ENXNET INC - FORM 10-K - June 28, 2011

Attached files

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EX-31.1 - ENXNET INC	ex31-1.htm
EX-32.1 - ENXNET INC	ex32-1.htm
EX-31.2 - ENXNET INC	ex31-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10K

ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: March 31, 2011

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: _____________ to _____________

ENXNET, INC.

(Exact name of registrant as specified in its charter)

Oklahoma	000-30675	73-1561191
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

11333 E. Pine Street, Suite 92 - Tulsa, OK 74116

(Address of principal executive offices & zip code)

(918) 592 – 0015

Registrant's telephone number, including area code:

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes ý No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. ¨ Yes ý No

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. ý Yes ¨ No

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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 (§ 229.405 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10K or any amendment to this Form 10K. ý

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 ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company ý

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

The aggregate market value of the voting common equity held by non-affiliates of the registrant on September 30, 2010 (the last business day of the registrant’s most recently completed second fiscal quarter), was $3,420,031.

On June 28, 2011, the registrant had 43,030,018 shares of common outstanding.

Documents incorporated by reference: None.

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ENXNET, INC.

FORM 10K

INDEX

		PAGE
PART I
Item 1.	Description of Business	2
Item 1A.	Risk Factors	5
Item 2.	Description of Property	6
Item 3.	Legal Proceedings	7
Item 4.	Reserved	7

PART II
Item 5.	Market for Common Equity and Related Stockholder Matters	7
Item 6.	Selected Financial Data	8
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operation	8
Item 8.	Financial Statements	10
Item 9.	Changes In And Disagreements With Accountants On Accounting and Financial Disclosure	11
Item 9A.	Controls and Procedures	11
Item 9B.	Other Information	12

PART III
Item 10.	Directors, Executive Officers, and Corporate Governance	12
Item 11.	Executive Compensation	14
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	16
Item 13.	Certain Relationships and Related Transactions	16
Item 14.	Principal Accountant Fees and Services	17
Item 15.	Exhibits	17
Signatures		18

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PART I

FORWARD LOOKING STATEMENTS

This Report on Form 10K (including the Exhibits hereto) contains certain "forward-looking statements" within the meaning of the of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, such as statements relating to our financial condition, results of operations, plans, objectives, future performance and business operations. Such statements relate to expectations concerning matters that are not historical fact. Accordingly, statements that are based on management's projections, estimates, assumptions and judgments are forward-looking statements. These forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "plan," "estimate," "approximately," "intend," and other similar words and expressions, or future or conditional verbs such as "should," "would," "could," and "may." In addition, we may from time to time make such written or oral "forward-looking statements" in future filings (including exhibits thereto) with the Securities and Exchange Commission (the “Commission" or "SEC"), in our reports to stockholders, and in other communications made by or with our approval. These forward-looking statements are based largely on our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry, and they involve inherent risks and uncertainties. Although we believe that these forward-looking statements are based upon reasonable estimates and assumptions, we can give no assurance that our expectations will in fact occur or that our estimates or assumptions will be correct, and we caution that actual results may differ materially and adversely from those in the forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, contingencies and other factors that could cause our or our industry's actual results, level of activity, performance or achievement to differ materially from those discussed in or implied by any forward-looking statements made by or on behalf of us and could cause our financial condition, results of operations or cash flows to be materially adversely effected. Accordingly, investors and all others are cautioned not to place undue reliance on such forward-looking statements. In evaluating these statements, some of the factors that you should consider include those described below under "Risk Factors" and elsewhere in this Report on Form 10K.

ITEM 1.

BUSINESS.

Overview

EnXnet, Inc. (the "Company") was formed under the laws of the State of Oklahoma on March 30, 1999. It is a business and technology development enterprise engaged in the development, marketing, and licensing of emerging technologies and innovative business strategies and practices. EnXnet is primarily focusing on products, solutions and services that support and enhance multimedia management.

Products and Services

ThinDisc

The Thin Disc is our Optical Disc Having a Reduced Planar Thickness. Thin Disc’s primary function is to make any size optical disc thinner with reading capability in players that play optical disc media. The Company has filed for a United States and an international patent covering the technology included in the Thin Disc. On March 31, 2010 the Company announced receiving the official Patent for the Optical Disc Having A Reduced Planar Thickness.

Tap ‘n Go II

We received a patent for our Optical Disc Having Remote Reading Capabilities on May 27, 2010.

DVDplus

The Company entered into a license on September 2, 2003 with DVDplus International, Inc. to manufacture and market DVDplus in the United States, Canada, and Mexico. DVDplus is a dual sided, hybrid optical disc media that uniquely combines two distinct content storage formats for distribution on a single disc, a DVD (digital versatile disc) on one side and a CD (compact disc) on the other. DVDplus allows content publishers to integrate their visual and audio assets into a single distribution. Utilizing the latest in manufacturing technology, the CD and DVD layers are bonded together to provide a multi-format hybrid disc, which is compatible with all CD, CD-ROM, DVD ROM formats, and is readable and capable of playback in conventional CD and DVD players and including players that are found in personal computers alike. DVDplus allows content publishers to integrate their visual and audio assets into a single distribution, such as releasing a DVD movie and its soundtrack together.

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Disc Security Tag

Disc Security Tag, (DSTag), is an invention which utilizes proprietary Electronic Article Surveillance (EAS) tags embedded or adhered to a DVD or CD during the injection mold phase of the manufacturing process. Products, to which this process is applied, provide unique item identification for its customers and clients. Manufacturers that use this product are given the opportunity to enhance the integrity of their product while providing added value to their customers (retailers). This will help reduce or stop the enormous losses attributed to employee and retail theft. Additionally, it can give content developers, manufacturers, and distributors the ability to protect their investment by providing an efficient means to authenticate legitimate products over counterfeit products produced by unauthorized manufacturers. On November 2, 2010 the Company received the patent for DSTag. On September 29, 2009 the Company announced receiving the official Patent for the Passive Resonant Reflector.

EnXcase

EnXcase combines two distinct features for the DVDplus (OneDisc - two-sided DVD-CD) optical disc media market. The outer styling of the case has the unique feature of a semi-rounded top. The second feature is a theft deterrent ring found within the inner structure of the EnXcase. The Company developed this unique case primarily for use with the DVDplus (OneDisc) two-sided disc format. The Company filed for a United States patent on EnXcase on October 10, 2003 and was awarded the patent on September 19, 2006.

ClearVideo License

The Company acquired exclusive licensing rights in March 2000 from Iterated Systems, Inc., to compile, use, copy and modify ClearVideo Source Code and to create and manufacture products and services. Ryan Corley acquired the rights for using the ClearVideo Source Code for video/audio streaming over the internet of TV type programming and content. Additionally, the license agreement provides that the Company may sublicense any products and services that it creates using the technology under the licensing agreement. The license was acquired for a $250,000 note payable and the issuance of 297,500 shares of common stock, valued at $2,975.

The Company entered into an agreement with Ryan Corley, the President on January 2, 2002 and majority stockholder of the Company, whereby the Company acquired his license agreement for video/audio streaming over the internet of TV type programming and content using the ClearVideo Source Code. The Company issued 1,000,000 shares of restricted common stock valued at $100,000 for the license. The licenses are being amortized over 10 years which is the estimated useful life of the patent covering the technology.

ClearVideo Technology

ClearVideo utilizes fractal digitization creating the smallest file possible while virtually duplicating the quality of the original. ClearVideo can reduce video file sizes by approximately 95-99% and virtually duplicates the quality of the original files. ClearVideo enhances how video with synchronized audio files are transmitted over both narrow and broadband lines. ClearVideo works equally well with NTSC, PAL, or SECAM (the three different TV formats used around the world) television as well as the Internet. It can be effectively used worldwide for the compression and transmission of video files for the broadcast industry.

Medical D-Tect-OR

We are partners with BAHF, LLC in a joint effort called Medical D-Tect-OR™. Medical D-Tect-OR™ has developed a Retained Foreign Object Detection System. This D-Tect-OR™ detection technology uses a hand held wand that is capable of detecting surgical instruments and surgical products such as gauze, laparoscopy sponges, and operating room towels that may have been left in the body during a surgical procedure. Medical D-Tect-OR has filed for patent protection.

Manufacturing

The Company will not manufacture any of its products. We will outsource any manufacturing needs.

Distribution

The Company has not distributed any of the products created with the use of the Company's technology. The licensees of the Company's product offerings will be responsible for the distribution. The Company plans to match manufacturers with its licensees to facilitate sale efforts.

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Marketing

The Company markets ThinDisc and DVDplus, and intends to market Security Tags, EnXcase, and ClearVideo by licensing the technology to individual manufacturers. Manufacturers will promote this product offering to distributors, production companies, and the content creation firms in order to increase their sales.

Patents

The Company has received a patent covering ThinDisc which is our optical disc having a reduced planar thickness. The Company believes that this patent will afford protection under existing patent laws against infringement. There is no assurance, however, that third parties will not attempt to infringe on the ThinDisc patents.

The Company has received a patent covering our Optical Disc Having Remote Reading Capabilities. The Company believes that this Patent will afford protection under existing Patent law against infringement. There is no assurance, however, that third parties will not attempt to infringe on the Optical Disc Having Remote Reading Capabilities patents.

Iterated Systems, Inc., the developer and licensor of ClearVideo software has twenty-four U.S. Patents and fourteen various international patents covering the methods, apparatus and processes used in compressing digital data, fractal encoding of data streams, fractal transformation of data, fractal compression of data, protecting the technology. The Company believes that these patents afford protection under existing patent laws against infringement for a period of time ranging from two years to twelve years. There is no assurance, however, that third parties will not infringe on the ClearVideo patents.

The Company has received a patent covering Disc Security Tag (DSTag). The Company believes that this patent will afford protection under existing patent laws against infringement. There is no assurance, however, that third parties will not attempt to infringe on the Disc Security Tag (DSTag) patents.

The Company has received a patent covering EnXcase. The Company believes that this patent will afford protection under existing patent laws against infringement. There is no assurance, however, that third parties will not attempt to infringe on the EnXcase patents.

The Company has received a patent covering an Antenna for a Storage Disc. The Company believes that this Patent will afford protection under existing Patent law against infringement. There is no assurance, however, that third parties will not attempt to infringe on the Antenna for a Storage Disc design Patents.

Competition

There are numerous companies offering various types of services and products similar to the Company's, some of which have more financial and technical resources than the Company and there can be no assurance that in the future, the Company will be able to compete successfully with our competitors.

There are numerous companies offering various types of security tag technologies and services. The Company can offer no assurance that in the future, the Company will be able to compete successfully with other companies providing similar technology and services.

Governmental Regulation

The Company is not aware of any governmental regulations which affect the manufacture, licensing, development or sale of any of its products other than those imposed applicable to technical data included in Export/Import Regulations imposed by the United States government and those controlling regulations and regulations of countries into which any products may be imported.

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Company's Office

The Company's offices and technology center are located at 11333 E Pine St, Ste 92, Tulsa, Oklahoma 74116 and its telephone number is (918) 592-0015.

Employees

The Company has one full-time employee and two consultants. The president and CEO of the Company is not receiving or accruing a salary at this time.

ITEM 1A.

RISK FACTORS.

No Operating History and Limited Revenues.

The Company has no record of profitable operations and there is nothing at this time that assumes the Company's plans will ultimately prove successful. The Company's Independent Certified Public Accountant's report on the Company's March 31, 2011 and 2010, financial statements contained an explanatory paragraph which expressed substantial doubt about the Company's ability to continue as a going concern due to the Company's recurring losses from operations and working capital deficit.

Lack of Market Research.

The Company has conducted limited research and has not engaged other entities on its behalf to conduct market research and provide management with assurance that market demand exists for the business contemplated by the Company.

Securities are Subject to Penny Stock Rules.

The Company's shares are "penny stocks" consequently they are subject to Securities and Exchange Commission regulations which impose sales practice requirements upon brokers and dealers in order to make risk disclosures available to customers before effecting any transactions therein.

Lack of Key Personnel Insurance.

The Company has not obtained key personnel life insurance on the lives of any of the officers or directors of the Company. The death or unavailability of one or all of the officers or directors of the Company could have a material adverse impact on the operation of the Company.

Uninsured Risks.

The Company may not be insured against all losses or liabilities which may arise from operations, either because such insurance is unavailable or because the Company has elected not to purchase such insurance due to high premium costs or other reasons.

Need for Subsequent Funding.

The Company believes it will need to raise additional funds in order to achieve profitable operations. The Company's continued operations therefore will depend upon the availability of cash flow, if any, from its operations or its ability to raise additional funds through bank borrowings or equity or debt financing. There is no assurance that the Company will be able to obtain additional funding when needed, or that such funding, if available, can be obtained on terms acceptable to the Company. If the Company cannot obtain needed funds, it may be forced to curtail or cease its activities.

Need for Additional Key Personnel.

The Company employs one full time employee. The success of the Company's proposed business will depend, in part, upon the ability to attract and retain qualified employees. The Company believes that it will be able to attract competent employees, but no assurance can be given that the Company will be successful in this regard. If the Company were unable to engage and retain the necessary personnel, its business would be materially and adversely affected.

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Reliance upon Directors and Officers.

The Company is wholly dependent, at the present, upon the personal efforts and abilities of its Officers and employees who will exercise control over the day-to-day affairs of the Company, and upon its Directors, most of whom are engaged in other activities, and will devote limited time to the Company's activities. Accordingly, while the Company may solicit business through its Officers, there can be no assurance as to the volume of business, if any, which the Company may succeed in obtaining, nor that its proposed operations will prove to be profitable. The Company at present does not have any commitments regarding its proposed operations and there can be no assurance that any commitments will be forthcoming.

Issuance of Additional Shares.

The Company has available as of June 8, 2011 approximately 156,969,982 shares of Common Stock or 78.48% of the 200,000,000 authorized shares of Common Stock of the Company still remained unissued. The Board of Directors has the power to issue such shares, without shareholder approval. The Company may also issue additional shares of Common Stock pursuant to a plan and agreement of merger with a private corporation. Although the Company presently has no commitments, contracts or intentions to issue any additional shares to other persons, the Company may in the future attempt to issue shares to raise capital, acquire products, equipment or properties, or for other corporate purposes.

Non-Arms' Length Transaction.

The number of shares of Common stock issued to present shareholders of the Company was arbitrarily priced and may not be considered the product of arms' length transactions.

Indemnification of Officers and Directors for Securities Liabilities.

The Articles of Incorporation of the Company provide that the Company may indemnify any Director, Officer, agent and/or employee as to those liabilities and on those terms and conditions that are specified in the Oklahoma Business Corporation Act. Further, the Company may purchase and maintain insurance on behalf of any such persons whether or not the Company would have the power to indemnify such person against an insured liability. The foregoing could result in substantial expenditures by the Company and prevent any recovery from such Officers, Directors, agents and employees for losses incurred by the Company as a result of their actions. Further, the Company has been advised that in the opinion of the Securities and Exchange Commission, indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable.

Limited Public Market for Securities.

The Company's stock is traded under the symbol "EXNT" on the NASD OTC Bulletin Board, and under the symbol "AOHMDW" on the Frankfurt, Berlin and Stuttgart Stock Exchanges in Germany The stock has traded sporadically and there is no assurance that a trading market will continue to develop in the future, or that it will be sustained. A shareholder of the Company's securities may, therefore, be unable to resell the securities should he/she desire to do so. Furthermore, it is unlikely that a lending institution will accept the Company's securities as pledged collateral for loans unless a regular trading market develops.

Cumulative Voting, Preemptive Rights and Control.

There are no preemptive rights in connection with the Company's Common Stock. Cumulative voting in the election of Directors is not provided for. Accordingly, the holders of a majority of the shares of Common Stock, present in person or by proxy, will be able to elect all of the Company's Board of Directors.

No Dividends Anticipated.

The Company at the present time does not anticipate paying dividends, cash or otherwise, on its Common Stock in the foreseeable future. Future dividends will depend on earnings, if any, of the Company, its financial requirements and other factors. Investors who anticipate the need of an immediate income from their investment in the Company's Common Stock should refrain from purchasing the Company's securities.

ITEM 2.

DESCRIPTION OF PROPERTY.

The Company does not own any real property. The Company owns personal property in the form of patents, licenses and office equipment.

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The Company currently leases its office and technology space in Tulsa, OK for $440 per month.

The Company's offices are currently adequate and suitable for its operations. The Company will relocate its offices as the need arises. However, The Company currently has not entered into any negotiations with anyone to relocate its offices.

ITEM 3.

LEGAL PROCEEDINGS.

We may from time to time be a party to various legal actions in the ordinary course of business. There can be no assurance that the Company will not be a party to litigation in the future that could have an adverse effect on the Company.

ITEM 4.

RESERVED.

PART II

ITEM 5.

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

The Company's stock is traded under the symbol "EXNT" on the OTCQB, and the symbol "AOHMDW" on the Frankfurt, Berlin and Stuttgart Stock Exchanges in Germany. There can be no assurance that an active or regular trading market for the common stock will develop or that, if developed, will be sustained. Various factors, such as operating results, changes in laws, rules or regulations, general market fluctuations, changes in financial estimates by securities analysts and other factors may have a significant impact on the market of the Company securities. The market price for the securities of public companies often experience wide fluctuations that are not necessarily related to the operating performance of such public companies such as high interest rates or impact of overseas markets.

The following table shows the reported high and low closing bid prices per share for our common stock based on information provided by the OTC Bulletin Board. The over-the-counter market quotations set forth for our common stock reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

	High		Low
Period from January 1, 2011 to March 31, 2011	$	0.06	$	0.04
Period from October 1, 2010 to December 31, 2010	$	0.10	$	0.02
Period from July 1, 2010 to September 30, 2010	$	0.12	$	0.06
Period from April 1, 2010 to June 30, 2010	$	0.13	$	0.06
Period from January 1, 2010 to March 31, 2010	$	0.18	$	0.03
Period from October 1, 2009 to December 31, 2009	$	0.24	$	0.02
Period from July 1, 2009 to September 30, 2009	$	0.50	$	0.06
Period from April 1, 2009 to June 30, 2009	$	0.55	$	0.15

Holders

There were approximately 120 stockholders of record of the Common Stock as of June 8, 2011. This does not reflect those shares held beneficially or in "street" name.

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Dividend Policy

The Company has never declared or paid any cash dividends on its Common Stock, and the Company currently intends to retain any future earnings to fund the development of its business and therefore does not anticipate paying any cash dividends on its Common Stock in the foreseeable future. Future declaration and payment of dividends on its Common Stock, if any, will be determined in light of the then-current conditions, including the Company's earnings, operations, capital requirements, financial conditions, restrictions in financing agreements, and other factors deemed relevant by the Board of Directors.

Recent Sales of Unregistered Securities

None

ITEM 6.

SELECTED FINANCIAL DATA.

This item is not applicable because we are a smaller reporting company.

ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following plan of operation, discussion of the results of operations and financial conditions should be read in conjunction with the financial statements and related notes appearing in this report.

Overview

EnXnet, Inc. was formed under the laws of the State of Oklahoma on March 30, 1999 as Southern Wireless, Inc. It is a business and technology development enterprise engaged in the development, marketing, and licensing of emerging technologies and innovative business strategies and practices, focusing primarily on products, solutions, and services which support and enhance multimedia management.

The Company currently can satisfy its current cash requirements for approximately 30 days and has a plan to raise additional working capital by the sale of shares of the Company common stock to select perspective individuals and from additional borrowings. This plan should provide the additional necessary funds required to enable the Company to continue marketing and developing its products until the Company can generate enough cash flow from sales to sustain its operations.

The Company does not anticipate any significant cash requirements for the purchase of any facilities.

The Company currently has one full-time employee on the payroll. The Company currently has arrangements with marketing affiliate Duplium for our DVDplus product and with One28 Marketing Group and Interactive Affinities for our ThinDisc product. Currently our employee and other outside consultants are used for the further development of our products.

Results of Operations.

Year Ended March 31, 2011 Compared to Year Ended March 31, 2010.

Revenues.

Our revenues from operations for the years ending March 31, 2011 and 2010 were $-0- and $12,540. Gross profits from these revenues were $-0- and $2,740, respectively. Revenues for the year ended March 31, 2010 consist of lease revenue on our DVDplus mold and royalty income from the production of DVDplus products.

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Operating Expenses.

The Company incurred operating expenses for the years ended March 31, 2011 and 2010 of $234,902 and $346,732. The decrease in operating expenses of $111,831 (32%) is attributed to a decrease in consulting expense of $102,348 (61.7%); a decrease in payroll expense of $48,439 (55.9%); an increase in professional services of $49,389 (55.9%), other expense categories decreased by $10,433.

Consulting expenses for the year ended March 31, 2011 decreased $102,348 from the year ended March 31, 2010. The increase in consulting expenses is due to a decrease in the valuation of the underlying common stock shares and common stock options issued for consulting services performed. The consulting expenses related to the issuance of common stock and options were $61,237 and $163,475 for the years ended March 31, 2011 and 2010, a decrease of $102,238. Cash outlay for consulting expenses also decreased $110 in the current year.

The decrease in payroll expenses for the year ended March 31, 2011 of $48,439 relates to a reduction in employees from 3 to 1 which accounted for a reduction of $22,922 in expenses. The reduction also takes into account the compensation expense for options issued to employees. Prior year’s expenses included $25,518 in Black-Scholes option valuation while the current year did not include any expenses for options valuations.

Professional services expenses for the year ended March 31, 2011 increased $49,389 from the year ended March 31, 2010. Of the increase, $43,713 relates to our use of attorneys in the patent filing process. Professional accounting services accounted for $5,283 of the increase as well.

We incurred net losses for the years ended March 31, 2011 and 2010 of $259,208 and $379,632 or $(0.006) and $(0.016) per share.

Liquidity and Capital Resources.

The Company from inception through June 8, 2011 has issued 43,030,018 shares of its Common Stock to officers, directors and others. The Company has little operating history and no material assets other than the license agreement for ClearVideo and DVDplus, and the patent for ThinDisc, the Optical Disc, DSTag, EnXcase, and the Antenna patents. The Company has $8,443 in cash as of March 31, 2011.

The Company has a limited source of revenue and has incurred operating losses since inception. The Company has incurred operating losses each year since its inception and has had a working capital deficit at March 31, 2011 and 2010. The working capital deficit at March 31, 2011 and 2010 was $1,374,515 and $1,495,759, respectively. Current liabilities include notes payable, accrued interest on those notes and advances from the CEO and shareholders in the aggregate amount of $1,088,798 and $1,288,998, respectively. The adjusted working capital deficit without these related party liabilities for March 31, 2011 and 2010 is $285,717 and $206,761, respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern. As a result of these factors, the Company's independent certified public accountants have included an explanatory paragraph in their reports on the Company's March 31, 2011 and 2010 financial statements which expressed substantial doubt about the Company's ability to continue as a going concern.

Contractual Obligations.

The Company at the present time has no material commitments for capital expenditures. If capital expenditures are required after operations commence, the Company will pay for the same through the sale of common stock; or through loans from third parties. There is no assurance, however, that such financing will be available and in the event such financing is not available, the Company may have to cease operations.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES.

Management's discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements. These statements have been prepared in accordance with generally accepted accounting principles in the United States of America.

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Use of estimates in preparation of financial statements

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, based on historical experience, and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The following critical accounting policies rely upon assumptions, judgments and estimates and were used in the preparation of our consolidated financial statements:

Licenses

The costs associated with acquiring exclusive licensing rights to patented technology have been capitalized and are being charged to expense using the straight line method of amortization over ten years, the estimated remaining useful lives of the patents.

Revenue Recognition

Revenue is generally recognized and earned when all of the following criteria are satisfied: a) persuasive evidence of sales arrangements exists; b) delivery has occurred; c) the sales price is fixed or determinable, and d) collectability is reasonably assured.

Persuasive evidence of an arrangement is demonstrated via a purchase order from our customers. Delivery occurs when title and all risks of ownership are transferred to the purchaser which generally occurs when the products are shipped to the customer. No right of return exists on sales of products except for defective or damaged products. The sales price to the customer is fixed upon acceptance of purchase order. To assure that collectability is reasonably assured we perform ongoing credit evaluations of all of our customers.

Fair Value of Financial Instruments

The carrying amounts reported in the balance sheets as of March 31, 2011 and 2010 for cash equivalents and accounts payable and accrued expenses approximate fair value because of the immediate or short-term maturity of these financial instruments.

Contingent Liability

We may have certain contingent liabilities with respect to material existing or potential claims, lawsuits and other proceedings. We accrue liabilities when it is probable that future cost will be incurred and such cost can be measured.

Off Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 8.

FINANCIAL STATEMENTS

The information for this Item is included beginning on Page F-1 of this Annual Report.

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ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Pattillo, Brown & Hill, LLP is the Company's independent auditor. At no time has there been any disagreement with such accountants regarding any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure.

ITEM 9A(T)

CONTROL AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), as of the end of the period covered by this Annual Report.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, errors, and instances of fraud, if any, have been or will be detected. The inherent limitations include, among other things, the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Controls and procedures also can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or employee override of the controls and procedures. The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls and procedures may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. If and when management learns that any control or procedure is not being properly implemented, (a) it immediately reviews our controls and procedures to determine whether they are appropriate to accomplish the control objective and, if necessary, modifies and improves our controls and procedures to assure compliance with our control objectives, (b) it takes immediate action to cause our controls and procedures to be strictly adhered to, (c) it immediately informs all relevant managers of the requirement to adhere to such controls, as well as all relevant personnel throughout our organization, and (d) it implements in our training program specific emphasis on such controls and procedures to assure compliance with such controls and procedures. The development, modification, improvement, implementation and evaluation of our systems of controls and procedures is a continuous project that requires changes and modifications to them to remedy deficiencies, to improve training, and to improve implementation in order to assure the achievement of our overall control objectives.

Based upon the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer have concluded that, subject to the limitations noted above, our disclosure controls and procedures as of the end of the period covered by this Annual Report were effective to ensure that material information relating to us and our consolidated subsidiaries is made known to them by others within those entities to allow timely decisions regarding required disclosures.

(b) Management’s Report on Internal Control Over Financial Reporting.

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable assurance to the Company's management and board of directors regarding the preparation and fair presentation of published financial statements and the reliability of financial reporting.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Our management team as of March 31, 2011 conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria provided in the Securities and Exchange Commission’s Interpretive Guidance regarding management’s report on internal control over financial reporting (Release No. 34-55929). Based on such assessment, we believe that, as of March 31, 2011, the Company's internal control over financial reporting is effective.

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This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this annual report.

Changes in Internal Control Over Financial Reporting

During the period covered by this Annual Report, there have been no changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION.

Not applicable.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERANCE.

Directors and Executive Officers

Set forth below are the names, ages, and positions of each of our executive officers and directors, together with such person's business experience during the past five (5) years.

Name	Age		Position(s)
Ryan Corley		67	President, Chief Executive Officer, Chairman of the Board of Directors
Stephen Hoelscher		52	Chief Financial Officer, Treasurer
Richard W Martel, Jr.		53	Director
Linda Howard		64	Secretary

Ryan Corley - President, CEO, and a member of the Board of Directors.

Mr. Corley has served as president and a member of the Board of Directors of the Company since February 5, 2000. Mr. Corley is the managing member of Treasure Finders LLC since it was founded on September 9, 2009. Mr. Corley became the Co-Managing member of San Juan Minerals, LLC in April 2006. Mr. Corley received a Bachelor of Science in Business Administration and a Masters in Business Administration from the University of Tulsa.

Stephen Hoelscher - Chief Financial Officer and Treasurer

Mr. Hoelscher has been Chief Financial Officer of the Company since May 21, 2004 and has been providing accounting consulting services to the Company since January 2001. Mr. Hoelscher is a Certified Public Accountant and has 31 years of accounting and auditing experience. Prior to joining the Company, Mr. Hoelscher was and continues to be the CFO for Mastodon Ventures, Inc., a financial consulting business in Austin, Texas since June 2000. In January 2006, Mr. Hoelscher became a director, secretary and CFO of Anpath Group, Inc, a North Carolina based small publicly traded company. Mr. Hoelscher will continue his work with EnXnet, Mastodon and Anpath and does not anticipate that this will interfere with his work for the Company. Mr. Hoelscher received a Bachelor of Business Administration from West Texas A&M University (formerly West Texas State University) in Canyon, Texas in 1981.

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Richard W. Martel, Jr. - Member of the Board of Directors

Mr. Martel was elected to the Board of Directors and began serving on October 1, 2006. Since November 1999, Mr. Martel has been the co-founder and President of Gem Depot, Inc which is an ecommerce company that sells and distributes gemstones, gold and jewelry over the internet. Mr. Martel is also the co-founder and Vice-President of Detekt Corporation, a company that provides nondestructive infrared services to diagnose electrical and roofing problems for facilities. Detekt was founded in April 1986. Mr. Martel received his B.S. in Chemistry from Oklahoma State University in Stillwater, Oklahoma in 1981 and a MBA in Telecommunications Management from St. Edwards University in Austin, Texas in 1998.

Linda Howard – Corporate Secretary

Ms. Howard has been employed by the Company since July 2001 and has served in the capacity of executive assistant. Prior to coming to the Company she managed Sooner Beauty Supply in Tulsa, OK from May 1998 to June 2001. Ms. Howard has worked with management for Doctor's Hospital; OTASCO; Yellow Freight System; Blue Cross and Blue Shield; and Skelly Oil Company. Ms. Howard attended Tulsa Community College.

Election of Officers and Directors

All directors hold office until the next annual meeting of shareholders and until their successors have been elected and qualified. The Company's officers are elected by the Board of Directors after each annual meeting of the Company's shareholders and hold office until their death, or until they resign or have been removed from office.

Compensation of Directors

It is intended that each member of our board of directors who is not also an employee (a “non-employee director”) will receive an annual retainer in shares of our common stock as determined by our board of directors and all directors will be reimbursed for costs and expenses related to attending meetings of the board of directors or committees of the board of directors on which they serve.

Our employee directors will not receive any additional compensation for serving on our board of directors or any committee of our board of directors, and our non-employee directors will not receive any compensation from us for their roles as directors other than the stock and stock option grants.

Committees of the Board of Directors

The Board of Directors currently consists of two members and the entire Board acts as the Company’s audit committee. There are no other committees of the Board. The board meets as needed.

Audit Committee and Code of Ethics.

The entire Board serves as the audit committee of the Company. We have not adopted an audit committee charter or made a determination as to whether any of our directors would qualify as an audit committee financial expert. The Company has not yet adopted a code of ethics applicable to its chief executive officer and chief accounting officer, or persons performing those functions, because of the small number of persons involved in management of the Company.

Family Relationships

There are no family relationships among our officers or directors.

Legal Proceedings

Based on our inquiries of all of our officers and directors, we are not aware of any pending or threatened legal proceedings involving any of our officers or directors that would be material to an evaluation of our management.

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ITEM 11.

EXECUTIVE COMPENSATION.

The following table sets forth certain information concerning all cash and non-cash compensation awarded to, earned by or paid to our Chief Executive Officer and other executive officers whose total compensation exceeded $100,000 for the fiscal years ended March 31, 2011 and 2010.

Summary Compensation Table
Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Total ($)
Ryan Corley, President and Chief Executive Officer	2011		-0-		-0-		-0-		-0-		-0-
Ryan Corley, President and Chief Executive Officer	2010		-0-		-0-		-0-		-0-		-0-

(1) There is a stock option plan for the benefit of the Company's officers and directors. There is no pension, or profit sharing plan for the benefit of the Company's officers and directors.

Employment Agreements

We do not have an employment agreement with our CEO. Mr. Corley.

Other Compensation

We may issue to our independent directors stock options and common stock as compensation as determined by the Board of directors.

Stock option Plan

2001 Stock Option Plan

We adopted our 2001 Stock Option Plan on July 24, 2001. The plan provides for the grant of options intended to qualify as “incentive stock options” and options that are not intended to so qualify or “non-statutory stock options”. The total number of shares of common stock reserved for issuance under the plan is 3,000,000 shares. We have issued 985,000 stock options that are outstanding at March 31, 2011.

The plan is administered by our board of directors, which selects the eligible persons to whom options or stock awards shall be granted, determines the number of shares subject to each option or stock award, the exercise price therefore and the periods during which options are exercisable, interprets the provisions of the plan and, subject to certain limitations, may amend the plan. Each option or stock award granted under the plan shall be evidenced by a written agreement between us and the optionee.

Grants may be made to our employees that includes officers and directors and to certain consultants and advisors.

The exercise price for incentive stock options granted under the plan may not be less than the fair market value of the common stock on the date the option is granted. The exercise price for non-statutory options is determined by the board of directors. Incentive stock options granted under the plan have a maximum term of ten years. Options granted under the plan are not transferable, except by will and the laws of descent and distribution.

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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

OPTION AWARDS

	Number of Securities Underlying Unexercised Options (#)				Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date
Name	Exercisable		Unexercisable
Ryan Corley		100,000		-0-		100,000	$	0.66	2011
Richard Martel, Jr.		65,000		-0-		65,000	$	0.35	2011
Stephen Hoelscher		325,000		-0-		325,000	$	0.40	2011
Linda Howard		210,000		-0-		210,000	$	0.39	2011

Compensation of Directors

DIRECTOR COMPENSATION

Name

Fees

Earned

or Paid

in Cash

($)

Stock

Awards

($)

Option Awards

($)

Non-Equity

Incentive Plan

Compensation

($)

Non-Qualified

Deferred

Compensation

Earnings

($)

All Other

Compensation

($)

Total

($)

Ryan Corley

Richard Martel, Jr.

Securities Authorized for Issuance under Equity Compensation Plans

The following table shows information about securities authorized for issuance under our equity compensation plans as of March 31, 2011:

Plan Category	Number of Securities to be issued upon exercise of outstanding options (a)		Weighted- average exercise price of outstanding (b)		Number of Securities remaining for future issuance under equity compensation plans(excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		985,000	$	0.36		365,000
Equity compensation plans not approved by security holders		-0-	$	-0-		-0-
Total		985,000	$	0.36		365,000

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ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information as of March 31, 2011 regarding the beneficial ownership of our common stock by (i) each person who, to our knowledge, beneficially owns more than 5% of our Common Stock; (ii) each of our directors and named executive officers; and (iii) all of our named executive officers and directors as a group:

Name and address of Beneficial Owner (2)	Amount (1)		Percent of Class
Directors and Named Executive Officers:
Ryan Corley (3)		8,193,948		19.00	%
Steve Hoelscher (4)		665,760		1.54	%
Richard W Martel, Jr. (5)		185,000		*
Linda Howard (6)		485,000		1.12	%
All directors and named executive officers as a group (4 persons)		9,529,708		21.79	%

Other 5% or Greater Beneficial Owners		-0-		N/A

* Less than 1%.

(1) Beneficial ownership is calculated based on 43,030,018 shares of our common stock issued and outstanding. Beneficial ownership is determined in accordance with Rule 13d-3 of the Securities and Exchange Commission. The number of shares beneficially owned by a person includes shares of common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days following the date hereof. The shares issuable pursuant to those options or warrants are deemed outstanding for computing the percentage ownership of the person holding these options and warrants but are not deemed outstanding for the purposes of computing the percentage ownership of any other person. The persons and entities named in the table have sole voting and sole investment power with respect to the shares set forth opposite the stockholder’s name, subject to community property laws, where applicable.

(2) The address for the directors and named executive officers is c/o EnXnet, Inc 11333 E Pine St, Suite 92 Tulsa, OK 74116.

(3) Includes 100,000 shares of common stock issuable upon the exercise of options at an average price of $.66 per share.

(4) Includes 325,000 shares of common stock issuable upon the exercise of options at an average price of $.40 per share.

(5) Includes 65,000 shares of common stock issuable upon the exercise of options at an average price of $.35 per share.

(6) Includes 210,000 shares of common stock issuable upon the exercise of options at an average price of $.39 per share.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.

Our CEO, Ryan Corley, has made advances to the Company in prior years. During the year ended March 31, 2011 and 2010, the CEO made additional unsecured advances totaling $48,400 and $12,593. During the year ended March 31, 2011 and 2010 the Company made payments on these advances of $4,000 and $2,000. Also during the year ended March 31, 2011 and 2010 the Company converted $88,437 and $-0- of the advances into notes payable. At March 31, 2011 and 2010, advances from the CEO were $2,543 and $46,580, respectively.

The Company has notes payable to the CEO in the aggregate amount of $540,062 and $611,625 as of March 31, 2011 and 2010. During the year ended March 31, 2011, the CEO transferred $20,000 of these notes to unrelated entities. These notes with accrued interest were then converted into 401,070 shares of the Company’s common stock. Also, year ended March 31, 2011, the CEO transferred $25,000 of notes payable to the CFO, Secretary and an outside member of the Board of Directors. These notes were then converted into 500,000 shares of the Company’s common stock. Additionally, during the year ended March 31, 2011, the CEO requested conversion of $85,000 in notes payable and $76,396 of accrued interest. The CEO assigned 1,563,940 of the conversion shares to trusts held for the benefit of his children, a relative and an unrelated individual. The CEO received 1,663,979 of the converted shares. Accrued interest owed on these notes at March 31, 2011 and 2010 is $110,689 and $174,390. These notes and accrued interest are convertible into 11,812,385 and 11,905,092 shares of Rule 144 restricted common stock of the company.

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An entity controlled by the CEO made unsecured advances totaling $23,250 and $64,000 during the year ended March 31, 2011 and 2010. During the year ended March 31, 2010 the Company charged this entity $1,200 for office space use and reduced these advances by that amount. The entity converted $10,350 of the advances into notes payable bearing interest of 3% during the year ended March 31, 2011. The entity converted $20,000 and $48,900 of the advances into notes payable bearing interest of 3% and 2%, respectively, during the year ended March 31, 2010. At March 31, 2011 and 2010, advances from the entity controlled by the CEO were $10,500 and $-0- and notes payable totaled $160,250 and $149,900. Accrued interest owed on these notes at March 31, 2011 and 2010 is $7,684 and $3,547. These notes and accrued interest are convertible into 2,500,444 and 2,438,509 shares of Rule 144 restricted common stock of the company.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit Fees

Our board of directors appointed Pattillo, Brown & Hill, L.L.P. as independent auditors to audit our financial statements for the year ended March 31, 2011 and 2010. The aggregate fees billed by Pattillo, Brown and Hill, L.L.P. for professional services rendered for the audits of our annual financial statements included in this Annual report on Form 10K for the fiscal years ended March 31, 2010 and March 31, 2009 were $27,867 and $22,584, respectively.

Audit Related Fees

For the Company's fiscal year ended March 31, 2011 and 2010, we were not billed for professional services rendered for any audit related fees.

Tax Related Fees

For the Company's fiscal year ended March 31, 2011 and 2010, we were not billed for professional services rendered for tax compliance, tax advice, and tax planning.

All Other Fees

The Company did not incur any other fees related to services rendered by our principal accountants for the fiscal years ended March 31, 2011 and 2010.

ITEM 15.

EXHIBITS.

(a)		Exhibits

Exhibit Number		Exhibit Description
3.1		Articles of Incorporation (1)
3.2		First Amendment to Articles of Incorporation (1)
3.3		Second Amendment to Articles of Incorporation (1)
3.4		Bylaws (1)
10.1		Sub-License Agreement with Ryan Corley as Nominee (1)
10.2		License agreement for Clear Video (1)
10.3		License agreement for Clear Video - addendum (1)
31.1		Chief Executive Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (2)
31.2		Chief Financial Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (2)
32.1		Chief Executive Officer’s and Chief Financial Officer’s Certificate, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (2)

(1) Filed as an exhibit to Registrant’s Form 10-SB filed on May 22, 2000 and incorporated herein by reference.

(2) Filed herewith.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


June 28, 2011	EnXnet, Inc.

	By:/s/ Ryan Corley
	Name: Ryan Corley
	Title: President, Chief Executive Officer and Director (principal executive officer)

In accordance with the Securities Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


June 28, 2011	/s/ Ryan Corley
	Ryan Corley, President, Chief Executive Officer and Director (principal executive officer)



June 28, 2011	/s/ Stephen Hoelscher
	Stephen Hoelscher, Chief Financial Officer (principal financial and accounting officer)



June 28, 2011	/s/ Richard W. Martel
	Richard W. Martel, Director

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Pattillo, Brown and Hill, L.L.P.

Certified Public Accountants

Board of Directors and Stockholders

EnXnet, Inc.

INDEPENDENT AUDITORS REPORT

We have audited the accompanying balance sheets of EnXnet, Inc. (the Company), as of March 31, 2011 and 2010, and the related statements of loss, changes in stockholders' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of EnXnet, Inc. as of March 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has a working capital deficit and has incurred losses since inception. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


	/s/ Pattillo, Brown and Hill, L.L.P.

Waco, Texas

June 20, 2011

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ENXNET, INC

BALANCE SHEET

	March 31,
	2011			2010
ASSETS	(Audited)

CURRENT ASSETS
Cash	$	8,443		$	24,289
Accounts receivable		-			-
Prepaid expenses		42,824			63,545
TOTAL CURRENT ASSETS		51,267			87,834
FIXED ASSETS
Furniture & fixtures		6,160			6,160
Machinery & equipment		74,516			74,516
Less accumulated depreciation		(76,865	)		(70,967	)
TOTAL FIXED ASSETS		3,811			9,709
OTHER ASSETS
Licenses, net		-			-
Investment		-			-
Deposits		1,137			1,137
TOTAL OTHER ASSETS		1,137			1,137
TOTAL ASSETS	$	56,215		$	98,680
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	500,014		$	518,075
Advances from officer - related party		13,043			46,580
Advances from stockholder		31,000			31,000
Notes payable		181,413			226,413
Notes payable - related party		700,312			761,525
TOTAL CURRENT LIABILITIES		1,425,782			1,583,593
COMMITMENTS AND CONTINGENCIES		-			-
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $0.00005 par value; 200,000,000 shares authorized, 43,030,018 and36,108,429 shares issued and outstanding		2,151			1,805
Additional paid-in capital		5,054,588			4,680,380
Accumulated deficit		(6,326,306	)		(6,067,098	)
Deferred consideration		-			-
Other comprehensive income		(100,000	)		(100,000	)
TOTAL STOCKHOLDERS' EQUITY (DEFICIT)		(1,369,567	)		(1,484,913	)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	56,215		$	98,680

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

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ENXNET, INC

CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Years Ended
	March 31,
	2011			2010

REVENUES	$	-		$	12,540
COST OF SALES		-			9,800
Gross Profit		-			2,740
EXPENSES
Consulting fees		63,637			165,985
Depreciation & amortization		5,898			790
Bad debts		-			9,561
Payroll		38,219			86,659
Professional services		104,006			54,617
Occupancy		15,308			16,221
Office		5,491			8,506
Travel		598			1,149
Other		1,745			3,244
Total Expenses		234,902			346,732
LOSS FROM OPERATIONS		(234,902	)		(343,992	)
OTHER INCOME (EXPENSE)
Interest expense		(24,306	)		(44,408	)
Other income		-			8,768
Total Other Income (Expense)		(24,306	)		(35,640	)
COMPREHENSIVE LOSS	$	(259,208	)	$	(379,632	)
BASIC AND DILUTED NET LOSS PER SHARE	$	(0.006	)	$	(0.016	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED		40,621,339			34,163,425

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

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ENXNET, INC

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

					Additional					Other			Total
	Common Stock				Paid-in		Accumulated			Comprehensive			Stockholders'
	Shares		Amount		Capital		(Deficit)			Income			Equity (Deficit)

Balance, March 31, 2009		32,694,809	$	1,635		4,370,440	$	(5,687,466	)	$	(100,000	)	$	(1,415,391	)
Common stock issued for:
Cash		1,076,000		54		59,446		-			-			59,500
Services		2,337,620		116		131,668		-			-			131,784
Stock options issued		-		-		118,826		-			-			118,826
Net loss for the year ended March 31, 2010		-		-		-		(379,632	)		-			(379,632	)
Balance, March 31, 2010		36,108,429	$	1,805	$	4,680,380	$	(6,067,098	)	$	(100,000	)	$	(1,484,913	)
Common stock issued for:
Cash		832,500		42		41,358		-			-			41,400
Services		377,000		19		14,831		-			-			14,850
Notes payable		5,712,089		285		285,319		-			-			285,604
Stock options issued		-		-		32,700		-			-			32,700
Net loss for the year ended March 31, 2010		-		-		-		(259,208	)		-			(259,208	)
Balance, March 31, 2011		43,030,018	$	2,151	$	5,054,588	$	(6,326,306	)	$	(100,000	)	$	(1,369,567	)

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

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ENXNET, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Years Ended
	March 31,
	2011			2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(259,208	)	$	(379,632	)
Depreciation and amortization		5,898			6,091
Common stock issued for services		14,850			131,784
Stock options issued		32,700			118,826
Adjustments to reconcile net loss to net cash used by operations:
Decrease (increase) in accounts receivable		-			17,290
Decrease (increase) in prepaid expenses		20,721			(47,239	)
Increase (decrease) in accounts payable & accrued expenses		51,598			(15,434	)
Net cash provided (used) by operating activities		(133,441	)		(168,314	)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash provided (used) in investing activities		-			-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock sales		41,400			59,500
Proceeds from note payable		21,295			117,380
Proceeds from advances from officer and stockholder		61,300			8,293
Repayment of advances		(6,400	)		(3,200	)
Net cash provided (used) by financing activities		117,595			181,973
NET INCREASE (DECREASE) IN CASH		(15,846	)		13,659
CASH - Beginning of period		24,289			10,630
CASH - End of period	$	8,443		$	24,289
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest expense	$	-		$	-
Income taxes	$	-		$	-
NON-CASH FINANCING AND INVESTING TRANSACTIONS:
Common stock issued for services	$	14,850		$	131,784
Common stock issued for payment of debt	$	179,000		$	-
Issuance of stock options for services	$	32,700		$	118,826
Common stock issued for payment of accrued expenses	$	76,604		$	-

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

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ENXNET, INC.

NOTES TO FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2011 and 2010

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

Cash Equivalents

For financial reporting purposes, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent. Financial instruments, which potentially subject the Company to a concentration of credit risk, consist of cash and cash equivalents. Cash and cash equivalents consist of funds deposited with various high credit quality financial institutions.

Fixed Assets

Fixed assets are recorded at cost. Depreciation and amortization are provided using the straight-line method over the useful lives of the respective assets, typically 3-10 years. Major additions and betterments are capitalized. Upon retirement or disposal, the cost and related accumulated depreciation or amortization is removed from the accounts and any gain or loss is reflected in operations.

Depreciation expenses included in operating expenses for the year’s ended March 31, 2011 and 2010 were $5,898 and $790, respectively. Depreciation expense included in cost of goods sold for the year’s ended March 31, 2011 and 2010 were $-0- and $5,300.

Advertising

Advertising costs are expensed as incurred.

Licenses

Revenue Recognition

Income Taxes

Income taxes are provided based on the liability method of accounting. Under this approach, deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end. A valuation allowance is recorded against deferred tax assets as management does not believe the Company has met the "more likely than not" standard to allow recognition of such an asset.

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ENXNET, INC.

NOTES TO FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2011 and 2010

Accounts Receivable

Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within thirty days from the invoice date or as specified by the invoice and are stated at the amount billed to the customer. Customer account balances with invoices dated over ninety days or ninety days past the due date are considered delinquent.

The carrying amount of accounts receivable is reduced by a valuation allowance that reflects management's best estimate of the amount that will not be collected. Management individually reviews all accounts receivable balances that are considered delinquent and based on an assessment of current credit worthiness, estimates the portion, if any, of the balance that will not be collected. In addition, management periodically evaluates the adequacy of the allowance based on the Company's past experience.

Estimates

The preparation of 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 disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Fair Value of Financial Instruments

Under FASB ASC 825 the Company is required to disclose the fair value of financial instruments for which it is practicable to estimate value.

The Company’s financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities and debt. The Company believes that the carrying amounts approximate fair value for all such instruments.

FASB ASC 820 defines fair value, establishes a framework for measurement, and expands disclosure about fair value measurements. Topic No. 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Topic No. 820 classifies the inputs used to measure fair value into the following hierarchy:

	Level 1:	Quoted prices for identical assets or liabilities in active markets.
	Level 2:	Quoted market prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
	Level 3:	Pricing inputs are unobservable for the assets and liabilities, including situations in which there is little to no market activity.

Fair values assigned to the Company’s acquired fixed assets were determined using Level 2, and the fair value associated with the Company’s intangible asset was based on Level 3 inputs. The inputs used to determine fair value require significant management judgment and estimation.

Compensated Absences

Employees of the Company do not earn annual leave or sick leave. There is no compensated absences accrued liability on March 31, 2011 and 2010.

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ENXNET, INC.

NOTES TO FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2011 and 2010

Research and Development Costs

Research and development costs are charged to expense as incurred.

Stock Based Compensation

FASB ASC 718 requires that measurement of the cost of employee services received in exchange for an award of equity instruments be based on the grant-date fair value of the award. Such costs are recorded over the periods employees are required to render services in exchange for the awards.

Income Tax/Deferred Tax Policy

FASB ASC 740 requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differing treatment of certain items between the Company’s financial records and tax returns. Deferred tax assets are also established for tax benefits associated with tax loss and tax credit carryforwards. Such deferred balances reflect tax rates by tax jurisdiction that are scheduled to be in effect, based on currently enacted tax laws, in the years the book/tax differences reverse and tax loss and tax credit carryforwards are expected to be realized. An allowance is established for any deferred tax asset that is not expected to be realized.

FASB ASC 740 also prescribes a comprehensive model for how a company should measure, recognize, present, and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. The Company recognizes the tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Interest and penalties, if incurred, are included in interest and financing expense. The Company’s income tax filings are subject to audit by various taxing authorities. The Company’s open audit periods are 2008 – 2010. The Company does not believe it has any material uncertain tax positions.

Net Loss Per Share

SFAS No. 128 requires dual presentation of basic EPS and diluted EPS on the face of all income statements for all entities with complex capital structures. Basic EPS is computed as net income divided by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operation, financial position or cash flows.

Reclassifications

Certain amounts have been reclassified from the prior financial statements for comparative purposes.

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ENXNET, INC.

NOTES TO FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2011 and 2010

NOTE 2 – GOING CONCERN

The Company has a working capital deficit and has incurred losses since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that may be necessary if the Company is unable to continue as a going concern.

Management of the Company has undertaken certain actions to address these conditions. Management is currently in negotiations with potential customers and with marketing representatives to establish a more developed product channel. Funds required to carry out management's plans are expected to be derived from future stock sales and borrowings from outside parties. There can be no assurances that the Company will be successful in executing its plans.

NOTE 3 – INCOME TAXES

At March 31, 2011 and 2010, the Company had net deferred tax assets of approximately $2,151,000 and $2,063,000 principally arising from net operating loss carry forwards for income tax purposes. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset has been established at March 31, 2011 and 2010. At March 31, 2011, the Company has net operating loss carry forwards totaling approximately $6,326,000 which will begin to expire in the year 2015.

NOTE 4 – NOTES PAYABLE

Notes payable-related party consists of the following:	March 31,
	2011			2010
8% convertible note payable to Ryan Corley, President of the Company, due November 15, 2003, Convertible into a maximum of 1,100,000 common shares		$	-		$	110,000
3% convertible note payable to Ryan Corley, President of the Company, due on demand, convertible into a maximum of 271,311 common shares			21,705			21,705
2% convertible note payables to Ryan Corley, President of the Company, due on demand, convertible into a maximum of 11,146,310 common shares			518,357			479,920
2% convertible note payable to an entity controlled by Ryan Corley the President of the Company, due on demand, convertible into a maximum of 978,000 common shares			48,900			48,900
3% convertible note payables to an entity controlled by Ryan Corley the President of the Company, due on demand, convertible into a maximum of 1,619,500 common shares			111,350			101,000
Total notes payable-related party		$	700,312		$	761,525

Notes payable consist of the following:	March 31,
	2011			2010
4% convertible notes payable to a stockholder, due on demand, convertible into a maximum of 350,000 common shares			175,000			175,000
2% convertible notes payable to 3 stockholders, due on demand, convertible into a maximum of 128,267 common shares			6,413			51,413
Total notes payable		$	181,413		$	226,413

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ENXNET, INC.

NOTES TO FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2011 and 2010

NOTE 5 – ADVANCES FROM OFFICER AND STOCKHOLDER

Advances from a stockholder at March 31, 2011 and 2010 were $31,000 and $31,000, respectively.

NOTE 6 - COMMON STOCK TRANSACTIONS

The Company issued 377,000 and 2,337,620 shares of Rule 144 restricted common stock during the years ended March 31, 2011 and 2010 for services in the amount of $14,850 and $131,784.

The Company issued 832,500 and 1,076,000 shares of Rule 144 restricted common stock during the years ended March 31, 2011 and 2010 in exchange for cash in the amount of $41,400 and $59,500.

The Company issued 5,712,089 shares of Rule 144 restricted common stock during the year ended March 31, 2011 in exchange for debt in the amount of $285,604.

NOTE 7 – STOCK OPTIONS

On July 24, 2001, the Company filed with the SEC Form S-8, for its 2002 Stock Option Plan, (the Plan). An aggregate amount of common stock that may be awarded and purchased under the Plan is 3,000,000 shares of the Company's common stock. Under the Plan during the years ended March 31, 2011 and 2010, the Company did not grant stock options to employees and members of the Board of Directors. At March 31, 2011 there were 985,000 options issued under the Plan and 365,000 options available to issue under the Plan.

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ENXNET, INC.

NOTES TO FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2011 and 2010

The Company also issues stock options to purchase Rule 144 restricted common stock which is not issued under the Plan. During the year ended March 31, 2011 the Company granted 300,000 options to purchase the Company’s common stock for a period of 24 months at an exercise price of $.05 per share to an unrelated entity who had purchased 300,000 shares of common stock for $15,000. At March 31, 2011, there were 300,000 options issued not under the Plan

The Company estimated the fair value of each stock option for employees and consultants at the grant date by using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants as follows:

Dividends yield		0	%
Expected volatility		2.04	%
Risk-free interest rate	.43 to .33		%
Expected life	2 years

For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period.

A summary of the status of the Company's stock options as of March 31, 2011 and March 31, 2010 is presented below:

	March 31,			March 31,
	2011			2010
Options outstanding at beginning of year		3,880,800			2,880,800
Options granted		300,000			1,250,000
Options exercised		-			-
Options canceled		(2,895,800	)		(250,000	)
Options outstanding at end of year		1,285,000			3,880,800

The following table summarizes the information about the stock options as of March 31, 2011:

Range of Exercise Price		Number Outstanding at March 31		Weighted Average Remaining Contractual Life Years		Weighted Average Exercise Price (Total shares)		Number Exercisable at March 31		Weighted Average Exercise Price (Exercisable shares)
$	.40 - .66		330,000		.25	$	.56		330,000	$	.56
	.43		200,000		.25		.43		200,000		.43
	.38		135,000		.31		.38		135,000		.38
	.06 - 51		320,000		.31		.38		320,000		.38
	.05		300,000		1.19		.05		300,000		.05
$	.05 – .66		1,285,000		.49	$	.36		1,285,000	$	.36

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ENXNET, INC.

NOTES TO FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2011 and 2010

The following table summarizes the information about the stock options as of March 31, 2010:

Range of Exercise Price		Number Outstanding at March 31		Weighted Average Remaining Contractual Life Years		Weighted Average Exercise Price (Total shares)		Number Exercisable at March 31		Weighted Average Exercise Price (Exercisable shares)
$	.10 - .50		555,800		.65	$	.39		555,800	$	.39
	.50		795,000		.64		.50		795,000		.50
	.40 - .50		45,000		.64		.43		45,000		.43
	.40 - .66		330,000		1.25		.56		330,000		.56
	.43		200,000		1.25		.43		200,000		.43
	.38		135,000		1.26		.38		135,000		.38
	.06 - 51		1,820,000		.32		.18		1,820,000		.18
$	.06 – .66		3,880,800		.74	$	.33		3,880,800	$	.33

NOTE 8 – EARNINGS PER SHARE

Basic income or loss per common share is computed based on the weighted average number of common shares outstanding during each period. For the years ended March 31, 2011 and 2010, potentially dilutive securities have not been included in the diluted loss per common share calculation as they would have been anti-dilutive.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

We may from time to time be a party to various legal actions in the ordinary course of business. The Company was a party to litigation regarding two agreements with plaintiff Erick Hansen, an individual alleging breach of contract, fraud, and breach of fiduciary duty. This litigation has now been dismissed with prejudice in favor of the Company. There can be no assurance that the Company will not be a party to litigation in the future that could have an adverse effect on the Company.

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