FORM 10-Q QUARTERLY REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2009.

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

For the transition period from _______________________ to ___________________________

Commission File Number: 000-51529

S2C GLOBAL SYSTEMS, INC.

(Exact name of registrant as specified in its charter)



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

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

210-561-6015

(Registrant’s telephone number, including area code)

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

£ Yes £ No

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

Large accelerated filer £

Accelerated filer £

Non-accelerated filer £ (Do not check if a smaller reporting company)

Smaller reporting company S

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of September 30, 2009 there were 97,646,320 shares of common stock, $0.001 par value issued and outstanding.

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows at September 30, 2009 and 2008 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2008 audited financial statements. The results of operations for the periods ended September 30, 2009 and 2008 are not necessarily indicative of the operating results for the full year.

FINANCIAL STATEMENTS

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Condensed Consolidated Financial Statements

(Presented in US dollars)

(Unaudited – Prepared by Management)

September 30, 2009

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Condensed Consolidated Financial Statements

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

September 30, 2009

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Operations

Condensed Consolidated Statements of Cash Flows

Notes to the Condensed Consolidated Financial Statements

9 - 14


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

			(Unaudited)
			September 30,		December 31,
			2009		2008

ASSETS
Current
	Cash	$	40,507	$	8,077
	Accounts receivable		8,459		14,899
	Due from government agency		349		66
	Prepaid expenses		1,500		6,016
	Advances to related party		-		985

			50,815		30,043

Investment in and advances to joint venture			4,669		21,217

Equipment			11,133		13,160

		$	66,617	$	64,420

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current
	Accounts payable and accrued liabilities	$	193,658	$	227,988
	Accounts payable and accrued liabilities - Related party		1,747		150,439
	Loans payable		16,889		10,974
	Loans payable - Related party		13,076		11,494
	Demand promissory notes - Related party		8,554		13,497
	Convertible promissory notes		11,743		27,532
	Sale of future earnings		199,000		175,000

			444,667		616,924

Stockholders' Equity (Deficit)
	Preferred stock, 25,000,000 shares authorized, $0.001 par value
	no shares issued		-		-
	Common stock, 200,000,000 shares authorized, $0.001 par value
	97,646,320 (2008 - 77,334,599) shares outstanding		97,646		77,334
	Additional paid-in capital		3,985,357		3,442,636
	Deficit accumulated during the development stage		(4,461,053)		(4,072,474)

			(378,050)		(552,504)

		$	66,617	$	64,420

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


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

			Cumulative
			from inception
			May 6, 2004 to		Three months ended				Nine months ended
			September 30,		September 30,				September 30,
			2009		2009		2008		2009		2008

Sales		$	1,848	$	-	$	16	$	-	$	271

Cost of sales			692		-		-		-		-

Gross profit			1,156		-		16		-		271

General and administrative expenses			4,336,957		255,340		158,651		330,948		419,435

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

Loss before other income (expense)			(4,618,321)		(255,340)		(158,635)		(330,948)		(419,164)

Other income (expense)
	Forgiveness of debt		275,564		-		12,513		-		12,513
	Interest earned		1,342		-		-		-		-
	Interest expense		(60,815)		(1,010)		-		(3,591)		(3,199)
	Loss from joint venture		(45,331)		(12,602)		-		(40,548)		-
	Loss from debt conversion		(13,492)		(13,492)		-		(13,492)		-
			157,268		(27,104)		12,513		(57,631)		9,314

Net and comprehensive loss		$	(4,461,053)	$	(282,444)	$	(146,122)	$	(388,579)	$	(409,850)

Weighted average number of shares outstanding - basic and diluted					88,189,438		69,456,334		81,562,420		70,233,537

Loss per share - basic and diluted				$	(0.00)	$	(0.00)	$	(0.00)	$	(0.01)

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


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

				Cumulative
				from inception
				May 6, 2004 to		Nine months ended
				September 30,		September 30,
				2009		2009		2008

Operating Activities
	Net loss for the period		$	(4,461,053)	$	(388,579)	$	(409,850)
	Adjustments to reconcile net loss to cash used by
	operating activities
		Depreciation		92,730		2,027		25,393
		Shares issued for management and consulting		2,112,522		189,851		196,821
		Loss from debt conversion		13,492		13,492		-
		Forgiveness of debt		(275,564)		-		(12,513)
		Unrealized foreign exchange loss (gain)		73,171		1,778		(1,231)
		Interest accrued		6,557		3,398		3,631
		Loss on impairment of property and equipment		282,520		-		-
		Loss from joint venture		45,331		40,548		-
	Changes in operating assets and liabilities
		Receivables		(8,808)		6,157		3,680
		Prepaid expenses		(1,500)		4,516		(5,302)
		Accounts payable and accrued liabilities		532,276		6,930		39,600
Net cash used by operating activities				(1,588,326)		(119,882)		(159,771)

Investing Activities
	Advances to joint venture			(50,000)		(24,000)		-
	Purchase of equipment			(239,050)		-		(2,872)
	Advances from related party			-		985		-
Net cash used by investing activities				(289,050)		(23,015)		(2,872)

Financing Activities
	Loan proceeds			91,398		5,000		29,677
	Demand promissory notes issued (repaid)			2,529		(5,673)		-
	Convertible notes issued			233,785		-		5,000
	Sale of future earnings			199,000		24,000		100,000
	Shares issued for cash			1,391,171		152,000		95,000
Net cash provided by investing activities				1,917,883		175,327		229,677

Net increase in cash during the development stage				40,507		32,430		67,034

Cash, beginning of period				-		8,077		10,287

Cash, end of period			$	40,507	$	40,507	$	77,321

Supplemental cash flow information
	Interest paid		$	-	$	-	$	-
	Income taxes paid		$	-	$	-	$	-

Non-cash financing and investing activities
	Shares issued for accounts payable		$	211,976	$	189,851	$	-
	Shares issued upon conversion of convertible debt		$	129,396	$	31,230	$	23,175
	Shares issued for services		$	405,373	$	189,952	$	-

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

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

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

September 30, 2009

Nature of Operations

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

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

S2C Global Systems USA, Inc. (“S2C USA”) was incorporated on November 27, 2006 in the State of Nevada. The main business is the marketing of the Company’s water dispensing and recycling system for sales in the USA.

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

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

Basis of Presentation

These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim consolidated financial information. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the periods ended September 30, 2009 and 2008 are not necessarily indicative of the results that may be expected for any interim period or the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2008. The Company applies the same accounting policies and methods in these condensed consolidated financial statements as those in the audited annual consolidated financial statements, except as described in Note 3.

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

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

September 30, 2009

Recently Adopted Accounting Pronouncements

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

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

Accounting Standards Update (“ASU”) ASU No. 2009-05 (ASC Topic 820), which amends Fair Value Measurements and Disclosures – Overall, ASU No. 2009-13 (ASC Topic 605), Multiple-Deliverable Revenue Arrangements, ASU No. 2009-14 (ASC Topic 985), Certain Revenue Arrangements that include Software Elements, and various other ASU’s No. 2009-2 through ASU No. 2009-15 which contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.

Investment in joint venture

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

As of September 30, 2009, the Company has advanced $50,000 to ARM. The Company accounts for the joint venture using the equity method. The Company recognized its share of the loss during the nine months ended September 30, 2009, which was $40,548.

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

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

September 30, 2009

Equipment


		September 30, 2009
				Accumulated		Net Book
		Cost		Amortization		Value

Computer equipment	$	2,610	$	2,424	$	186
Bottles		21,929		10,982		10,947

	$	24,539	$	13,406	$	11,133


		December 31, 2008
				Accumulated		Net Book
		Cost		Amortization		Value

Computer equipment	$	2,610	$	2,330	$	280
Bottles		21,929		9,049		12,880

	$	24,539	$	11,379	$	13,160

Loans Payable

The Company is indebted to various parties for short-term loans amounting to $29,965 (2008 – $22,468), which are due on demand, unsecured, and with interest accrued annually. Two of the loans totaling $13,076 are due to current and former officers. The amount reported for related party loans includes accrued interest of $1,494.

Demand Promissory Notes

At September 30, 2009, the Company is liable for a promissory note in the amount of $6,500 and due to a company controlled by the president of S2C Canada and S2C USA, which is due on demand, and bears interest at 12% per annum. The amount reported includes accrued interest of $2,054.

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

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

September 30, 2009

Convertible Promissory Notes

During the year ended December 31, 2008, the Company issued an unsecured convertible promissory note for $5,000, bearing interest at a rate of 15% per annum and due on August 31, 2009. As the market price of the shares was less than the conversion price on the date of issuance, no value was allocated to the conversion feature. On July 21, 2009 the noteholder converted the principal amount of the note into 125,000 shares of common stock of the Company. At September 30, 2009 accrued interest is $727.

During the year ended December 31, 2008, the Company issued an unsecured convertible promissory note for $9,853, bearing interest at a rate of 10% per annum and due on August 1, 2009. The note is convertible at a rate of one common share for each $0.04 of principal and accrued interest. As the market price of the shares was less than the conversion price on the date of issuance, no value was allocated to the conversion feature. As of September 30, 2009 accrued interest was $1,163. The Company has not paid the principal and interest as it has come due and the note is in default.

During the year ended December 31, 2008, the Company issued an unsecured convertible promissory note for $2,500. The note bears interest at a rate of 10% per annum and was due on June 11, 2009. As the market price of the shares was less than the conversion price on the date of issuance, no value was allocated to the conversion feature. On July 21, 2009 the noteholder converted the note, including accrued interest of $277 into 115,725 shares of common stock of the Company.

During the year ended December 31, 2008, the Company issued an unsecured convertible promissory note for $5,000, bearing interest at a rate of 10% per annum and due on August 6, 2009. As the market price of the shares was less than the conversion price on the date of issuance, no value was allocated to the conversion feature. On July 21, 2009 the noteholder converted the note, including accrued interest of $292 into 230,083 shares of common stock of the Company.

During the year ended December 31, 2008, the Company issued an unsecured convertible promissory note for $4,000, bearing interest at a rate of 10% per annum and due on July 21, 2009. As the market price of the shares was less than the conversion price on the date of issuance, no value was allocated to the conversion feature. On July 21, 2009 the noteholder converted the note, including accrued interest of $439 into 184,956 shares of common stock of the Company.

Sale of Future Earnings

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


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

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

The buyer receiving the maximum payment;

ii.

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

iii.

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

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

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

September 30, 2009

10.

Warrants

As at September 30, 2009, the Company had no (2008 – 745,000) warrants outstanding. During the three months ended September 30, 2009, a total of 745,000 warrants expired.

11.

Financial Instruments

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

As of September 30, 2009 the Company had the following financial assets and liabilities denominated in Canadian dollars:


		USD equivalent		CDN dollars

Cash	$	5,037	$	5,393
Accounts payable	$	153,712	$	164,574
Loans payable	$	13,076	$	14,000

As of September 30, 2009 CDN dollar amounts were converted at a rate of $1.0707 Canadian dollars to $1.00 US dollar.

12.

Commitments

The Company is committed to pay rent for premises at $3,890 per month through February 2010.

13.

Related Party Transactions

The related party transactions are as described in Notes 6, 7 and 12. As of September 30, 2009 there was a total of $1,747 (2008 – $150,439) included in accounts payable for amounts owing to officers and companies controlled by current and former directors of the Company.

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

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

September 30, 2009

14.

Segmented Information

Details on a geographic basis are as follows:


	September 30, 2009		December 31, 2008
Total Assets
USA	$	53,759	$	28,734
Canada		12,858		35,686

Total	$	66,617	$	64,420

Equipment
USA	$	3,662	$	4,308
Canada		7,471		8,852

Total	$	11,133	$	13,160

	Nine months ended September 30,
		2009		2008
Net and Comprehensive Loss
USA	$	278,581	$	225,279
Canada		109,998		184,571

Total	$	388,579	$	409,850

15.

Common Stock Issuances

During the period ended September 30, 2009, the Company issued shares of common stock as follows:

A total of 13,322,624 shares of common stock for management and consulting services, valued at $0.02 to $0.05 per share, for an aggregate value of $379,803. Current period expense was $189,851 while $189,952 offset accounts payable for amounts previously accrued.

A total of 6,333,333 shares of common stock for cash at $0.024 per share for aggregate proceeds of $152,000.

A total of 655,754 shares of common stock pursuant to conversion of convertible notes payable totaling $17,738 for stock with an aggregate market value of $31,230, resulting in a loss of $13,492 on the conversion.

16.

Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through November 16, 2009 and determined that there are no events to disclose.

ITEM 2. PLAN OF OPERATIONS

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

FORWARD-LOOKING STATEMENT NOTICE

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

OUR BUSINESS

HISTORICAL. We were formed as a Nevada corporation on March 19, 2001; originally under the name of Sun Vacation Club Inc.; on November 21, 2002 the name was changed to United Athletes, Inc. On February 2, 2005, after a reverse merger with S2C Global Systems Inc. (a private British Columbia corporation) we changed our name to S2C Global Systems, Inc. with the intent to focus on developing, marketing and distributing their 5-gallon bottled water vending and loading systems. S2C Global Systems (S2C-Private) the private company was incorporated in May 2004 after acquiring the intellectual property rights from Will Benedikt et al for his early version of the 5-gallon vending system. S2C-Private continued with the development of the system and market preparation with the Company assuming this role in February 2005. S2C has generated minimal sales or revenues and only from market tests.

The Company was founded as a supplier to Consumer Technology Company with its main focus in packaged water sales of the 5-gallon format. As the Company evolved and completed market testing it became apparent that the overall markets we would participate in required a smaller machine than we had designed and that it would need to carry two sizes; the 5-gallon and the 2.5 gallon.

We completed the design work and market strategies in the last quarter of 2007; we set out late in the year to secure financing to fund our roll out plans. Management soon discovered that the only financings being offered would be detrimental to the Company, there was not enough money offered to do the job at hand and they were extremely dilutive. At this point management had to decide on a course of action that would see the Company potentially fund itself.

An opportunity presented itself in the last quarter of 2007 to establish a bulk water division, where the Company would broker the sales of large volumes of fresh water. It took until the 3^rd quarter of 2008 to secure the first bulk water source, the waters for sale at Sitka, Alaska. S2C formed a partnership with True Alaska Bottling Corp. (TAB) in an Alaska State limited liability corporation; Alaska Resource Management LLC (“ARM”). In ARM, TAB vended in their license from the city of Sitka for 3.3 billion gallons annually expandable to over 12 billion gallons and the Company agreed to vend in bulk water buyers.

Management is now focused on selling these waters and is working with clients from California, Mexico, India, the Middle East and Asia. We represent the water for sale at three cents ($0.03 USD) per US gallon freight on board (FOB) dockside Sitka, Alaska. Buyers must provide a standing letter of credit approved by our American bank for six months worth of volume agreed to on their accepted purchase order. As each shipload of water is certified loaded at the dock in Sitka we then draw down the agreed payment for that boatload. We currently have two food grade ships based out of Texas, on reserve, capable of hauling 70 Million gallons each.

The City of Sitka, has already built a pipeline to the shore, ARM will connect a loading system from the shore to the ships at its cost. The system is designed but not built until the first order is confirmed.

Most of the clients seeking bulk water require it for drinking water, agriculture and industry, offloading and distributing the water on the receiving end is the last of the three pieces involved in shipping bulk water. As part of the selling process the Company has to provide off loading solutions, we have provided these and now await confirmation of the first business.

We have placed the four existing AquaDucts in storage to reduce the current operating costs, until the Company has the money to place a minimum of twenty AquaDucts in one market at one time and promote the same. As part of selling the bulk water many of the clients have expressed interest in using the S2C AquaDuct system to distribute the bulk water to consumers.

Employees

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

PLAN OF OPERATION

S2C spent the first quarter of 2009 making direct contact with potential buyers of its bulk water supplies. Our CFO concentrated on the domestic market in the USA while our Alaska Resource Management managing partner focused on establishing International markets. Through the balance of this year we will continue to secure and fulfill contracts in the continental USA focusing on California, Florida and Texas, the Middle East focusing on Saudi Arabia, and Asia focusing on Korea. As we sell off our inventory we will continue to source and negotiate ownership of additional source waters through December 2009.

Product Development:

We have developed the AquaDuct system as far as we can until we build our mass production facility. The bulk water product requires developing and buying contacts, not the product itself.

Sales & Marketing:

System Distribution. Rather than sell the Aquaduct system outright, we elected to disseminate our equipment at our own expense. This approach gives us ownership of the residual earnings rather than a one time sale. Securing locations for lease in retail shopping centre parking lots is critical to this process. Building relationships with national and regional property managers gives us an ongoing supply of locations. These relationships have been put on hold pending the generation of cash flow significant enough to support multiple market installations.

Water Sales Overall sales of bottled water as reported by the International Bottled Water Association and Beverage Marketing Corporation continued to grow through 2007, total bottled water volume was 8.8 billion gallons, a 6.9 percent increase over 2006, and the 2007 bottled water per capita consumption of 29.3 gallons increased nearly two gallons, from 27.6 gallons per capita the previous year. Additionally, the wholesale dollar sales for bottled water exceeded $11.7 billion in 2007, a 7.8 percent increase over the $10.8 billion in 2006. ¹ Half of these volumes typically as reported by Nestlé’s and E-zine² are in the bulk categories (2.5 and 5 gallon).

Corporate Sales. “The bottled water industry is under increased scrutiny for a number of its practices. Something so seemingly healthy is the antithesis of “green.” The bottling process is very inefficient: Nestlé, for example, reports that it requires 1.86 liters of water to produce one liter of bottled water. The landfill of plastic bottles—more than 75% of bottles are never recycled—has environmentalists up in arms. The fuel usage and emissions that arise from trucking so many billions of gallons of water around the country (and shipping water around the world) has a negative environmental impact. Finally, communities that have aquifers (underground sources of water) find large water companies moving into their towns to pump and sell their water.”³ The S2C AquaDuct system addresses all of the environmental impact issues stated above and after completing a first stage roll out in Houston will be in a position to aggressively secure Corporate sales. To accelerate product distribution the Company intends to form joint ventures with established partners.

Finance and Administration. The Company has continued to keep its overhead costs to a minimum while it looks to secure cash flow significant enough to take it through to its operating status.

As part of establishing the Company as an Operating Company the Company has identified that its markets will be best served from the United States. The company moved its head office to San Antonio, Texas effective September 13, 2008. As part of this process a new Chief Financial Officer was engaged based in New York state effective in July 2008 and on September 14, 2008 a new CEO, Alejandro Bautista, was appointed.

Conclusion. The Company is at the transition point of going from a development stage company to an operating stage company, however significant cash needs to be generated to complete this process, and we anticipate the sale of bulk water will accomplish this for the Company. The Company has created opportunities both domestically and internationally that we believe will establish S2C Global as a leader in both bulk water sales and retail distribution technologies specifically as they relate to bottled water.

RESULTS OF OPERATIONS

Three Months Ended September 30, 2009 Compared with Three Months Ended September 30, 2008

Revenues. The Company generated $0 in sales revenue for the three months ended September 30, 2009 compared to $16 for the same period in 2008.

Total Operating Expenses

General and Administrative. General and administrative expenses consist primarily of salaries and related costs for our executive, administrative, finance and management personnel, as well as support services and professional service fees. These expenses increased from $ 158,651 in the three months ended September 30, 2008 to $255,340 in the three months ended September 30, 2009. The increase in general and administrative expenses primarily was driven by increase management and consulting expense.

Loss from Operations

Total Loss from Operations. Our loss from operations was ($282,446) for the three months ended September 30, 2009 while our loss from operations was ($146,122) for the three months ended September 30, 2008.

LIQUIDITY AND CAPITAL RESOURCES

We have financed our operations to date primarily through the sale of equity and debt securities as we generated negative cash flow from operations prior to fiscal 2008 and for the nine months ended September 30, 2009. Our principal liabilities at September 30, 2009 consisted of accounts payable, loans payable, sale of future earnings, demand promissory notes and convertible promissory notes.

Net cash used in operating activities was ($119,882) for the nine months ended September 30, 2009 compared with net cash used in operating activities of ($159,771) for the nine months ended September 30, 2008.

Net cash provided by financing activities was $229,677 in the nine months ended September 30, 2008 compared with $175,327 of cash provided by financing activities in the nine months ended September 30, 2009. The cash provided by financing activities in the nine months ended September 30, 2009 was $5,000 from a loan payable, $152,000 from shares issued for cash, and $24,000 from the sale of future earnings while repaying a demand note of $5,673. In the nine months ended September 30, 2008, financing activities raised $29,677 from a loan payable and $95,000 from the sale of shares, $100,000 from sales of future earning and $5,000 from note issuance.

We expect our future liquidity position to meet our anticipated cash needs for working capital and capital expenditures, for at least the next six months to be met by raising capital. Since the cash generated from our operations is insufficient to satisfy our cash needs, we are required to raise additional capital. Because we will raise additional funds through the issuance of equity securities, our stockholders may experience significant dilution. Furthermore, additional financing may not be available when we need it or, if available, financing may not be on terms favorable to us or to our stockholders. If financing is not available when required or is not available on acceptable terms, we may be unable to develop or enhance our products or services. In addition, we may be unable to take advantage of business opportunities or respond to competitive pressures. Any of these events could have a material and adverse effect on our business, results of operations and financial condition.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required by smaller reporting companies.

ITEM 4T. CONTROLS AND PROCEDURES.

(a)

Evaluation of Disclosure Controls and Procedures. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management has concluded that the Company’s internal control over financial reporting and procedures was effective as of September 30, 2009.

(b)

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

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

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

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

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

During the period ended September 30, 2009, the Company issued shares of common stock as follows:

A Total of 13,322,624 shares of common stock for management and consulting services, valued at $0.02 to $0.05 per share, for an aggregate value of $379,803. Current period expense was $189,851 while $189,852 offset accounts payable for amounts previously accrued.

A total of 6,333,333 shares of common stock for cash at $0.024 per share for aggregate proceeds of $152,000.

A total of 655,754 shares of common stock pursuant to conversion of convertible notes for an aggregate value of $17,738.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

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

No matters were submitted during the period covered by this report to a vote of security holders.

ITEM 5. OTHER INFORMATION.

None

ITEM 6. EXHIBITS

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


Exhibit No.	Title of Document	Location

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

The Exhibit attached to this Form 10-Q shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

SIGNATURES

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, thereunto duly authorized.

S2C GLOBAL SYSTEMS, INC.

Date: November 16, 2009

By: /s/ Alejandro Bautista

Alejandro Bautista, President and Chief Executive Officer

Date: November 16, 2009

By: /s/ Joe F. Dickson

Joe F Dickson, Treasurer and Chief Financial Officer

S2C GLOBAL SYSTEMS, INC. 10-Q