Unassociated Document

10-Q 1 v154594_10q.htm Unassociated Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended May 31, 2009

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

For the transition period from ______________ to _______________

Commission File Number 000-33271

GLOBAL BIOTECH CORP

(Exact name of registrant as specified in its charter)

DELEWARE (State of Incorporation)		98-0229951 (I.R.S. Employer Identification No.)

5800 Metropolitan Blvd E suite 328 (Address of principal executive offices)		H1S 1A7 (Zip Code)

(514) 333-4545

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant 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 o	Accelerated Filer o	Non-Accelerated
Filer o Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as determined in Rule 12b-2 of the Exchange Act). Yes x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of July 10, 2009, the Registrant had 67,265,500 shares of Common Stock outstanding.

INDEX

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheets at May 31, 2009 (Unaudited), November 30, 2008			4
Statements of Operations (Unaudited) for the Six and Three months ended May 31, 2009 and May 31, 2008 and from Inception (November 2, 1998) to May 31, 2009.			5
Statement of Cash Flows (Unaudited) for the Six months ended May 31, 2009 and May 31, 2008 and from Inception (November 2, 1998) to May 31, 2009.			6
Notes to the Financial Statements (Unaudited).			7

Item 2. Plan of Operations

Item 3. Controls and Procedures			12

PART II: OTHER INFORMATION

Item 6. Exhibits and Reports On Form

SIGNATURES			13

Chang G. Park, CPA, Ph. D.

t 2667 CAMINO DEL RIO SOUTH PLAZA B t SAN DIEGO t CALIFORNIA 92108-3707t

t TELEPHONE (858)722-5953 t FAX (858) 408-2695 t FAX (858) 764-5480

t E-MAIL changgpark@gmail.com t

Report of Independent Registered Public Accounting Firm

To the Board of Directors of

Global Biotech Corp.

(A Development Stage company)

We have reviewed the accompanying balance sheet of Global Biotech Corp. (A Development Stage “Company”) as of May 31, 2009, and the related statements of operations, and cash flows for the three months ended May 31, 2009 and 2008, and for the period from November 2, 1998 (inception) through May 31, 2009. These financial statements are the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company’s losses from operations raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Chang G. Park

____________________________

Chang G. Park, CPA

July 9, 2009

San Diego, California

Member of the California Society of Certified Public Accountants

Registered with the Public Company Accounting Oversight Board

GLOBAL BIOTECH CORP.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

	31-May-09			Nov. 30, 2008
	(Unaudited)
ASSETS
Current Assets
Cash	$	172		$	6
Prepaid exp		-			7,428
Total current assets		172			7,434

Property & Equipment (Net)		605,000			605,000

Total Assets	$	605,172		$	612,434

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payables and accrued liabilities		81,605			47,421
Notes Payable related party		1,005			29,844

Notes Payable		582,892			467,902

Total current liabilities		665,502			545,167

Stockholders' Equity

Preferred stock, $0.0001 par value authorized 80,000,00 shares 0 shares issued and outstanding May 31 2009, and November 31, 2008		-			-
Common stock, $0.0001 par value authorized 260,000,000 shares: issued and outstanding 67,265,500 May 31 2009 and November 30, 2008		6,727			6,727
Paid in capital		1,346,502			1,346,502
Deficit accumulated during the development stage		(1,413,559	)		(1,285,962	)

Total Stockholders' (Deficit) Equity		(60,330	)		67,267
Total liabilities and Stockholders' Equity	$	605,172		$	612,434

See the accompanying notes to financial statements.

GLOBAL BIOTECH CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months			Three Months			Six Months			Six Months			Inception
	Ended			Ended			Ended			Ended			to
	May 31, 2009			May 31, 2008			May 31, 2009			May 31, 2008			May 31, 2009


Revenues:	$	-		$	-		$	-		$	-		$	944,811

Cost of Revenues:		-			-			-			-			603,063
		-			-			-			-			341,748
Operating Expenses:
Bad Debt Exp		-			-			-			-			120,844
Licensing rights		-			-			-			-			700,000
Depreciation Exp		-			-			-			-			73,274
Marketing		-			-			-			-			236,266
Professional Fees		3,000			1,500			5,500			3,000			163,424
Selling, general and administrative		29,568			423			88,808			5,463			386,841
Total Operating Expenses		32,568			1,923			94,308			8,463			1,680,649

(Loss) before other income (expense)		(32,568	)		(1,923	)		(94,308	)		(8,463	)		(1,338,901	)

Other income (expense):
Other income		-			-			-			-			81,052
Foreign exchange gain (loss)		(18,477	)					(16,560	)					(12,607	)
Interest income		-			-			-			-			111,878
Interest Expense		(8,701	)		(7,773	)		(16,729	)		(15,412	)		(292,075	)
Gain on Sale of Investment		-			-			-			-			359,583
Impairment Loss		-			-			-			-			(331,261	)
Write down - leashold improvements		-			-			-			-			(2,663	)
Write down - Notes receivable		-			-			-			-			11,435

Total other income (Expense)		(27,178	)		(7,773	)		(33,289	)		(15,412	)		(74,658	)

Net (Loss)	$	(59,746	)	$	(9,696	)	$	(127,597	)	$	(23,875	)	$	(1,413,559	)

Basic weighted avg. common shares outstanding		67,265,500			67,265,500			67,265,500			67,265,500

Basic (Loss) per common share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

See the accompanying notes to financial statements.

(A DEVELOPMENT STAGE COMPANY)

Statement of Cash Flows (Unaudited)

							From Inception
	Six months ended						(November 2, 1998)
	31-May-09			31-May-08			to May 31, 2009


CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)	$	(127,597	)	$	(23,875	)	$	(1,413,559	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation expense		-			-			73,274
Common stock issued for services		-			-			113,375
Gain on sale of Investment								(359,583	)
Impairment Loss		-			-			331,261
Write down of leasehold improvements		-			-			2,663
Write down of notes receivable		-			-			(11,435	)
Accrued interest expense - note payable		16,729			15,412			182,587
Accrued interest income - note receivable		-			-			(106,352	)
Changes in operating assets and liabilities
(Increase) Decrease - acc. receivable/prepaids		7,428			-			-
(Increase) Decrease in notes receivable		-			-			(461,899	)
Increase (decrease) - accounts payable		34,184			3,000			81,605
Net Cash Provided by (used in) Operating Activities		(69,256	)		(5,463	)		(1,568,063	)

Cash Flows from Investing Activities
Net sale (purchase of fixed assets		-			-			(60,937	)
Proceeds from sale of investment shares		-			-			489,061
Net Cash Provided by (used in) Investing Activities		-			-			428,124

Cash Flows from Financing Activities
Bank Advances		-			(2,834	)		-
Issue of Common stock		-			-			156,262
Payment of common stock subscription receivable		-			-			206,239
Proceeds from notes payable-related party		69,422			8,400			777,610
Net Cash provided by (used in) Financing Activities		69,422			5,566			1,140,111

Net Increase (Decrease) in Cash		166			103			172

Cash at Beginning of Period		6			-			-
Cash at End of Period	$	172		$	103		$	172

GLOBAL BIOTECH CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

MAY 31, 2009

(UNAUDITED)

NOTE 1 – BASIS OF PRESENTATION

The accompanying Unaudited financial statements of GLOBAL BIOTECH CORP. have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Rule 10-01 of Regulation S-X. The financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the periods shown. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

These financial statements should be read in conjunction with the audited financial statements and footnotes thereto included for the year ended November 30, 2008 for GLOBAL BIOTECH CORP. on form 10 KSB as filed with the Securities and Exchange Commission.

The preparation of financial statements in conformity with generally accepted accounting principles 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 date of the financial statements and that effect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Earnings (Loss) Per Share

The Company follows Statement of Financial Accounting Standards ("SFAS") 128, "Earnings Per Share." Basic earnings (loss) per Common share ("EPS") calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income (loss) by the weighted average number of common shares and dilutive common share equivalents outstanding. During the periods presented common stock equivalents were not considered, as their effect would be anti-dilutive.

GLOBAL BIOTECH CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

MAY 31, 2009

(UNAUDITED)

NOTE 3 – GOING CONCERN

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The company reported net loss of $59,746 and $127,597 for the three and six months ended May 31, 2009 as well as reporting net losses of $1,413,559 from inception (November 2, 1998) to May 31, 2009. At May 31, 2009 the Company had negative working capital of $665,330 and stockholders’ deficit of $60,330. This condition raises substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The officers and directors are committed to help in raising funds to fill any operating cash flow shortages during the next fiscal year until the organization can generate sufficient funds from operations to meet current operating expenses and overhead, although there are no guarantees that this commitment will be met

Note 4 RELATED PARTY TRANSACTIONS

Between March 1,2009 and May 31,2009 the Company borrowed $1,715 from related parties and repaid $1,554 to said parties, for net borrowings of $161. As of May 31,2009, the outstanding balance of related party note payable is $1,005.

Note5-OPERATING LEASE

The Company signed a one year lease, for 1771 sq. ft of office space located in Montreal,Quebec, ending Sept 1,2009,at $1,695Cdn per month. The Company has the option to renew this lease for 4 one- year terms.

ITEM 6 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Special Note Regarding Forward-Looking Statements

Some of the statements under "Plan of Operations," "Business" and elsewhere in this registration statement are forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements about our plans, objectives, expectations, intentions and assumptions and other statements contained herein that are not statements of historical fact. You can identify these statements by words such as "may," "will," "should," "estimates," "plans," "expects," "believes," "intends" and similar expressions. We cannot guarantee future results, levels of activity, performance or achievements. Our actual results and the timing of certain events may differ significantly from the results discussed in the forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements.

Plan of Operation.

The following discussion should be read in conjunction with the financial statements and related notes which are included elsewhere in this prospectus. Statements made below which are not historical facts are forward-looking statements. Forward-looking statements involve a number of risks and uncertainties including, but not limited to, general economic conditions and our ability to market our product.

The business objective of GLOBAL is to position AquaBoost™ as a top quality oxygenated water in the specialty waters market. Our oxygenation level (up to 100 ppm and greater), the ability of our bottled water to retain this level of oxygenation, even over lengthy periods of time and the purity of our product, we believe, should give us the ability to become a staple in this specialty waters niche.

We have set a conservative sales objective of 4-6% of the European and American markets, or $12.5 million U.S. to $20 million U.S., by the year 2012. The fact that AquaBoost™ was seen by hundreds of distributors at the SIAL in Montreal, Canada in 2001 and that there is already a market in Mexico for the product, gives us confidence in our abilities to reach our sale objectives. However, no assurances can be given that the Company will meet these goals.

The Company has held discussions with several large beverage companies about oxygenating fruit juices. Should these discussions prove successful, the Company would have another major revenue generating area. Currently, it is too premature to hazard an estimate about the likelihood of finalizing any deals with said corporations.

The Company will also attempt to engage in partnering with other beverage distributors or leasing its technology for royalties in those regions and for those products where it will not negatively impact on potential AquaBoost™ sales.GLOBAL BIOTECH CORP. (formerly Sword Comp-Soft Corp.) was incorporated in November 1998 as an (ASP) Application Service Provider, specializing in the E-Healthcare sector. As of March 5, 2003 this business was sold to Millenia Hope Inc., its former parent corporation. Subsequently, GLOBAL acquired the exclusive 10- year North American licensing rights to market a unique vehicle tracking system.

As of February 24, 2005, GLOBAL’s Board of Directors concluded that its attempt to enter the vehicle tracking business was unsuccessful and entered into a provisional agreement, with Advanced Fluid Technologies Inc. (AFT), a Delaware corporation, to acquire assets from the latter corporation pursuant to entering the bottled water, more specifically, the oxygenated bottled water market. On August 15, 2007 the Company finalized this agreement with Advanced Fluid Technologies to purchase their to be patented oxygenation unit and all technical know how, intellectual properties, methodologies and all information pertaining to the following: the fixation of the oxygen molecule to water or any other fluid and/or to the building and maintenance of the oxygenation unit. Furthermore, all trademarks for the name AquaBoost Oxygenated Water, currently in force in the U.S., Canada, and Mexico and the right to use and register said name globally, were to be transferred to the Company.

Purchase price, for all the aforementioned assets, was a combination of debt this being the $216,261 due by AFT to the Company in a note payable as of August 26, 2005, and 18 million shares of the Company’s common stock, valued at $0.04 per share or $720,000. Pursuant to the August 15, 2007 issuance of stock to Advanced Fluid Technologies, all the aforesaid assets were transferred to Global Biotech.

GLOBALS’s registration statement, with the Security and Exchange Commission, was accepted on July 16, 2001 and, on June 16, 2009, the Company was cleared to trade on the OTC:BB.

Three months ended May 31, 2009 compared to May 31, 2008.

Professional, selling, general and administrative in 2009 was $32,568 and $1,923 in 2008.We had rent expense of $5,505 in the 2009 period and $0 in 2008. Our 2009 professional fees were $3,000 vs. $1,500 in 2008. We had $20,924 of regulatory exp in 2009 and $0 in 2008 as we were actively working on getting listed to publicly trade our shares.

We had foreign exchange losses on our transactions of $18,477 and no loss in 2008. We had interest expense, on our loans, of $8,701 in 2009 and $7,773 in 2008.

As a result of the above, we had a net loss of $59,746 in 2009 and $9,696 in 2008.

Six months ended May 31, 2009 compared to May 31, 2008.

Professional, selling, general and administrative in 2009 was $94,308 and $8,463 in 2008.We had $16,116 of consulting exp in 2009 in regard to our gearing up to ongoing production status and $3,000 in 2008. We also had an additional $12,459 of developmental exp in 2009 in connection with new beverage formulations that we are working on. We had $44,470 of regulatory exp in 2009 and $400 in 2008 as we were actively working on getting listed to publicly trade our shares. We had rent expense of $9,197 in 2009 and $0 in 2008. Our 2009 professional fees were $5,500 vs, $3,000 in 2008.

We had foreign exchange losses on our transactions of $16,560 and no loss in 2008. We had interest expense, on our loans, of $16,729 in 2009 and $15,412 in 2008.

As a result of the above, we had a net loss of $127,597 in 2009 and $23,875 in 2008.

Liquidity and cash flow needs of the company

From December 1st, 2008 to May 31, 2009 the company used $69,256 for operating activities while recording no revenues. From June 1, 2009 to November 30, 2009, the fiscal year end, the company estimates that its net cash flow needs will be $550,000.

Item 3. CONTROLS AND PROCEDURES

QUARTERLY EVALUATION OF THE COMPANY’S DISCLOSURE CONTROLS AND INTERNAL CONTROLS.

As of the close of the period covered by this Quarterly Report on Form 10-QSB, the Company evaluated the effectiveness of the design and operation of its “disclosure controls and procedures” (Disclosure Controls) and its “internal controls and procedures for financial reporting” (Internal Controls). This evaluation (the Controls Evaluation) was done under the supervision and with the participation of management, including our Principal Executive Officer (President) and Chief Financial Officer. Rules adopted by the SEC require that in this section of the Quarterly Report we present the conclusion of the Principal Executive and Financial Officer about the effectiveness of our Disclosure Controls and Internal Controls based on and as of the date of the Controls Evaluation. Based upon that evaluation, the Principal Executive and Financial Officers concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company requires to be included in this Quarterly Report on form 10-Q. There have been no changes in the Company’s internal controls or in other factors, which could significantly affect internal controls, subsequent to the date the Company carried out its evaluation.

PRESIDENT’S AND CHIEF FINANCIAL OFFICER’S CERTIFICATIONS

Appearing immediately following the Signatures section of this Quarterly Report there are two separate Forms of “Certification” of the President and Chief Financial Officer. The first form of Certification is required in accord with section 302 of the Sarbanes-Oxley Act of 2002 (the Section 302 Certification). This section of the Quarterly report which you are currently reading is the information concerning the Controls Evaluation referred to in the Section 302 Certificate and this information should be read in conjunction with the Section 302 Certification for a more complete understanding of the topics presented.

DISCLOSURE CONTROLS AND INTERNAL CONTROLS

Disclosure Controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports foiled under the Securities Exchange Act of 1934 (Exchange Act), such as this Quarterly Report is recorded, processed, summarized and reported within the time period specified.

Part II other information

Item 2: Sales of Unregistered securities

None

(b) Reports on Form 8-K

Changes in Principal Officers and Directors

Material Modifications to Security Holders’ Rights

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

GLOBAL BIOTECH CORP. (Registrant)

Dated July 10,2009	By: /s/ Louis Greco
	President