Antiviral 10-Q 2010 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2010

or

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

For the transition period from ___________ to ______________

Commission File Number: 000-53449

ANTIVIRAL TECHNOLOGIES, INC.

 (Exact name of registrant as specified in its charter)

Nevada	26-1188469
(State or other jurisdiction of incorporation)	(IRS Employer Identification Number)
Suite 1111, Tower II, Silvercord, 30 Canton Road, Tsimshatsui, Kowloon, Hong Kong
(Address of principal executive offices)
(852) 2317 1291
(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 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.  [ X ] Yes   [ ] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Not Applicable.

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.

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

As of September 30, 2010 the Issuer had 150,000,000 shares of common stock issued and outstanding.

i

INDEX

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements	1
	Consolidated Balance Sheet as of September 30, 2010 and December 31, 2009 (Unaudited)	2
	Consolidated Statements of Income and Comprehensive Income for the nine Months ended September 30, 2010 and 2009 (Unaudited)	3
	Consolidated Statement of Stockholders' Equity and Accumulated Other Comprehensive Income for the year ended December 31, 2009 and the nine months ended September 30, 2010 (Unaudited)	4
	Consolidated Statements of Cash Flows for the nine months period ended September 30, 2010 and 2009 (Unaudited)	5
	Notes to Consolidated Financial Statements	6-11
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12-13
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	13
Item 4.	Controls and Procedures	13-14
PART II. OTHER INFORMATION
Item 1	Legal Proceedings	15
Item 1A	Risk Factors	15
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3	Defaults Upon Senior Securities	15
Item 4	(Removed and Reserved)	15
Item 5	Other Matters	15
Item 6.	Exhibits	15
SIGNATURES		16

ii

PART I   FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS.

The consolidated financial statements of Antiviral Technologies, Inc., (the "Company"), a Nevada corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission.  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company for the fiscal year ended December 31, 2009, as included in the Company's annual report on Form 10-K previously filed with the SEC.  

1

ANTIVIRAL TECHNOLOGIES, INC.

(A Development Stage Company, Formerly Table Mesa Acquisitions, Inc.)

CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2010 AND DECEMBER 31, 2009

(UNAUDITED)   (Stated in US Dollars)

			September 30, 2010		December 31, 2009
	Notes		-----------------		-----------------
ASSETS			(Unaudited)		(Audited)
Current Assets:
Cash and cash equivalents		$	8,334	$	10,599
Prepayments, deposit and other receivables			9,215		9,155
			---------------------		---------------------
Total current assets			17,549		19,754
Non-Current Assets
Property, plant and equipments, net	5		4,354		5,222
Patents, net	6		361,863		343,413
			---------------------		---------------------
Total non-current assets			366,217		348,635
			---------------------		---------------------
Total Assets		$	383,766	$	368,389
			=============		=============
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
Current liabilities:
Accruals and other payables		$	120,996	$	87,261
Amounts due to directors and officers	7		442,527		222,738
Amount due to the shareholder	8		1,225,020		1,143,585
			---------------------		---------------------
Total Liabilities		$	1,788,543	$	1,453,584
			---------------------		---------------------
Stockholders' equity/(deficit):
Preferred stock, $0.001 par value; 20,000,000 shares authorized;
no share issued and outstanding			-		-
Common stock, $0.001 par value; 150,000,000 shares authorized;
150,000,000 shares issued and outstanding		$	150,000	$	150,000
Additional paid-in-capital			(144,858)		(144,858)
Accumulated other comprehensive income			535		1,544
Deficit accumulated during the development stage			(1,410,454)		(1,091,881)
			---------------------		---------------------
Total stockholders' equity/(deficit)			(1,404,777)		(1,085,195)
			---------------------		---------------------
Total Liabilities and Shareholders' equity		$	383,766	$	368,389
			============		============

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

2

ANTIVIRAL TECHNOLOGIES, INC.

(A Development Stage Company, Formerly Table Mesa Acquisitions, Inc.)

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 AND FROM SEPTEMBER 13, 2007 (INCEPTION) TO SEPTEMBER 30, 2010

(UNAUDITED)   (Stated in US Dollars)

		Three months periods ended    September 30				Nine months periods ended        September 30				For the period from September 13, 2007
		--------------------------------------				--------------------------------------				(Inception) to
		2010		2009		2010		2009		September 30, 2010
		---------------		---------------		---------------		---------------		------------------------
Revenue	$		$	-	$	-	$	-	$	-
		---------------		---------------		---------------		---------------		---------------------
Operating Expenses:
Selling and distribution costs		3		8,135		1,051		17,395		37,396
General and administrative expenses		113,008		104,237		317,613		338,239		1,255,221
		---------------		---------------		---------------		---------------		---------------------
Loss from operations before other expense		(113,011)		(112,372)		(318,664)		(355,634)		(1,292,617)
Other expenses – net exchange gain / (loss)		11		2,867		78		13,667		(95,226)
Bad debt written off		-		-		-		-		(3,585)
Preliminary expenses		-		-		-		-		(1,393)
Interest income		2		98		13		207		14,329
Interest expense		-		-		-		-		(31,962)
		---------------		---------------		---------------		---------------		---------------------
Net loss		(112,998)		(109,407)		(318,573)		(341,760)		(1,410,454)
Other comprehensive income
Foreign currency translation gain / (loss)		(5,174)		37		(1,009)		(148)		535
		---------------		---------------		---------------		---------------		---------------------
Comprehensive loss		(118,172)		(109,370)		(319,582)		(341,908)		(1,409,919)
		=========		=========		=========		=========		============
Basic and diluted loss per common share	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.01)
		=========		=========		=========		=========		============
Basic and diluted weighted average number of common shares of common shares *		150,000,000		147,000,000		150,000,000		147,000,000		147,946,092
		=========		=========		=========		=========		============

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

3

ANTIVIRAL TECHNOLOGIES, INC.

(A Development Stage Company, Formerly Table Mesa Acquisitions, Inc.)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME

FOR THE PERIOD FROM SEPTEMBER 13, 2007 (INCEPTION) TO SEPTEMBER 30, 2010

(UNAUDITED)   (Stated in US Dollars)

			Additional	Accumulated other		Total
	Common stock		paid-in	comprehensive	Accumulated	stockholders'
	Shares	Amount	capital	income	deficit	equity (deficit)
		US$	US$	US$	US$	US$
Balance at September 13, 2007 (inception)	-	-	-	-	-	-
Issuance of founder shares	147,000,000	147,000	(146,999)	-	-	1
Foreign currency translation adjustment	-	-	-	1,052	-	1,052
Net loss	-	-	-	-	(629,869)	(629,869)
	----------------	-----------	--------------	---------------	--------------	---------------
Balance at January 1, 2009	147,000,000	147,000	(146,999)	1,052	(629,869)	(628,816)
Reverse acquisition	3,000,000	3,000	2,141	-	-	5,141
Foreign currency translation adjustment	-	-	-	492	-	492
Net loss	-	-	-	-	(462,012)	(462,012)
	---------------	-----------	--------------	---------------	--------------	---------------
Balance at December 31, 2009 and January 1, 2010	150,000,000	150,000	(144,858)	1,544	(1,091,881)	(1,085,195)
Foreign currency translation adjustment	-	-	-	(1,009)	-	(1,009)
Net loss	-	-	-	-	(318,573)	(318,573)
	---------------	-----------	--------------	---------------	--------------	---------------
Balance at September 30, 2010	150,000,000	150,000	(144,858)	535	(1,410,454)	(1,404,777)
	=========	=======	========	=========	========	=========

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

4

ANTIVIRAL TECHNOLOGIES, INC.
(A Development Stage Company, Formerly Table Mesa Acquisitions, Inc.)
STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDEDSEPTEMBER 30, 2010 AND 2009 AND FROM SEPTEMBER 13, 2007 (INCEPTION) TO SEPTEMBER 30, 2010
(UNAUDITED)   (Stated in US Dollars)
						For the period from
		Nine months periods ended September 30				September 13, 2007
		--------------------------------------				(Inception) to
		2010		2009		September 30, 2010
		-----------------		-----------------		---------------------------
Cash flows from operating activities:
Net Loss	$	(318,573)	$	(341,760)	$	(1,410,454)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		932		785		6,229
Amortization		2,734		2,685		15,077
(Increase) decrease in assets and liabilities:
Prepaid expenses, deposit		(60)		(6,986)		(9,215)
Other receivables		-		4		-
Accruals		33,736		(6,380)		120,506
Related party payables		-		-		490
Amounts due to directors and officers		219,789		141,958		414,716
Compensatory option issuances		-		-		560
		------------------		------------------		---------------------------
Net cash generated/(used) in operating activities		(61,442)		(209,694)		(862,091)
Cash flows from investing activities:
Purchase of plant and equipment		(87)		(3,233)		(10,619)
Patents filing costs		(21,184)		(26,089)		(376,971)
		------------------		------------------		---------------------------
Net cash used in investing activities		(21,271)		(29,322)		(387,590)
Cash flows from financing activities:
Amount due to the shareholder		81,434		(160,635)		1,225,019
Sales of common stock		-		-		21,000
		------------------		------------------		---------------------------
Net cash (used in) provided by financing activities		81,434		(160,635)		1,246,019
		------------------		------------------		---------------------------
Net increase/(decrease) in cash and cash equivalents		(1,279)		(399,651)		(3,662)
Effect of exchange rate changes on cash and cash equivalents		(986)		(118)		11,996
Cash and cash equivalents – beginning of period		10,599		522,833		-
		------------------		------------------		---------------------------
Cash and cash equivalents – end of period	$	8,334	$	123,064	$	8,334
		===========		===========		================
Supplemental disclosure of cash flow information:
Interest paid	$	-	$	-	$	31,962
		===========		===========		================
Income taxes paid	$	-	$	-	$	-
		===========		===========		================

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

* In 2009, the issuance of Common Stock for the acquisition of Obio (H.K.) of $147,000 by issuance of 147 million shares is not included in the Consolidated Cash Flow Statements due to non-cash in nature.

5

ANTIVIRAL TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010   (UNAUDITED)

(Stated in US Dollars)

NOTE 1.  ORGANIZATION AND PRINCIPAL ACTIVITY

Antiviral Technologies, Inc. (“the Company”) was incorporated in the state of Nevada on September 13, 2007, as Table Mesa Acquisitions, Inc., and on October 13, 2009, changed its name to Antiviral Technologies, Inc.,  On October 14, 2009, the Company acquired Obio Pharmaceutical (H.K.) Ltd (“Obio HK”), and its wholly-owned subsidiary, Beijing Obio Pharmaceutical Co., Ltd (“Beijing Obio”) in a share exchange transaction (the “Share Exchange”). This transaction was accounted for as a “reverse merger” with Obio HK deemed to be the accounting acquirer and the Company as the legal acquirer.  Consequently, the assets and liabilities and the historical operations that are reflected in the financial statements for periods prior to the Share Exchange are those of Obio HK, recorded at its historical cost basis. After completion of the Share Exchange, the Company’s consolidated financial statements in clude the assets and liabilities of both the Company and Obio HK, the historical operations of Obio HK and the operations of the Company and its subsidiaries from the closing date of the Share Exchange.

Obio HK is a Hong Kong corporation which was formed on June 28, 1999 as Pacific Cosmos Investment Limited. After formation, it had several name changes including a change to J & P Capital (Hong Kong) Limited, on August 27, 1999, a change to Omega-Pharma (Hong Kong) Limited, on May 21, 2003, a change to Omega-BioPharma (HK) Limited, on December 10, 2003, and finally, a change to its current name, Obio Pharmaceutical (H.K.) Limited, on March 2, 2009.

Beijing Obio was incorporated under the laws of the PRC as a limited company on January 2, 2008.

The Company and its subsidiaries (hereinafter, collectively referred to as the “Group”) are engaged in human pharmaceutical research and development.

NOTE 2  UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not generated 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 ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations.

As of September 30, 2010, the Company has not generated any revenue and has incurred an accumulated deficit since inception totaling $1,410,454 at September 30, 2010 and its current liabilities exceed its current assets by $1,770,994. These financial statements do not include any adjustments relating to the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors noted above raise substantial doubts regarding the Company's ability to continue as a going concern

NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)

Method of Accounting

The Company maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The consolidated financial statements and notes are representations of management.  Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of consolidated financial statements.

(b)

Principles of consolidation

The consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiary.  All significant inter-company balances and transactions are eliminated in consolidation.

The Company owned its subsidiary soon after its inception and continued to own the equity’s interests through September 30, 2010.  The following table depicts the identity of the subsidiary:

6

ANTIVIRAL TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010   (UNAUDITED)

(Stated in US Dollars)

NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

		Attributable equity Interest %	Registered
Name of subsidiary	Place of Incorporation	interest %	capital
Obio Pharmaceutical (H.K.) Ltd	Hong Kong	100	$1
Beijing Obio Pharmaceutical Co., Ltd	PRC	100	$200,000

(c)

Use of estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles in the 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.  Management makes these estimates using the best information available at the time the estimates are made; however actual results could differ materially from those estimates.

(d)

Property, plant and equipment

Plant and equipment are carried at cost less accumulated depreciation.  Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the plant and equipment are as follows:

Office equipment

5 years

Testing equipment

5 years

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income.

(e)

Patents

Patents that are acquired by the Company and/or self-invented are stated as cost less accumulated amortization. Amortization is provided over the respective useful lives, using the straight-line method.  Estimated useful lives of the patents are 20 years.

(f)

Accounting for the impairment of long-lived assets

The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC No. 360. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily

using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose.

During the reporting years, there was no impairment loss.

(g)

Cash and cash equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains bank accounts in the United States of America. The subsidiaries of the Company maintain bank accounts in Hong Kong and the PRC.

(h)

Income taxes

The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts

7

ANTIVIRAL TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010   (UNAUDITED)

(Stated in US Dollars)

NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

used for income tax purposes.  A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

(i)

Foreign currency translation

The accompanying consolidated financial statements are presented in United States dollars. The functional currency of the Company is the Hong Kong Dollar (HK$) and Renminbi (RMB). The consolidated financial statements are translated into United States dollars from RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.

The exchange rates used to translate amounts in HK$ and RMB into USD for the purposes of preparing the consolidated financial statements were as follows:

	September 30, 2010	December 31, 2009	September 30, 2009
	------------------	------------------------	------------------
Twelve months ended HK$ : USD exchange rate		7.7551
Nine months ended HK$ : USD exchange rate	7.7582		7.7504
Average nine months ended HK$ : USD exchange rate	7.77172		7.75236

	September 30,2010	December 31, 2009	September 30, 2009
	-----------------	------------------------	------------------
Twelve months ended RMB : USD exchange rate		6.8372
Nine months ended RMB : USD exchange rate	6.6981		6.8376
Average nine months ended RMB : USD exchange rate	6.8164		6.84251

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.  No representation is made that the RMB amounts could have been, or could be, converted into USD at the rates used in translation. In addition, the current foreign exchange control policies applicable in PRC also restrict the transfer of assets or dividends outside the PRC.

(j)

Comprehensive income

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners.  Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other consolidated financial statements. The Company’s current component of comprehensive income is the net income and foreign currency translation adjustment.

(k)

Recently accounting pronouncements

ASC 105, Generally Accepted Accounting Principles ("ASC 105") (formerly Statement of Financial Accounting Standards No.168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No.162) reorganized by topic existing accounting and reporting guidance issued by the Financial Accounting Standards Board ("FASB") into a single source of authoritative generally accepted accounting principles ("GAAP") to be applied by nongovernmental entities. All guidance contained in the Accounting Standards

8

ANTIVIRAL TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010   (UNAUDITED)

(Stated in US Dollars)

NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Codification ("ASC") carries an equal level of authority. Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Accordingly, all other accounting literature will be deemed "non-authoritative". The implementation of this guidance changed the Company's references to GAAP authoritative guidance but did not impact the Company's financial position or results of operations.

In August 2009, the FASB issued FASB ASU 2009-05, "Measuring Liabilities at Fair Value". FASB ASU 2009-05 amends FASB ASC 820, "Fair Value Measurements". Specifically, FASB ASU 2009-05 provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following methods: 1) a valuation technique that uses a) the quoted price of the identical liability when traded as an asset or b) quoted prices for similar liabilities or similar liabilities when traded as assets and/or 2) a valuation technique that is consistent with the principles of FASB ASC 820 of the Accounting Standards Codification (e.g. an income approach or market approach). FASB ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to adjust to include inputs relating to the existence of transfer restrictions on that liability. The adoption of such standard did not have a material impact on the Company's consolidated financial statements.

In 2010, ASC 855 “Subsequent Events” codified SFAS No. 165, "Subsequent Events", which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements. The standard was subsequently amended by FASB ASU 2010-09 which exempts an entity that is an SEC filer from the requirement to disclose the date through which subsequent events have been evaluated. In February 2010, the FASB issued Accounting Standards Update 2010-09 (ASU 2010-09), "Subsequent Events (Topic 855)." The amendments remove the requirements for an SEC filer to disclose a date, in both issued and revised financial statements, through which subsequent events have been reviewed. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. ASU 2010-09 is effective for interim or annual financial p eriods ending after June 15, 2010. The provisions of ASU 2010-09 did not have a material effect on the Company's consolidated financial statements.

In 2010, the FASB issued ASC Update ("ASU") No.2010-21, Accounting for Technical Amendments to Various SEC Rules and Schedules. This update amends various SEC paragraphs in the FASB Accounting Standards Codification pursuant to SEC Final Rule, "Technical Amendments to Rules Forms, Schedules and Codification of Financial Reporting Policies". The adoption of this update did not have any material impact on the Company's financial statements.

In 2010, the FASB issued ASC Update ("ASU") No.2010-22, Accounting for Various Topics. This update amends various SEC paragraphs in the FASB Accounting Standards Codification based on external comments received and the issuance of Staff Accounting Bulletin (SAB) No. 112 which amends or rescinds portion of certain SAB topics. SAB 112 was issued to being existing SEC guidance into conformity with ASC 805 "Business Combination" and ASC 810 "Consolidation". The adoption of this update did not have any material impact on the Company's financial statements.

NOTE 4  CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

Financial instruments which potentially expose the Company to concentrations of credit risk, consists of cash and other receivables as of September 30, 2010 and 2009. The Company performs ongoing evaluations of its cash position and credit evaluations to ensure collections and minimize losses.

As of September 30, 2010 and 2009, the Company’s bank deposits were all placed with banks in Hong Kong and the PRC where there is currently no rule or regulation in place for obligatory insurance of bank accounts.

The maximum amount of loss due to credit risk that the Company would incur if the counter parties to the financial instruments failed to perform is represented the carrying amount of each financial asset in the balance sheet.

9

ANTIVIRAL TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010   (UNAUDITED)

(Stated in US Dollars)

NOTE 5  PROPERTY, PLANT AND EQUIPMENT, NET

Property and equipment is summarized as follows:

		As of September 30, 2010		As of December 31, 2009
		----------------------		----------------------
Cost
Plant and Machinery	$	3,891	$	3,893
Furniture, fixture and equipment		1,671		1,636
Office equipment		5,057		5,003
		-----------------------		-----------------------
		10,619		10,532
Accumulated depreciation		(6,265)		(5,310)
		-----------------------		-----------------------
	$	4,354	$	5,222
		==============		==============

Depreciation expenses included in the general and administrative expenses for the nine months ended September 30, 2010 and for the year ended December 31, 2009 were $932 and $1,096.

NOTE 6  PATENTS, NET

Patents are summarized as follows:

		As of September 30, 2010		As of December 31, 2009
		----------------------		----------------------
Cost
Patents	$	309,945	$	288,735
License		67,026		67,053
		-----------------------		-----------------------
		376,971		355,788
Accumulated amortization		(15,108)		(12,375)
		-----------------------		-----------------------
	$	361,863	$	343,413
		==============		==============

Amortization included in the general and administrative expenses for the nine months ended September 30, 2010 and for the year ended December 31, 2009 were $2,734 and $3,599.

NOTE 7  AMOUNTS DUE TO DIRECTORS AND OFFICERS

Amounts due to directors and officers were the amount due to Mr. Francis Chi, Director, Dr. Bill Piu Chan, Director/Chief Executive Officer, Mr. Kin Chung Cheng, Director/Chief Financial Officer and Dr. Jess Gilbert Thoene, Director/Chief Technical Officer and was unsecured, interest free and repayable upon completion of any fund raising exercise of Obio HK or ATI. The balances due to directors and officers are $442,527 and $222,738 as of September 30, 2010 and December 31, 2009 respectively.

NOTE 8  AMOUNT DUE TO THE SHAREHOLDER

Amount due to the shareholder was unsecured, interest free and does not have a fixed repayment date.

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ANTIVIRAL TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010   (UNAUDITED)

(Stated in US Dollars)

NOTE 9  CAPITALIZATION

As a result of the share exchange transaction on October 14, 2009, which is being accounted for as a “reverse merger,” the Group’s capital structure has changed. Following completion of the share exchange transaction, the Company has a total of 150,000,000 shares of $0.001 par value common stock issued and outstanding. The paid-in capital is $150,000 with additional paid-in capital of ($144,858).

NOTE 10  RELATED PARTY TRANSACTIONS

In the normal course of its business, the group carried out the following related party transactions during the nine months ended September 30, 2010 and 2009.

		For the nine months ended
		2010		2009
Accounting services fee paid to a related party (a)	$	-	$	4,642
Company secretarial fee paid to related parties (b)	$	924	$	1,158

(a)

The accounting services fee was paid to a related company controlled by Chi Francis, a director of the shareholder.

(b)

The company secretarial fee was paid to related companies controlled by Chan Kin Man, Eddie, a director of the shareholder.

NOTE 11  FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties.  The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, prepaid expenses, amount due from/to a director/officers/fellow subsidiary/holding company, other receivables, and accruals approximate their fair values because of the short maturity of these instruments and the availability of the market rates of interest.

NOTE 12  SEGMENT INFORMATION

The Company is principally engaged in business of human pharmaceutical research and development.  No significant revenues are derived during the reporting periods. Accordingly, no analysis of the Company’s sales and assets by geographical market is presented.

NOTE 13 SUBSEQUENT EVENTS

In preparing these financial statements, the Company evaluated the events and transactions that occurred from August 1,

2010 through October 29, 2010, the date these financial statements were issued. The Company has made the required additional disclosures in reporting periods in which subsequent events occur.

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ITEM 2.   MANAGEMENT’S DISCUSSIONS AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS," "INTENDS," "WILL," "HOPES," "SEEKS," "ANTICIPATES," "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS REPORT ON FORM 10-Q AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS.

Overview

History

The Registrant was incorporated in the state of Nevada on September 13, 2007, as Table Mesa Acquisitions, Inc., and on October 13, 2009, changed its name to Antiviral Technologies, Inc..  On October 14, 2009, the Registrant acquired Obio Pharmaceutical (H.K.) Limited, and its wholly-owned subsidiary, Beijing Obio Pharmaceutical Co., Ltd. in a share exchange transaction.  This transaction was accounted for as a “reverse merger” with Obio HK deemed to be the accounting acquirer and the Registrant as the legal acquirer.  Consequently, the assets and liabilities and the historical operations that are reflected in the financial statements for periods prior to the share exchange transaction are those of Obio HK, recorded at its historical cost basis. Following completion of the share exchange transaction, the Registrant’s consolidated financial statements include the assets and liabilities of both the Registrant and Obio HK, the hi storical operations of Obio HK and the operations of the Registrant and its subsidiaries from October 14, 2009, the closing date of the share exchange transaction.

Corporate Background

We are a development stage biotechnology company utilizing Cysteamine compositions in the development of antiviral drugs for human application.  We have been assigned rights in certain patents and have obtained licenses to use certain technology owned by Walcom Group Limited.  The rights assigned or licensed to us by Walcom include its proprietary micro-encapsulation technology for cysteamine. We intend to use the rights assigned or licensed to us by Walcom Group, which were developed by Walcom Group for use in develop of products for animals, in conjunction with efforts to develop products for human application.  

Because we are in the development stage of operations the relationships between revenue, cost of revenue, and operating expenses reflected in our financial statements are not necessarily indicative of the relationship between and among such items as we expand and as we progress towards operations. Accordingly, there is currently no basis upon which we are able to provide a meaningful comparison of our results of operation for one period as compared to another period.

Liquidity and Capital Resources

As of September 30, 2010, we had current assets of $17,549 consisting of cash and cash equivalents of $8,334 as well as deposits and prepayments of $9,215.  As of September 30, 2010, our total assets were $383,766, consisting primarily of the net value of patents of $366,217.

As of September 30, 2010, our current liabilities were $1,788,543, consisting primarily of amounts due to our shareholder in the amount of $1,225,020, which are unsecured, interest free and repayable upon demand.

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As described more fully below under Plan of Operations, our plan of operations calls for significant expenditures in connection with conducting additional research and development activities and conducting clinical trials TG 21.

Plan of Operations

Our plan of operations for the fiscal year ending December 31, 2010, is to continue to conduct additional research and development activities regarding TG 21 and other potential antiviral solutions for various viruses.  Our initial consideration will be to begin pre-clinical and clinical trials in China in cooperation with the South China Center for Innovative Pharmaceuticals (SCCIP), to undertake efforts in the United Kingdom directed toward international recognition of TG 21, to conduct additional research and development in India and to prepare for filing of additional patent applications in various countries.

We currently estimate that we will require approximately US$7 million to conduct initial clinical trials and the additional research and development activities described above, and approximately US$3 million for working capital purposes.  We do not currently have any arrangements in place to obtain the necessary financing for these activities and may not be able to find such financing on terms which are acceptable to us. We believe the most likely source of additional financing presently available to us is through sale of equity capital after, or in conjunction with, the process of establishing a public trading market for our shares.  There can be no assurance that a trading market will be established, or we will be able to raise additional capital on terms we consider satisfactory, either after, or in conjunction with, the establishment of a trading market for our shares.

We have no current sources of liquidity other than cash on hand.  We do not have in place any line of credit or other credit facility, and our lack of revenue and assets with which to be collateralized of a loan would make borrowing from conventional financial institutions or funds a difficulty. For this reason, we believe that the most feasible source of funds currently available to us is from the offer and sale of equity securities, or debt securities convertible into equity securities either after, or in conjunction with, the establishment of a public trading market for our shares.

Going Concern Consideration

The Company is a development stage company. The Company incurred a net loss of $318,573 for the nine months ended September 30, 2010 and has accumulated net loss of $1,410,454 as at September 30, 2010. The Company's ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered in emerging markets and the competitive environment in which the Company operates. The Company is pursuing financing for its operations. Failure to secure such financing and to raise additional equity capital may result in the Company depleting its available funds and not being able to pay its obligations. These financial statements do not include any adjustment to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

ITEM 4.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Co mpany maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.

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As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported with the time periods specified.  Our chief executive officer and chief financial officer also concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance of the achievement of these objectives.  

Changes in Internal Control over Financial Reporting

There was no change in the Company's internal control over financial reporting during the period ended September 30, 2010, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II   OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS

The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated. No director, officer or affiliate of the Company, and no owner of record or beneficial owner of more than 5.0% of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation.

ITEM 1A. RISK FACTORS

Smaller reporting companies are not required to provide the information required by this item.

ITEM 2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.   (REMOVED AND RESERVED)

ITEM 5.   OTHER INFORMATION.

None.

ITEM 6.   EXHIBITS.

3.1	Original Articles of Incorporation filed with the State of Nevada on September 13, 2007, incorporated by reference from exhibit to Form 10 filed with the Securities and Exchange Commission on October 8, 2008 (incorporated by reference from exhibit to Form 8-K filed with the Securities and Exchange Commission on October 22, 2009).
3.2	Bylaws incorporated by reference from exhibit to Form 10 filed with the Securities and Exchange Commission on October 8, 2008 (incorporated by reference from exhibit to Form 8-K filed with the Securities and Exchange Commission on October 22, 2009).
31.1	Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2	Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certifications 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.

ANTIVIRAL TECHNOLOGIES, INC.

By:

/s/ Bill Piu CHAN

--------------------------------------------------

Bill Piu CHAN, Chief Executive Officer

Date:  November 11 2010.

By:

/s/ Kin Chung CHENG

-------------------------------------------------------

Kin Chung CHENG, Chief Financial Officer

Date:  November 11, 2010.

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