Form 10-Q

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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 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 website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or 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. (Check One)

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

As of September 15, 2010 there were 322,910,846 shares of the Registrant’s Common stock, $0.001 par value per share, outstanding.

THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH STATEMENTS ARE BASED ON CURRENT EXPECTATIONS, ASSUMPTIONS, ESTIMATES AND PROJECTIONS ABOUT THE COMPANY AND ITS INDUSTRY. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE ACTUAL RESULTS, LEVELS OF ACTIVITY, PERFORMANCE, ACHIEVEMENT AND PROSPECTS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS FOR ANY REASON EVEN IF NEW INFORMATION BECOMES AVAILABLE OR OTHER EVENTS OCCUR IN THE FUTURE.

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

National Energy Services Company, Inc. (“NES”) was incorporated on February 17, 1998 in Nevada as Coastal Enterprises, Inc. to engage in an internet-related business. NES and National Energy Services Company, Inc., an unaffiliated New Jersey corporation formed in 1995 (“NESNJ”), entered into an Agreement and Plan of Share Exchange, dated January 19, 2001, pursuant to which the shareholders of NESNJ on January 19, 2001 were issued 10,000,000 shares of common stock of NES, par value $0.001 in exchange for 100% of the issued and outstanding shares of NESNJ, which became a wholly-owned subsidiary of the Company. For accounting purposes, the transaction was accounted for as a reverse acquisition.

NES together with its subsidiaries (collectively the “Company”), are engaged in operating three divisions and various subsidiaries within each division either created by the Company or to be purchased for more rapid growth. The divisions include Renewable Energy Project Management, Renewable Energy Product Sales and Green Internet Technologies.

Renewable Energy Project Management initially consists of project management and marketing of those services to solar/thermal, bio-fuels and waste to energy project owners. Current various joint ventures investments are being negotiated to enable the Company to get into the markets with signed projects. These projects include bio-fuel from algae and from pyrolisis of tires, pyrolisis of municipal solid waste to energy, and combination operations of solar/thermal and animal waste pyrolisis.

The Renewable Energy Product Sales division markets to the end user products that reduce the energy cost to home and commercial building users to pennies on the dollars they previously spent and provide revenue for the company through sale of excess energy to the grid. Additional products include lighting and water systems for commercial structures, some that have been marketed by the Company’s former New Jersey subsidiary.

The Green Internet Technologies Service and Training Division is designed to first assist all affiliated divisions in the marketing of their products and services and will expand into green social networking products and services and training for new technology development and certification initially in the virtualization and cloud computing markets.

Except for the Internet Technologies Service and Training Division that became active in the three months ended July 31, 2010, none of the divisions were active during the nine months ended July 31, 2010. The divisions were formed in February 2010, except for the Company’s subsidiary, Applied Concepts for Energy Corp., which was previously formed and had no operations through July 31, 2010.

On January 21, 2010, the Company acquired an agreement to manage the construction of a solar/thermal site in California (the “Agreement”). The Agreement required former management to transfer to the seller 13,000,000 of the common shares they held, the Company to issue 10,000 shares of Series B Cumulative Convertible Preferred Stock with a stated value of $400,000 and a voting preference as if the holder held 50.1% of the outstanding votes of the Company and the settlement of the related party notes payable of approximately $1.3 million with a cash payment of $57,000 and the issuance of a $400,000 convertible promissory note. The settlement of the related party notes payable resulted in an effective reduction of $890,318 in related party debt.

The Agreement also required the resignation of all officers and directors at that time and the placement of a new director and officer to operate the Company. Further requirements caused the 13,000,000 common shares and 10,000 shares of Series B Cumulative Convertible Preferred Stock to be issued in accordance with the acquisition to be placed in escrow until all sales tax debts had been paid or negotiated for payment and the payment of certain debts to prior management and a counsel to the Company. The shares in escrow were released on April 30, 2010.

In March 2010, the Company purchased Global Green Resources, Inc. (“GGR”) for 6,000,000 restricted common shares with a stock value of $180,000. GGR’s assets consisted of its training software and contract and it had no liabilities. GGR provides training programs for green technologies such as cloud computing and data virtualization. GGR had no revenues until May 2010, at which time it started to recognize revenues from providing training classes.

These unaudited condensed consolidated financial statements reflect the sale of the Company’s New Jersey subsidiary (see Note 11 – Discontinued Operations and Sale of Subsidiary).

The unaudited condensed consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. The unaudited condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain all the information included in the Company’s annual

financial statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the October 31, 2009 audited consolidated financial statements and the accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2009. The October 31, 2009 consolidated balance sheet was derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. The results of operations for the three and nine months ended July 31, 2010, are not necessarily indicative of the results for the full fiscal year ending October 31, 2010 or for any other period. These unaudited condensed consolidated financial statements reflect all the adjustments, including normal recurring adjustments, which, in the opinion of management, are necessary to present fairly the operations and cash flows for the period presented.

The Company incurred net losses from continuing operations for the three and nine months ended July 31, 2010 and 2009 and has working capital deficiencies and accumulated deficits. The Company also had negative cash flows from operations for the nine months ended July 31, 2010 and 2009. There is no guarantee the Company will be able to continue to generate enough revenue and/or raise capital to support its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The unaudited condensed consolidated financial statements have been prepared on a basis which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company’s ability to continue as a going concern is dependent upon its ability to execute management’s plans to be profitable, generate positive cash flows from operations and to raise additional capital through the issuance of debt and/or equity securities. Although management continues to pursue these plans and believes it will be successful, there is no assurance that the Company will be successful in generating such profitable operations or obtaining financing on terms acceptable to the Company.

The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant inter-company accounts and transaction have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The Company receives revenues according to agreements with its customers. Revenues are recognized when services are rendered, evidence of a contract exists, the price is fixed or reasonably determinable, and collectability is reasonably assured.

Accounts receivable are stated at the amount management expects to collect. When needed, an allowance for doubtful accounts is recorded based on information on the collectability of specific accounts. Accounts are considered past due or delinquent based on contractual terms, how recently payments have been received and management’s judgment of collectability. The Company presently has written off all accounts receivable that are more than twelve months old and others that were not expected to be collected. At July 31, 2010, no allowance had been established.

All property and equipment are recorded at cost and depreciated over their estimated useful lives, generally three, five or seven years, using the straight-line method. Upon sale or retirement, the costs and related accumulated depreciation are eliminated from their respective accounts, and the resulting gain or loss is included in the results of operations. Repairs and maintenance charges, which do not increase the useful lives of the assets, are charged to operations as incurred.

Estimates made by management include assumptions about future conditions such as future revenues, gross margins and operating expenses. The second step is only performed if impairment is indicated after the first step has been performed, as it involves measuring the actual impairment to the intangible assets. No impairment of the intangible assets was recorded for the three and nine months ended July 31, 2010.

Training software and contract costs will be amortized over the estimated useful lives of the software and average remaining terms of the contracts. As of July 31, 2010, the software has not been placed in service, the contracts have not commenced and management is still evaluating the appropriate amortization periods for these assets.

The Company accounts for business combinations in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations” (guidance formerly reflected in Statement of Financial Accounting Standards (“SFAS”) No. 141(R), “Business Combinations”) (“Topic 805”). Topic 805 establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree. Topic 805 also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination.

Earnings (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share includes additional dilution from common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants and conversion of convertible debt and preferred stock. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for the periods presented.

The following table shows the approximate number of common stock equivalents outstanding at July 31, 2010 and 2009 that could potentially dilute basic income per share, but were not included in the calculation of diluted loss per share because their inclusion would have been anti-dilutive.

The carrying amounts reported in the unaudited condensed consolidated balance sheet for financial instruments approximate fair value because of the immediate or short-term maturity of these financial instruments (see Notes 7 and 8).

The Company has outstanding convertible debt instruments that contain derivative features. The Company accounts for these derivatives in accordance with FASB ASC 815, “Accounting for Derivative Instruments and Hedging Activities,” including “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock.” In accordance with the provisions of ASC 815, the embedded derivatives are required to be bifurcated from the debt instrument and recorded as a liability at fair value on the balance sheet. Changes in the fair value of the derivatives are recorded at each reporting period and recorded in gain on derivative instruments, a separate component of other income (expenses).

The income tax benefit is computed on the pretax loss based on the current tax law. Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each three months-end based on enacted tax laws and statutory tax rates.

Certain prior period amounts have been reclassified to conform to the current period presentation.

The Company does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, will have a material effect on its consolidated financial position, results of operations, or cash flows.

Depreciation expense was $0 and $5,477 for the three and nine months ended July 31, 2010 and $2,832 and $7,759 for the three and nine months ended July 31, 2009.

The Company received the proceeds of two notes totaling $102,500 during the year ended October 31, 2009. In April 2010, one of the notes with a value of $22,500 was repaid through the issuance of 1.5 million shares of the Company’s common stock. The remaining note has no stated terms and is due on demand. Proceeds from two additional notes totaling $90,000 have been received during the nine months ended July 31, 2010. The notes bear interest at 8% per annum and are convertible into shares of common stock at a variable conversion price as defined in the agreements. The $50,000 note matures on October 25, 2010 and the $40,000 note matures on December 22, 2010. Interest expense was $1,840 and $ 0 for the three months ended July 31, 2010 and 2009 and $3,289 and $ 0 for the nine months ended July 31, 2010 and 2009. Notes payable – other consist of the following at:

Charter Management, LLC (“Charter”) funded the operations of the Company with a credit facility. The balance payable to Charter before the reduction described below was $1,347,318. With the execution of the Agreement entered into on January 21, 2010, the debt was extinguished after two principal payments totaling $57,000 and the issuance of a new convertible promissory note to the former CEO of the Company and owner of Charter, for $400,000. As a result of the extinguishment, the debt was reduced by $890,318, which was reflected as a reduction on the unaudited condensed consolidated balance sheet to additional paid-in capital since it was a debt reduction from a related party. Charter was related to the Company through common ownership, but as of May 5, 2010, these parties are no longer affiliates of the Company due to the Agreement.

The convertible promissory note is non-interest bearing, matures on January 21, 2011 and is convertible into shares of common stock at a variable conversion price as defined in the agreement. Notes payable – related parties consist of the following at:

The Company’s financial liabilities subject to recurring fair value measurements and the necessary disclosures are as follows:

In accordance with FASB ASC 815-10 “Accounting for Derivative Instruments and Hedging Activities” and FASB ASC 815-40 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled In a Company’s Own Stock,” the conversion features associated with the convertible promissory notes – other (see Note 6) and convertible promissory note – related party (see Note 7) represent derivatives. As such, the Company has recognized the amount of $1,046,409 as derivative liabilities at the time of issuance of the debt instruments, and are measured at their estimated fair value of $838,230 at July 31, 2010.

The estimated fair value of the derivative liabilities have been calculated based on a Black-Scholes option pricing model using the following assumptions at July 31, 2010:

On August 4, 2009, PPL Spectrum Inc. (“PPL”) filed a complaint which alleged the Company failed to make payments due to PPL, and demands damages in the amount of $435,745. NESNJ received a judgment in favor of PPL on October 14, 2009.

This judgment is against NESNJ, a New Jersey corporation that was a wholly-owned subsidiary until its sale in March 2010. The settlement liability was assumed by the buyer as part of the sale of the subsidiary and is included in the gain on sale of subsidiary during the three and nine months ended July 31, 2010.

As of July 31, 2010, the Company had 500,000 authorized shares of $0.001 par value Series A preferred stock and zero shares outstanding. The Series A preferred shares convert at a ratio of 58:1 into shares of the Company’s common stock.

The Board of directors amended the Company’s Articles of Incorporation by filing a Stock Designation with the Nevada Secretary of State on January 26, 2010 to authorize 10,000 shares of Series B Cumulative Convertible Preferred Stock, at a par value of $0.001. The Series B Convertible Preferred Stock represents a 50.1% voting interest regardless of the common shares outstanding. During the nine months ended July 31, 2010, the Company issued 10,000 shares of the Series B Cumulative Convertible Preferred Stock.

In April 2010, the Company issued 1,500,000 common shares for the payment of $22,500 of debt.

In April 2010, the Company issued 6,000,000 common shares with a value of approximately $180,000 for the acquisition of a subsidiary.

In April 2010, the Company issued 4,500,000 common shares for the payment of $70,000 of consulting services.

In March 2010, the Company issued 4,500,000 common shares for the payment of $67,500 for consulting services.

In March, 2010, the Company issued 8,400,000 common shares with a fair market value of $226,000 to investor relations firms.

On July 29, 2009, the Company issued 1,500,000 shares for $10,000 in cash in a subscription agreement.

On March 11, 2009, the Company issued 350,000 common shares for $17,500 in cash.

On February 18, 2009, the Company issued 100,000 common shares for $5,000 in cash.

On January 9, 2009, the Company issued 425,425 common shares with a fair market value of $30,511 to an investor relation agent for services performed.

In January 2010, the Company discontinued sales of its ozone laundry equipment business and all warranty, supply and repair services associated with it (“Ozone division”) and in March 2010 the Company sold its New Jersey subsidiary and realized a gain of $683,804. The New Jersey subsidiary was sold for cash proceeds of $10 and the assumption of all the Company’s liabilities net of property and equipment. The Company has classified these operations as discontinued operations for the current and prior periods reported.

One debtor, Technology Business Group, represented 100% of the total outstanding accounts receivable as of July 31, 2010 and 100% of the training revenue was earned from one customer, Technology Business Group during the three and nine months ended July 31, 2010.

The Company leased its former New Jersey office space under a lease that expired in April 2008, and which was renewed on a yearly basis. Payments under this lease were $0 and $6,000 for the three months ended July 31, 2010 and 2009. Payments were $0 and $18,000 for the nine months ended July 31, 2010 and 2009. The lease terminated in February 2010.

The Company also had various lease agreements for certain office equipment, expiring in 2012. Payments under these leases were $0 and $927 and $1,241 and $3,155 for the three and nine months ended July 31, 2010 and 2009. All leased equipment has been returned to the lessor. No allowance has been made for any potential future costs.

The Company leased an upgrade to its sales management software under an operating lease. The lease was signed on July 22, 2007 and was to expire in 2012. Payments under this lease were $0 and $1,268 for the three months ended July 31, 2010 and 2009 and $1,734 and $3,839 for the nine months ended July 31, 2010 and 2009. The lease was assumed by the buyer as part of the sale of the New Jersey subsidiary in March 2010.

The Company has entered into consulting contracts for various services ranging from professional services to merger and acquisition services. All of the contracts were to expire in February 2012. As a result of the Company entering into a certain stock purchase agreement, dated August 31, 2010 (see Note 14), all three consulting contracts were terminated and will only be paid through September 30, 2010. A new contract for one of the three consultants will be negotiated. The future minimum payments required under these consulting contracts were $68,000 through September 30, 2010.

On December 17, 2009, Nutek International, Inc. filed for an injunction to enjoin an employee of NESNJ, a New Jersey corporation from continuing to provide services. The Company believes that the suit has no merit as the employee resigned from the Company on December 22, 2009.

All above litigation was the responsibility of NESNJ, Inc., a New Jersey corporation, which was assumed by the buyer as part of the sale of the subsidiary in March 2010.

The Company is a party from time to time to various other legal actions that arise in the normal course of business. In the opinion of management, the resolution of these other matters will not have a material and adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

In April 2010, the Company secured a $10,000,000 line of credit to facilitate its business model. The Company will be able to draw down on the line of credit after a form S-1 Registration Statement is filed and becomes effective.

On August 31, 2010, the Company issued a $15,000 convertible debenture that matures on March 1, 2011. The debenture bears interest at 9% per annum and is convertible into shares of common stock at a variable conversion price as defined in the agreement.

On August 31, 2010, the Company issued 3,500,000 for the payment of $35,000 of accounts payable and accrued expenses.

On September 2, 2010, the Company purchased Propalms International Ltd., a Nevada corporation, which was formed on August 24, 2010, (“Propalms International”) pursuant to a stock purchase agreement, dated August 31, 2010 (“Stock Purchase Agreement”), for 250,000,000 restricted common shares. Propalms International had no revenues and no liabilities and its assets consisted solely of an intangible asset, a worldwide marketing and sales agreement between Propalms Ltd, a UK corporation and Propalms International as of September 2, 2010. The Company and Propalms International agreed to a purchase price of $2.5 million, which is allocated entirely to Propalms International’s intangible asset. Propalms International will be responsible for overseeing the daily marketing, sales, and distribution network of Propalms software product line, which includes Propalms TSE 6.0, Propalms VPN, and Propalms VDI, and any new applications that are being developed, and in return will pay a royalty on the revenue generated by the current and future products agreement for the sales of several software products in the virtualization and cloud computing market. Propalms International will also manage the 48 distributors in the U.S., U.K., Japan and India, Canada, Western Europe plus several other international locations. Revenues from sales will begin immediately with additional revenues from maintenance and support dollars from prior sales by the licensor inuring to Propalms International. Propalms International’s costs will be managed by implementing an employee leasing program for an already trained product sales staff.

Pursuant to the Stock Purchase Agreement, on September 3, 2010, David F. LaFave resigned as President while remaining a member of the board of directors. At the close of business September 3, 2010, Owen Dukes and Robert Zysblat were seated as members of the board of directors. Mr. Dukes was installed as Chief Executive Officer and Mr. Zysblat as President and Chief Financial Officer of the Company. There were no disagreements leading to the resignation of Mr. LaFave.

In completion of the closing of the Stock Purchase Agreement, the Company increased its authorized common stock to 950,000,000 shares from 150,000,000 shares after approval by a stockholder with a majority voting interest (50.1%) and issued 250,000,000 common shares as required.

On September 3, 2010, the Company issued 10,800,000 common shares for the payment of accounts payable and accrued expenses of $108,000 and 1,500,000 shares for a capital raise of $3,333.

National Energy Services Company, Inc. (“NES”) together with its subsidiaries (collectively the “Company”, “we”, “us” or “our”) incurred net losses from continuing operations for the three and nine months ended July 31, 2010 and 2009 and has working capital deficiencies and accumulated deficits. The Company also had negative cash flows from operations for the nine months ended July 31, 2010 and 2009. There is no guarantee the Company will be able to continue to generate enough revenue and/or raise capital to support its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

On January 21, 2010, the Company acquired an agreement to manage the construction of a solar/thermal site in California (the “Agreement”). The Agreement required the former management to transfer to the seller 13,000,000 of the common shares they held, the Company to issue 10,000 shares of Series B Cumulative Convertible Preferred Stock with a stated value of $400,000 and a voting preference as if the holder held 50.1% of the outstanding votes of the Company and the settlement of the related party notes payable of approximately $1.3 million with a cash payment of $57,000 and the issuance of a $400,000 convertible promissory note. The settlement of the related party notes payable resulted in an effective reduction of $890,318 in related party debt.

During January 2010, the Company discontinued sales of its ozone laundry equipment business and all warranty, supply and repair services associated with it (“Ozone division”) and in March 2010 the Company sold its New Jersey subsidiary and realized a gain of $683,804. The New Jersey subsidiary was sold for cash proceeds of $10 and the assumption of all the Company’s liabilities net of property and equipment with a book value of $12,678. The Company has classified these operations as discontinued operations for the current and prior periods reported.

The Company had $56,056 in revenue for the three and nine months ended July 31, 2010 and no revenue in 2009. GGR commenced its training classes in May 2010.

Operating expenses for the three months ended July 31, 2010 totaled $184,297, an increase of $3,642 compared to the three months ended July 31, 2009. The operating expenses for the nine months ended July 31, 2010 were $812,536 an increase of $342,442 over the nine months ended July 31, 2009. Management increased expenses to pay for an awareness campaign for the changes in the Company to help support the value of the common stock. We also hired consultants to seek out acquisitions and provide accounting, legal and business management services. We decreased all other office related expenses and expect to have new permanent office space during the fourth quarter of 2010.

Interest expense for the three and nine months ended July 31, 2010 was $172,165 and $201,351, compared to $4,397 and $13,148 in the three and nine months ended July 31, 2009. Interest expense has primarily increased as a result of the amortization of the debt discount on the notes payable of approximately $169,000 and $192,000 during the three and nine months ended July 31, 2010. Management also expects that interest expense will continue to increase as borrowing for expansion is received.

During the nine months ended July 31, 2010, the Company recognized a gain of $683,804 on the sale of its New Jersey subsidiary, as a result of the Company’s new business plan.

The Company recognized a gain on its derivative instruments of $63,583 and $20,020 during the three and nine months ended July 31, 2010. The derivative instruments are related to the convertible promissory notes issued during the nine months ended July 31, 2010 and accordingly, there was no such loss in the prior periods.

During the years prior to October 31, 2009, the Company’s only significant source of working capital financing was Charter Management, LLC, which is owned by two former members of the Company’s Board of Directors. The financing from this source will not continue and current management is seeking new sources of credit and equity financing. We borrowed $90,000 from non-affiliates during the nine months ended July 31, 2010.

On August 31, 2010, the Company issued 3,500,000 for the payment of $35,000 of accounts payable and accrued expenses.

On September 2, 2010, the Company purchased Propalms International Ltd., a Nevada corporation, which was formed on August 24, 2010, (“Propalms International”) pursuant to a stock purchase agreement, dated August 31, 2010 (“Stock Purchase Agreement”), for 250,000,000 restricted common shares. Propalms International had no revenues and no liabilities and its assets consisted solely of an intangible asset, a worldwide marketing and sales agreement between Propalms Ltd, a UK corporation and Propalms International as of September 2, 2010. Propalms International will be responsible for overseeing the daily marketing, sales, and distribution network of Propalms software product line, which includes Propalms TSE 6.0, Propalms VPN, and Propalms VDI, and any new applications that are being developed, and in return will pay a royalty on the revenue generated by the current and future products agreement for the sales of several software products in the virtualization and cloud computing market. Propalms International will also manage the 48 distributors in the U.S., U.K., Japan and India, Canada, Western Europe plus several other international locations. Revenues from sales will begin immediately with additional revenues from maintenance and support dollars from prior sales by the licensor inuring to Propalms International. Propalms International’s costs will be managed by implementing an employee leasing program for an already trained product sales staff.

On September 3, 2010, the Company issued 10,800,000 common shares for the payment of accounts payable and accrued expenses of $108,000 and 1,500,000 shares for a capital raise of $3,333.

The Company’s working capital deficit decreased by $1,352,838 during the nine months ended July 31, 2010, primarily as a result of the settlement of the related party debt and the reduction of the liabilities of the Company’s New Jersey subsidiary due to the sale. The Company’s working capital deficit is primarily a result of the use of notes payable and cash on hand to fund expenses

incurred in prior years. The Company has minimal liquidity and working capital is severely strained. It is expected that there will continue to be a working capital deficit until revenues are generated. The Company’s working capital deficit will be positively impacted by the new businesses acquired and contracts received by our divisions. The Company expects the change in the businesses with which we participate and the acquisition of the construction management contracts and their size and scope will bring profitability and financing opportunities that have not formerly been available.

The addition of the construction management operations provides the expansion to markets such as alternative energy processing, medical treatment, and agricultural facilities. The contracts we have or are negotiating are all cost-plus based with the add-ons ranging from 8-11%. These new revenues and substantial profits are expected to bring us acceptable financing opportunities.

GGR provides training boot camps for ten days each twice per month and other software training classes. The attendance is between 14 and 20 trainee’s at each boot camp. The fees are $9,500 per boot camp session with a net profit of approximately 30%. The Company is searching for additional trainers and selecting sites around the country to have at least five sessions going concurrently. Its marketing plan began in May 2010. We are also in negotiations with major computer and software sellers to provide training for them which may enhance our revenue substantially while costing us a very limited amount for marketing.

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

Except as described below, there have been no changes to our critical accounting policies in the nine months ended July 31, 2010. Critical accounting policies and the significant estimates made in accordance with them are discussed under “Critical Accounting Policies” in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of our Annual Report on Form 10-K for the year ended October 31, 2009.

The Company reviews intangible assets for impairment annually, or more frequently if impairment indicators arise, and the intangible assets are written off when impaired. Impairment, if any, would be determined based on an implied fair value model for determining the carrying value of the intangible assets. The impairment test is a two-step process. The first step requires comparing the fair value of each reporting unit to its net book value. The Company uses management estimates of future cash flows to perform the first step of the intangible assets’ impairment test. Estimates made by management include assumptions about future conditions such as future revenues, gross margins and operating expenses. The second step is only performed if impairment is indicated after the first step has been performed, as it involves measuring the actual impairment to the intangible assets. No impairment of the intangible assets was recorded for the three and nine months ended July 31, 2010.

Training software and contract costs will be amortized over the estimated useful lives of the software and average remaining terms of the contracts. As of July 31, 2010, the software has not been placed in service, and management is still evaluating the appropriate amortization periods for these assets.

The Company has outstanding convertible debt instruments that contain embedded derivative features. The Company accounts for these derivatives in accordance with FASB ASC 815, “Accounting for Derivative Instruments and Hedging Activities,” including “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock.” In accordance with the provisions of ASC 815, the embedded derivatives are required to be bifurcated from the debt instrument and recorded as a liability at fair value on the balance sheet. Changes in the fair value of the derivatives are recorded at each reporting period and recorded in gain on derivative instruments, a separate component of other income (expenses).

Please refer to Note 2 to our unaudited condensed consolidated financial statements.

The term “disclosure controls and procedures” (defined in SEC Rule 13a-15(e)) refers to the controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within required time periods specified by the Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of July 31, 2010, the Company’s Chief Executive Officer and Chief Financial Officer (or persons performing similar functions) have concluded that such controls and procedures are not effective to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms.

The material weakness consisted primarily of inadequate staffing and supervision that could lead to the untimely identification and resolution of accounting and disclosure matters and failure to perform timely and effective reviews. However, our size prevents us from being able to employ sufficient resources to enable us to have adequate segregation of duties within our internal control system. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The term “internal control over financial reporting” (defined in SEC Rule 13a-15(f)) refers to the process of a company that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer (or persons performing similar functions), has evaluated any changes in the Company’s internal control over financial reporting that occurred during the three months covered by this quarterly report, and they have concluded that there was no change to the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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


National Energy Services Company, Inc.

By:		/S/ Owen Dukes
		Owen Dukes, Director and Chief Executive Officer

In accordance with the Exchange Act, this Report has been signed below on September 15, 2010 by the following persons, on behalf of the Registrant and in the capacities and on the dates indicated.


PART 1 - FINANCIAL INFORMATION		1

Item 1.	Condensed Consolidated Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4T.	Controls and Procedures	16

PART II - OTHER INFORMATION		16

Item 1.	Legal Proceedings	16
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	17
Item 4.	(Removed and Reserved)	17
Item 5.	Other Information	17
Item 6.	Exhibits	17

SIGNATURES		18


	July 31, 2010			OCTOBER 31, 2009
	(Unaudited)
ASSETS
Current Assets:
Cash	$	64		$	4,724
Accounts receivable		23,045			71,954
Prepaid expenses and other current assets		279			28,985


Total current assets		23,388			105,663

Property and equipment, net		—			18,155

Intangible assets		807,500			—


TOTAL ASSETS	$	830,888		$	123,818


LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES
Current Liabilities:
Notes payable - other	$	133,114		$	102,500
Notes payable - related parties		138,346			1,339,558
Derivative liabilities		838,230			—
Settlement liability		—			437,020
Accounts payable and accrued expenses		266,536			381,517


Total current liabilities		1,376,226			2,260,595


COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS’ DEFICIT
Preferred stock, Series A, $.001 par value, 500,000 shares authorized, 0 shares issued and outstanding at July 31, 2010 and October 31, 2009		—			—
Preferred stock, Series B, $.001 par value, 10,000 shares authorized, 10,000 shares and 0 shares issued and outstanding at July 31, 2010 and October 31, 2009		10			—
Common stock, $.001 par value; 150,000,000 shares authorized; 57,110,846 and 32,210,846 shares issued and outstanding at July 31, 2010 and October 31, 2009		57,111			32,211
Additional paid-in capital		4,937,996			3,247,338
Accumulated deficit		(5,540,455	)		(5,416,326	)


Total Stockholders’ Deficit		(545,338	)		(2,136,777	)


TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	830,888		$	123,818


	Three Months Ended July 31,						Nine Months Ended July 31,
	2010			2009			2010			2009
REVENUES
Training revenue	$	56,056		$	0		$	56,056		$	0


OPERATING EXPENSES
General and administrative expenses		184,297			180,655			812,536			470,094


OTHER INCOME (EXPENSES)
Gain on sale of subsidiary		0			0			683,804			0
Gain on derivative instruments		63,583			0			20,020			0
Interest expense		(172,165	)		(4,397	)		(201,351	)		(13,148	)

		(108,582	)		(4,397	)		502,473			(13,148	)


LOSS FROM CONTINUING OPERATIONS		(236,823	)		(185,052	)		(250,007	)		(483,242	)

INCOME FROM DISCONTINUED OPERATIONS		420			85,448			129,878			212,463


NET LOSS APPLICABLE TO COMMON SHARES	$	(236,403	)	$	(99,604	)	$	(124,129	)	$	(270,779	)


EARNINGS (LOSS) PER SHARE, BASIC AND DILUTED
FROM CONTINUING OPERATIONS	$	*		$	(0.01	)	$	(0.01	)	$	(0.02	)
FROM DISCONTINUED OPERATIONS		*			*			*			0.01


NET LOSS	$	*		$	(0.01	)	$	(0.01	)	$	(0.01	)


WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED		57,110,846			30,650,681			43,435,754			30,413,257


	Nine Months Ended July 31,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(124,129	)	$	(270,779	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		5,477			7,759
Common stock issued for services		363,500			35,511
Gain on sale of subsidiary		(683,804	)		0
Gain on derivative instruments		(20,020	)		0
Amortization of debt discount		191,460			0
Changes in assets and liabilities
(Increase) decrease in accounts receivable		48,909			6,923
(Increase) decrease in prepaid expenses and other current assets		28,706			(3,332	)
Increase (decrease) in settlement liability		2,572			0
Increase (decrease) in accounts payable and accrued expenses		141,899			126,349


Net cash used in operating activities		(45,430	)		(97,569	)


CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of subsidiary		10			0
Acquisition of property and equipment		0			(11,059	)
Proceeds from notes receivable		0			49,607


Net cash provided by investing activities		10			38,548


CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable - other		90,000			80,000
Principal payments on notes payable - other		0			(56,596	)
Proceeds from notes payable - related parties		7,760			56,596
Principal payments on note payable - related parties		(57,000	)		0
Principal payments on note payable - bank		0			(2,379	)
Principal payments on long-term debt		0			(46,637	)
Issuance of common stock		0			27,500


Net cash provided by financing activities		40,760			58,486


NET DECREASE IN CASH		(4,660	)		(535	)
CASH - BEGINNING OF PERIOD		4,724			6,736


CASH - END OF PERIOD	$	64		$	6,201

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company


	Outstanding at July 31,
	2010	2009
Warrants	1,000,000	1,000,000
Preferred stock – Series B	20,000,000	0
Convertible notes – other	15,517,242	0
Convertible note – related party	76,800,000	0

Total	113,317,242	1,000,000


Construction management contract	$	627,500
GGR training software and contract		180,000

	$	807,500


	July 31, 2010			October 31, 2009
	(Unaudited)
Cost	$	170,000		$	102,500
Less: Debt discount		(90,000	)		0
Add: Amortization of debt discount		53,114			0

Total	$	133,114		$	102,500


	July 31 2010			October 31, 2009
	(Unaudited)
Cost	$	400,000		$	1,339,558
Less: Debt discount		(400,000	)		0
Add: Amortization of debt discount		138,346			0

Total	$	138,346		$	1,339,558


	July 31, 2010				Fair Value Measurements at July 31, 2010
	Cost		Fair Value		Level 1		Level 2		Level 3
Notes payable - related parties (a)	$	400,000	$	138,346	$	0	$	0	$	138,346
Notes payable - other (a)		170,000		133,114		0		0		133,114
Derivative liabilities (b)		838,230		838,230		0		838,230		0

	$	1,408,230	$	1,109,690	$	0	$	838,230	$	271,460


Fair market value of stock		$0.01
Exercise price		$0.0050 to $0.0058
Dividend yield		0.00%
Risk free interest rate		0.15% to 0.20%
Expected volatility		405% to 439%
Expected life		0.24 to 0.48 years


	July 31, 2010			October 31, 2009
	(Unaudited)
Assets
Current assets from discontinued operations:
Accounts receivable	$	0		$	71,954


Liabilities
Current liabilities of discontinued operations:
Settlement payable	$	0		$	437,020
Accounts payable and other current liabilities		24,206			319,292

	$	24,206		$	756,312

Net liabilities of discontinued operations	$	(24,206	)	$	(684,358	)


	Three Months Ended July 31,				Nine Months Ended July 31,
	2010		2009		2010		2009
Revenues	$	420	$	124,622	$	236,210	$	653,258

Cost and expenses		0		39,174		106,332		440,795

Income from discontinued operations	$	420	$	85,448	$	129,878	$	212,463


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

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

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

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


	July 31, 2010			October 31, 2009
	(Unaudited)
Office equipment	$	0		$	67,982
Furniture and fixtures		2,107			2,107
Leasehold improvements		0			2,900

		2,107			72,989
Accumulated depreciation		(2,107	)		(54,834	)

Total	$	0		$	18,155