primarily due to a $49,000 or 46% decrease in our Application revenues in comparison to the second quarter of 2010. This decrease is due to a decrease in the number of paid for Apps released in 2011 compared to 2010. A large portion of subscriber downloads of our Apps in 2011 relate to upgrades to current subscriptions, which upgrades are provided free of charge. During the second quarter of 2011 we continued to recognize revenue from our agreements with Aetrex and MNX, hardware product sales, portal software licensing, monthly subscriptions, Code Amber annual news feed subscriptions, points of display sponsorships and the sale of Code Amber Alertags. We expect that revenues will increase during the third quarter of 2011 with the release of the Aetrex shoe, the continued sales of devices and monthly monitoring services to MNX, the continued sales of smart-phone Apps along with the introduction of new Apps, and continued Code Amber Alertag sales.

The increase in cost of goods sold as a percentage of revenues during the second quarter of 2011 is primarily attributable to costs incurred in generating new business for our portal services, as well as costs associated with implementing the Aetrex agreement. Additionally, included in cost of goods sold is the depreciation on the capitalized costs of the Apps, which increased by approximately $14,000 or 65% in comparison to the second quarter of 2010 due to the continued development of our Apps.

Salaries and professional fees during the second quarter of 2011 stayed relatively unchanged compared to the same 2010 period. Near the end of fiscal 2009, we implemented numerous cost cutting efforts, including reductions in staff and management positions, in response to the downturn in the U.S. and global economy. These reductions have remained in place and we continue to keep the current workforce at the minimum level necessary to maintain operations. Professional fees consist primarily of costs attributable to consultants and contractors who primarily spend their time on sales, marketing and the development of technology; legal fees relating to general corporate matters and our patent applications; and accounting expenses. We anticipate that operations will increase during the third quarter of 2011 primarily from the release of the Aetrex shoe and the continued sale of devices to MNX. Accordingly, we may have to increase our workforce, increase the amount of wages and benefits we pay, and increase the utilization of consultants and contractors in the future as the economy recovers from the setbacks caused by the crisis in the global markets.

General and administrative expenses consist primarily of corporate administrative costs, depreciation, occupancy costs, insurance and travel and entertainment. General and administrative expenses during the second quarter of 2011 decreased 21% in comparison to the comparable period in 2010 due primarily to reductions in depreciation expense and website maintenance, as well as the implementation of various general cost cutting measures.

Other income (expense), net for the second quarter of 2011 is primarily attributable to discount amortization, derivative income and the gain on conversion of our convertible promissory notes. The derivative income represents the net unrealized (non-cash) change during the period in the fair value of our derivative liabilities related to embedded derivatives in our convertible promissory notes that have been bifurcated and accounted for separately. Additionally, during the second quarter of 2011, a lender converted $65,808 of our convertible promissory notes (including interest of approximately $2,000) resulting in a gain on conversion of approximately $6,000. The financial instruments that resulted in the derivative liability and debt discounts were not in place during the second quarter of 2010. Interest income generated during the same period in 2010 was minor and related to interest earned on money market accounts.

	Six Months Ended June 30,												Dollar Variance			% Variance
	2011						2010
	$			% of Revenues			$			% of Revenues			Favorable (Unfavorable)

Revenues	$	254,568			100	%	$	217,712			100	%	$	36,856			17	%
Cost of goods sold		183,336			72	%		101,112			46	%		(82,224	)		(81	)%
Net profit		71,232			28	%		116,600			54	%		(45,368	)		(39	)%

Salaries and professional fees		719,550			283	%		872,293			401	%		152,743			18	%
Research and development		4,049			1	%		40,475			19	%		36,426			90	%
General and administrative		139,698			55	%		185,675			85	%		45,977			25	%
Operating expenses		863,297			339	%		1,098,443			505	%		235,146			21	%

Loss from operations		(792,065	)		(311	)%		(981,843	)		(451	)%		189,778			(19	)%
Other income (expense), net		(12,196	)		(5	)%		636			-	%		(12,832	)		(2,018	)%
Net loss	$	(804,261	)		(316	)%	$	(981,207	)		(451	)%	$	176,946			(18	)%

Revenues during the first six months of 2011 increased 17% as compared to the same period in 2010 primarily because of an increase in revenues generated from our licensing agreements with Aetrex and MNX. In addition to approximately $125,000 in revenues generated from the sale of our Apps, we continued to generate revenues from the Aetrex agreement, the promotion of our portal services, hardware product sales, portal software licensing, monthly subscriptions, Code Amber annual news feed subscriptions, points of display sponsorships and the sale of Code Amber Alertags. We expect that revenues will increase during the third quarter of 2011 with the release of the Aetrex shoe and the continued sale of devices to MNX.

The increase in cost of goods sold as a percentage of revenues during the first six months of 2011 is primarily attributable to costs incurred in generating new business for our portal services, as well as, costs associated with the Aetrex agreement. Additionally, included in cost of goods sold is the depreciation on the capitalized costs of the Apps, which increased by approximately $32,000 or 82% in comparison to the first six months of 2010 due to the continued development of our Apps.

Salaries and professional fees during the first six months of 2011 decreased 18% compared to the same 2010 period. The decrease is primarily due to reductions in staffing in order to preserve cash, as well as cost cutting efforts we implemented in response to the downturn in the U.S. and global economy. Professional fees consist primarily of costs attributable to consultants and contractors who primarily spend their time on sales, marketing and the development of technology; legal fees relating to general corporate matters and our patent applications; and accounting expenses. We anticipate that operations will increase during the third quarter of 2011 primarily from the release of the Aetrex shoe and the continued sale of devices to MNX. Accordingly, we may have to increase our workforce, increase the amount of wages and benefits we pay, and increase the utilization of consultants and contractors in the future.

General and administrative expenses consist primarily of corporate administrative costs, depreciation, occupancy costs, insurance and travel and entertainment. General and administrative expenses during the first six months of 2011 decreased 25% in comparison to the same period in 2010 due primarily to reductions in depreciation expense and website maintenance, as well as, the implementation of various general cost cutting measures.

Other income (expense), net for the first six months of 2011 is primarily attributable to discount amortization, derivative income and the gain on conversion of our convertible promissory notes. The derivative income represents the net unrealized (non-cash) change during the period in the fair value of our derivative liabilities related to embedded derivatives in our convertible promissory notes that have been bifurcated and accounted for separately. Additionally, during the first six months of 2011, a total of $78,808 of our convertible promissory notes (including interest of approximately $2,000) were converted, resulting in a gain on conversion of approximately $14,000. The financial instruments that resulted in the derivative liability and debt discounts were not in place during the first six months of 2010. Interest income generated during the same period in 2010 was minor and related to interest earned on money market accounts.

During the six months ended June 30, 2011 our net loss decreased to approximately $804,000 compared to a net loss of approximately $981,000 for the same 2010 period. Net cash used in operating activities was approximately $337,000 for the first six months of 2011 compared to $584,000 during the same 2010 period. The decrease in cash used in operating activities is primarily attributable to an increase in the use of stock, rather than cash, to pay consultants and employees, the accrual of management’s salaries, a reduction in our support staff, and reductions in amounts paid for accounting and legal services during the period.

Net cash provided by financing activities during the six months ended June 30, 2011 and 2010 was approximately $641,000 and $303,000, respectively and primarily consists of proceeds received from the sale of shares from the Equity Line financing agreement and $297,500 from the June 2011 subscription agreements. During the first six months of 2011, we sold 4,844,553 shares of common stock to Dutchess at prices ranging from $0.050 - $0.0752 per share under our Equity Line, resulting in proceeds of approximately $316,000. .

Because revenues from our operations have, to date, been insufficient to fund our working capital needs, we currently rely on the cash we receive from our financing activities as well as the common stock line of credit we entered into with Dutchess to fund our capital expenditures and to support our working capital requirements. Since we entered into the Investment Agreement with Dutchess in November 2009 in connection with the Equity Line, we have sold to Dutchess 7,183,389 shares of our common stock (at prices ranging from $0.1763 - $.050 per share) for net proceeds of approximately $614,000. We anticipate that we will continue to, from time to time, draw on the Equity Line to provide additional funding. The amount of such funding will depend upon our needs and the amount that is available to us under the Equity Line. In the event that we do not generate the amount of revenues that we anticipate, or if our expenses exceed our budgeted amounts, we may need to increase our use of the Equity Line. No assurance can be given that we will be able to obtain sufficient funds under the Equity Line to fund our expected working capital deficits.

On December 16, 2010 and September 14, 2010, in order to fund our working capital needs, we received loans from a third-party in the principal amounts of $52,000 and $45,000, respectively (the “Loans”). The Loans bore interest at 8% per annum with maturity dates of September 20, 2011 and June 15, 2011, respectively, and were convertible into shares of our common stock. On March 23, 2011, the lender converted $13,000 of the principal balance of the $45,000 note into 384,615 shares of common stock at a conversion price of $.0338 per share. During April 2011, the lender converted the remaining balance of $32,000 plus $1,800 of accrued interest on the $45,000 note into 1,082,800 shares of common stock at conversion prices ranging from $.0301 to $.0321 per share. During June 2011, the lender converted $32,000 of the principal balance of the $52,000 note into 580,172 shares of common stock at conversion prices of approximately $.055 per share. During July 2011, the lender converted the remaining balance of $20,000 plus $2,080 of accrued interest on the $52,000 note into 461,748 shares of common stock at conversion prices of approximately $.048 per share. Accordingly, as of July 6, 2011, both Loans are paid in full.

On May 17, 2011, the Company entered into a $50,000 original issue discount loan agreement whereby we received $40,000 and we are required to make payments of $12,500 each on June 16, July 16, August 16 and September 16, 2011. The original issue discount totaling $10,000 was recorded as interest expense during the three months ended June 30, 2011. The Loan Payable is secured by the Company’s equity line financing arrangement with Dutchess. In the event we do not have the funds available to pay the amount due on any designated pay date we are required to immediately instruct Dutchess to sell as many shares as are necessary in order to make such payment. We paid both the June 16 and July 16, 2011 payments as scheduled without using the Dutchess equity line.

We are currently a party to two licensing agreements (Aetrex and MNX), two international distributor agreements, and two separate platform test agreements for the development and release of additional products. Based on the anticipated release of the products pursuant to the licensing agreements, the orders and subscription revenues from our international partners and the development and testing of the products that are currently the subject of platform test agreements, and on the early results of those tests, we currently anticipate that we will generate revenues from both of the licensing agreements, at least one of the platform test agreements and all three of our current international distributors during 2011. However, we currently expect to incur continued losses until these and our other revenue initiatives collectively generate substantial revenues. Revenues from these sources are expected to be realized during the course of 2011. However, no assurance can be given that our current contractual arrangements and the revenues from device sales, subscriptions, Alertags, software licensing or our smart phone or tablet Apps will be sufficient to fund our working capital needs by the end of calendar year 2011.

We will continue to incur normal operating expenses and we intend to continue our development efforts for our various technologies and products, including hardware, software, interface customization, and website development. We expect to further develop our sales, marketing and manufacturing programs associated with the commercialization and licensing of our GPS devices and technology. In addition, we intend to further commercialize our LOCiMOBILE® Apps, CANS and the CANS Code Amber Alertags. These activities can only be conducted if our liquidity improves. Accordingly, unless we improve our liquidity, the development of improved products, and our ability to compete, will be adversely affected.

As noted above, based on budgeted revenues and expenditures, planned sales of stock, proceeds from the Equity Line, the use of stock to pay for services and other measures to preserve cash, we believe that we will have sufficient liquidity to satisfy our operating cash requirements for the next twelve months. However, we expect that unless our sales increase significantly, we will need to raise additional funds during the remainder of 2011. The sale of additional equity securities will result in additional dilution to our existing stockholders. Sale of debt securities could involve substantial operational and financial covenants that might inhibit our ability to follow our business plan. Additional financing may not be available in amounts or on terms acceptable to us or at all. We may draw on the Equity Line from time to time at our option over a three year period by selling to Dutchess either (a) 200% of the average daily volume (U.S. market only) of the common stock for the three (3) trading days prior to the date of delivery of the applicable put notice, multiplied by the average of the closing prices for such trading days, or (b) any other specified amount, up to $500,000. If we are unable to obtain additional financing (through the Equity Line, or otherwise), we may be required to reduce the scope of, delay or eliminate some or all of our planned research, development and commercialization activities, which could harm our financial conditions and operating results.

Since inception in 2002, we have generated significant losses (as of June 30, 2011, we had an accumulated deficit of approximately $12,051,000), and we currently expect to incur continued losses until our revenue initiatives collectively generate substantial revenues. Depending on our current contractual arrangements and the revenues from our new LOCiMOBILE® applications, we currently anticipate that our losses will continue until at least the end of calendar year 2011. We are subject to many risks associated with small and growing businesses, including the above-discussed risks associated with the ability to raise capital. Please see the section entitled “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2010 for more information regarding risks associated with our business.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 as of the end of the period covered by this report (the “Evaluation Date”). Based upon the evaluation, our principal executive officer and principal financial officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective. Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls include controls and procedures designed to reasonably ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

During the three months and six months ended June 30, 2011, we issued 4,388,000 and 5,568,000 shares of common stock, respectively to various consultants, members of management and board members, at prices ranging from $0.050 to $0.085 per share, as compensation for services rendered, the grant-date fair value of which was approximately $229,000 and $295,000, respectively. Subsequent to June 30, 2011, 750,000 shares of common stock were issued to a total of five consultants, at $0.074 per share, as compensation for services rendered, the grant-date fair value of which was estimated at $55,500. The foregoing shares were issued in reliance upon an exemption from the registration requirements pursuant to Section 4(2) of the Securities Act of 1933, as amended.

In connection with the conversion of a $45,000 Convertible Promissory Note, we issued 1,467,415 shares of common stock, at conversion prices ranging from $.0301 to $.0338 per share, to one lender during March and April 2011. In connection with the conversion of a $52,000 Convertible Promissory Note, we issued 1,041,920 shares of common stock, at conversion prices ranging from $.0467 to $.0558 per share, to the same lender during June and July 2011. The foregoing shares were issued to a single accredited investor in reliance upon an exemption from the registration requirements pursuant to Section 4(2) of the Securities Act of 1933, as amended.

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation

101.LAB		XBRL Taxonomy Extension Label

101.PRE		XBRL Taxonomy Extension Presentation

Nevada		98-0493446

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

117 W. 9th Street, # 1214, Los Angeles, CA, 90015
(Address of principal executive offices) (Zip Code)

(213) 489-3019
(Registrant's telephone number, including area code)

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

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

Description	Convertible Notes			Derivative Liability			Total

Fair value at December 31, 2010	$	22,660		$	74,340		$	97,000
Amortization of debt discount		53,503			-			53,503
Change in fair value for the six months ended June 30, 2011		-			(60,442	)		(60,442	)
Conversions during period		(64,579	)		-			(64,579	)
Fair value at June 30, 2011	$	11,584		$	13,898		$	25,482

				Number of
	Exercise Price			Warrants

Outstanding and exercisable at December 31, 2010		$	0.40 – 1.50		3,201,750
Warrants exercised					-
Warrants granted					-
Warrants expired		$	1.50		(1,930,750	)
Outstanding and exercisable at June 30, 2011		$	0.40		1,271,000

Stock Warrants as of June 30, 2011
Exercise		Warrants		Remaining		Warrants
Price		Outstanding		Life (Years)		Exercisable

$	0.40		1,271,000		2.04		1,271,000
			1,271,000				1,271,000

		GTX CORP

Date: August 11, 2011	By:	/s/ MURRAY WILLIAMS
		Murray Williams,
		Chief Financial Officer (Principal Financial Officer)

Date: August 11, 2011	By:	/s/ PATRICK BERTAGNA
		Patrick Bertagna,
		Chief Executive Officer