Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

On May 27, 2009, SG Telecom, Inc. did not repay the 340 million Yen requested by a Japanese lender. After review by corporate counsel, the Company is challenging the validity of the loan and the collateral claimed by the lender.

As previously reported, on February 25 and 28, 2009, SG Telecom, Inc. received a total of 250,000,000 Yen, or approximately $2,577,000 at current exchange rates, in working capital loans from a Japanese lender. Interest of 15.0% is to be paid starting on February 25, 2009, with a default interest rate of 21%. SG Telecom paid a 10% fee for this working capital loan.

On April 30, 2009, SG Telecom, Inc. received an additional 90 million Yen, or approximately $929,000 at current exchange rates, working capital loan from a Japanese lender. In addition, the lender requested repayment of all loans by May 27, 2009.

The loans are guaranteed by Hideki Anan, Kyo Nagae, all Global Hotline affiliated entities and two directors of Global Hotline.

On approximately April 1, 2009, IA Global, Inc. pledged its ownership in Global Hotline, Inc. as collateral for the loans, subject to a thirty day notice period in the case of default under the agreement.

The amendments and agreements will be filed as exhibits to the Form 10-K for the twelve months ending March 31, 2009.