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