10-Q 1 v180974_10q.htm

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 February 28, 2010

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

For the transition period from ______________ to _______________

Commission File Number 000-33271

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 ¨

Accelerated Filer ¨

Non-Accelerated Filer ¨

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 April 12, 2010, the aggregate market value of the issuer's common stock based on its reported price on the OTC Bulletin Board held by non-affiliates of the issuer was approximately $26,368,676.

As of April 12, 2010, the Registrant had 67,661,990 shares of Common Stock outstanding.

INDEX

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements	3

Balance Sheets at February 28, 2010 (Unaudited) and November 30, 2009	3
Statements of Operations (Unaudited) for the Three months ended February 28, 2010 and February 28, 2009 and from Inception (November 2, 1998) to February 28, 2010.	4
Statement of Cash Flows (Unaudited) for the Three months ended February 28, 2010 and February 28, 2009 and from Inception (November 2, 1998) to February 28, 2010.	5
Notes to the Financial Statements (Unaudited).	6

Item 2. Plan of Operations	9

Item 3. Controls and Procedures	11

PART II: OTHER INFORMATION

Item 6. Exhibits and Reports On Form

SIGNATURES	13

GLOBAL BIOTECH CORP.

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

	Feburary 28, 2010			Novmber 30, 2009
	(Unaudited)
ASSETS

Current Assets
Cash	$	625		$	44,019
Short Term Investments		164,721			122,409
Total current assets		165,346			166,428

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

Total Assets	$	770,346		$	771,428

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payables and accrued liabilities		120,146			98,016
Notes Payable related party		14,704			15,592

Notes Payable		817,910			801,265

Total current liabilities		952,760			914,873

Stockholders' Equity

Preferred stock, $0.0001 par value authorized 80,000,00 shares 0 shares issued and outstanding Feburary 29, 2010 and November 30, 2009		-			-
Common stock, $0.0001 par value authorized 260,000,000 shares: issued and outstanding 67,661,990 Feburary 28, 2010 and 67,265,500 November 30, 2009		6,766			6,727
Paid in capital		1,448,112			1,346,502
Deficit accumulated during the development stage		(1,637,292	)		(1,496,674	)

Total Stockholders' Equity		(182,414	)		(143,445	)
Total liabilities and Stockholders' Equity	$	770,346		$	771,428

See the accompanying notes to financial statements.

GLOBAL BIOTECH CORP.

(A DEVELOPMENT STAGE COMPANY)

STATEMENT OF OPERATIONS

(UNAUDITED)

							From inception
	Three Months			Three Months			(November 2, 1998)
	Ended			Ended			to
	Feburary 28, 2010			Feburary 28, 2009			Feburary 28, 2010

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			2,500			183,295
Selling, general and administrative expenses		122,872			59,240			546,532
Total Operating Expenses		125,872			61,740			1,860,211

(Loss) before other income (expense)		(125,872	)		(61,740	)		(1,518,463	)

Other income (expense):
Other income		-			-			85,005
Foreign exchange		(2,097	)		1,917			(24,197	)
Interest income		1,321			-			113,199
Interest Expense		(13,970	)		(8,028	)		(329,930	)
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)		(14,746	)		(6,111	)		(118,829	)

Net (Loss)	$	(140,618	)	$	(67,851	)	$	(1,637,292	)

Basic weighted average common shares outstanding		67,540,585			67,265,500

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

See the accompany notes to financial statements.

GLOBALBIOTECH CORP.

(A DEVELOPMENT STAGE COMPANY)

Statement of Cash Flows (Unaudited)

	Three months ended						From Inception (Nov. 2, 1998)
	February 28, 2010			February 28, 2009			to February 28, 2010

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)	$	(140,618	)	$	(67,851	)	$	(1,637,292	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation expense		-			-			73,274
Common stock issued for services		101,649			-			215,024
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		13,970			8,028			220,442
Accrued interest income - note receivable		(1,321	)		-			(107,673	)
Changes in operating assets and liabilities
(Increase) Decrease - acc receivable/prepaids		-			7,428			-
(Increase) Decrease in notes receivable		-			-			(461,899	)
Increase (decrease) - accounts payable		22,130			11,781			120,146
Net Cash Provided by (used in) Operating Activities		(4,190	)		(40,614	)		(1,615,072	)

Cash Flows from Investing Activities
Net sale (purchase of fixed assets		-			-			(60,937	)
Purchase of short term investments		(40,991	)					(163,400	)
Proceeds from sale of investment shares		-			-			489,061
Net Cash Provided by (used in) Investing Activities		(40,991	)		-			264,724

Cash Flows from Financing Activities
Bank Advances		-			-			-
Issue of Common stock		-			-			156,262
Payment of common stock subscription receivable		-			-			206,239
Payment of note receivable		-			-			-
Proceeds from notes payable		1,787			41,210			988,472
Net Cash provided by (used in) Financing Activities		1,787			41,210			1,350,973

Net Increase (Decrease) in Cash		(43,394	)		596			625

Cash at Beginning of Year		44,019			6			-
Cash at End of Year	$	625		$	602		$	625

Supplemental Cash Flow Disclosures:

Cash paid during period for intrest		-			-			-

Cash paid during period for taxes		-			-			-

See accompanying notes to Financial Statements

GLOBAL BIOTECH CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

FEBRUARY 28, 2010

(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-Q 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, 2009 for GLOBAL BIOTECH CORP. on form 10 K as filed with the Securities and Exchange Commission.

The preparation of financial statements in conformity with generally accepted accounting principles of 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 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 computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. 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 period. 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

FEBRUARY 28, 2010

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements

In June 2009, the FASB issued guidance now codified as ASC 105, Generally Accepted Accounting Principles as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the SEC. ASC 105 does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The adoption of ASC 105 did not have a material impact on the Company’s financial statements, but did eliminate all references to pre-codification standards.

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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 $140,618 for the three months ended Feb 28, 2010 as well as reporting net losses of $1,637,292 from inception (November 2, 1998) to February 28, 2010. At February 28, 2010 the Company had negative working capital of $787,414 and stockholders’ deficit of $182,414. 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. SHORT TERM INVESTMENT

As of February 28,2010, the Company had purchased 2 term deposits, one in the amount of $122,409 ($130,000 CDN), and one in the amount of $40,132 ($42,000CDN) both bearing interest rate of 5%, maturing on November 6, 2010 and December 3,2010 respectively. As of February 28, 2010, the Company accrued $1,321 of interest income. No withdrawals allowed for first 90 days and 90 days early withdrawal notice needed. Early withdrawal interest rate - 1 ½%.

NOTE 5. RELATED PARTY TRANSACTION

Between December 1, 2009 and February 28, 2010 the Company borrowed $670 ($700CDN) from related parties and repaid $1,717 ($1747CDN) to said related parties, net repayment of $1,047. Balance due to related parties as of Feb. 28, 2010 was $14,704.

NOTE 6. STOCK ISSUANCE

On December 18,2009 the Company issued 333,333 restricted common shares in settlement of consulting services in the amount of $83,333. On February 18, 2010 the Company issued 63,157 restricted common shares in settlement of consulting services in the amount of $18,316.

NOTE 7 SUBSEQUENT EVENTS

In accordance with ASC 855, Subsequent Events, the Company has evaluated subsequent events through April 14, 2010, the date of issuance of the unaudited interim financial statements. During this period, the Company did not have any material recognizable subsequent events.

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™, our initial product being offered, 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 2013. 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. ("GLOBAL"), formerly (SWORD COMP-SOFT CORP.) was organized on November 2, 1998. Its goal was to bring interactive healthcare information services utilizing the Internet to the consumer, the end user, to access what they, as individuals, need.

As of March 5, 2003 this business was sold along with the assumption of a note payable in the amount of $700,000 to Millenia Hope Inc., its former parent corporation. In exchange, GLOBAL received 30.7 million shares of its outstanding common shares held by Millenia Hope Inc. Subsequently, GLOBAL acquired the exclusive 10 year North American licensing rights to a vehicle tracking system in exchange for 30.7 million of its common shares.

GLOBAL’s vehicle tracking system was supposed to seamlessly tie together wireless communications and the Internet with global positioning technology to link vehicles to a world of unlimited wireless services. 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. a Delaware corporation, to acquire assets from the latter corporation pursuant to entering the bottled water, more specifically the oxygenated bottled water, market. This Agreement was finalized on August 15, 2007.

GLOBAL’s goal is to position AquaBoost(TM), the bottled oxygenated water product it acquired, as an energizing alternative to soft drinks and as a beverage with more health benefits than ordinary water. To date, the aforementioned product has had minimal sales and the Company will endeavor, but can offer no guarantees, to raise its sales level significantly. Officers and director of the firm have committed to fund the operations of the Company until sufficient funds have been generated from ongoing business.

In an effort to expand its product line, the Company is working on developing a new product that we currently refer to as “Aquaboost-VitA: Orange Antioxidant”. This experimental product contains water oxygenated using the Aquaboost™ technology, vitamin C, vitamin E and apple skin extract. The Company is in the research and testing phase of the product’s development, and is conducting research into the product’s antioxidant effects and palatability.

The Company’s short-term and medium-term objectives are as follows:

To attach our oxygenation unit in Quebec to the bottling line of a recognized North American bottler via a joint venture, said objective is in the process of being completed as we await the finalization of hooking up our unit and running the pre-production tests.

To create a revenue stream through sales from strategic merchandising relationships and highly targeted markets - to this end, the Company is working on forming business relationships with pharmacy chains to place its nutraceutical beverage products in the next 6 to 12 months;

To strengthen its investor relations program, to increase shareholder value and increase public investors’ interest in the Company; and

To complete development of additional oxygenated and non-oxygenated drinks with nutraceutical values, which can be added to the Company’s product offering, distributed by others, or licensed to others.

GLOBAL’s registration statement, with the Security and Exchange Commission, was accepted on July 16, 2001 and it was cleared by FINRA on June 16, 2009 to trade its shares on the OTC: BB.

Three months ended February 28, 2009 compared to February 28, 2010.

Professional, selling, general and administrative in 2009 was $61,740 and $125,872 in 2010, a difference of $64,132. This was due to an additional $81,972 of consulting exp in 2010 in regard to our positioning the Company as we gear up to production status. In 2009 we had an additional $12,459 of developmental exp in connection with new beverage formulations vs 2010. We also had $9,183 of higher regulatory exp in 2009 vs 2010 as we are in the middle of the listing process in 2009 and were almost finished in 2010.

We had net interest expense, on our loans, of $8,028 in 2009 and $12,649 in 2010 and $2,097 of foreign exchange losses in 2010 vs an foreign exchange gain of $1,917 in 2009.

As a result of the above, we had a net loss of $67,851 in 2009 and$140,618 in 2010.

Liquidity and cash flow needs of the company

From December 1st, 2009 to February 28, 2010 the company used $4,190 for operating activities while recording no revenues. From March 1, 2010 to November 30, 2010, the fiscal year end, the company estimates that its net cash flow needs will be $300,000.

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-Q, 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

Date of	Title	Number		Consideration	Exemption from
Sale	of Security	Sold		Received	Registration Claimed

Dec 18,2009	Common		333,333	$ 83,333
				for Consulting expenses	Regulation S

Feb 18,2010	Common		63,157	$ 18,316	Regulation D

				for Consulting expenses

(b) Reports on Form 8-K

Changes in Principal Officers and Directors

None

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
April 14, 2010	By: /s/ Louis Greco
	President

	/s/ Perry Choiniere
	Chief Financial Officer