UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from to

Commission File Number: 000-30949

NUMOBILE, INC.

2520 South Third Street, Suite 206

Louisville, Kentucky 40208

(502) 636-2807

Incorporated in Nevada

I.R.S. Employer

Identification No. 61-1342734

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 o

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 during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files. Yes o No o

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. (Check one):

	Large accelerated filer o	Accelerated filer o
	Non-accelerated filer o (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 o No x

As of May 17, 2010 there were 427,156,387 shares of common stock were outstanding.

NUMOBILE, INC.

FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2010

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION	2
Item 1. Financial Statements	2
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosures About Market Risk	22
Item 4. Controls and Procedures	23
PART II. OTHER INFORMATION	23
Item 1. Legal Proceedings	23
Item 1A. Risk Factors	23
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3. Defaults Upon Senior Securities	24
Item 4. [Removed and Reserved.]	24
Item 5. Other Information	24
Item 6. Exhibits	25
SIGNATURES	26

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NUMOBILE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2010 AND DECEMBER 31, 2009

	March 31,			December 31,
	2010			2009
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	160,689		$	177,436
Accounts receivable		29,615			130,171
Prepaid expenses		840			840

TOTAL CURRENT ASSETS		191,144		$	308,447

PROPERTY AND EQUIPMENT, net		13,125			14,277
INTANGIBLE ASSETS, net		4,539,293			4,811,618
LOANS RECEIVABLE		56,000			50,000

TOTAL ASSETS	$	4,799,562		$	5,184,342

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
Cash overdraft	$	-		$	22,249
Convertible debt, net of discounts of $365,474 and $23,156, respectively		106,800			28,844
Notes payable - related parties		1,166,446			680,793
Notes payable		3,578,074			3,830,033
Accounts payable and accrued expenses		715,858			1,049,937
Due to related party		7,295			7,295
Dividends payable		989,814			996,189
Accrued derivative liability		1,635,074			1,313,307
Preferred stock; Series A; $0.001 par value; 5,000 shares authorized;
2,656 and 2,656 shares issued and outstanding		265,600			265,600
Preferred stock; Series D convertible; $0.001 par value; 25,000 shares authorized;
7,034 and 9,034 shares issued and outstanding		703,400			903,400
Preferred stock; Series E convertible; $0.001 par value; 25,000 shares authorized;
2,418 and 2,418 shares issued and outstanding		241,800			241,800

TOTAL CURRENT LIABILITIES		9,410,161			9,339,447


COMMITMENTS AND CONTINGENCIES		-			-

STOCKHOLDERS' DEFICIT
Preferred stock; Series B; $0.001 par value; 100,000 shares authorized;
0 and 0 shares issued and outstanding		-			-
Preferred stock; Series C; $0.001 par value; 12,000,000 shares authorized;
5,000 and 5,000 shares issued and outstanding		5			5
Common stock; $0.001 par value; 5,000,000,000 shares authorized;
318,187,626 and 162,069,338 shares issued and outstanding		318,187			162,069
Additional paid-in capital		5,896,235			5,234,872
Accumulated deficit		(10,825,026	)		(9,552,051	)

TOTAL STOCKHOLDERS' DEFICIT		(4,610,599	)		(4,155,105	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	4,799,562		$	5,184,342

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

NUMOBILE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009

(Unaudited)

	2010			2009

REVENUES	$	88,840		$	809

COST OF REVENUE		50,854			-

GROSS PROFIT		37,986			809

OPERATING EXPENSES
General and adminstative		278,424			52,904
Depreciation and amortization		273,477			-

TOTAL OPERATING EXPENSES		551,901			52,904

LOSS FROM OPERATIONS		(513,915	)		(52,095	)

OTHER INCOME (EXPENSE)
Interest expense and financing costs		(233,551	)		(4,500	)
Change in accrued derivative liability		164,313			(25,890	)
Loss on conversion of debt to equity		(638,903	)		-

TOTAL OTHER INCOME (EXPENSE)		(708,141	)		(30,390	)

LOSS BEFORE PROVISION FOR INCOME TAXES		(1,222,056	)		(82,485	)

PROVISION FOR INCOME TAXES		-			-

NET LOSS		(1,222,056	)		(82,485	)

PREFERRED STOCK DIVIDENDS		(50,919	)		(76,301	)

NET LOSS ATTRIBUTED TO COMMON STOCKHOLDERS	$	(1,272,975	)	$	(158,786	)

NET LOSS PER SHARE ATTRIBUTED TO COMMON
STOCKHOLDERS - BASIC AND DILUTED:	$	(0.01	)	$	(0.02	)

WEIGHTED AVERAGE SHARES OUTSTANDING:
BASIC AND DILUTED		232,895,355			10,529,110

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

NUMOBILE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2010

AND YEAR ENDED DECEMBER 31, 2009

(unaudited)

									Additional					Total
	Series C				Common Stock				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficit

Balance, December 31, 2009		5,000	$	5		162,069,338	$	162,069	$	5,234,872	$	(9,552,051	)	$	(4,155,105	)

Common stock issued for conversion of Series D preferred stock and preferred stock dividends						50,435,516		50,435		217,616					268,051
Accrued preferred stock dividends												(50,919	)		(50,919	)
Conversion of debt to equity						105,682,772		105,683		443,747					549,430
Net loss												(1,222,056	)		(1,222,056	)

Balance, March 31, 2010		5,000	$	5	$	318,187,626	$	318,187	$	5,896,235	$	(10,825,026	)	$	(4,610,599	)

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

NUMOBILE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009

(unaudited)

	2010			2009

CASH FLOW FROM OPERATING ACTIVITIES:
Net loss	$	(1,222,056	)	$	(82,485	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		273,477			-
Amortization of debt discount		128,802			-
Change in accrued derivative liability		(164,313	)		25,890
Non-cash financing charge		14,960			-
Loss on convertion of debt to equity		638,903			-
Changes in operating assets and liabilities:
Accounts receivable		100,556			11,874
Accounts payable and accrued expenses		86,694			-
Accrued compensation - related party		84,067			8,662

Net cash used in operating activities		(58,910	)		(36,059	)

CASH FLOW FROM INVESTING ACTIVITIES:
Advances towards loans receivable		(6,000	)		-

Net cash used in financing activities		(6,000	)		-

CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from notes payable		140,000			18,500
Payments on notes payable		(91,837	)		-

Net cash provided by financing activities		48,163			18,500

NET INCREASE IN CASH AND CASH EQUIVALENTS		(16,747	)		(17,559	)

CASH AND CASH EQUIVALENTS, Beginning of period		177,436			17,620

CASH AND CASH EQUIVALENTS, End of period	$	160,689		$	61

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Interest paid	$	-		$	-
Income taxes paid	$	-		$	-

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:

Conversion of debentures/notes payable to common stock	$	549,430		$	12,182
Conversion of Series D & E dividends to common stock	$	57,294		$	558
Conversion of Series A, D & E preferred stock to common stock	$	109,650		$	3,100
Conversion of accrued payroll liability to promissory note	$	523,844		$	-

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

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

NOTE 1 – ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presenation

NuMobile, Inc. (the “Company”) was organized under the laws of Nevada on March 25, 1999 as Thoroughbred Interests, Inc. Effective May 18, 2004, the Company changed its name to Phoenix Interests, Inc. and effective July 14, 2009 changed its name to NuMobile,Inc. The Company’s prior business operations consisted of purchasing, training and selling of thoroughbred horses. The Company has recently launched a new business strategy to create a comprehensive and global mobile computing technology business.

Going Concern

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company has incurred a net loss of $1,172,113, used cash for operations of $58,910 for the three months ended March 31, 2010, has an accumulated deficit of $10,825,026 as of March 31, 2010 and has a working capital deficit of $9,219,017 as of March 31, 2010. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management believes that it can continue to raise equity or debt financing to support its operations or find an acquisition candidate to complete a merger. Management believes that this could cause additional dilution to its shares of common stock. During September 2009, the Company acquired, through a stock purchase, Enhance Network Communication, Inc., which has developed a proprietary large enterprise network security technology designed for managing the information management requirements of network delivered government services. During October 2009, the Company also acquired, through a stock purchase, Stonewall Networks, Inc. which has developed a proprietary software solution for mobile network security, including an innovative security policy management product for enterprise customers. The Company continues to exercise efforts to settle its debt in shares of its common stock and raise additional capital.

Stock Splits

On January 7, 2004, the Company affected a one-for-ten (1 for 10) reverse stock split of its common stock. On January 20, 2006, the Company authorized a one-for-fifty (1 for 50) reverse stock splits of its common stock. On June 1, 2009, the Company authorized a one-for-one hundred sixty (1 for 160) reverse stock split of its common stock. All share information for common shares has been retroactively restated for these three reverse stock splits.

Consolidated Financial Statements

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Online Enterprises, Inc., Enhance Network Communication, Inc. from the date of acquisition (September 17, 2009), and Stonewall Networks, Inc. from the date of acquisition (October 2, 2009). The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. All inter-company accounts and transactions have been eliminated.

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

Stock Based Compensation

The Company records stock-based compensation in accordance with ASC Topic 718, “Compensation – Stock Compensation.” ASC 718 requires companies to measure compensation cost for stock-based employee compensation at fair value at the grant date and recognize the expense over the employee’s requisite service period. The Company recognizes in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees and non-employees. There were no options outstanding as of March 31, 2010.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. As of March 31, 2010, the Company used estimates in determining accrued expenses, the value of stock based compensation issued for services and the value of the accrued derivative liability. Actual results could differ from these estimates.

Fair Value of Financial Instruments

For certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and convertible debt, the carrying amounts approximate their fair values due to their short maturities.

ASC Topic 820, “Fair Value Measurements and Disclosures,” requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, “Financial Instruments,” defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

	●	Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets.

	●	Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

	●	Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815.

The following table represents our assets and liabilities by level measured at fair value on a recurring basis at March 31, 2010.

Description	Level 1	Level 2	Level 3

Liabilities
Accrued derivative liability	-	$1,635,074	-

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company defines cash equivalents as all highly liquid debt instruments purchased with a maturity of three months or less, plus all certificates of deposit.

Accounts Receivable

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and accounts receivables. The Company places its cash with high quality financial institutions and at times may exceed the FDIC $250,000 insurance limit. The Company extends credit based on an evaluation of the customer’s financial condition, generally without collateral. Exposure to losses on receivables is principally dependent on each customer’s financial condition. The Company monitors its exposure for credit losses and maintains allowances for anticipated losses, as required.

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

Property and Equipment

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:

Computer equipment	5 years
Office furniture and fixtures	7 years
Office equipment	5 years

The following are the details of property and equipment:

	March 31,			December 31,
	2010			2009

Computer equipment	$	7,459		$	9,418
Office furniture and fixtures		633			705
Office equipment		6,185			7,625
Total		14,277			17,748

Less accumulated depreciation		(1,152	)		(3,471	)

	$	13,125		$	14,277

Intangible Assets

Intangible assets consist of capitalized software development costs, and purchased technology in connection with the acquisition of Enhance Network Communication, Inc. and Stonewall Networks, Inc. in 2009. The Company evaluates intangible assets for impairment at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Recoverability of intangible assets is measured by comparing its net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss.

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

The following are the details of intangible assets:

	March 31,			December 31,
	2010			2009

Software	$	485,078		$	485,078
Purchased technology		4,638,049			4,638,049
Total		5,123,127			5,123,127

Less Accumulated amortization		(583,834	)		(311,509	)

Intangibles, net	$	4,539,293		$	4,811,618

Impairment of Long-Lived Assets

The Company applies the provisions of ASC Topic 360, “Property, Plant, and Equipment,” which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. ASC 360 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair values are reduced for the cost of disposal. Based on its review, the Company believes that as of March 31, 2010 and December 31, 2009, there was no significant impairment of its long-lived assets.

Accrued Derivative Liability

The convertible debt and the Series A, D and E preferred stock can be converted into common stock at a conversion price that is a percentage of the market price; therefore the number of shares that could be required to be delivered upon “net-share settlement” is essentially indeterminate. The Company has bifurcated the beneficial conversion features embedded in its convertible debentures and preferred stock and convertible debt and has recorded the fair value of these beneficial conversion features as a current liability.

Convertible Preferred Stock and Convertible Debt

The Company’s Series A, D and E preferred stock and convertible debt are presented as a current liability since the Company has financial instruments that are convertible into common stock at a conversion price that is a percentage of the market price; therefore the number of shares that could be required to be delivered upon “net-share settlement” is essentially indeterminate and the Company does not have enough authorized shares to satisfy the conversion of its convertible preferred stock.

Revenue Recognition

The Company's revenue recognition policies are in compliance with SEC Staff Accounting Bulletin (SAB) 104. Revenue is recognized when services are rendered to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

Income Taxes

The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes.” ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The adoption had no effect on the Company’s consolidated financial statements.

Loss Per Share

The Company reports loss per share in accordance with ASC Topic 260, “Earnings Per Share.” Basic earnings per share is based upon the weighted average number of common shares outstanding. Diluted earnings per share is based on the assumption that all dilutive convertible shares and stock warrants were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. The following potential common shares have been excluded from the computation of diluted net loss per share for the three months ended March 31, 2010 and 2009 because the effect would have been anti-dilutive:

	2010		2009
Common stock issuable (approximate) upon conversion of convertible debt		217,430,366		40,937,750

Common stock issuable (approximate) upon conversion of preferred stock		619,987,810		267,732,101

Comprehensive Loss

For the three months ended March 31, 2010 and 2009, the Company did not have items that represented other comprehensive income and, accordingly, a statement of comprehensive loss has not been included herein.

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

Reclassification

Certain reclassifications have been made to the 2009 balances to conform to the 2010 presentation.

Recently Issued Accounting Pronouncements

In October 2009, the FASB issued Accounting Standards Update 2009-15 ("ASU 2009-15") regarding accounting for own-share lending arrangements in contemplation of convertible debt issuance or other financing. This ASU requires that at the date of issuance of the shares in a share-lending arrangement entered into in contemplation of a convertible debt offering or other financing, the shares issued shall be measured at fair value and be recognized as an issuance cost, with an offset to additional paid-in capital. Further, loaned shares are excluded from basic and diluted earnings per share unless default of the share-lending arrangement occurs, at which time the loaned shares would be included in the basic and diluted earnings-per-share calculation. This ASU is effective for fiscal years beginning on or after December 15, 2009, and interim periods within those fiscal years for arrangements outstanding as of the beginning of those fiscal years. The adoption of this ASU will not have a significant impact on the Company’s financial statements.

On December 15, 2009, the FASB issued ASU No. 2010-06 Fair Value Measurements and Disclosures Topic 820 “Improving Disclosures about Fair Value Measurements”. This ASU requires some new disclosures and clarifies some existing disclosure requirements about fair value measurement as set forth in Codification Subtopic 820-10. The FASB’s objective is to improve these disclosures and, thus, increase the transparency in financial reporting. The adoption of this ASU did not have a material impact on the Company’s financial statements.

On February 25, 2010, the FASB issued ASU 2010-09 Subsequent Events Topic 855 “Amendments to Certain Recognition and Disclosure Requirements,” effective immediately. The amendments in the ASU remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. The FASB believes these amendments remove potential conflicts with the SEC’s literature. The adoption of this ASU did not have a material impact on the Company’s financial statements.

On March 5, 2010, the FASB issued ASU No. 2010-11 Derivatives and Hedging Topic 815 “Scope Exception Related to Embedded Credit Derivatives.” This ASU clarifies the guidance within the derivative literature that exempts certain credit related features from analysis as potential embedded derivatives requiring separate accounting. The ASU specifies that an embedded credit derivative feature related to the transfer of credit risk that is only in the form of subordination of one financial instrument to another is not subject to bifurcation from a host contract under ASC 815-15-25, Derivatives and Hedging — Embedded Derivatives — Recognition. All other embedded credit derivative features should be analyzed to determine whether their economic characteristics and risks are “clearly and closely related” to the economic characteristics and risks of the host contract and whether bifurcation is required. The ASU is effective for the Company on July 1, 2010. Early adoption is permitted. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements.

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

NOTE 2 – RELATED PARTY TRANSACTIONS

Total rent expense accrued to Mr. Tilton, the Company’s CEO for the three months ended March 31, 2010 and 2009 was approximately $4,500 and $4,500, respectively.

For additional related party transactions see Note 5.

NOTE 3 – CONVERTIBLE DEBT

On September 21, 2009, the Company exchanged with a Holder 3,000 shares of its Series D preferred stock for a $301,250 convertible note, due March 21, 2010. The note accrues interest at 12% per annum. The remaining balance of the note of $52,000 was converted into 26,171,764 shares of the Company’s common stock during the three months ended March 31, 2010.

On February 18, 2010, the Company entered into a convertible debenture for cash proceeds of $50,000. The debenture matures on August 18, 2010 and bears interest at 8% per annum. The holder is entitled, at its options, to convert any or all of the outstanding principal plus accrued and unpaid interest at any time into shares of the Company’s common stock, at a price per share equal to 50% of the lowest closing bid price for the preceding 10 days prior to the Company receiving notice of conversion. On February 18 and March 31, 2010, the debenture was convertible into 31,250,000 and 24,634,146 shares of the Company’s common stock, respectively. The Company has complied with the provisions of ASC 815 “Derivatives and Hedging”, and recorded the fair value of the embedded conversion option liability associated with the debenture. The initial fair value of the conversion option feature was estimated at $50,045 using the Black-Scholes pricing model. The assumptions used in the Black-Scholes option pricing model at February 18, 2010 in connection with this debenture are as follows: (1) dividend yield of 0%; (2) expected volatility of 0%, (3) risk-free interest rate of 0.18%, and (4) expected life of 0.50 years. The fair value of the conversion option feature at March 31, 2010 was $61,643. The Company recorded the change of $11,598 in its accompanying statements of operations for the three months ended March 31, 2010 as change in accrued derivative liability. The assumptions used in the Black-Scholes option pricing model at March 31, 2010 in connection with this debenture are as follows: (1) dividend yield of 0%; (2) expected volatility of 0%, (3) risk-free interest rate of 0.24%, and (4) expected life of 0.39 years. On March 31, 2010, the entire $50,000 balance remained outstanding. Interest expense on this debenture for the three months ended March 31, 2010 was $500. Interest expense arising from amortization of debt discounts on this debenture amounted to $11,236 during the three months ended March 31, 2010.

On March 3, 2010, the Company entered into a convertible debenture for cash proceeds of $90,000, which is in addition to a convertible debenture outstanding with the same holder in the amount of $182,440. The entire $272,440 debenture matures on September 30, 2010 and bears interest at 8% per annum. The holder is entitled, at its option, to convert any or all of the outstanding principal plus accrued and unpaid interest at any time into shares of the Company’s common stock, at a price per share equal to 50% of the closing bid price of the common stock on the date that the Company receives notice of conversion. On March 3 and March 31, 2010, the entire debenture was convertible into 70,872,840 and 116,513,600 shares of the Company’s common stock, respectively. The initial fair value of the conversion option feature was estimated at $287,354 using the Black-Scholes pricing model. The assumptions used in the Black-Scholes option pricing model at March 3, 2010 in connection with this debenture are as follows: (1) dividend yield of 0%; (2) expected volatility of 0%, (3) risk-free interest rate of 0.19%, and (4) expected life of 0.59 years. The fair value of the conversion option feature at March 31, 2010 was $291,639. The Company recorded the change of $4,285 in its accompanying statements of operations for the three months ended March 31, 2010 as change in accrued derivative liability. The assumptions used in the Black-Scholes option pricing model at March 31, 2010 in connection with this debenture are as follows: (1) dividend yield of 0%; (2) expected volatility of 0%, (3) risk-free interest rate of 0.24%, and (4) expected life of 0.51 years. On March 31, 2010, the entire $90,000 plus the $182,440 previous balance remained outstanding. Interest expense on this debenture for the three months ended March 31, 2010 was $4,249. Interest expense arising from amortization of debt discounts on this debenture amounted to $36,153 during the three months ended March 31, 2010.

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

On February 26, 2010, the Company exchanged 2,000 shares, or $200,000 plus $1,250 of accrued dividends of its Series D preferred stock for a convertible promissory note with a principal amount of $201,250. The note matures on August 26, 2010 and bears interest at 12% per annum. The holder is entitled, at its option, to convert any or all of the outstanding principal plus accrued and unpaid interest at any time into shares of the Company’s common stock, as is determined by dividing (i) the sum f (A) the outstanding amount, plus (B) an amount equal to 1% of the outstanding amount multiplied by the number of months elapsed from January 20, 2004 until the date of conversion by (ii) the conversion price at that time. The Conversion price means the lesser of 70% of the closing bid price or (ii) $0.0192. On February 26 and March 31, 2010, the note was convertible into 115,000,000 and 76,282,620 shares of the Company’s common stock, respectively. The initial fair value of the conversion option feature was estimated at $148,680 using the Black-Scholes pricing model. The assumptions used in the Black-Scholes option pricing model at February 26, 2010 in connection with this debenture are as follows: (1) dividend yield of 0%; (2) expected volatility of 0%, (3) risk-free interest rate of 0.19%, and (4) expected life of 0.50 years. The fair value of the conversion option feature at March 31, 2010 was $114,687. The Company recorded the change of $33,993 in its accompanying statements of operations for the three months ended March 31, 2010 as change in accrued derivative liability. The assumptions used in the Black-Scholes option pricing model at March 31, 2010 in connection with this debenture are as follows: (1) dividend yield of 0%; (2) expected volatility of 0%, (3) risk-free interest rate of 0.24%, and (4) expected life of 0.41 years. During the three months ended March 31, 2010, the holder converted $51,416 of the note into 24,000,087 shares of the Company’s common stock. Interest expense on this note for the three months ended March 31, 2010 was $4,495. Interest expense arising from amortization of debt discounts on this debenture amounted to $58,167 during the three months ended March 31, 2010.

NOTE 4 – NOTE PAYABLE

Notes payable consisted of the follows at March 31, 2010 and December 31, 2009:

	March 31, 2010		December 31, 2009
Note payable to investor; interest accrues at 12%; note is unsecured and due upon demand	$	108,400	$	108,400

Note payable to investor; interest accrues at 18%; note is unsecured and due upon demand		10,000		10,000

Note payable to investor; interest accrues at 18%; note is unsecured and due upon demand		-		19,119

Note payable assumed in connection with purchase of Enhance Network Communication, Inc.		425,000		425,000

Note payable to shareholders of Stonewall Networks, Inc.; note is due on September 9, 2010		1,350,000		1,350,000

Note payable to shareholders of Enhance Network Communication, Inc.; note is due on September 9, 2010		949,600		1,000,000

Note payable to investor; note is unsecured; interest accrues at 8% and due March 31, 2010		-		182,440

Note payable to investor; note is unsecured; interest accrues at 8% and due June 15, 2010		100,000		100,000

Note payable to investor; note is unsecured; interest accrues at 8% and due December 31, 2008. Note is past due.		25,016		25,016

Note payable to investor; note is unsecured; interest accrues at 8% and due October 15, 2011		610,058		610,058

	$	3,578,074	$	3,830,033

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

NOTE 5 – NOTE PAYABLE – RELATED PARTIES

Notes payable – related parties consisted of the follows at March 31, 2010 and December 31, 2009:

	March 31, 2010		December 31, 2009
Note payable executed in January 2010 to officer of Stonewall Networks, Inc. converted from accrued payroll; note is unsecured and accrued interest at 8% per annum; due on demand	$	300,000	$	-

Note payable executed in January 2010 to officer of Stonewall Networks, Inc. converted from accrued payroll; note is unsecured and accrued interest at 8% per annum; due on demand		223,844		-

Note payable to officer; note is unsecured and does not accrue interest; due on December 31, 2009		100,000		100,000

Loan payable to company wholly owned by officer of Stonewall Networks, Inc.; interest accrues at Prime Rate plus 1%; note is unsecured and due upon demand		389,399		386,153

Note payable to employee of Stonewall Networks, Inc.; does not accrue interest; note is unsecured and due on demand		102,026		105,026

Note payable to company wholly owned by officer of Stonewall Networks, Inc.; does not accrue interest; note is unsecured and due on demand		49,594		61,439

Note payable to officer of Stonewall Networks, Inc.; does not accrue interest; note is unsecured and due on demand		1,583		18,075

Note payable to company wholly owned by officer of Enhance Network Communication, Inc.; does not accrue interest; note is unsecured and due on demand		-		10,100

	$	1,166,446	$	680,793

NOTE 6 – STOCKHOLDERS’ DEFICIT

On January 2, 2004, the Company filed a Certificate of Amendment to its Articles of Incorporation for the State of Nevada to amend its capitalization. The amendment grants the Company the authority to issue 1 billion shares of par value $0.001 stock consisting of 20,000,000 preferred shares and 980,000,000 common shares.

On October 5, 2005, the Company filed an Information Statement requesting approval from the stockholders to give the Company’s board of directors the authority to (1) effect a reverse stock split of each share of common stock of the Company at a ratio of one share for up to 50 shares of common stock outstanding, as determined by the Company’s board of directors at its discretion, and (2) amend the Company’s Articles of Incorporation to increase from 980,000,000 to 5,000,000,000 the number of shares of common stock the Company is authorized to issue. The stockholders approved items (1) and (2) above and on November 9, 2005, the Company filed a Certificate of Amendment with the Nevada Secretary of State increasing the number of authorized common shares to 5,000,000,000.

On January 7, 2004, the Company affected a one-for-ten reverse stock split of its common stock. On January 20, 2006, the Company authorized a one for fifty reverse stock split of its common stock. On June 1, 2009, the Company authorized a one for one hundred sixty (160) reverse stock splits of its common stock. All share information for common shares has been retroactively restated for these two reverse stock splits.

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

Common Stock

The Company had the following transactions in its common stock.

For the three months ended March 31, 2010, the Company issued:

	●	50,435,516 shares of common stock for the for conversion of Series D stock and preferred stock dividends of $109,650 and $57,294, respectively;

	●	105,682,772 shares of common stock for the conversion of convertible debt/notes payable of $122,535.

Preferred Stock

The Company has debt and equity instruments that can be converted into common stock at a conversion prices that are a percentage of the market price; therefore the number of shares that could be required to be delivered upon “net-share settlement” is essentially indeterminate. Therefore, the Series A, D and E Preferred Stock which can be converted into shares of common stock are shown in the accompanying consolidated balance sheet as a current liability.

Series A Preferred Stock - There are 5,000 shares of Series A preferred stock authorized. Each share of Series A preferred stock is entitled to receive a monthly dividend of $2.00 per share, payable quarterly in arrears, and is convertible into common stock at the rate of $100 per share ($500,000 in the aggregate) at a discount of (1) 75% of the closing bid price of the common stock (if at the option of the holder), or (2) 60% of the closing bid price of the common stock (if at the option of our company). In the event of liquidation, all shares of Series A preferred stock would automatically be converted into shares of our common stock at rate of $100 per share, with holders of shares of Series A preferred stock being entitled to receive, in the aggregate, shares of our common stock valued at $500,000. Shares of Series A preferred stock vote with shares of our common stock on an as-converted basis.

Series B Preferred Stock - There are 100,000 shares of Series B preferred stock authorized. In the event of liquidation, each share of Series B preferred stock ranks equivalent to one share of our common stock. Shares of Series B preferred stock are not entitled to participate in dividends declared on our common stock. The Series B preferred stock votes together with our common stock on the basis of 1,000 votes per share.

Series C Preferred Stock - There are 12,000,000 shares of Series C preferred stock authorized. Each share of Series C preferred stock is convertible into one share of our common stock. The Series C preferred stock is non-interest bearing, does not have voting rights, and is not entitled to receive dividends. In the event of a liquidation, each share of Series C preferred stock will automatically convert into one share of our common stock and will otherwise not be entitled to any preference over shares of our common stock or any shares of our preferred stock. Shares of Series C preferred stock are entitled to name two members of our board of directors.

Series D Preferred Stock - There are 25,000 shares of Series D preferred stock authorized. Shares of Series D preferred stock are entitled to participate, on an as-converted basis, in any dividends declared on the common stock. In the event of a voluntary or involuntary liquidation, dissolution or winding up of the Corporation, holders of Series D preferred stock shall be entitled to share pari passu with the holders of shares of common stock in the assets of the Corporation, on an as converted basis, whether such assets are capital or surplus of any nature. Any outstanding shares of Series D preferred stock may, at the option of the holder, be converted at any time or from time to time into fully paid and nonassessable shares of common stock at the conversion rate in effect at the time of conversion, determined as provided herein, except that (1) a holder of shares of Series D preferred stock may at any given time convert only up to that number of shares of Series D preferred stock as would result in the aggregate beneficial ownership of the Company’s common stock (calculated in accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of that holder and all persons affiliated with that holder not being more than 4.99% of the Company’s common stock then outstanding and (2) a holder of shares of Series D preferred stock may not convert more than half of that holder’s shares of Series D preferred stock within any 30-day period. The number of shares into which one share of Series D preferred stock is convertible will be determined by dividing (1) the sum of (A) Stated Value plus (B) an amount equal to 1% of the Stated Value multiplied by the number of months from the original issue date until the date of conversion (pro rated for any period of less than a month) by (2) the conversion price at that time. The conversion price is the lesser of (1) 70% of the closing bid price and (2) $0.0192 (the amount being 120% of the closing bid price on December 22, 2004).

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

Series E Preferred Stock - There are 25,000 shares of Series E preferred stock authorized. Shares of Series E preferred stock may, at the option of the holder, be converted into shares of common stock at the conversion rate in effect at the time of conversion. The number of shares into which one share of Series E preferred stock is convertible will be determined by dividing (1) the sum of (A) the “Stated Value” (equal to $100) plus (B) an amount equal to 1.5% of the Stated Value multiplied by the number of months from the date of issuance until the date of conversion (pro rated for any period of less than a month) by (2) the lesser of (A) $0.006 and (B) the Conversion Price at that time. For these purposes, “Conversion Price” means 70% of the Closing Bid Price, and “Closing Bid Price” on a given day means the lowest closing bid price of the common stock out of the closing bid price of the common stock on each of the five immediately preceding trading days on NASDAQ or any other principal securities price quotation system or market on which prices of the common stock are reported.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

The Company’s executive and administrative office is located in Louisville, Kentucky. These premises are owned by James D. Tilton, Jr., the Company’s chief executive officer. Through June 30, 2003, he did not charge the company any rent for our use of these premises. Starting July 1, 2003, he has charged the company $1,250 per month for its use of these premises, and during 2005 increased it to $1,500 per month. Since August 2006, the Company has not been able to pay any rent. From June 2008 through July 2009, we moved to a space on Riverbend Drive in Ludlow, Kentucky. Rent was $1,500 per month, and Mr. Tilton paid the monthly rent on behalf of the Company. Total rent expense accrued to Mr. Tilton for the three months ended March 31, 2010 and 2009 was $4,500 and $4,500, respectively.

The Company’s subsidiary, Enhance Network Communication, Inc., rents 642 square feet of office space for its main corporate office in San Jose, California on a lease that runs through April 30, 2010. The amount of future lease payments due from July 1, 2009 through April 30, 2010 under this agreement is $11,880.

The Company’s subsidiary, Stonewall Networks, Inc., rented shared office space on a lease that ran through October 31, 2008. The Company then made arrangements for its employees to work from home until it signed a new one-year lease that started on November 9, 2009. Monthly rent under this new lease is $840. Total rent expense under the new lease will be $10,080.

Rent expense recorded in the financial statements for the three months ended March 31, 2010 and 2009 was approximately $11,582 and $4,500, respectively.

On September 17, 2009 the Company entered into a stock purchase agreement with Enhance Network Communication, Inc., a California corporation ("Enhance"). Enhance is an information technology company headquartered in Cupertino, California, that has developed a proprietary large enterprise network security technology designed for managing the information management requirements of network delivered government services. The Company purchased from the shareholders of Enhance 1,500 shares of common stock of Enhance, representing 100% of the outstanding capital stock of Enhance. The Company issued to the Enhance shareholders a note in the principal amount of $5,000,000 (the "Note"). $1,000,000 of the principal amount of the Note (the "Initial Principal Amount") will be due and payable on September 9, 2010. The Company's obligation to repay the remaining $4,000,000 principal amount of the Note (the "Final Principal Amount") is conditioned upon Enhance entering into a contract for its proprietary technology that contemplates the generation of at least $20,000,000 in revenue and $8,000,000 in gross margin prior to April 1, 2011 (the "Final Principal Amount Conditions"). If the Final Principal Amount Conditions are met, the Final Principal Amount will be due and payable on September 9, 2014. If the Final Principal Amount Conditions are not met, the Note shall be deemed paid in full and cancelled on April 1, 2011, subject to the payment of the Initial Principal Amount, interest thereon, and any other amounts due thereon. Interest on the Note accrues at the rate of 8% per annum commencing on September 9, 2009, with respect to the Initial Principal Amount and April 1, 2011 with respect to the Final Principal Amount, and is due and payable upon maturity of the Initial Principal Amount and Final Principal Amount (provided the Final Principal Amount Conditions are met) respectively. If the Final Principal Amount Conditions are met, the shareholders of Enhance will have the option to repurchase the 1,500 shares of common stock of Enhance for $5,000,000 in cash and the cancellation of the Note. The Final Principal Amount of $4,000,000 is considered a contingent note and will not be recorded on the balance sheet until the Final Principal Amount Conditions are met.

NuMobile, Inc and Subsidiaries

Notes to Consolidated Financial Statements

For the Three Months Ended March 31, 2010

NOTE 8 – SUBSEQUENT EVENTS

On May 3, 2010, the Company filed an amendment to the Company certificate of designation of its Class A Preferred Stock. Pursuant to the amendment:

	●	All accrued but unpaid dividends payable to the holders of Class A Preferred Stock were eliminated.

	●	The right of the holders of the Class A Preferred Stock to receive future dividends was eliminated.

	●	The holders of the Class A Preferred Stock will own 51% of the voting power of the shareholders of the Company.

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

Interim financial statements

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto for the year ended December 31, 2009 included in the Company’s Form 10-K filed on April 8, 2010. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The financial statements reflect all adjustments (consisting primarily of normal recurring adjustments) that are, in the opinion of management necessary for a fair presentation of the Company’s financial position and results of operations. The operating results for the three months ended March 31, 2010 are not necessarily indicative of the results to be expected for any other interim period of any future year.

This Quarterly Report on Form 10-Q and the information incorporated by reference may include “forward-looking statements” All statements regarding our expected financial position and operating results, our business strategy, our financing plans and the outcome of any contingencies are forward-looking statements. The forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth or implied by any forward-looking statements.

The following discussion should be read in conjunction with NuMobile’s financial statements and the related notes included in this Form 10-Q included elsewhere in this Quarterly Report.

Overview

We were organized under the laws of Nevada on March 25, 1999 as Thoroughbred Interests, Inc. Effective May 18, 2004, we changed our name to Phoenix Interests, Inc. and effective July 14, 2009 we changed our name to NuMobile,Inc. In connection with this latter name change, our stock ticker symbol on the Over-the-Counter Bulletin Board was changed from “PXIT” to “NUBL.” Our prior business operations consisted of purchasing, training and selling of thoroughbred horses. We have recently launched a new business strategy to create a comprehensive and global mobile computing technology business.

On September 17, 2009, we acquired 100% of the outstanding capital stock of Enhance Network Communications, Inc. (“Enhance” or “Enhance Network Communication”). Enhance is an information technology company headquartered in Cupertino, California, that has developed a proprietary large enterprise network security technology designed for managing the information management requirements of network delivered government services.

On October 12, 2009, we acquired 100% of the outstanding capital stock of Stonewall Networks, Inc., a Delaware corporation (“Stonewall” or “Stonewall Networks”). Stonewall is a development stage information technology security product company headquartered in Cary, North Carolina.

Our business address is 2520 South Third Street, Suite 206, Louisville, Kentucky 40208, and our telephone number is (502) 636-2807.

NuMobile, Inc

NuMobile currently conducts its operations through its subsidiaries Enhance and Stonewall. NuMobile’s plan and focus is to strategically acquire corporations that focus on four major vertical markets. The first of these markets is applications providing for smart phones and mobile computing trending to cloud network support and scaling. The second is infrastructure, architect design and management for wireless and land based networking. The third is the creation of mobile framework and applications for healthcare services and products. The fourth and last is providing infrastructure and support to the hospitality and gaming sectors with emphasis on mobile monitoring of fleet management, infrastructure security and communication for security detailing. We have no current arrangements or agreements for any specific acquisitions.

Enhance Network Communication

Enhance provides a wide variety of services from infrastructure architect to software as a service supplier. This positions Enhance to continue working with local and national government to provide service and support to the educational sector through to commercial usage such as conventions and local business markets.

Stonewall Networks

Stonewall Networks has built the Cornerstone Security Policy Manager. Cornerstone, a centralized IT security policy manager, is an engine for security policy modeling, implementation, monitoring, enforcement, and auditing. Product features include consistent security policy implementation across all (multi-vendor) network security devices, policy auditing, mobile device security, rapid support of new network security devices, and rapid threat response.

Critical Accounting Policies

Accrued Derivative Liability - The convertible debenture and the Series A, D and E preferred stock can be converted into common stock at a conversion price that is a percentage of the market price; therefore the number of shares that could be required to be delivered upon “net-share settlement” is essentially indeterminate. In accordance with ASC 815, we have bifurcated the beneficial conversion features embedded in our convertible debentures and preferred stock and have recorded the fair value of these beneficial conversion features as a current liability.

Convertible Preferred Stock - Our Series A, D and E preferred stock are presented as a current liability since we have financial instruments that are convertible into common stock at a conversions price that is a percentage of the market price; therefore the number of shares that could be required to be delivered upon “net-share settlement” is essentially indeterminate and we do not have enough authorized shares to satisfy the conversion of our convertible preferred stock.

Revenue Recognition - Revenue is recognized at the time the services are performed under contract agreements.

Operating Results for the Three Months Ended March 31, 2010 and 2009

Revenues. Our revenues for the three months ended March 31, 2010 and 2009 were $88,840 and $809, respectively. The increase in revenue in 2010 is primarily the result of revenue earned from our two subsidiaries, Enhance Network Communication, Inc. and Stonewall Networks, Inc., acquired in the second and third quarters of 2009 subsequent to their respective acquisition dates.

Operating Expenses. Our operating expenses for the three months ended March 31, 2010 and 2009, were $551,901 and $52,904, respectively. The increase from 2009 to 2010 is primarily the result of the operational expenses incurred from our two recently acquired subsidiaries, Enhance Network Communication, Inc. and Stonewall Networks, Inc. subsequent to their respective acquisition dates.

Interest Expense and Financing Costs. Our interest expense and financing costs for the three months ended March 31, 2010 and 2009 were $233,551 and $4,500, respectively. The increase in the interest expense and financing costs is the result of increased borrowings and interest incurred from existing borrowings assumed from the acquisition of Enhance Network Communication, Inc. and Stonewall Networks, Inc.

Change in Accrued Derivative Liability. Change in accrued derivative liability for the three months ended March 31, 2010 and 2009 was $164,313 and $(25,890), respectively. The change in derivative liability is directly related to the change in the accrued derivative liability balance which fluctuates based fair value.

Loss on conversion of debt to equity. Loss on conversion of debt to equity for the three months ended March 31, 2010 and 2009 was $638,903 and $0, respectively. This amount represents the excess of the fair value of the stock issued over the carrying value of the debt that was converted.

Net (Loss). Our net loss for the three months ended March 31, 2010 and 2009 was $1,222,056 and $82,485, respectively. The difference is principally due to the loss on conversion of debt to equity, increased in interest and financing costs due to the increase in the notes payable outstanding balance, and the depreciation and amortization expense on purchased equipment and intangibles.

Changes In Balance Sheet. We had current assets of $191,144 at March 31, 2010. We had total assets of $4,849,962 at March 31, 2010, total liabilities of $9,460,561 at March 31, 2010 and stockholders’ (deficit) of ($4,610,599) at March 31, 2010.

Liquidity, Capital Resources and Cash Requirements. During the three months ended March 31, 2010 net cash used in operating activities was $58,910 as compared to $36,059 for the three months ended March 31, 2009. During the three months ended March 31, 2010, net cash used in investing was $6,000 towards payments on loans receivables. Net cash provided by financing activities during the three months ended March 31, 2010 and 2009 was $48,163 and $18,500, respectively, primarily as a result of the net proceeds from notes payable.

As a result of the above, as of March 31, 2010, we had a cash position of $160,689.

We have historically financed our operations via convertible-debt and preferred-stock financing obtained from various private equity firms. These funds intend, over time, to convert their positions into shares of our common stock. This will cause significant dilution to existing shareholders.

In the immediate future, we have no commitments or plans to finance our business.

Change in Number of Employees

In connection with the recent acquisitions of Stonewall Networks, Inc. and Enhance Network Communication, Inc., we anticipate hiring additional employees to allow us to expand our business. With the acquisitions, our workforce increased in 2009 by approximately five employees.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not required

Item 4. Controls and Procedures

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in the reports we file pursuant to the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and that such information is accumulated and communicated to our Chief Executive Officer (“CEO”), who also serves as the Company’s Principal Financial Officer (“PFO”), to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide a reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management designed the disclosure controls and procedures to provide reasonable assurance of achieving the desired control objectives.

We carried out an evaluation, under the supervision and with the participation of our management, including our CEO and PFO, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report. Based upon that evaluation, the Chief Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There have been no significant changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act) during the quarter ended March 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder, is an adverse party or has a material interest adverse to our company.

Item 1A. Risk Factors

There have been no material changes from the disclosure provided in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2009.

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

During the three months ended March 31, 2010, the Company issued 50,435,516 shares of common stock upon conversion of and as dividends on its Series D Preferred Stock in the amounts of $109,650 and $57,294, respectively.

During the three months ended March 31, 2010, the Company issued 105,682,772 shares of common stock upon conversion of convertible debt and notes in the amount of $122,535.

On February 18, 2010, the Company issued and sold a convertible debenture in the principal amount of $50,000, convertible into common stock at price per share equal to 50% of the lowest closing bid price for the preceding 10 days prior to the Company receiving notice of conversion.

On March 3, 2010, the Company issued and sold a convertible debenture in the principal amount of $90,000, convertible into shares of the Company’s common stock, at a price per share equal to 50% of the closing bid price of the common stock on the date that the Company receives notice of conversion.

In connection with the foregoing, the Company relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.

Item 3. Defaults Upon Senior Securities

None.

Item 4. [Removed and Reserved.]

Item 5. Other Information

Not applicable.

Item 6. Exhibits

No.		Description

31.1		Certification of the Principal Executive Officer and Principal Financial Officer under 18 U.S.C. section 1350, as adopted in accordance with section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Principal Executive Officer and Principal Financial Officer under 18 U.S.C. section 1350, as adopted in accordance with section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NUMOBILE, INC.

	By:	/s/ James D. Tilton, Jr.
		James D. Tilton, Jr.
		Chairman, President, Secretary and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)
Dated: May 17, 2010

NUMOBILE, INC. 10-Q