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EX-32.1 - SECTION 906 CERTIFICATION - Kedem Pharmaceuticals Inc.exhibit32-1.htm
EX-32.2 - SECTION 906 CERTIFICATION - Kedem Pharmaceuticals Inc.exhibit32-2.htm
EX-31.2 - SECTION 302 CERTIFICATION - Kedem Pharmaceuticals Inc.exhibit31-2.htm
EX-31.1 - SECTION 302 CERTIFICATION - Kedem Pharmaceuticals Inc.exhibit31-1.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 August 31, 2009

OR

[     ]     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 333-137888

GLOBAL HEALTH VENTURES INC.
(Exact name of registrant as specified in its charter)

Nevada N/A
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)

1517 West 58th Avenue, Vancouver, British Columbia Canada V6P 1W6
(Address of principal executive offices) (zip code)

604-761-7371
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)

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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ([ ]229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files)
Yes [    ]    No [    ]  (Not currently applicable to the Registrant)

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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [    ]   Accelerated filer [    ]
Non-accelerated filer [    ] (Do not check if a smaller reporting company) Smaller reporting company [ x ] 

1


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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date

62,722,000 common shares issued and outstanding as of October 14, 2009

2


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

In the opinion of management the interim financial statements for the quarter ended August 31, 2009 include all adjustments necessary in order to ensure that the interim financial statements are not misleading.

3


GLOBAL HEALTH VENTURES INC.
(a development stage company)
FINANCIAL STATEMENTS
(EXPRESSED IN U.S. DOLLARS)

AUGUST 31, 2009



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
August 31, 2009
(unaudited)

  Index
   
Consolidated Balance Sheets F-1
Consolidated Statements of Operations F-2
Consolidated Statements of Cash Flows F-3
Consolidated Statement of Stockholders’ Deficit F-4
Notes to the Consolidated Financial Statements F-5



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
Consolidated Balance Sheets
(Expressed in US Dollars)

    August 31,     May 31,  
    2009     2009  
    (unaudited)        
     
ASSETS            
Current Assets            
   Cash and cash equivalents   204,012     332,716  
   Prepaid expenses   10,800     15,892  
    214,812     348,608  
Property, Plant and Equipment            
     Laboratory equipment   4,974     3,769  
     Accumulated depreciation   (585 )   (377 )
     Computer Hardware   775     -  
     Accumulated depreciation   (44 )   -  
    5,120     3,392  
Intangible Assets            
     Website development costs   2,509     2,509  
     Accumulated amortization   (1,046 )   (418 )
    1,463     2,091  
Total Assets   221,395     354,091  
             
             
LIABILITIES AND STOCKHOLDERS’ EQUITY            
Current Liabilities            
   Accounts payable   18,490     3,788  
   Accrued liabilities (Note 3)   133,092     67,063  
   Due to related party (Note 4)   6,558     1,499  
    158,140     72,350  
Commitments (Note 4 (b))            
Stockholders’ Equity            
Preferred Stock: 80,000,000 shares authorized, $0.0001 par value            
No shares issued and outstanding   -     -  
Common Stock: 196,000,000 shares authorized, $0.0001 par value            
62,722,000 shares issued and outstanding (August 31, 2008 – 60,522,000 shares)   6,272     6,272  
Additional Paid-In Capital   610,374     567,478  
Donated Capital   2,474,000     2,474,000  
Accumulated other comprehensive income (loss)   37,309     41,632  
             
Deficit accumulated during the development stage   (3,064,700 )   (2,807,641 )
    63,255     281,741  
Total Liabilities and Stockholders’ Equity   221,395     354,091  

(The accompanying notes are an integral part of these consolidated financial statements)

F-1



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
Consolidated Statements of Operations (Unaudited)
(Expressed in US Dollars)

                Accumulated  
    Three Months     Three Months     from April 25, 2006  
    Ended     Ended     (Date of inception)  
    August 31, 2009     August 31, 2008     to August 31, 2009  
       
                   
Revenue            
                   
                   
Expenses                  
                   
       Amortization   627         1,045  
       Depreciation   252         629  
       General and administrative:                  
             Stock-based compensation   9,874         9,874  
             Incurred   21,689     873     104,983  
       Interest expense       95     905  
       Professional fees:                  
             Stock-based compensation   2,468         2,468  
             Incurred   14,118     17,175     155,539  
       Research and development (Note 4(b))   93,337         126,670  
       Salaries and wages                  
             Stock-based compensation   30,554         30,554  
             Incurred   84,140         133,033  
                   
Total Expenses   257,059     18,143     565,700  
                   
Net Loss   (257,059 )   (18,143 )   (565,700 )
                   
Other Comprehensive Income                  
     Foreign currency translation adjustment   (4,323 )       37,309  
                   
Comprehensive Loss   (261,382 )   (18,143 )   (528,391 )
                   
Net Loss Per Share – Basic and Diluted              
                   
Weighted Average Shares Outstanding   62,722,000     60,522,000        

(The accompanying notes are an integral part of these consolidated financial statements)

F-2



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
Consolidated Statements of Cash Flows (Unaudited)
(Expressed in US Dollars)

                Accumulated  
    Three Months     Three Months     from April 25, 2006  
    Ended     Ended     (Date of inception)  
    August 31, 2009     August 31, 2008     to August 31, 2009  
       
                   
Operating Activities                  
                   
   Comprehensive loss   (261,382 )   (18,143 )   (528,391 )
   Adjustment to reconcile net loss to net cash used                  
   in operating activities:                  
       Donated services   -     2,250     24,000  
       Amortization   627     -     1,045  
       Depreciation   252     -     629  
       Stock based compensation   42,896     -     42,896  
   Change in operating assets and liabilities:                  
       Prepaid expenses   5,092     -     (10,800 )
       Accounts payable and accrued liabilities   80,731     13,225     151,582  
       Due to related party   5,059     -     38,444  
Net Cash Used In Operating Activities   (126,725 )   (2,668 )   (280,595 )
                   
Investing Activities                  
     Purchase of equipment   (1,979 )   -     (5,748 )
     Website development costs   -     -     (2,509 )
Net Cash Used in Investing Activities   (1,979 )   -     (8,257 )
                   
Financing Activities                  
       Payment of share offering costs   -     -     (28,400 )
       Advances from a related party   -     17,707     165,261  
       Repayments to a related party   -     -     (81,147 )
       Proceeds from issuance of common stock   -     -     437,150  
       Proceeds from loan payable   -     -     6,234  
       Repayments of loan payable   -     (416 )   (6,705 )
Net Cash Provided by (Used In) Financing Activities   -     17,291     492,393  
                   
Effect of exchange rate changes on cash   -     (269 )   471  
Increase (decrease) in Cash   (128,704 )   14,354     204,012  
Cash – Beginning of Period   332,716     5,726     -  
Cash - End of Period   204,012     20,080     204,012  
                   
Supplemental Disclosures                  
   Interest paid       101     718  
   Income taxes paid            
                   
Non-cash Financing Transactions                  
   Shares issued in settlement of advances from                  
   related party           10,460,000  

(The accompanying notes are an integral part of these consolidated financial statements)

F-3



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
Consolidated Statement of Stockholders’ Deficit (Unaudited)
For the Period from April 25, 2006 (Date of Inception) to August 31, 2009
(Expressed in US Dollars)

                            Accumulated              
    Common Stock     Additional           Other     Deficit Accumulated        
                Paid-In           Comprehensive     During the        
    Shares     Amount     Capital     Donated Capital       Income     Development Stage     Total  
    #              
                                           
Balance – April 25, 2006 (Date of                                          
inception)                            
April 26, 2006 – common shares issued for                                          
cash at $0.0001 per share   140,000,000     14,000     (13,000 )               1,000  
Donated services and rent               750             750  
Net loss for the period                       (9,040 )   (9,040 )
Balance – May 31, 2006   140,000,000     14,000     (13,000 )   750         (9,040 )   (7,290 )
April 2, 2007 – common shares issued for         14,000                                
cash at $0.0036 per share   14,322,000     1,432     49,718                 51,150  
Share issuance costs               (28,400 )                   (28,400 )
Donated services and rent               9,000             9,000  
Net loss for the year                       (61,174 )   (61,174 )
Balance – May 31, 2007   154,322,000     15,432     8,318     9,750           (70,214 )   (36,714 )
Cancellation of shares   (93,800,000 )   (9,380 )   9,380                  
Donated services and rent               9,000             9,000  
Net loss for the year                       (65,168 )   (65,168 )
Balance – May 31, 2008   60,522,000     6,052     17,698     18,750         (135,382 )   (92,882 )
Donated services and rent (Note 4(c))               5,250             5,250  
Sep 30, 2008 – common shares issued at                                          
$0.0001 per share in loan settlement (Note                                          
6 (b))   10,000,000     1,000     2,499,000             (2,499,000 )   1,000  
Sep 30. 2008 – common shares returned to                                          
treasury (Note 6 (a))   (9,800,000 )   (980 )   (2,449,020 )   2,450,000              
Jan 20, 2009 – common shares issued at                                          
$0.25 per share in loan settlement (Note 6                                          
(c))   460,000     46     114,954                 115,000  
Jan 20, 2009 common shares issued for                                          
cash at $0.25 per share (Note 6 (d))   1,540,000     154     384,846                 385,000  
                                           
Foreign currency translation adjustment                   41,632         41,632  
Net loss for the year                                 (173,259 )   (173,259 )
Balance – May 31, 2009   62,722,000     6,272     567,478     2,474,000     41,632     (2,807,641 )   281,741  
Stock-based compensation           42,896                 42,896  
                                           
Foreign currency translation adjustment                   (4,323 )       (4,323 )
Net loss for the period                       (257,059 )   (257,059 )
Balance – August 31, 2009   62,722,000     6,272     610,374     2,474,000     37,309     (3,064,700 )   63,255  

(See Note 6 for return and issuance of common shares)

(The accompanying notes are an integral part of these consolidated financial statements)

F-4



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements (Unaudited)
August 31, 2009

1.

Development Stage Company

     

Global Health Ventures Inc. (the “Company”) was incorporated in the State of Nevada on April 25, 2006 under the name Acting Scout Inc. The Company changed its name to Goldtown Investments Corp. on September 20, 2007 and on October 6, 2008 changed its name to Global Health Ventures Inc. The Company is located in British Columbia, Canada. The Company is a healthcare technology financial institution that is in the business of acquiring and licensing current outstanding and promising healthcare related technologies for further development and re-licensing to major pharmaceutical companies. The Company is a Development Stage Company, as defined by Statement of Financial Accounting Standard (“SFAS”) No. 7 “Accounting and Reporting for Enterprises in the Development Stage”.

     

These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has not generated significant revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate significant earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. As at August 31, 2009, the Company has never generated any significant revenue and has accumulated losses of $3,064,700 since inception. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

     

The Company’s common shares trade on the Over the Counter Bulletin Board (“OTCBB”) under the symbol “GHLV”.

     
2.

Summary of Significant Accounting Policies

     
a)

Basis of Presentation

     

These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and its inactive wholly-owned subsidiary, Global Health (BC) Ventures Inc.

     
b)

Interim Financial Statements

     

The interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. These financial statements should be used in conjunction with our annual audited financial statements.

     
c)

Use of Estimates

     

The preparation of financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to deferred income tax asset valuation allowance. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

F-5



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements (Unaudited)
August 31, 2009

2.

Summary of Significant Accounting Policies (continued)

     
d)

Basic and Diluted Net Income (Loss) Per Share

     

The Company computes net income (loss) per share in accordance with SFAS No. 128, "Earnings per Share". SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.

     
e)

Revenue Recognition

     

The Company recognizes revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104 (“SAB 104”), “Revenue Recognition in Financial Statements”. The Company has never generated any revenue since inception.

     
f)

Comprehensive Loss

     

SFAS No. 130, “Reporting Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements.

     
g)

Cash and Cash Equivalents

     

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

     
h)

Property, Plant and Equipment

     

Property, plant and equipment are recorded at cost. Depreciation is provided annually at rates calculated to write off the assets over their estimated useful lives as follows:


Laboratory equipment 20% diminishing balance
Computer hardware 45% diminishing balance

 

In the year of acquisition, these rates are reduced by one-half.

     
  i)

Long-Lived Assets

     
 

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

     
 

Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

F-6



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements (Unaudited)
August 31, 2009

2.

Summary of Significant Accounting Policies (continued)

     
j)

Website Development Costs

     

The Company capitalizes website development costs in accordance with the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use” and Emerging Issues Task Force (EITF) No. 00-2, “Accounting for Website Development Costs”, whereby costs related to the preliminary project stage of development are expensed and costs related to the application development stage are capitalized. Any additional costs for upgrades and enhancements which result in additional functionality will be capitalized. Capitalized costs will be amortized based on their estimated useful life over three years. Internal costs related to the development of website content are charged to operations as incurred.

     
k)

Financial Instruments

     

The fair value of financial instruments, which include cash, accounts payable and amounts due to a related party, were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Company’s operations will be in Canada and the United States, resulting in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

     
l)

Income Taxes

     

The Company follows the asset and liability method of accounting for income taxes. Under this method, current taxes are recognized for the estimated income taxes payable for the current period.

     

Deferred income taxes are provided based on the estimated future tax effects of temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases as well as the benefit of losses available to be carried forward to future years for tax purposes.

     

Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which those temporary differences are expected to be covered or settled. The effect of deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets when it is more likely than not that such deferred tax assets will not be realized.

     
m)

Foreign Currency Translation

     

The functional currency of the Company is the Canadian dollar with the reported amounts being stated in the United States dollar. In accordance with the Statement of Financial Accounting Standards (“SFAS”) No. 52, Foreign Currency Translation, assets and liabilities are translated at the rates of exchange at the balance sheet dates. Income and expense items are translated at average annual rates of exchange. The resulting translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity.

     
n)

Research and development costs

     

Research costs are expensed in the period incurred. Development costs are expensed in the period incurred unless the Company believes a development project meets generally accepted accounting criteria for deferral and amortization. No such costs have been deferred as at August 31, 2009 and 2008.

F-7



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements (Unaudited)
August 31, 2009

2.

Summary of Significant Accounting Policies (continued)

     
o)

Stock-based Compensation

     

In accordance with SFAS 123R, “Share Based Payments”, the Company accounts for share-based payments using the fair value method. Common shares issued to third parties for non-cash consideration are valued based on the fair market value of the services provided or the fair market value of the common stock on the measurement date, whichever is more readily determinable

     
p)

Recent Accounting Pronouncements

     

In May 2009, the FASB issued FAS No. 165, “Subsequent Events”. This pronouncement establishes standards for accounting for and disclosing subsequent events (events which occur after the balance sheet date but before financial statements are issued or are available to be issued). FAS 165 requires an entity to disclose the date subsequent events were evaluated and whether that evaluation took place on the date financial statements were issued or were available to be issued. It is effective for interim and annual periods ending after June 15, 2009. The adoption of FAS 165 did not have a material impact on the Company’s financial condition or results of operation.

     

In June 2009, the FASB issued FAS 166, “Accounting for Transfers of Financial Assets”, an amendment of FAS 140. FAS 140 is intended to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets: the effects of a transfer on its financial position, financial performance and cash flows: and a transferor’s continuing involvement, if any, in transferred financial assets. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 166 to have an impact on the Company’s results of operations, financial condition or cash flows.

     

In June 2009, the FASB issued FAS 167, “Amendments to FASB Interpretation No. 46(R)”. FAS 167 is intended to (1) address the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, as a result of the elimination of the qualifying special- purpose entity concept in FAS 166, and (2) constituent concerns about the application of certain key provisions of Interpretation 46R, including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 167 to have an impact on the Company’s results of operations, financial condition or cash flows.

     

In June 2009, the FASB issued FAS 168, “The FASB Accounting Standards Codification and the Hierarchy of General Accepted Accounting Principles”. FAS 168 will become the source of authoritative U.S. general accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non- authoritative. This statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company does not expect the adoption of FAS 168 to have an impact on the Company’s results of operations, financial condition or cash flows.

F-8



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements (Unaudited)
August 31, 2009

3. Accrued Liabilities

      August 31,     May 31,  
      2009     2009  
       
  Accrued interest   -     -  
  Professional fees   2,283     10,830  
  Research and development   39,175     33,333  
  Salaries   91,634     22,900  
      133,092     67,063  

4.

Related Party Transactions

     
a)

During the three month period ended August 31, 2009, the President of the Company advanced Nil (2008 - $Nil) to the Company and incurred $6,395 (2008 - $Nil) of expenses on behalf of the Company. During the three month period ended August 31, 2009, the President of the Company was repaid $4,557 (2008 - $2,112) by the Company for expenses incurred on behalf of the Company.

     
b)

On March 15, 2009, the Company entered into a research contract with Globe Laboratories Inc. (“Globe”), a company controlled by 2 individuals related to the President of the Company, to engage Globe for research on the sublingual technologies developed by Globe. The Company agreed to pay $50,000 per quarter to Globe from April 1, 2009 until the technology is put into commercial production, or the technologies are sold or sublicensed. To date, $83,333 in research costs have been accrued under this agreement, of which $45,135 has been paid to Globe.

     
c)

During the three month period ended August 31, 2009, a company controlled by the President advanced $3,222 (2008 - $Nil) to the Company.

     
d)

On March 25, 2009, the Company signed a letter of intent with Posh Cosmeceuticals Inc., a company controlled by the President of the Company, to have each company exchange shares with one another.

     
5.

Income Taxes

     

The Company accounts for income taxes using the liability method of tax allocation. Deferred income taxes are recognized for the future income tax consequences attributable to differences between the carrying values of assets and liabilities and their respective income tax bases. Deferred income tax assets are evaluated periodically and if realization is not considered likely, a valuation allowance is provided.

     
a) Deferred tax assets and liabilities

      August 31, 2009     May 31, 2009  
       
  Operating loss carry forwards   174,600     92,400  
  Valuation allowance   (174,600 )   (92,400 )
  Net future tax asset   -     -  

Management believes that it is not more likely than not that it will create sufficient taxable income sufficient to realize its deferred tax assets. Due to this, the Company has no income tax expense.

F-9



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements (Unaudited)
August 31, 2009

5.

Income Taxes (continued)

b) Loss carry forwards

The Company has estimated accumulated non-capital losses of approximately $498,000 which will expire as follows:

2026 $  9,000  
2027   52,000  
2028   56,000  
2029   168,000  
2030   213,000  
  $  498,000  

6.

Warrants

   

On January 20, 2009, pursuant to the completion of a 2,000,000 unit private placement, the Company issued 2,000,000 share purchase warrants exercisable to acquire 2,000,000 common shares of the Company at $0.40 per share, expiring January 20, 2011. At August 31, 2009, the 2,000,000 warrants issued are still outstanding.

   
7.

Stock Option Plan

   

The Company may grant options to purchase 2,000,000 common shares of the Company. Options may be issued under the stock option plan as determined at the sole discretion of the Company’s board of directors. Options may be issued for a term of up to 10 years at an exercise price of $0.70. All options vest at a rate of four per cent of the total number of Options granted to an Optionee vesting each month on a monthly basis during the two-year period and the total remainder of such Options vesting on the second anniversary of the date of grant.

   

A summary of stock options outstanding is presented below:


    Number of     Weighted Average  
    Options     Exercise Price  
Options outstanding at June 1, 2009   -     -  
           Granted   2,000,000   $ 0.70  
             Expired   -     -  
Options outstanding at August 31, 2009   2,000,000   $ 0.70  

During the quarter ended August 31, 2009, the Company granted 2,000,000 options. The fair value of the options of $42,896 has been expensed.

The Company has estimated the fair value of each option on the date of grant using the Black-Scholes Options Pricing Model with the following weighted average assumptions:

Risk-free interest rate 2.93%
Expected life of options 5-10 years
Expected volatility in the market price of the shares 94.0%
Expected dividend yield 0.0%

F-10



Global Health Ventures Inc.
(formerly Goldtown Investments Corp.)
(A Development Stage Company)
Notes to the Consolidated Financial Statements (Unaudited)
August 31, 2009

8.

Fair Value Measures

   

SFAS 157 requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. SFAS 157 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. SFAS 157 prioritizes the inputs into three levels that may be used to measure fair value:

   

Level 1

   

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

   

Level 2

   

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model- derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

   

Level 3

   

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

   

Our financial instruments consist principally of cash and accounts payable. Pursuant to SFAS No. 157, Fair Value Measurements, or SFAS 157, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

F-11


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements as that term is defined in applicable securities laws. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors”, that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Financial information contained in this quarterly report and in our unaudited interim consolidated financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles. The following discussion should be read in conjunction with our unaudited interim consolidated financial statements and the related notes that appear elsewhere in this quarterly report.

As used in this quarterly report, and unless otherwise indicated, the terms “we”, “us” and “our” mean Global Health Ventures Inc., unless otherwise indicated.

Corporate History

We were incorporated on April 25, 2006 under the name “Acting Scout Inc.”, pursuant to the laws of the state of Nevada.

On September 10, 2007, we filed an Amendment to our Articles of Incorporation with the Secretary of State of Nevada to be effective as of September 10, 2007 to decrease our authorized capital from 80,000,000 common shares to 14,000,000 common shares.

On September 20, 2007, we changed our name to Goldtown Investments Corp. to better reflect our new business model. In addition, effective as of September 20, 2007, we also filed a Certificate of Change to increase our issued and outstanding, and authorized, capital, on a basis of fourteen (14) new common shares for every one (1) existing common share, from 11,023,000 issued and outstanding common shares into 154,322,000 issued and outstanding common shares, and from 14,000,000 authorized common shares to 196,000,000 authorized common shares.

On September 29, 2008, Blair Law resigned as our president, secretary, treasurer, chief executive officer and chief financial officer. On September 29, 2008, Hassan Salari was appointed as our president, secretary, treasurer, chief executive officer and chief financial officer.

Effective October 6, 2008, we changed our name from “Goldtown Investments Corp.” to “Global Health Ventures Inc.” as a result of a merger with Global Health Ventures Inc., our wholly-owned subsidiary that was incorporated solely to effect the name change. Our common shares trade on the Over The Counter Bulletin Board (OTCBB) under the symbol “GHLV”.

On March 15, 2009, we entered into a research contract with Globe Laboratories Inc., a company controlled by two individuals related to the president of our company, to engage Globe for research on the sublingual technologies developed by Globe. We agreed to pay $50,000 per quarter to Globe from April 1, 2009 until the technologies are put into commercial production, or the technologies are sold or sublicensed.

On May 14, 2009, Dr. David Filer and Christian Bezy were appointed to our board of directors. Also on May 14,

4


2009, Audrey Lew was appointed as our chief financial officer and Hassan Salari resigned from this position.

Current Business

We are a specialty pharmaceutical company developing proprietary platform technology that delivers drugs via the sublingual (under the tongue) route. This unique method delivers drugs to the bloodstream quickly and with minimal drug breakdown in the liver and gastro-intestinal system, a process that can greatly reduce side effects while also requiring a lower dosage than conventional oral drugs while generally still producing the same results. Additionally, we are also developing oral formulations of drugs which are intended to cause fewer stomach side effects than formulations of such drugs previously marketed by other pharmaceutical companies. Our drug formulations are specifically designed to deliver drugs to the blood stream rapidly and more efficiently than traditional drug formulations but with fewer side effects.

We intend to develop our products to the final stage of marketing. If we need to carry out further clinical trials to support regulatory filings we will do so in-house. We plan to market the products through direct consumer sources such as advertisements on the internet, television, radio and in magazines. We also plan to sign up co-marketing partners, which typically will be larger specialty pharmaceutical companies and distributors. In the latter case, we plan to share the revenue on a pre-arranged royalty basis structure. We anticipate our products and any new product will require substantial funding. There can be no assurance, however, that we will be able to acquire the financing necessary to enable us to pursue our plan of operation. If our company requires additional financing and we are unable to acquire such funds, our business may fail.

Management of our company believes that there are perceived benefits to being a reporting company with a class of publicly-traded securities. These are commonly thought to include: (i) the ability to use registered securities to acquire assets or businesses; (ii) increased visibility in the financial community; (iii) the facilitation of borrowing from financial institutions; (iv) improved trading efficiency; (v) stockholder liquidity; (vi) greater ease in subsequently raising capital; (vii) compensation of key employees through stock options; (viii) enhanced corporate image; and (ix) a presence in the United States capital market.

RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read together with the unaudited interim financial statements and the notes to the unaudited interim financial statements included in this quarterly report. This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those anticipated in these forward-looking statements.

For the three month periods ended August 31, 2009 and August 31, 2008

Our interim consolidated financial statements report a net loss of $257,059 for the three month period ended August 31, 2009 as compared to a net loss of $18,143 for the three month period ended August 31, 2008.

During the three months ended August 31, 2009, we incurred expenses of $257,059 compared to $18,143 during the three months ended August 31, 2008. The increase in expenses during the three months ended August 31, 2009 was largely due to increases in general and administrative expenses, research and development expenses and salaries and wages.

As of August 31, 2009, we had a working capital of $56,672. Our total liabilities as of August 31, 2009 were $158,140, as compared to total liabilities of $128,855 as of August 31, 2008. The change was due primarily to an decrease in the amount due to related parties of $96,343, a decrease in accounts payable of $3,261 and an increase in accrued liabilities of $133,061.

Cash Flow Used in Operating Activities

Operating activities used cash of $126,725 for the three month period ended August 31, 2009, compared to using cash of $2,668 for the three month period ended August 31, 2008. The increase in cash used during the three month

5


period ended August 31, 2009 was commensurate with an increase in the amount due to related parties of $5,059, an increase in stock based compensation of $42,896, and an increase in accounts payable and accrued liabilities of $67,506.

Cash Flow Provided by Financing Activities

Financing activities provided cash of $Nil for the three month period ended August 31, 2009 compared to providing cash of $17,291 for the three month period ended August 31, 2008.

Cash Flow Provided by Investing Activities

Investing activities used cash of $1,979 for the three month period ended August 31, 2009 compared to using $Nil for the three month period ended August 31, 2008.

Liquidity and Capital Resources

We had cash and cash equivalents of $204,012 and current liabilities of $158,140 as of August 31, 2009. We had working capital of $56,672 as of August 31, 2009.

To date, we have had negative cash flows from operations and we have been dependent on sales of our equity securities and debt financing to meet our cash requirements. We expect this situation to continue for the foreseeable future. We anticipate that we will have negative cash flows during the next twelve month period ended August 31, 2010.

On January 2, 2009, we agreed to settle the outstanding amount of $115,000 owed to our president by the issuance of 460,000 units of our company at a price of $0.25 per unit. Each unit consisted of one common share and one common share purchase warrant exercisable to acquire an additional 460,000 common shares at an exercise price of $0.40 per share and having an expiry date of January 20, 2011. We issued the 460,000 units to our president on January 20, 2009.

Also on January 20, 2009, we completed a private placement of 1,540,000 units of our company at a price of $0.25 per unit for gross proceeds of $385,000. Each unit consisted of one common share and one common share purchase warrant exercisable to acquire an additional 1,540,000 common shares at an exercise price of $0.40 per share and having an expiry date of January 20, 2011.

We incurred a loss of $257,059 for the three month period ended August 31, 2009. As indicated below, our estimated working capital requirements and projected operating expenses for the next twelve month period total $200,000. Although we have sufficient funds to carry out our operations for the next twelve month period, we may attempt to raise additional funds through the issuance of equity securities or through debt financing. There can be no assurance that we will be successful in raising the required capital or that actual cash requirements will not exceed our estimates. We intend to fulfill any additional cash requirement through the sale of our equity securities.

We expect to require a total of approximately $1,300,000, as set out below to carry out our business plan over the twelve months beginning September 2009. Our expenditures for the next twelve months include:

    Our cost to  
    complete  
Description  
Equipment   250,000  
Leasehold Improvement/rent   200,000  
Research   200,000  
Packaging   100,000  
Wages   300,000  
Professional Fees   100,000  
Travel   50,000  
Overhead   50,000  
Administration   50,000  
Total   1,300,000  

6


We do not anticipate generating positive internal operating cash flow until we can generate substantial revenues, which may take the next few years to realize. There is no assurance we will achieve profitable operations in the future. We have historically financed our operations primarily by cash flows generated from the sale of our equity securities and through cash infusions from officers and affiliates in exchange for debt and/or common stock. No officer or affiliate has made any commitment or is obligated to continue to provide cash through loans or purchases of equity.

We intend to meet the balance of our cash requirements for the next 12 months through a combination of debt financing and equity financing through private placements. Currently we are active in contacting broker/dealers in Canada and elsewhere regarding possible financing arrangements. However, we currently do not have any arrangements in place for the completion of any further private placement financings and there is no assurance that we will be successful in completing any further private placement financings. If we are unsuccessful in raising sufficient funds through future capital raising efforts, we may review other financing options.

We have generated no revenues and incurred significant operating losses from operations. Since we anticipate we will expand operational activities in the future, we may continue to experience net negative cash flows from operations and will be required to obtain additional financing to fund operations through equity securities offerings and bank borrowings to the extent necessary to provide working capital. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow from stockholders or other outside sources to sustain operations and meet our obligations on a timely basis and ultimately to attain profitability. We have limited capital with which to pursue our business plan. There can be no assurance that our future operations will be significant and profitable or that we will have sufficient resources to meet our objectives.

There are no assurances that we will be able to obtain funds required for our continued operation. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease the operation of our business.

There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon obtaining further financing. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

Product Research and Development

During the twelve month period ending August 31, 2010, we intend to work on the formulation of our drugs. The rate of blood absorption will be investigated. Further, we intend to evaluate the dose ratio between active chemicals and other ingredients. We want to improve the drug bioavailability and maximize absorption. We also intend to set out a formula for drug to body mass ratio. Research will also be conducted on other ingredients which can be used for enhancement of skin penetration.

Purchase of Significant Equipment

During the twelve month period ending August 31, 2010, we intend to purchase a tablet maker which will produce at least 100 tablets a minute. This tablet maker will cost approximately $50,000. We also intend to purchase an automated tablet packager. The automated tablet packager will automatically drop a certain number of tablets into each bottle. The bottles then go for sealing, capping and labeling. Once the sealing, capping and labeling are completed, the automated tablet packager will produce a complete packed bottle. The cost of this fully automated equipment is approximately $200,000.

7


Off-Balance Sheet Arrangements

As of August 31, 2009, our company had no off-balance sheet arrangements, including any outstanding derivative financial statements, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. Our company does not engage in trading activities involving non-exchange traded contracts.

Employees

Our company is currently operated by Hassan Salari as our president, secretary, treasurer and chief executive officer and Audrey Lew as our chief financial officer. Currently we have three employees. Our company may hire employees when circumstances warrant, however we do not anticipate hiring additional employees in the near future. We presently conduct our business through agreements with consultants and arms-length third parties.

Going Concern

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our annual financial statements for the year ended May 31, 2009, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure 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. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations.

Long-Lived Assets

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, our company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Website Development Costs

We capitalize website development costs in accordance with the American Institute of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) No. 98-1, “Accounting for the Costs of Computer Software Developed or Obtained for Internal Use” and Emerging Issues Task Force (EITF) No. 00-2, “Accounting for Website Development Costs”, whereby costs related to the preliminary project stage of development are expensed and costs related to the application development stage are capitalized. Any additional costs for upgrades and enhancements which result in additional functionality will be capitalized. Capitalized costs will be amortized based on their

8


estimated useful life over three years. Internal costs related to the development of website content are charged to operations as incurred.

Research and Development Costs

Research costs are expensed in the period incurred. Development costs are expensed in the period incurred unless we believe a development project meets generally accepted accounting criteria for deferral and amortization. No such costs had been deferred as at August 31, 2009 and 2008.

Foreign Currency Translation

Our company’s functional currency is the Canadian dollar with the reported amounts being stated in the United States dollar. In accordance with the Statement of Financial Accounting Standards (“SFAS”) No. 52, Foreign Currency Translation, assets and liabilities are translated at the rates of exchange at the balance sheet dates. Income and expense items are translated at average annual rates of exchange. The resulting translation adjustments are included in accumulated other comprehensive income (loss), a separate component of stockholders’ equity.

Stock-based Compensation

In accordance with SFAS 123R, “Share Based Payments”, our company accounts for share-based payments using the fair value method. Common shares issued to third parties for non-cash consideration are valued based on the fair market value of the services provided or the fair market value of the common stock on the measurement date, whichever is more readily determinable.

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2009, the FASB issued FAS No. 165, “Subsequent Events”. This pronouncement establishes standards for accounting for and disclosing subsequent events (events which occur after the balance sheet date but before financial statements are issued or are available to be issued). FAS 165 requires an entity to disclose the date subsequent events were evaluated and whether that evaluation took place on the date financial statements were issued or were available to be issued. It is effective for interim and annual periods ending after June 15, 2009. The adoption of FAS 165 did not have a material impact on our company’s financial condition or results of operation.

In June 2009, the FASB issued FAS 166, “Accounting for Transfers of Financial Assets”, an amendment of FAS 140. FAS 140 is intended to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets: the effects of a transfer on its financial position, financial performance and cash flows: and a transferor’s continuing involvement, if any, in transferred financial assets. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. Our company does not expect the adoption of FAS 166 to have an impact on its results of operations, financial condition or cash flows.

In June 2009, the FASB issued FAS 167, “Amendments to FASB Interpretation No. 46(R)”. FAS 167 is intended to (1) address the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, as a result of the elimination of the qualifying special-purpose entity concept in FAS 166, and (2) constituent concerns about the application of certain key provisions of Interpretation 46R, including those in which the accounting and disclosures under the Interpretation do not always provide timely and useful information about an enterprise’s involvement in a variable interest entity. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. Our company does not expect the adoption of FAS 167 to have an impact on its results of operations, financial condition or cash flows.

In June 2009, the FASB issued FAS 168, “The FASB Accounting Standards Codification and the Hierarchy of General Accepted Accounting Principles”. FAS 168 will become the source of authoritative U.S. general accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are

9


also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. This statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009. Our company does not expect the adoption of FAS 168 to have an impact on its results of operations, financial condition or cash flows.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not Applicable.

Item 4T. Controls and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our president (who is also our chief executive officer, secretary and treasurer) and our chief financial officer to allow for timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of August 31, 2009, the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our president (who is also our chief executive officer, secretary and treasurer) and our chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our president and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the three month period ended August 31, 2009 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

Item 1A. Risk Factors.

RISK FACTORS

Much of the information included in this quarterly report includes or is based upon estimates, projections or other forward-looking statements. Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein.

10


Such estimates, projections or other forward-looking statements involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other forward-looking statements. Prospective investors should consider carefully the risk factors set out below.

Risks Related To Our Financial Condition and Business Model

The worldwide macroeconomic downturn may reduce the ability of our company to obtain the financing necessary to continue our business and may reduce the number of viable businesses that we may wish to acquire.

Since 2008, there has been a downturn in general worldwide economic conditions due to many factors, including the effects of the subprime lending and general credit market crises, volatile but generally declining energy costs, slower economic activity, decreased consumer confidence and commodity prices, reduced corporate profits and capital spending, adverse business conditions, increased unemployment and liquidity concerns. In addition, these macroeconomic effects, including the resulting recession in various countries and slowing of the global economy, will likely result in decreased business opportunities as potential target companies face increased financial hardship. Tightening credit and liquidity issues will also result in increased difficulties for our company to raise capital for our continued operations and to consummate a business opportunity with a viable business.

Our future product development efforts may not yield marketable products due to results of studies or trials, failure to achieve regulatory approvals or market acceptance, proprietary rights of others or manufacturing issues.

Development of a product candidate requires substantial technical, financial and human resources. Our potential product candidates may appear to be promising at various stages of development yet fail to reach the market for a number of reasons, including:

  • the lack of adequate quality or sufficient prevention benefit, or unacceptable safety during preclinical studies or clinical trials;

  • their failure to receive necessary regulatory approvals;

  • the existence of proprietary rights of third parties; or

  • the inability to develop manufacturing methods that are efficient, cost-effective and capable of meeting stringent regulatory standards.

We face competition from several companies with greater financial, personnel and research and development resources than ours.

Our competitors are developing product candidates which could compete with those we may develop in the future. Our commercial opportunities will be reduced or eliminated if our competitors develop and market products for any of the diseases that we target that:

  • are more effective;

  • have fewer or less severe adverse side effects;

  • are more adaptable to various modes of dosing;

  • are easier to store or transport;

  • are easier to administer; or

  • are less expensive than the product candidates we develop.

Even if we are successful in developing effective products and obtaining appropriate regulatory approvals necessary for commercializing them, our products may not compete effectively with other successful product candidates. Researchers are continually learning more about diseases, which may lead to new technologies for treatment. Our

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competitors may succeed in developing and marketing products that are either more effective than those that we may develop, alone or with our collaborators, making our products obsolete, or that are marketed before any product candidates we develop are marketed.

Our competitors include fully integrated pharmaceutical companies and biotechnology companies that currently have drug and target discovery efforts, as well as universities and public and private research institutions. Many of the organizations competing with us may have substantially greater capital resources, larger research and development staffs and facilities, greater experience in product development and in obtaining regulatory approvals, and greater marketing capabilities than we do.

We may use hazardous materials and chemicals in developing our products which may require us to comply with regulatory requirements and expose us to potential liabilities.

Our research and development may involve the controlled use of hazardous materials and chemicals. We are subject to federal, provincial, local and foreign laws governing the use, manufacture, storage, handling and disposal of such materials. We cannot eliminate the risk of accidental contamination or injury from these materials. In the event of such an accident, we could be held liable for significant damages or fines. These damages could exceed our resources and any applicable insurance coverage. In addition, we may be required to incur significant costs to comply with regulatory requirements in the future.

Delays in successfully completing any clinical trials we may conduct could jeopardize our ability to obtain regulatory approval or market our potential product candidates on a timely basis.

Our business prospects may depend on our ability to complete patient enrolment in clinical trials, to obtain satisfactory results in same, to obtain required regulatory approvals and to successfully commercialize our products. Product development to show adequate evidence of effectiveness in animal models and safety and immune response in humans is a long, expensive and uncertain process, and delay or failure can occur at any stage of our non-clinical studies or clinical trials. Any delay or significant adverse clinical events arising during any of our clinical trials could force us to abandon a product candidate altogether or to conduct additional clinical trials in order to obtain approval from the FDA or other regulatory body. These development efforts and clinical trials are lengthy and expensive, and the outcome is uncertain. Completion of any clinical trials we may commence, announcement of results of the trials and our ability to obtain regulatory approvals could be delayed for a variety of reasons, including:

  • lower-than-anticipated recruitment of medical centers to participate in clinical trials;

  • serious adverse events related to the products;

  • unsatisfactory results of any clinical trial; or

  • different interpretations of our preclinical and clinical data, which could initially lead to inconclusive results.

Our development costs will increase if we have material delays in any clinical trial or if we need to perform more or larger clinical trials than planned. If the delays are significant, or if any of our product candidates do not prove to be safe or effective or do not receive required regulatory approvals, our financial results and the commercial prospects for our products will be harmed. Furthermore, our inability to complete our clinical trials in a timely manner could jeopardize our ability to obtain regulatory approval.

Biopharmaceutical product development is a long, expensive and uncertain process and the approval requirements for many products are still evolving. If we are unable to successfully develop and test product candidates in accordance with such requirements, our business will suffer.

We cannot predict whether we will obtain regulatory approval for any biological drug product candidates pursuant to regulatory provisions. We may fail to obtain approval from regulatory authorities, or experience delays in obtaining such approvals, due to varying interpretations of data or failure to satisfy current safety, efficacy and quality control requirements. Further, our business is subject to substantial risk because the current policies of

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regulators may change suddenly and unpredictably and in ways that could impair our ability to obtain regulatory approval of our products. We cannot guarantee that the regulatory authorities will approve our products on a timely basis or at all.

We may become subject to product liability claims, which could result in damages that exceed our insurance coverage.

We face an inherent risk of exposure to product liability suits in connection with products tested in human clinical trials or sold commercially. We may become subject to a product liability suit if any product we develop causes injury, or if individuals subsequently become infected or otherwise suffer adverse effects from our products. If a product liability claim is brought against us, the cost of defending the claim could be significant and any adverse determination could result in liabilities in excess of our insurance coverage. We cannot be certain that additional insurance coverage, if required, could be obtained on acceptable terms, if at all.

We may be subject to claims that our employees or we have wrongfully used or disclosed alleged trade secrets of their former employers.

As is commonplace in the biotechnology industry, we may employ individuals who were previously employed at other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although no claims against us are currently pending, we may be subject to claims that such future employees, or we, have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

Before we can seek regulatory approval of any product candidates, we may need to successfully complete clinical trials, outcomes of which are uncertain.

Conducting clinical trials is a lengthy, time-consuming, and expensive process, and the results of these trials are inherently uncertain. The time required to complete necessary clinical trials is often difficult, if not impossible, to predict. Our commencement and rate of completion of clinical trials may be delayed by many factors, including:

  • ineffectiveness of our product candidate or perceptions by physicians that the product candidate is not safe or effective for a particular indication;

  • inability to manufacture sufficient quantities of the product candidate for use in clinical trials;

  • delay or failure in obtaining approval of our clinical trial protocols from regulatory authorities or institutional review boards;

  • inability to adequately follow and monitor patients after treatment;

  • difficulty in managing multiple clinical sites;

  • unforeseen safety issues;

  • government or regulatory delays; and

  • clinical trial costs that are greater than we currently anticipate.

Even if we achieve positive interim results in clinical trials, these results do not necessarily predict final results, and positive results in early trials may not be indicative of success in later trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials, even after promising results in earlier trials. Negative or inconclusive results or adverse medical events during a clinical trial could cause us to repeat or terminate a clinical trial or require us to conduct additional trials. We do not know whether our existing or any future clinical trials will demonstrate safety and efficacy sufficiently to result in marketable products. Our clinical trials may be suspended at any time for a variety of reasons, including if regulatory authorities or we believe the patients participating in our trials are exposed to unacceptable health risks or if a regulator finds deficiencies in the conduct of these trials.

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Failures or perceived failures in our clinical trials will directly delay our product development and regulatory approval process, damage our business prospects, make it difficult for us to establish collaboration and partnership relationships, and negatively affect our reputation and competitive position in the pharmaceutical community.

The commercialization of our product candidates may not be profitable.

In order for the commercialization of our product candidates to be profitable, our products must be cost-effective and economical to manufacture on a commercial scale. Furthermore, if our products do not achieve market acceptance, we may not be profitable. Subject to regulatory approval, we expect to incur significant sales, marketing, and manufacturing expenses in connection with the commercialization of our product candidates. Even if we receive additional financing, we may not be able to complete planned clinical trials and the development, manufacturing, and marketing of any or all of our product candidates. Our future profitability will depend on many factors, including, but not limited to:

  • the cost and timing of developing a commercial scale manufacturing facility or the costs of outsourcing our manufacturing;

  • the costs of filing, prosecuting, defending, and enforcing any patent claims and other intellectual property rights;

  • the costs of establishing sales, marketing, and distribution capabilities;

  • the effect of competing technological and market developments; and

  • the terms and timing of any collaborative, licensing, and other arrangements that we may establish.

Even if we receive regulatory approval for our product candidates, including regulatory approval of a commercial scale manufacturing facility, we may not ever receive significant revenues from our product candidates. To the extent that we are not successful in commercializing our product candidates, our product revenues will suffer, we will incur significant additional losses and the price of our common stock will be negatively affected.

We will require additional capital in order to pursue our plan of operation. If we are not able to obtain further financing, our business operations may fail.

We had cash and cash equivalents in the amount of $204,012 and working capital of $56,672 as of August 31, 2009. Although we believe that we have funds sufficient to meet our immediate needs, we anticipate that we may require additional financing in order to pursue our plan of operation. We will likely secure any additional financing necessary through a private placement of our common shares. If additional funds are raised by issuing equity securities, further dilution to existing or future shareholders is likely to result. There can be no assurance that, if required, any such financing will be available upon terms and conditions acceptable to us, if at all. If adequate funds are not available on acceptable terms when needed, we may be required to delay, scale back or eliminate the development of our business. Our inability to obtain additional financing in a sufficient amount when needed and upon terms and conditions acceptable to us could have a materially adverse effect upon our company.

We have a history of losses and no revenues, which raises substantial doubt about our ability to continue as a going concern.

From incorporation to August 31, 2009, we have incurred aggregate net losses of $565,700 from operations. We can offer no assurance that we will ever operate profitably or that we will generate positive cash flow in the future. In addition, our operating results in the future may be subject to significant fluctuations due to many factors not within our control, such as the unpredictability of technology development, the demand for our products, the level of competition and general economic conditions.

Our company's operations will be subject to all risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of any significant operating history. No assurance can be given that we will be able to operate on a profitable basis.

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Due to the nature of our business and the early stage of our development, our securities must be considered highly speculative. We have not realized a profit from our operations to date and there is little likelihood that we will realize any profits in the short or medium term. Any profitability in the future from our business will be dependent upon the successful development of our technology into commercial products, which is itself subject to numerous risk factors described herein.

We expect to continue to incur development costs and operating costs. Consequently, we expect to incur operating losses and negative cash flows until our products gain market acceptance sufficient to generate a commercially viable sustainable level of sales, and/or additional products are developed and commercially released and sales of such products enable us to operate in a profitable manner.

A decline in the price of our common shares could affect our ability to raise further working capital and adversely impact our operations.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because our operations have been primarily financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our continued operations. Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and would have a significant negative effect on our business plans and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we may not be able to raise additional capital or generate funds from operations sufficient to meet our obligations.

We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease our ongoing business operations.

We have a limited operating history on which to base an evaluation of our business and prospects. Our prospects must be considered in light of the risks, uncertainties, expenses and difficulties frequently encountered by companies seeking to establish a new business. Some of these risks and uncertainties relate to our ability to identify, secure and complete the acquisition of a suitable healthcare technologies. We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition.

It is unlikely that we will generate any or significant revenues while we establish and develop our business. This may result in our company incurring a net operating loss which will increase continuously until we develop products that can generate revenues that result in a net profit to us. Our short and long-term prospects depend upon our ability to select and secure suitable healthcare technologies to develop. In order for us to make a profit, we will need to successfully develop acquired healthcare technologies into commercial products and generate revenues from such products in an amount sufficient to cover any and all future costs and expenses in connection with the development of such products. Even if we become profitable, we may not sustain or increase our profits on a quarterly or annual basis in the future.

Risks Associated with Our Common Stock

Trading of our stock may be restricted by the Securities and Exchange Commission’s penny stock regulations, which may limit a stockholder’s ability to buy and sell our stock.

The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and

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Exchange Commission, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

The Financial Industry Regulatory Authority, or FINRA, has adopted sales practice requirements which may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Our common stock is illiquid and the price of our common stock may be negatively impacted by factors which are unrelated to our operations.

Our common stock currently trades on a limited basis on the OTC Bulletin Board. Trading of our stock through the OTC Bulletin Board is frequently thin and highly volatile. There is no assurance that a sufficient market will develop in our stock, in which case it could be difficult for shareholders to sell their stock. The market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of our competitors, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On July 30, 2009, we granted options to purchase 2,000,000 common shares of our common stock to four persons who are all either directors or executive officers of our company pursuant to stock option agreements all dated July 30, 2009 in consideration for their continued services to our company. The options have an exercise price of $0.70 per share and expire on July 30, 2019. The options are subject to vesting provisions. We issued the stock options to non-U.S. persons (as that term is defined in Regulation S of the Securities Act of 1933) in an offshore transaction relying on Section 4(2) and/or Regulation S of the Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

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Item 5. Other Information

None.

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Item 6. Exhibits.

Exhibit
Number

Description of Exhibit
3.1

Certificate (Articles) of Incorporation (incorporated by reference from our Form SB-2 Registration Statement, as amended, originally filed on October 6, 2006)

3.2

Bylaws (incorporated by reference from our Form SB-2 Registration Statement, as amended, originally filed on October 6, 2006)

3.3

Certificate of Amendment filed with the Secretary of State of Nevada on September 10, 2007

3.4

Certificate of Amendment filed with the Secretary of State of Nevada on September 20, 2007

3.5

Certificate of Change filed with the Secretary of State of Nevada on September 20, 2007

4.1

Form of Share Certificate (incorporated by reference from our Form SB-2 Registration Statement, as amended, originally filed on October 6, 2006)

10.1

PayPal User Agreement (incorporated by reference from our Form SB-2 Registration Statement, as amended, originally filed on October 6, 2006)

10.2

Web Development Agreement with Rob Caruk (incorporated by reference from our Form SB-2 Registration Statement, as amended, originally filed on October 6, 2006)

10.3

Share Cancellation Agreement with Blair Law dated October 2, 2007 (incorporated by reference from our Annual Report on Form 10-K, filed on September 12, 2008)

10.4

Return to Treasury Agreement dated September 29, 2008 with Blair Law (incorporated by reference from our Current Report on Form 8-K, filed on October 2, 2008)

10.5

Return to Treasury Agreement dated September 29, 2008 with Blair Law Casting Corp. (incorporated by reference from our Current Report on Form 8-K, filed on October 2, 2008)

10.6

Form of Subscription Agreement with Julian Salari, Hassan Salari and VP Bank (Switzerland) Ltd. (incorporated by reference from our Quarterly Report on Form 10-Q, filed on May 14, 2009)

10.7

Research Agreement with Globe Laboratories Inc. dated March 15, 2009 (incorporated by reference from our Quarterly Report on Form 10-Q, filed on May 14, 2009)

14.1

Code of Ethics (incorporated by reference from our Annual Report on Form 10-K, filed on August 4, 2009)

31.1*

Certification of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*

Certification of Principal Financial Officer and Principal Accounting Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*

Certification of Principal Financial Officer and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

99.1

Audit Committee Charter (incorporated by reference from our Annual Report on Form 10-K, filed on August 4, 2009)

* Filed herewith.

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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 HEALTH VENTURES INC.

/s/ Hassan Salari  
By: Hassan Salari, President, Secretary,  
Treasurer, Chief Executive Officer and Director  
(Principal Executive Officer)  
Dated: October 15, 2009  
   
   
/s/ Audrey Lew  
By: Audrey Lew, Chief Financial Officer  
(Principal Financial Officer and  
Principal Accounting Officer)  
Dated: October 15, 2009  

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