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 endedNovember 30, 2008
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 number333-137888
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 [ ] No [X]
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] |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date
60,722,000 common shares issued and outstanding as of January 20, 2009
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
In the opinion of management the interim financial statements for the quarter ended November 30, 2008 include all adjustments necessary in order to ensure that the interim financial statements are not misleading.
3
| Global Health Ventures Inc. |
| (formerly Goldtown Investments Corp.) |
| (A Development Stage Company) |
| November 30, 2008 |
| (Unaudited) |
| Index | |
| Consolidated Balance Sheets | F-1 |
| Consolidated Statements of Operations | F-2 |
| Consolidated Statements of Cash Flows | F-3 |
| Notes to the Consolidated Financial Statements | F-4 |
F-1
| Global Health Ventures Inc. |
| (formerly Goldtown Investments Corp.) |
| (A Development Stage Company) |
| Consolidated Balance Sheets |
| (Expressed in US Dollars) |
| November 30, | May 31, | |||||
| 2008 | 2008 | |||||
| $ | $ | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Current Assets | ||||||
| Cash | 785 | 5,726 | ||||
| Total Assets | 785 | 5,726 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||
| Current Liabilities | ||||||
| Accounts payable | 8,590 | 5,220 | ||||
| Accrued liabilities (Note 3) | 300 | 3,337 | ||||
| Due to related party (Notes 4(a) and (b)) | 116,792 | 85,194 | ||||
| Current portion of loan payable (Note 5) | - | 1,751 | ||||
| Total Current Liabilities | 125,682 | 95,502 | ||||
| Loan payable (Note 5) | - | 3,106 | ||||
| Total Liabilities | 125,682 | 98,608 | ||||
| Commitments and Contingencies (Notes 1 and 5) | ||||||
| Stockholders’ Deficit | ||||||
| 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 | ||||||
| 60,722,000 shares issued and outstanding (May 31, 2008 – 60,522,000 shares) | 6,072 | 6,052 | ||||
| Additional Paid-In Capital | 18,678 | 17,698 | ||||
| Donated Capital (Note 4(c)) | 23,250 | 18,750 | ||||
| Deficit Accumulated During the Development Stage | (172,897 | ) | (135,382 | ) | ||
| Total Stockholders’ Deficit | (124,897 | ) | (92,882 | ) | ||
| Total Liabilities and Stockholders’ Deficit | 785 | 5,726 |
(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 Operations |
| (Expressed in US Dollars) |
| (Unaudited) |
| Accumulated from | ||||||||||
| Three Months | Three Months | Six Months | Six Months | April 25, 2006 | ||||||
| Ended | Ended | Ended | Ended | (Date of inception) | ||||||
| November 30 | November 30, | November 30, | November 30, | to November 30, | ||||||
| 2008 | 2007 | 2008 | 2007 | 2008 | ||||||
| $ | $ | $ | $ | $ | ||||||
| Revenue | – | 27 | – | 27 | – | |||||
| Expenses | ||||||||||
| General and administrative (Note 4(c)) | (1,388 | ) | 5,955 | (515 | ) | 8,216 | 54,230 | |||
| Interest expense | 52 | 130 | 147 | 263 | 905 | |||||
| Professional fees | 20,708 | 19,897 | 37,883 | 35,682 | 117,762 | |||||
| Total Expenses | 19,372 | 25,982 | 37,515 | 44,161 | 172,897 | |||||
| Net Loss | (19,372 | ) | (25,955 | ) | (37,515 | ) | (44,134 | ) | (172,897 | ) |
| Net Loss Per Share – Basic and Diluted | – | – | – | – | ||||||
| Weighted Average Shares Outstanding | 60,657,000 | 93,507,000 | 60,590, 000 | 124,080,000 |
(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) |
| Statements of Consolidated Cash Flows |
| (Expressed in US Dollars) |
| (Unaudited) |
| Six Months | Six months | |||||
| Ended | Ended | |||||
| November 30, | November 30, | |||||
| 2008 | 2007 | |||||
| $ | $ | |||||
| Operating Activities | ||||||
| Net loss for the period | (37,515 | ) | (44,134 | ) | ||
| Adjustment to reconcile net loss to net cash used in operating | ||||||
| activities: | ||||||
| Donated services | 4,500 | 4,500 | ||||
| Change in operating assets and liabilities: | ||||||
| Accounts payable and accrued liabilities | 333 | 14,131 | ||||
| Due to related party | 15,621 | - | ||||
| Deferred revenue | - | 206 | ||||
| Net Cash Used In Operating Activities | (17,061 | ) | (25,297 | ) | ||
| Financing Activities | ||||||
| Payment of share offering costs | 1,000 | - | ||||
| Advances from a related party | 17,684 | 21,177 | ||||
| Repayments to a related party | (1,707 | ) | (13,000 | ) | ||
| Proceeds from issuance of common stock | - | - | ||||
| Proceeds from loan payable | - | - | ||||
| Repayments of loan payable | (4,857 | ) | (730 | ) | ||
| Net Cash Provided by (Used In) Financing Activities | 12,120 | 7,447 | ||||
| Effect of exchange rate changes on cash | - | 446 | ||||
| Decrease in Cash | (4,941 | ) | (17,404 | ) | ||
| Cash – Beginning of Period | 5,726 | 18,939 | ||||
| Cash - End of Period | 785 | 1,535 | ||||
| Supplemental Disclosures | ||||||
| Interest paid | 52 | 263 | ||||
| Income taxes paid | – | – |
(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 |
| November 30, 2008 |
| (Unaudited) |
| 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. As at November 30, 2008, the Company has a working capital deficit of $124,897 and accumulated losses of $172,897 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. These factors raise substantial doubt regarding the Company’s ability 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 represent the consolidation of the Company and its wholly-owned subsidiary, Global Health (BC) Ventures Inc. The Company’s fiscal year-end is May 31. | ||
| b) | Interim Consolidated Financial Statements | |
The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these interim unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended May 31, 2008, included in the Company’s Annual Report on Form 10-K filed on September 15, 2008 with the SEC. | ||
The consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s consolidated financial position at November 30, 2008 and May 31, 2008, and the consolidated results of its operations and consolidated cash flows for the six months ended November 30, 2008 and 2007. The results of operations for the six months ended November 30, 2008 are not necessarily indicative of the results to be expected for future quarters or the full year. | ||
F-5
| Global Health Ventures Inc. |
| (formerly Goldtown Investments Corp.) |
| (A Development Stage Company) |
| Notes to the Consolidated Financial Statements |
| November 30, 2008 |
| (Unaudited) |
| 2. | Summary of Significant Accounting Policies (continued) | |
| 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. | ||
| 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. As at November 30, 2008 and 2007 the Company has no items that represent a comprehensive loss and, therefore, has not included a schedule of comprehensive loss 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) | 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 |
| November 30, 2008 |
| (Unaudited) |
| 2. | Summary of Significant Accounting Policies (continued) | |
| i) | Financial Instruments | |
The fair value of financial instruments, which include cash, accounts payable, accrued liabilities 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. | ||
| j) | Income Taxes | |
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted SFAS No. 109,“Accounting for Income Taxes”, as of its inception. Pursuant to SFAS No. 109 the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years. | ||
| k) | Foreign Currency Translation | |
The Company’s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated in accordance with SFAS No. 52 “Foreign Currency Translation”using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financials statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. | ||
| l) | Stock-based Compensation | |
In accordance with SFAS 123R,“Share Based Payments”, the Company accounts for share-based payments using the fair value method. The Company has not issued any stock options or share based payments since its inception. 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. | ||
| m) | Recent Accounting Pronouncements | |
In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,“Accounting for Financial Guarantee Insurance Contracts – An interpretation of FASB Statement No. 60”.SFAS 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk- management activities. SFAS 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company’s financial statements. | ||
In May 2008, the FASB issued SFAS No. 162,“The Hierarchy of Generally Accepted Accounting Principles”. | ||
SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement is not expected to have a material effect on the Company’s financial statements. | ||
F-7
| Global Health Ventures Inc. |
| (formerly Goldtown Investments Corp.) |
| (A Development Stage Company) |
| Notes to the Consolidated Financial Statements |
| November 30, 2008 |
| (Unaudited) |
| 2. | Summary of Significant Accounting Policies (continued) | |
| n) | Recent Accounting Pronouncements (continued) | |
In March 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment to FASB Statement No. 133”.SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of this statement is not expected to have a material effect on the Company’s financial statements. | ||
In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 141R, “Business Combinations”. This statement replaces SFAS 141 and defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS 141R also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements. | ||
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements Liabilities –an Amendment of ARB No. 51”. This statement amends ARB 51 to establish accounting and reporting standards for the Noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on the Company's financial statements. | ||
Recently Adopted Accounting Pronouncements | ||
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115”. This statement permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments in Debt and Equity Securities” applies to all entities with available- for-sale and trading securities. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157, “Fair Value Measurements”.The adoption of this statement did not have a material effect on the Company's financial statements. | ||
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The objective of SFAS No. 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement did not have a material effect on the Company's financial statements. | ||
F-8
| Global Health Ventures Inc. |
| (formerly Goldtown Investments Corp.) |
| (A Development Stage Company) |
| Notes to the Consolidated Financial Statements |
| November 30, 2008 |
| (Unaudited) |
| 3. | Accrued Liabilities |
| November 30, | May 31, | |||||
| 2008 | 2008 | |||||
| $ | $ | |||||
| (unaudited) | ||||||
| Accrued interest | - | 37 | ||||
| Professional fees | 300 | 3,300 | ||||
| 300 | 3,337 |
| 4. | Related Party Transactions | |
| a) | During the six month period ended November 30, 2008, the former President advanced $Nil (2007 - $21,177) to the Company, was repaid $1,707 (2007 - $13,000) by the Company and incurred $4,970 (2007 - $Nil) of expenses on behalf of the Company. On September 29, 2008, an amount of $85,194 was owed to the former President of the Company who assigned the full amount to the President of the Company. | |
| b) | During the six month period ended November 30, 2008, the President of the Company advanced $17,684 (2007 - $Nil) to the Company and incurred $10,651 (2007 - $Nil) of expenses on behalf of the Company. At November 30, 2008, the Company owes $116,792 (May 31, 2008 - $Nil) to the President of the Company, and the amount is unsecured, bears no interest, and has no terms of repayment | |
| c) | During the six month period ended November 30, 2008, the Company recognized a total of $3,000 (2007 - $3,000) for donated services at $500 per month (2007 - $500) and $1,500 (2007 - $1,500) for donated rent at $250 per month provided by the President of the Company. | |
| d) | On September 30, 2008, the Company issued 10,000,000 common shares at $0.0001 per share for gross proceeds of $1,000 to a company controlled by the President of the Company. | |
| 5. | Loan Payable | |
On December 1, 2006, the Company obtained an unsecured bank loan in the amount of $6,234 (CDN$7,100), bearing interest at 8.75% per annum, and due December 1, 2010. The loan is repayable by 48 monthly payments of CDN$176, including principal and interest. During the six month period ended November 30, 2008, the Company made full payment of the outstanding principal of $4,857. | ||
| 6. | Common Shares | |
| a) | On September 30, 2008, the former President of the Company returned, and the Company cancelled, 9,800,000 issued and outstanding common shares of the Company for no consideration. | |
| b) | On September 30, 2008, the Company issued 10,000,000 common shares at $0.0001 per share for gross proceeds of $1,000 to a company controlled by the President of the Company. | |
| 7. | Subsequent events | |
| a) | On January 2, 2009, the Company agreed to convert the outstanding amount of $115,000 owed to the President of the Company by the issuance of 460,000 units at $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 of $0.40 per share expiring January 5, 2010. On January 5, 2009, the President converted the amount owed to 460,000 units of the Company as full settlement. | |
| b) | On January 5, 2009, the Company completed a private placement to issue 1,540,000 units of the Company at $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 additional 1,540,000 common shares at an exercise of $0.40 per share expiring January 5, 2010. | |
F-9
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 under 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 new common shares for every one 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, Hassan Salari was appointed as our president, secretary, chief executive officer and chief financial officer.
On September 30, 2008, the former President of the Company returned, and the Company cancelled, 9,800,000 issued and outstanding common shares of the Company for no consideration.
On September 30, 2008, the Company issued 10,000,000 common shares at $0.0001 per share for gross proceeds of $1,000 to a company controlled by the President of the Company.
4
On September 30, 2008, the Company incorporated Global Health Ventures Inc. (“Global Health”) under the laws of the State of Nevada as its wholly-owned subsidiary.
On October 2, 2008, our former president returned, and our company cancelled, 9,800,000 issued and outstanding common shares of our company for no consideration.
On October 6, 2008, the Company filed the Agreement and Plan of Merger with the State of Nevada to merge Global Health Ventures Inc. with and into the Company. Upon the effective date of the merger, the Company changed its name to Global Health Ventures Inc. The Company’s common shares trade on the Over The Counter Bulletin Board (OTCBB) under the symbol “GHLV”.
On January 2, 2009, the Company agreed to convert the outstanding amount of $115,000 owed to the President of the Company by the issuance of 460,000 units at $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 of $0.40 per share expiring January 5, 2010.
On January 5, 2009, the President converted the amount owed to 460,000 units of the Company. Also on January 5, 2009, the Company completed a private placement to issue 1,540,000 units of the Company at $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 additional 1,540,000 common shares at an exercise of $0.40 per share expiring January 5, 2010.
Current Business
We are a development stage company in biopharmaceutical field, developing opportunities which we plan to acquire through licensing or merger with other established business entities. In certain instances, a target business may wish to become a subsidiary of us or may wish to contribute assets to us rather than merge. We anticipate that any new acquisition or business opportunities by our company will require additional financing. 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.
We may seek a business opportunity with entities who have recently commenced operations, or entities who wish to utilize the public marketplace in order to raise additional capital in order to expand business development activities, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.
In implementing a structure for a particular business acquisition or opportunity, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. Upon the consummation of a transaction, it is likely that our present management will no longer be in control of our company. In addition, it is likely that our officers and directors will, as part of the terms of the acquisition transaction, resign and be replaced by one or more new officers and directors.
As of the date hereof, management has not entered into any formal written agreements for a business combination or opportunity. When any such agreement is reached, we intend to disclose such an agreement by filing a current report on Form 8-K with the Securities and Exchange Commission.
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RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read together with the unaudited interim consolidated financial statements and the notes to the unaudited interim consolidated 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 six month periods ended November 30, 2008 and November 30, 2007
Our interim consolidated financial statements report a net loss of $37,515 for the six month period ended November 30, 2008 as compared to a net loss of $44,134 for the six month period ended November 30, 2007. Our accumulated net losses for the period from April 26, 2006, our date of inception, to November 30, 2008 was $172,897.
As of November 30, 2008, we had a working capital deficit of $124,897. Our total liabilities as of November 30, 2008 were $125,682, as compared to total liabilities of $98,608 as of November 30, 2007. The change was due primarily to increase in due to related parties of $31,598, and an increase in accounts payable of $3,370 for professional fees.
Cash Flow Used in Operating Activities
Operating activities used cash of $17,061 for the six month period ended November 30, 2008, compared to using $5,073 for the six month period ended November 30, 2007. The decrease in cash used during the six month period ended November 30, 2008 was commensurate with an increase in due to related parties of $15,621.
Cash Flow Provided by Financing Activities
Financing activities provided cash of $12,120 for the six month period ended November 30, 2008 compared to using cash of $10,361for the six month period ended November 30, 2007.
Liquidity and Capital Resources
We had cash of $785 and current liabilities of $125,682 as of November 30, 2008. We had a working capital deficit of $124,897 as of November 30, 2008.
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 November 30, 2009.
We incurred a loss of $37,515 for the six month period ended November 30, 2008. As indicated above, our estimated working capital requirements and projected operating expenses for the next twelve month period total $200,000. Although we will have sufficient funds to carry out our operation for the next twelve month period, we shall 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.
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We expect to require a total of approximately $200,000, as set out as follows to fully carry out our business plan over the next twelve months beginning December 2008. Our expenditures for the next twelve months include:
| Our cost to | |||
| complete | |||
| Description | $ | ||
| Development and acquisition of new business opportunities | 50,000 | ||
| Legal and Accounting Consultants | 50,000 | ||
| General Administration and working capital | 100,000 | ||
| Total | 200,000 |
We do not anticipate enough positive internal operating cash flow until we can generate substantial revenues, which may take the next few years to fully realize depending on the type of business we acquire. Still, 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 external sources: 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 enough money through future capital raising efforts, we may review other financing
We have generated no revenues and incurred significant operating losses from operations. Since we anticipate we will expand operational activities, 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
Unless we are successful in acquiring financing and business opportunities in the biotech field, we do not anticipate that we will spend any significant monies on research and development over the twelve month period ending November 30, 2009.
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Purchase of Significant Equipment
We do not intend to purchase any significant equipment over the twelve month period ending November 30, 2009.
Off-Balance Sheet Arrangements
As of November 30, 2008, 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
We currently have no employees, other than our sole officer and director, and we do not expect to hire any employees in the foreseeable 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 the annual financial statements for the year ended May 31, 2008, 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. Our significant accounting policies are also disclosed in the notes to our audited financial statements for the year ended May 31, 2008 included in our Annual Report on Form 10-K filed with the SEC on September 15, 2008.
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.
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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.
Stock-based Compensation
In accordance with SFAS 123R,“Share Based Payments”, our company accounts for share-based payments using the fair value method. Our company has not issued any stock options or share based payments since its inception. 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 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,“Accounting for Financial Guarantee Insurance Contracts – An interpretation of FASB Statement No. 60”.SFAS 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration has occurred in an insured financial obligation. It also clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk-management activities. SFAS 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted. The adoption of this statement is not expected to have a material effect on the Company’s financial statements.
In May 2008, the FASB issued SFAS No. 162,“The Hierarchy of Generally Accepted Accounting Principles”. SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The adoption of this statement is not expected to have a material effect on our company’s financial statements.
In March 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities – an amendment to FASB Statement No. 133”.SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity's financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures
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about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of this statement is not expected to have a material effect on our company’s financial statements.
In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 141R, “Business Combinations”. This statement replaces SFAS 141 and defines the acquirer in a business combination as the entity that obtains control of one or more businesses in a business combination and establishes the acquisition date as the date that the acquirer achieves control. SFAS 141R requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at the acquisition date, measured at their fair values as of that date. SFAS 141R also requires the acquirer to recognize contingent consideration at the acquisition date, measured at its fair value at that date. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on our company's financial statements.
In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements Liabilities –an Amendment of ARB No. 51”. This statement amends ARB 51 to establish accounting and reporting standards for the Non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this statement is not expected to have a material effect on our company's financial statements.
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No. 115”. This statement permits entities to choose to measure many financial instruments and certain other items at fair value. Most of the provisions of SFAS No. 159 apply only to entities that elect the fair value option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments in Debt and Equity Securities” applies to all entities with available-for-sale and trading securities. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provision of SFAS No. 157, “Fair Value Measurements”. The adoption of this statement did not have a material effect on our company's financial statements.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The objective of SFAS No. 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS No. 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The adoption of this statement did not have a material effect on our company's financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable.
Item 4T. 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
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Commission's rules and forms, and that such information is accumulated and communicated to our management, including our President (who is also our Secretary) 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 November 30, 2008, 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 Secretary), of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our President (who is also our Secretary) concluded that our disclosure controls and procedures were effective as of the end of the period covered by this quarterly report.
There have been no significant changes in our internal controls over financial reporting that occurred during the six month period ended November 30, 2008 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.
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
Scarcity of and Competition for Business Opportunities and Combinations
We are, and will continue to be, an insignificant participant amongst numerous other companies seeking a suitable business opportunity or business combination. A large number of established and well-financed entities, including venture capital firms, are actively seeking suitable business opportunities or business combinations which may also be desirable target candidates for us. Virtually all such entities have significantly greater financial resources, technical expertise and managerial capabilities than we do. We
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are, consequently, at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. We will also compete with numerous other small public companies seeking suitable business opportunities or business combinations.
We have had negative cash flows from operations and if we are not able to obtain further financing, our business operations may fail.
We had cash in the amount of $785 and a working capital deficit of $124,897 as of November 30, 2008. We anticipate that we may require additional financing while we are seeking a suitable business opportunity or business combination. We may be required to raise additional financing for a particular business combination or business opportunity. We would likely secure any additional financing necessary through a private placement of our common shares.
There can be no assurance that, if required, any such financing will be available upon terms and conditions acceptable to us, if at all. 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. Although we believe that we have funds sufficient to meet our immediate needs, we may require further funds to finance the development of any business opportunity that we acquire. There can be no assurance that such funds will be available or available on terms satisfactory to us. If additional funds are raised by issuing equity securities, further dilution to existing or future shareholders is likely to result. If adequate funds are not available on acceptable terms when needed, we may be required to delay, scale back or eliminate the development of any business opportunity that we acquire.
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 acquire or establish a new business opportunity. Some of these risks and uncertainties relate to our ability to identify, secure and complete an acquisition of a suitable business opportunity.
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. In addition, our operating results are dependent to a large degree upon factors outside of our control. There are no assurances that we will be successful in addressing these risks, and failure to do so may adversely affect our business.
It is unlikely that we will generate any or significant revenues while we seek a suitable business opportunity. Our short and long-term prospects depend upon our ability to select and secure a suitable business opportunity. In order for us to make a profit, we will need to successfully acquire a new business opportunity in order to generate revenues in an amount sufficient to cover any and all future costs and
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expenses in connection with any such business opportunity. Even if we become profitable, we may not sustain or increase our profits on a quarterly or annual basis in the future.
We will, in all likelihood, sustain operating expenses without corresponding revenues, at least until we complete a business combination or acquire a business opportunity. This may result in our company incurring a net operating loss which will increase continuously until we complete a business combination or acquire a business opportunity that can generate revenues that result in a net profit to us. There is no assurance that we will identify a suitable business opportunity or complete a business combination.
No Agreement for Business Combination or Other Transaction/No Standards for Business Combination.
We have no arrangement, agreement, or understanding with respect to acquiring a business opportunity or engaging in a business combination with any private entity. There can be no assurance that we will successfully identify and evaluate suitable business opportunities or conclude a business combination. There is no assurance that we will be able to negotiate the acquisition of a business opportunity or a business combination on terms favorable to us. We have not established a specific length of operating history or a specified level of earnings, assets, net worth or other criteria which we will require a target business opportunity to have achieved, and without which we would not consider a business combination in any form with such business opportunity. Accordingly, we may enter into a business combination with a business opportunity having no significant operating history, losses, limited or no potential for earnings, limited assets, negative net worth or other negative characteristics.
Risks Associated with Our Common Stock
Trading of our stock may be restricted by the Securities 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 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.
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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
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information
On October 6, 2008, we filed an Agreement and Plan of Merger with the State of Nevada to merge our subsidiary, Global Health Ventures Inc., which was incorporated solely for the purposes of effecting a change in our name, with and into our company. Upon the effective date of the merger, we will change our name to Global Health Ventures Inc.
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Item 6. Exhibits.
| ExhibitNumber | 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) |
| 31.1* | Certification of Principal Executive Officer, 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 |
*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.
By:/s/ Hassan Salari
Hassan Salari
President, Chief Executive Officer, Secretary,
Treasurer, Chief Financial Officer and Director
(Principal Executive Officer and Principal Financial Officer)
Date: January 20 , 2009
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