FORM 10-Q QUARTERLY REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2010.

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

For the transition period from _______________________ to ___________________________

Commission File Number: 000-51529

S2C GLOBAL SYSTEMS, INC.

(Exact name of registrant as specified in its charter)


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

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

210-561-6015

(Registrant’s telephone number, including area code)

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

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

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

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


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

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

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of August 23, 2010 there were 101,746,320 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 June 30, 2010 and 2009 and for the periods then ended have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2009 audited financial statements. The results of operations for the periods ended June 30, 2010 and 2009 are not necessarily indicative of the operating results for the full year.

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Condensed Consolidated Financial Statements

(Presented in US dollars)

(Unaudited – Prepared by Management)

June 30, 2010

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Condensed Consolidated Financial Statements

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

June 30, 2010


Condensed Consolidated Balance Sheets	5

Condensed Consolidated Statements of Operations	6

Condensed Consolidated Statements of Cash Flows	7

Notes to the Condensed Consolidated Financial Statements	8


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

			(Unaudited)
			June 30,		December 31,
			2010		2009

ASSETS
Current
	Cash	$	842	$	4,417
	Accounts receivable		15,909		11,609
	Due from government agency		2,028		906
	Prepaid expenses		1,500		1,500

			20,279		18,432

Equipment, net			9,393		10,458

		$	29,672	$	28,890

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current
	Accounts payable and accrued liabilities	$	248,627	$	262,975
	Accounts payable and accrued liabilities - Related party		166,813		137,891
	Loans payable		15,000		15,000
	Loans payable - Related party		26,168		20,992
	Demand promissory note - Related party		9,306		8,803
	Convertible promissory notes		129,136		12,016
	Sale of future earnings		199,000		199,000
	Due to joint venture		29,783		4,783

			823,833		661,460

Stockholders' Equity (Deficit)
	Preferred stock, 25,000,000 shares authorized, $0.001 par value
	no shares issued		-		-
	Common stock, 200,000,000 shares authorized, $0.001 par value
	100,146,320 (2009 - 97,646,320) shares outstanding		100,146		97,646
	Additional paid-in capital		4,632,864		4,490,364
	Deficit accumulated during the development stage		(5,527,171)		(5,220,580)

			(794,161)		(632,570)

		$	29,672	$	28,890

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


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

			Cumulative
			From inception
			May 6, 2004 to		Three months ended				Six months ended
			June 30,		June 30,				June 30,
			2010		2010		2009		2010		2009

Sales		$	1,848	$	-	$	-	$	-	$	-

Cost of sales			692		-		-		-		-

Gross profit			1,156		-		-		-		-

General and administrative expenses			5,325,474		125,629		32,474		182,037		75,608

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

Loss before other income (expense)			(5,606,838)		(125,629)		(32,474)		(182,037)		(75,608)

Other income (expense)
	Forgiveness of debt		275,564		-		-		-		-
	Interest earned		1,342		-		-		-		-
	Interest expense		(103,964)		(98,294)		(1,325)		(99,554)		(2,581)
	Loss from conversion of debt		(13,492)		-		-		-		-
	Loss from joint venture		(79,783)		(25,000)		(12,467)		(25,000)		(27,946)
			79,667		(123,294)		(13,792)		(124,554)		(30,527)

Net and comprehensive loss		$	(5,527,171)	$	(248,923)	$	(46,266)	$	(306,591)	$	(106,135)

Weighted average number of shares outstanding - basic and diluted					100,146,320		78,859,599		99,262,343		78,193,991

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

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


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

				Cumulative
				from inception
				May 6, 2004 to		Six months ended
				June 30,		June 30,
				2010		2010		2009

Operating Activities
	Net loss for the period		$	(5,527,171)	$	(306,591)	$	(106,135)
	Adjustments to reconcile net loss to cash
	used by operating activities
		Depreciation		94,470		1,065		1,351
		Shares issued for management and consulting		2,857,481		50,000		67,250
		Forgiveness of debt		(275,564)		-		-
		Unrealized foreign exchange loss (gain)		73,283		(171)		603
		Interest accrued		11,283		3,938		2,416
		Loss on conversion of debt		13,492		-		-
		Loss on impairment of property and equipment		282,520		-		-
		Loss from joint venture		79,783		25,000		27,946
		Non-cash interest expense		95,000		95,000		-
	Changes in operating assets and liabilities
		Receivables		(17,937)		(5,422)		12,806
		Prepaid expenses		(1,500)		-		4,516
		Accounts payable and accrued liabilities		562,359		14,574		(18,848)
Net cash used by operating activities				(1,752,501)		(122,607)		(8,095)

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

Financing Activities
	Loan proceeds			100,908		4,032		5,000
	Demand promissory notes issued (repaid)			2,529		-		(5,673)
	Convertible notes issued			348,785		115,000		-
	Sale of future earnings			199,000		-		24,000
	Shares issued for cash			1,391,171		-		-
Net cash provided by investing activities				2,042,393		119,032		23,327

Increase (decrease) in cash during the development stage				842		(3,575)		(7,783)
Cash, beginning of period				-		4,417		8,077
Cash, end of period			$	842	$	842	$	294

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

Non-cash financing and investing activities
	Shares issued for accounts payable		$	22,125	$	-	$	-
	Shares issued upon conversion of convertible debt		$	31,230	$	-	$	-
	Shares issued for promissory notes		$	98,166	$	-	$	-
	Shares issued for services		$	2,857,481	$	50,000	$	67,250

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

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

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

June 30, 2010

Nature of Operations

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

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

S2C Global Systems USA, Inc. (“S2C USA”) was incorporated on November 27, 2006 in the State of Nevada. The main business 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 June 30, 2010 and 2009 are not necessarily indicative of the results that may be expected for any interim period or the entire year. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2009. The Company applies the same accounting policies and methods in these condensed consolidated financial statements as those in the audited annual consolidated financial statements.

Investment in Joint Venture

During 2008, 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 June 30, 2010, the Company has advanced $50,000 to ARM. The Company accounts for the joint venture using the equity method. The Company recognized its 50% share of the loss during the six months ended June 30, 2010 and 2009, which was $25,000 and $27,946, respectively. ARM had no sales, no gross profit and a loss of $50,000 and $55,892 for the six months ended June 30, 2010 and 2009.

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

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

June 30, 2010

Equipment


	June 30, 2010
		Accumulated	Net Book
	Cost	Depreciation	Value

Computer equipment	$ 2,610	$ 2,491	$ 119
Bottles	21,929	12,655	9,274

	$ 24,539	$ 15,146	$ 9,393


	December 31, 2009
		Accumulated	Net Book
	Cost	Depreciation	Value

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

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

Loans Payable

The Company is indebted to various parties for short-term loans amounting to $41,168 (2009 – $35,992), which are due on demand, unsecured, and with interest at rates between Nil and 18%. Two of the loans totaling $26,168 are due to current and former officers. The amount reported for related party loans includes accrued interest of $3,561.

Demand Promissory Note


		June 30, 2010		December 31, 2009

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

Accrued interest		2,806		2,303

	$	9,306	$	8,803

S2C GLOBAL SYSTEMS, INC.

(A Development Stage Enterprise)

Notes to the Condensed Consolidated Financial Statements

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

June 30, 2010

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. As of June 30, 2010 accrued interest is $727.

During the year ended December 31, 2008, the Company issued an unsecured convertible promissory note for $9,852, 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 June 30, 2010 accrued interest is $1,974. The Company has not paid the principal and interest as it has come due and the note is in default.

During the three months ended June 30, 2010, the Company issued three unsecured convertible promissory notes for aggregate proceeds of $115,000, bearing interest at a rate of 8% per annum and due nine months following the date of issuance. The notes are convertible at a rate of one common share for an amount determined with reference to the trading price of the Company’s stock prior to conversion but not exceeding $0.009. As of June 30, 2010 accrued interest is $1,583. The company realized $95,000 of expense on the beneficial conversion feature of these promissory notes.

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)

June 30, 2010

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 June 30, 2010 the Company had the following financial assets and liabilities denominated in Canadian dollars:


		USD equivalent		CDN dollars

Cash	$	690	$	735
Accounts payable	$	159,967	$	170,304
Loans payable (including accrued interest)	$	15,837	$	16,860

As of June 30, 2010, CDN dollar amounts were converted at a rate of $1.0646 Canadian dollars to $1.00 US dollar.

10.

Commitments

The Company is committed to the following:

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

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

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

Effective October 1, 2009 through September 30, 2010, the Company entered into an executive compensation agreement with the Senior Vice President Business Development Asia of the Company for consideration of 800,000 common shares of the Company.

11.

Related Party Transactions

The related party transactions are as described in Notes 5, 6 and 10. As of June 30, 2010 there was a total of $166,813 (December 31, 2009 – $137,891) included in accounts payable for amounts owing to officers and companies controlled by current and former directors of the Company.

At June 30, 2010 there was a total of $15,909 and (December 31, 2009 - $11,609), for accounts receivable for rent from companies related to 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)

June 30, 2010

12.

Segmented Information

Details on a geographic basis are as follows:


		June 30, 2010		December 31, 2009
Total Assets
USA	$	20,663	$	19,233
Canada		9,009		9,657

Total	$	29,672	$	28,890

Equipment
USA	$	3,102	$	3,447
Canada		6,291		7,011

Total	$	9,393	$	10,458

		Six months ended June 30,
		2010		2009
Net and Comprehensive Loss
USA	$	262,238	$	64,355
Canada		44,353		41,780

Total	$	306,591	$	106,135

13.

Common Stock Issuances

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

14.

Reclassifications

Certain prior period information has been reclassified to conform with the current period presentation.

15.

Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued. Subsequent to June 30, 2010, the Company issued 1,600,000 shares of common stock as compensation to directors and officers of the Company.

ITEM 2. PLAN OF OPERATIONS

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

FORWARD-LOOKING STATEMENT NOTICE

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

OUR BUSINESS

HISTORICAL

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

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

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

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

Employees

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

PLAN OF OPERATION

For the past year we have been working to develop a revised business plan and execute the same where we cause the establishment of three water hubs around the planet. These hubs will best serve the global markets that need water by being located on or near the Arabian Sea, the East China Sea and the Caribbean sea. Each hub will be required to receive a “Very Large Water Carrier (“VLWC”) which is a ship that can carry in the realm of eighty million gallons (80,000,000 USG) of water per load, and receive and process the same.

Within 6 to 8 months the company expects to start distributing water from its first “World Water Hub” located on the west coast of India. For security reasons the port will not be disclosed, however this first hub will include a berth for a Suezmax vessel (156,000 cubic meters/41Million USG), an offloading system to a dedicated tank farm and a distribution complex for packaged water. Within 18 months we will be able to switch to a very large class vessel (75 Million USG) as both it and the moorage for it will be completed within this time frame. Contracts for the distribution hub and ships are being finalized.

[s2c10q063010001.jpg]

The company will be able to sell from its Hub, bulk water by way of smaller ships that can deliver to shallower ports, like Umm Qasr in Iraq (located within 3 to 4 days of India’s west coast). S2C will also sell our water in 20 foot containers with flexi-tanks (4623 USG) suitable for pharmaceutical/high tech manufacturing and packaged water (18.9 and 10L) for the consumer markets anywhere containers are delivered in south and west Asia from India. India itself provides an amazing growth market for the packaged waters with a current population of 1.15 billion people, an emerging middle class and an increasing clean water shortage.

Our Alaskan mountain water is so pure it requires no treatment except to remove organics that might be present through the natural cycle. During its 30 day voyage from Alaska to the Arabian Sea we will protect the water using an “Ozonating” system in the ships holds.

Sales efforts throughout south and west Asia will continue with travels planned immediately through the region. “S2C Global has an exciting future in India and the region,” states Rod Bartlett managing partner of Alaska Resource Management and President of S2C Global Systems, USA “after recently spending time traveling in India, meeting port authorities and potential distributors, our vision to distribute water globally became real. This is just the first of three hubs we plan and we fully expect the India World Water Hub to fulfill our minimum expectations of a half a billion gallons sold annually.”

Through the second quarter of 2010 we worked to secure the first of these hubs for the Arabian Sea in order to serve potential clients in the Gulf Corporation Council and India. Through a process of elimination we have settled on one of two ports in India. We also traveled to India to finalize our selection, contract the necessary land, incorporate a subsidiary with the appropriate tax status in India, finalize investments from strategic partners in the subsidiary, finalize the financing component, contract the build out of the first hub and complete pre-sales or distribution agreements of the Alaska water to two of our identified markets (Saudi Arabia, Iraq, India, Cyprus). More travel to India is expected as we develop our World Water Hub.

Product Development:

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

Sales & Marketing:

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

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

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

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

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

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

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

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

RESULTS OF OPERATIONS

Three Months Ended June 30, 2010 Compared with Three Months Ended June 30, 2009

Revenues The Company generated $0 in sales revenue for the three months ended June 30, 2010 compared to $0 for the same period in 2009.

Total Operating Expenses

General and Administrative General and administrative expenses consist primarily of salaries and related costs for our executive, administrative, finance and management personnel, as well as support services and professional service fees. These expenses increased from $ 32,474 in the three months ended June 30, 2009 to $125,629 in the three months ended June 30, 2010. The increase in general and administrative expenses primarily was driven by increased management and consulting expense.

Net Loss

Total Loss from Operations. Our loss from operations was ($248,923) for the three months ended June 30, 2010 while our loss from operations was ($46,266) for the three months ended June 30, 2009.

Six Months Ended June 30, 2010 Compared with Six Months Ended June 30, 2009

Revenues The Company generated $0 in sales revenue for the six months ended June 30, 2010 compared to $0 for the same period in 2009.

Total Operating Expenses

General and Administrative General and administrative expenses consist primarily of salaries and related costs for our executive, administrative, finance and management personnel, as well as support services and professional service fees. These expenses increased from $ 75,608 in the six months ended June 30, 2009 to $182,037 in the six months ended June 30, 2010. The increase in general and administrative expenses primarily was driven by increased management and consulting expense.

Net Loss

Total Loss from Operations. Our loss from operations was ($306,591) for the six months ended June 30, 2010 while our loss from operations was ($106,135) for the six months ended June 30, 2009.

LIQUIDITY AND CAPITAL RESOURCES

We have financed our operations to date primarily through the sale of equity and debt securities as we generated negative cash flow from operations prior to fiscal 2009 and for the six months ended June 30, 2010. Our principal liabilities at June 30, 2010 consisted of accounts payable, loans payable, sale of future earnings, demand promissory notes and convertible promissory notes.

Net cash used in operating activities was ($122,607) for the six months ended June 30, 2010 compared with net cash used in operating activities of ($8,095) for the three months ended June 30, 2009.

Net cash provided by financing activities was $23,327 in the six months ended June 30, 2009 compared with $119,032 of cash provided by financing activities in the six months ended June 30, 2010. The cash provided by financing activities in the six months ended June 30, 2010 was $4,032 from a loan payable and $115,000 from convertible notes. In the six months ended June 30, 2009, financing activities raised $5,000 from a loan payable, $24,000 from sales of future earning and ($5,673) repaid on notes payable. As of June 30, 2010, the Company has advanced $50,000 to ARM. The Company accounts for the joint venture using the equity method. The Company recognized its 50% share of the loss during the three months ended June 30, 2010 and 2009, which was $25,000 and $12,467 respectively.

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

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required by smaller reporting companies.

ITEM 4T. CONTROLS AND PROCEDURES.

(a)

Evaluation of Disclosure Controls and Procedures We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2010. The evaluation was conducted under the supervision and with the participation of management, including our chief executive officer and chief financial officer. Disclosure controls and procedures mean our controls and other procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. Disclosure controls and procedures are also designed to provide reasonable assurance that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our quarterly evaluation of disclosure controls and procedures includes an evaluation of some components of our internal control over financial reporting, and internal control over financial reporting is also separately evaluated on an annual basis for purposes of providing the management report. We did not make any changes in our internal controls over financial reporting during our recent fiscal quarter.

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

Our chief executive officer and chief financial officer have concluded, based on the evaluation of the effectiveness of the disclosure controls and procedures by our management, that as of June 30, 2010, our disclosure controls and procedures were not effective due to the material weaknesses described in Management’s Report on Internal Control over Financial Reporting as noted in our annual report on Form 10-K for the year ended December 31, 2009.

(b)

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

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

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

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

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

During the period ended June 30, 2010, the Company issued 2,500,000 shares of common stock as compensation to directors and officers of the Company.

Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued. Subsequent to June 30, 2010, the Company issued 1,600,000 shares of common stock to as compensation to directors and officers of the Company.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION.

None

ITEM 6. EXHIBITS

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


Exhibit No.	Title of Document	Location
31.1	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Attached
31.2	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Attached
32.1	Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*	Attached
32.2	Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*	Attached

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: August 23 , 2010

By: /s/ Alejandro Bautista

Alejandro Bautista, President and Chief Executive Officer

Date: August 23, 2010

By: /s/ Joe F. Dickson

Joe F Dickson, Treasurer and Chief Financial Officer

S2C GLOBAL SYSTEMS, INC. 10-Q