UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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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, 2013

 

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

For the transition period from ______________ to _______________

 

Commission File Number 000-33271

 

GLOBAL BIOTECH CORP

(Exact name of registrant as specified in its charter)

 

DELAWARE (State of Incorporation)		98-0229951 (I.R.S. Employer Identification No.)
2711 Centreville Rd Suite 400 Wilmington, Delaware		19808
(Address of principal executive offices)		(Zip Code)

 

(302) 288-0658

(Registrant’s telephone number, including area code)

 

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

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large Accelerated filer [ ] Accelerated Filer [ ] Non-Accelerated Filer [ ] Smaller Reporting Company [x]

 

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

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

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

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

As of October 1, 2013, the aggregate market value of the issuer's common stock based on its reported price on the OTC held by non-affiliates of the issuer was approximately $1,544,739. 

 

As of October 1, 2013, the Registrant had 154,473,890 shares of Common Stock outstanding.

 

INDEX

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

Balance Sheets at August 31, 2013 (Unaudited) and November 30, 2012

Statements of Operations (Unaudited) for the Nine and Three months ended August 31, 2013 and August 31, 2012 and from Inception (November 2, 1998) to August 31, 2013.

Statement of Cash Flows (Unaudited) for the Nine months ended August 31, 2013 and August 31, 2012 and from Inception (November 2, 1998) to August 31, 2013.

Notes to the Financial Statements (Unaudited).

Item 2. Plan of Operations

Item 4T. Controls and Procedures

PART II: OTHER INFORMATION

Item b. Exhibits and Reports On Form

SIGNATURES

  

GLOBAL BIOTECH CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
		August 31, 2013				November 30, 2012
			(Unaudited)
ASSETS
Current Assets
Cash		$	23,535			$	7
Prepaid expenses			58,175				95,581
Short term investments			195,046				198160
Total current assets			276,756				293,748
Property & Equipment (Net)			86,430				86,430
Total Assets		$	363,186			$	380,178
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Bank overdraft		$	—			$	—
Accounts payables  and accrued liabilities			976,435				972,551
Notes Payable related party			45,244				46,352
Notes Payable			1,458,259				1,248,156
Total current liabilities			2,479,938				2,267,059
Stockholders' Equity
Preferred stock, $0.0001 par value authorized 80,000,000 shares 0 shares issued and outstanding August 31, 2013 and November 30, 2012			—				—
Common stock,  $0.0001 par value authorized 260,000,000 shares: issued and outstanding 82,073,890  August 31, 2013 and 82,073,890 November 30,2012			8,207				8,207
Paid in capital			1,667,790				1,667,790
Deficit accumulated during the development stage			(3,792,749	)			(3,562,878	)
Total Stockholders'  (Deficit) Equity			(2,116,752	)			(1,886,881	)
Total liabilities and Stockholders' Equity		$	363,186			$	380,178
See the accompanying notes to financial statements.

 

GLOBAL BIOTECH CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
		Three Months Ended August 31,2013				Three Months Ended August 31,2012				Nine Months Ended August 31,2013				Nine Months Ended August 31,2012				Inception to August 31,2013
Revenues:		$	—			$	—			$	—			$	—			$	944,811
Cost of Revenues:			—				—				—				—				603,063
			—				—				—				—				341,748
Operating Expenses:
Bad Debt Exp			—				—				—				—				120,844
Licensing rights			—				—				—				—				700,000
Depreciation Exp			—				—				—				—				73,274
Marketing			30,273				—				30,273				—				266,539
Professional Fees			2,000				2,000				6,000				6,000				231,295
Selling, general and administrative			46,854				13,336				179,552				39,978				1,911,283
Total Operating Expenses			79,127				15,336				215,825				45,978				3,303,235
(Loss) before other income (expense)			(79,127	)			(15,336	)			(215,825	)			(45,978	)			(2,961,487	)
Other income (expense):
Other  income			—				—				—				—				85,005
Foreign exchange gain (loss)			11,269				(15,878	)			30,531				(15,878	)			(18,665	)
Interest income			2,402				2,287				7,206				6,861				144,395
Interest Expense			(16,789	)			(17,249	)			(51,783	)			(51,011	)			(560,521	)
Gain on Sale of Investment			—				—				—				—				359,583
Impairment Loss			—				—				—				—				(849,831	)
Write down - leasehold improvements			—				—				—				—				(2,663	)
Write down - Notes receivable			—				—				—				—				11,435
Total other income (Expense)			(3,118	)			(30,840	)			(14,046	)			(60,028	)			(831,262	)
Net (Loss)		$	(82,245	)		$	(46,176	)		$	(229,871	)		$	(106,006	)		$	(3,792,749	)
Basic weighted avg. common shares outstanding			82,073,890				82,073,890				82,073,890				82,073,890
Basic and Diluted (Loss) per common share		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
See the accompanying notes to financial statements.

GLOBAL BIOTECH CORP.
(A DEVELOPMENT STAGE COMPANY)
Statement of Cash Flows (Unaudited)
										From Inception
		Nine months ended								(November 2, 1998)
		August 31, 2013				August 31, 2012				to August 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)		$	(229,871	)		$	(106,006	)		$	(3,792,749	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation expense			—				—				73,274
Common stock issued for services			—				—				436,143
Gain on sale of Investment											(359,583	)
Impairment Loss			—				—				849,831
Write down of leasehold improvements			—				—				2,663
Write down of notes receivable			—				—				(11,435	)
Accrued interest expense - note payable			51,783				51,011				451,033
Accrued interest income - note receivable			(7,206	)			(6,861	)			(138,869	)
Changes in operating assets and liabilities
(Increase) Decrease  - accounts  receivable/prepaids			37,406				37,401				(58,175	)
(Increase) Decrease in notes receivable			10,320				(5,069	)			(455,868	)
Increase (decrease) - accounts payable			3,884				11,367				976,435
Net Cash Provided by (used in) Operating Activities			(133,684	)			(18,157	)			(2,027,300	)
Cash Flows from Investing Activities
Net sale (purchase of fixed assets			—				—				(60,937	)
Purcase of short term investments			—				—				(168,560	)
Proceeds from sale of investment shares			—				—				489,061
Net Cash Provided by (used in) Investing Activities			—				—				259,564
Cash Flows from Financing Activities
Bank Advances			—				2				—
Issue of Common stock			—				—				156,262
Payment of common stock subscription receivable			—				—				206,239
Proceeds from notes payable & related party			157,212				18,146				1,428,770
Net Cash provided by  (used in) Financing Activities			157,212				18,148				1,791,271
Net Increase (Decrease) in Cash			23,528				(9	)			23,535
Cash at Beginning of Period			7				9				—
Cash at End of Period		$	23,535			$	—			$	23,535
Supplemental Cash Flow Disclosures:
Cash paid during period for interest
Cash paid during period for taxes
See accompanying notes to Financial Statements

 GLOBAL BIOTECH CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

AUGUST 31, 2013

(UNAUDITED)

  

NOTE 1 – BASIS OF PRESENTATION

 

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

 

These financial statements should be read in conjunction with the audited financial statements and footnotes thereto included for the year ended November 30, 2012 for GLOBAL BIOTECH CORP. on form 10 K as filed with the Securities and Exchange Commission.

 

The preparation of financial statements in conformity with generally accepted accounting principles of United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and that effect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Earnings (Loss) Per Share

 

The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. Basic earnings (loss) per Common share ("EPS") calculations are determined by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earning per common share calculations are determined by dividing net income (loss) by the weighted average number of common shares and dilutive common share equivalents outstanding. During the periods presented common stock equivalents were not considered, as their effect would be anti-dilutive.

 

Recent Accounting Pronouncements

 

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

  

NOTE 3 – GOING CONCERN

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The company reported net losses of $82,245 and $229,871 for the three months and nine months ended August 31, 2013 as well as reporting net losses of $3,792,749 from inception (November 2, 1998) to August 31, 2013. At August 31, 2013 the Company had negative working capital of $2,203,182 and stockholders’ deficit of $2,116,752. This condition raises substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

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

GLOBAL BIOTECH CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

AUGUST 31, 2013

(UNAUDITED)

 

NOTE 4. SHORT TERM INVESTMENT

 

As of August 31, 2013, the Company had purchased a term deposit in the amount of CAD172,000 (USD 163,400), bearing interest rate of 5%, maturing on November 6, 2013. As of August 31, 2013, the Company accrued 31,646 USD of interest income. No withdrawals allowed for first 90 days and 90 days early withdrawal notice needed. Early withdrawal interest rate - 1 ½%.

  

NOTE 5. PROPERTY & EQUIPMENT

 

On August 15, 2007 the Company acquired Oxygenation Equipment with a cost of $605,000 in exchange for common shares.

 

		August 31,				November 30,
		2013				2012
Oxygenation equipment		$	605,000			$	605,000
Less: Impairment Loss			518,570				518,570
Net Property and Equipment		$	86,430			$	86,430

 

NOTE 6. NOTE PAYABLE TO RELATED PARTY

 

Note payable to related party as of August 31, 2013 and November 30, 2012 consist of the following:

		August 31, 2013		November 30, 2012
Due to an officer, unsecured, non-interest bearing		$45,244		$46,352

 

NOTE 7. NOTES PAYABLE

 

Note payable as of August 31, 2013 and November 30, 2012 consist of the following:

		August 31, 2013				November 30, 2012
Note payable to: Millenia Hope Inc. unsecured, with annual interest rate 7%.		$	640,895			$	608,392
Third parties, unsecured with annual interest of 4%, commencing July 1, 2009			104,147				107,063
Convertible note payable  to third parties with annual interest of 2%,commencing March 1, 2011 Loan is convertible to common shares of Global Biotech at par to the lowest daily trading price of the shares on the conversion request date			204,328				213,612
Third parties, unsecured ,non-interest bearing			190,000
Convertible note payable  to third parties with annual interest of 8%,commencing April 30,2009 Loan is convertible to common shares of Global Biotech at the lesser of $1.00 per share or the average closing price of the shares for the 5 business days prior to conversion			318,889				319,089
		$	1,458,259			$	1,248,156

  

There are no beneficial conversion features because the Company has conversion right.

GLOBAL BIOTECH CORP.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE INTERIM FINANCIAL STATEMENTS

AUGUST 31, 2013

(UNAUDITED)

  

NOTE 8. STOCKHOLDERS' EQUITY

  

The stockholders' equity section of the Company contains the following classes of capital stock as of August 31, 2013 and November 30, 2012:

 

Common stock, $ 0.0001 par value; 260,000,000 shares and 260,000,000 shares authorized August 31, 2013 and November 30, 2012 : 82,073,890 shares issued and outstanding as of August 31, 2013 and November 30, 2012.

 

Preferred Stock, $0.0001 par value; 80,000,000 shares authorized August 31, 2013 and November 30, 2012. Zero (0) shares issued and outstanding as of August 31, 2013 and November 30, 2012.

 

NOTE 9 - SUBSEQUENT EVENTS

 

In accordance with ASC 855, Subsequent Events, the Company has evaluated subsequent events through the date of issuance of the unaudited interim financial statements.

 

As of September 10, 2013, Global acquired from Purthanol International all the intellectual property, process know-how and methodology, etc. for the production of Athanol, a green- technology ethanol fuel alternative, produced via the Purthanol Process. Further, the Company has acquired purchase orders of $28.5 million USD for the purchase of ethanol or Athanol from Purthanol International, delivery within the ensuing 12 months. Any other revenue generated via the Purthanol Process, will belong wholly and solely to Global as of the signing of this Agreement. The consideration for the above was 70 million (70,000,000) restricted common shares, valued at $0.01 per share or $700,000 USD.

 

On September 23, 2013 Global issued 2.4 million restricted common shares, valued at $24,000, in settlement of consulting services rendered.

 

 

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

 

Special Note Regarding Forward-Looking Statements

 

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

 

Plan of Operation.

 

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

 

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

 

We set a conservative sales objective for our product, but no assurances can be given that the Company will meet their goals. The Company will also attempt to engage in partnering with other beverage distributors or leasing its technology for royalties in those regions and for those products where it will not negatively impact on potential AquaBoost™ sales.

 

GLOBAL BIOTECH CORP. ("GLOBAL"), formerly (SWORD COMP-SOFT CORP.) was organized on November 2, 1998. Its goal was to bring interactive healthcare information services utilizing the Internet to the consumer, the end user, to access what they, as individuals, need. As of March 5, 2003 this business was sold along with the assumption of a note payable in the amount of $700,000 to Millenia Hope Inc., its former parent corporation. In exchange, GLOBAL received 30.7 million shares of its outstanding common shares held by Millenia Hope Inc. Subsequently, GLOBAL acquired the exclusive 10 year North American licensing rights to a vehicle tracking system in exchange for 30.7 million of its common shares. As of February 24, 2005, GLOBAL’s Board of Directors concluded that its attempt to enter the vehicle tracking business was unsuccessful and entered into an agreement with Advanced Fluid Technologies Inc., on August 15, 2007, to acquire its assets pursuant to entering the oxygenated bottled water, market.

 

GLOBAL’s goal is to position AquaBoost(TM), the bottled oxygenated water product it acquired, as an energizing alternative to soft drinks and as a beverage with more health benefits than ordinary water. To date, the aforementioned product has had minimal sales and the Company will endeavor, but can offer no guarantees, to raise its sales level significantly.

 

As of September 10, 2013, Global acquired from Purthanol International all the intellectual property, process know-how and methodology, etc. for the production of Athanol, a green- technology ethanol fuel alternative, produced via the Purthanol Process. Further, the Company has acquired purchase orders of $28.5 million USD for the purchase of ethanol or Athanol from Purthanol International, delivery within the ensuing 12 months. Any other revenue generated via the Purthanol Process, will belong wholly and solely to Global as of the signing of this Agreement. The consideration for the above was 70 million (70,000,000) restricted common shares, valued at $0.01 per share or $700,000 USD.

  

On September 16, 2013 the Company sold its first license to the rights to utilize the Purthanol process for the production of Athanol for the Province of Quebec, Canada. Mr. Yvon Brin purchased the license on behalf of a newly formed corporation, Purthanol Quebec, that now owns this license.

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

 

On July 3, 2013 Mr. Leonard Stella joined the Company as its CEO and a Director.

 

On July 3, 2013 Mr. Yehuda Kops joined the Company as its CFO and a Director.

 

On September 3, 2013 Mr. Louis Greco resigned and Mr. Louis Pharand took his position in the Company as its President and a Director.

 

On September 3, 2013 Mr. Serge Mersilian joined the Company as its Director of Communications.

 

Three months ended August 31, 2013 compared to August 31, 2012.

 

Marketing costs were $30,273 in 2013 and $0 in 2012, as we are embarking in getting our latest product, Athanol, into as many relationships and markets as possible. Professional, selling, general and administrative in 2013 was $48,854 and $15,336 in 2012, a difference of $33,518. This was primarily due to an additional $23,080 of consulting fees, again as we position our product and reorient the Company. Also we had $4,961 in additional regulatory fees, primarily bringing the franchise taxes to date, and higher office and other SG&A expenses.

 

We had net interest expense, on our loans, of $14,387 in 2013 and $14,962 in 2012 and $15,878 of foreign exchange losses in 2012 vs. a gain of $11,269 in 2013.

 

As a result of the above, we had a net loss of $82,245 in 2013 and $46,176 in 2012.

 

Nine months ended August 31, 2013 compared to August 31, 2012.

 

Marketing costs were $30,273 in 2013 and $0 in 2012, as we are embarking in getting our latest product, Athanol, into as many relationships and markets as possible. Professional, selling, general and administrative in 2013 was $185,552 and $45,978 in 2012, a difference of $139,574. This was primarily due to an additional $100,000 in administrative fees and $6,000 of auto expenses, as agreed to by a Resolution of the Board vs. none in 2012. Also, an additional $23,080 of consulting fees, again as we position our product and reorient the Company. Also we had $4,961 in additional regulatory fees, primarily bringing the franchise taxes to date, and higher office and other SG&A expenses.

 

We had net interest expense, on our loans, of $44,577 in 2013 and $44,150 in 2012 and $15,878 of foreign exchange losses in 2012 vs. a gain of$30,531 in 2013.

 

As a result of the above, we had a net loss of $229,871 in 2013 and$106,006 in 2012.

 

Liquidity and cash flow needs of the company

 

From June 1, 2013 to August 31, 2013 the company used $133,684 from operating activities while recording no revenues. From September 1, 2013 to November 30, 2013, the fiscal year- end, the company’s net cash flow needs will be $280,000.

 

Item 4T. CONTROLS AND PROCEDURES QUARTERLY EVALUATION OF THE COMPANY’S DISCLOSURE CONTROLS AND INTERNAL CONTROLS.

 

As of October 1, 2013, the date of the report, our Principal Executive Officer, (CEO) and Chief Financial Officer (CFO) evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 13a -15(e) under the Securities Exchange act of 1934, as amended. Based upon that evaluation, the Principal Executive and Financial Officer concluded that, as of August 31, 2013, the Company’s disclosure controls and procedures are effective.

 

Further, there was no change during the last quarter in the Company’s internal control over financial reporting that has materially affected or is likely to materially affect, the Company’s internal control over financial reporting.

 

Part II other information

 

Item 2: Sales of Unregistered securities

 

None

 

Item (6) Reports on Form 8-K

 

Changes in Principal Officers and Directors

 

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.

 

Date: October 3, 2013	By: /s/ Leonard Stella
	Leonard Stella , CEO
	Principal Executive Officer