UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)
              [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2003
                                                 -------------

                 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                               OF THE EXCHANGE ACT

     For the transition period from                to                 .
                                    --------------    -----------------

                         Commission file number 0-30299
                                                -------

                         GLOBAL INNOVATIVE SYSTEMS, INC.
                         -------------------------------
        (Exact name of small business issuer as specified in its charter)

                                     Nevada
         (State or other jurisdiction of incorporation or organization)

                                   98-0217653
                                   ----------
                      (I.R.S. Employer Identification No.)

Suite 104-630 Columbia Street, New Westminster, British Columbia, Canada V3M 1A5
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

                            (604) 522-8618 (Issuer's
                                telephone number)

Check whether the issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

Yes [X]     No [  ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest  practicable date:  37,133,579 common shares issued and
outstanding as at August 11, 2003

Transitional Small Business Disclosure Format (Check one):  Yes [  ]     No [X]


<PAGE>

                         Part I - FINANCIAL INFORMATION

Item 1.           Financial Statements.

Our consolidated  financial statements are stated in United States Dollars (US$)
and are prepared in accordance with United States Generally Accepted  Accounting
Principles.

It is  the  opinion  of  management  that  the  consolidated  interim  financial
statements for the quarter ended June 30, 2003 include all adjustments necessary
in  order  to  ensure  that  the  consolidated   financial  statements  are  not
misleading.


<PAGE>


Robison, Hill & Co.                                Certified Public Accountants
A PROFESSIONAL CORPORATION
                                                   Brent M. Davies, CPA
                                                   David O. Seal, CPA
                                                   W. Dale Westenskow, CPA
                                                   Barry D. Loveless, CPA



                         INDEPENDENT ACCOUNTANT'S REPORT



Global Innovative Systems, Inc.
(A Development Stage Company)

         We have reviewed the accompanying consolidated balance sheets of Global
Innovative Systems,  Inc. (a development stage company) as of June 30, 2003, and
the related  consolidated  statements of operations for the three and nine month
periods  ended June 30, 2003 and 2002 and cash flows for the nine month  periods
ended June 30, 2003 and 2002. These financial  statements are the responsibility
of the Company's management.

         We conducted our review in accordance with standards established by the
American  Institute  of  Certified  Public  Accountants.  A  review  of  interim
financial  information consists principally of applying analytical procedures to
financial  data and making  inquiries of persons  responsible  for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of an opinion  regarding the  financial  statements  taken as a
whole. Accordingly, we do not express such an opinion.

         Based on our  review,  we are not aware of any  material  modifications
that should be made to the accompanying  financial  statements referred to above
for them to be in conformity with accounting  principles  generally  accepted in
the United States of America.

         We have  previously  audited,  in accordance  with  auditing  standards
generally  accepted in the United States of America,  the  consolidated  balance
sheet of Global  Innovative  Systems,  Inc. (a development  stage company) as of
September 30, 2002, and the related consolidated statements of operations,  cash
flows, and stockholders'  equity for the year then ended (not presented herein);
and in our report dated February 14, 2003, we expressed an  unqualified  opinion
on those consolidated financial statements.  In our opinion, the information set
forth in the accompanying  consolidated  balance sheet as of September 30, 2002,
is fairly  stated,  in all material  respects,  in relation to the  consolidated
balance sheet from which it has been derived.

MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
MEMBERS OF THE SEC PRACTICE SECTION and THE PRIVATE COMPANIES PRACTICE SECTION

1366 East Murray-Holladay Road, Salt Lake City, Utah  84117-5050
Telephone 801/272-8045, Facsimile 801/277-9942

<PAGE>


         Note 1 of the Company's  audited  financial  statements as of September
30, 2002,  and for the year then ended  discloses  that the Company has suffered
recurring  losses from  operations and has no  established  source of revenue at
September 30, 2002. Our auditors' report on those financial  statements includes
an explanatory  paragraph  referring to the matters in Note 1 of those financial
statements and indicating that these matters raised  substantial doubt about the
Company's ability to continue as a going concern.  As indicated in Note 1 of the
Company's  unaudited interim  financial  statements as of June 30, 2003, and for
the three  months then ended,  the Company  has  continued  to suffer  recurring
losses from  operations and still has no  established  source of revenue at June
30, 2003. The  accompanying  interim  consolidated  financial  statements do not
include any adjustments that might result from the outcome of this uncertainty.

                                                  Respectfully submitted

                                                  /s/ Robison, Hill & Co.
                                                  Certified Public Accountants

Salt Lake City, Utah
August 12, 2003


<PAGE>

                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                               (Unaudited)
                                                                                 June 30,         September 30,
                                                                                   2003                2002
                                                                            ------------------  ------------------
ASSETS
Current Assets:
<S>                                                                         <C>                 <C>
Receivables                                                                 $            7,378  $                -

Other Assets:
Intangible Assets                                                                       18,000              18,000
                                                                            ------------------  ------------------

     TOTAL ASSETS                                                           $           25,378  $           18,000
                                                                            ==================  ==================

LIABILITIES
Current Liabilities:
Accounts Payable and Accrued Liabilities                                    $          436,608  $          241,043
Shareholder Payables                                                                    26,064              20,821
Net Liabilities of Discontinued Operations                                                   -             268,747
                                                                            ------------------  ------------------

     Total Liabilities                                                                 462,672             530,611
                                                                            ------------------  ------------------

     Minority Interest                                                                   2,566               2,793
                                                                            ------------------  ------------------

STOCKHOLDERS EQUITY
Common Stock - $0.001 par value, 200,000,000 shares
   authorized, 37,133,579 and 36,906,509 shares issued
    and outstanding at June 30, 2003 and September 30, 2002                             37,134              36,907
Additional Paid-in Capital                                                             412,493             412,493
Currency Translation Adjustment                                                              -               5,097
Deficit Accumulated During the
  Development Stage                                                                   (889,487)           (969,901)
                                                                            ------------------  ------------------
     Total Stockholders' Equity                                                       (439,860)           (515,404)
                                                                            ------------------  ------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                  $           25,378  $           18,000
                                                                            ==================  ==================
</TABLE>




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


<PAGE>

                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                                        Cumulative
                                                                                                                           Since
                                                                                                                        January 15,
                                                                                                                           1997
                                                           For the three months            For the nine months         Inception of
                                                                   ended                          ended
                                                                 June 30,                       June 30,                Development
                                                       -----------------------------  -----------------------------
                                                            2003           2002           2003            2002             Stage
                                                       --------------  -------------  -------------  --------------  --------------
<S>                                                    <C>             <C>            <C>            <C>             <C>
REVENUES                                               $            -  $           -  $           -  $            -  $            -

EXPENSES
   Research & Development                                      40,527              -        121,581               -         242,451
   General & Administrative                                    39,521          8,091        119,761          35,966         321,969
                                                       --------------  -------------  -------------  --------------  --------------
                                                               80,048          8,091        241,342          35,966         564,420
                                                       --------------  -------------  -------------  --------------  --------------

Net Loss from Continuing Operations                           (80,048)        (8,091)      (241,342)        (35,966)       (564,420)
                                                       --------------  -------------  -------------  --------------  --------------

Minority Interest                                                   -              -              -               -               -
                                                       --------------  -------------  -------------  --------------  --------------

Discontinued Operations
   Income (Loss) from Operations of Niew
     Industries, Inc. to be disposed of,
     Net of tax effect of $0                                        -         (6,627)        (2,400)        (20,231)       (649,223)
   Gain on Disposal of Niew Industries, Inc.
     Net of tax effect of $0                                        -              -        324,156               -         324,156
                                                       --------------  -------------  -------------  --------------  --------------

Net Income (Loss) from
Discontinued Operations                                             -         (6,627)       321,756         (20,231)       (325,067)
                                                       --------------  -------------  -------------  --------------  --------------

NET INCOME (LOSS)                                      $      (80,048) $     (14,718) $      80,414  $      (56,197) $     (889,487)
                                                       ==============  =============  =============  ==============  ==============

Earnings per Share, Basic & Diluted
   Income from continuing operations                   $            -  $           -  $       (0.01) $            -
   Income (Loss) from discontinued operations                       -              -           0.01               -
                                                       --------------  -------------  -------------  --------------

Loss Per Share                                         $            -  $           -  $           -  $            -
                                                       ==============  =============  =============  ==============

Weighted Average Shares Outstanding                        37,087,980     36,906,509     36,997,672      29,776,717
                                                       ==============  =============  =============  ==============
</TABLE>



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


<PAGE>


                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                                                 Cumulative
                                                                                                                    Since
                                                                                                                 January 15,
                                                                                                                     1997
                                                                             For the nine months ended           Inception of
                                                                                     June 30,                    Development
                                                                       -------------------------------------
                                                                             2003                2002               Stage
                                                                       -----------------  ------------------  ------------------
Cash Flows From Operating Activities
<S>                                                                    <C>                <C>                 <C>
   Net income (loss) for the period                                    $          80,414  $          (56,197) $         (889,487)
Adjustments to reconcile net loss to net cash
   Provided by operating activities
     Net (Income) Loss from Discontinued Operations                             (321,756)             20,231             325,067
     Increase in Receivables                                                       7,378                   -               7,378
     Increase in Accounts Payable & Accrued Liabilities                          195,565              42,820             436,608
                                                                       -----------------  ------------------  ------------------
Net Cash Used in Continuing Activities                                           (38,399)              6,854            (120,434)
Net Cash Used in Discontinued Activities                                          (2,400)            (41,969)           (620,344)
                                                                       -----------------  ------------------  ------------------
Net Cash Used in Operating Activities                                            (40,799)            (35,115)           (740,778)
                                                                       -----------------  ------------------  ------------------

Cash Flows From Investing Activities

   Net Cash from Discontinued Activities                                          40,643                   -              62,033
                                                                       -----------------  ------------------  ------------------
Net Cash Used by Investing Activities                                             40,643                   -              62,033
                                                                       -----------------  ------------------  ------------------

Cash Flows From Financing Activities

   Net Cash from Discontinued Activities                                           1,154              37,608             657,419
   Advances from Shareholders & Directors                                          5,243                   -              26,064
                                                                       -----------------  ------------------  ------------------
Net Cash Provided by (Used in) Financing Activities                                6,397              37,608             683,483
                                                                       -----------------  ------------------  ------------------

Increase (Decrease) in Cash                                                        6,241               2,493               4,738
Effect of foreign exchange on cash                                                (6,241)             (2,493)             (4,738)
Cash at beginning of period                                                            -                   -                   -
                                                                       -----------------  ------------------  ------------------
Cash at End of Period                                                  $               -  $                -  $                -
                                                                       =================  ==================  ==================


Supplemental Disclosure of Interest and Income Taxes Paid

   Interest paid during the period                                     $               -  $                -  $                -
                                                                       =================  ==================  ==================
   Income taxes paid during the period                                 $               -  $                -  $                -
                                                                       =================  ==================  ==================

Supplemental Disclosure of Non-cash Investing and Financing Activities:
   Shares issued for Subsidiaries                                      $               -  $           18,000  $           18,000
   Discontinued Operations                                             $               -  $                -  $          493,165
</TABLE>


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


<PAGE>

                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         This summary of accounting policies for Global Innovative Systems, Inc.
and  Subsidiaries ( the "Company") is presented to assist in  understanding  the
Company's  financial  statements.  The accounting  policies conform to generally
accepted  accounting  principles  and  have  been  consistently  applied  in the
preparation of the financial statements.

Interim Financial Statements

         The unaudited financial statements as of June 30, 2003 and for the nine
months then ended reflect, in the opinion of management,  all adjustments (which
include  only  normal  recurring  adjustments)  necessary  to  fairly  state the
financial  position and results of  operations  for the nine  months.  Operating
results for interim periods are not necessarily  indicative of the results which
can be expected for full years.

Organization and Basis of Presentation

         The Company was  incorporated  in the State of Nevada on September  14,
1995 and was  inactive  until  January 31, 2000 when it closed a share  exchange
agreement  with  the  stockholders  of  Niew  Industries  Inc.   ("Niew").   The
transaction resulted in Niew becoming a wholly-owned  subsidiary of the Company.
Since the  stockholders  of Niew controlled 55% of the combined entity after the
merger and the business of Niew presents the only  operations of the new entity,
the  transaction  was  recorded  as a  recapitalization  of Niew.  As such,  the
historical financial information of the Company is that of Niew.

         Niew was  incorporated  on January 15, 1997 under the British  Columbia
Company  Act.  The Company was  inactive  until March 23, 1998 when it began the
development of a twin rotating  asphalt  mixing system.  Subsequent to September
30,  2002,  the  Company  entered  into an  agreement  to sell its wholly  owned
subsidiary, Niew Industries, Inc. for $44,315.

         On  February  6,  2002,  April 8, 2003 and May 12,  2003,  the  Company
exchanged  15,206,509,  151,380 and 75690 shares,  respectively,  for a total of
15,433,579, shares in exchange for 85.74% of Energy Medicine Developments Corp.,
(a Delaware company) owning the worldwide  marketing and distribution  rights to
the "Enermed Therapy" and the "Enermed Device".  Enermed Therapy treats multiple
sclerosis  and  migraine  headaches  using  extremely  low  frequency,   patient
specific, pulsed electromagnetic fields.

         Energy Medicine  Developments  Corp. is in the  development  stage with
only asset,  the  worldwide  marketing and  distribution  rights to the "Enermed
Therapy"  and  the  "Enermed  Device",  and  no  liabilities.   Energy  Medicine
Developments  Corp. was  incorporated  on March 27, 1997,  under the laws of the
state of Delaware.


<PAGE>

                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Principles of Consolidation

         The consolidated  financial  statements  include the accounts of Global
Innovative   Systems,   Inc.  and  the  following   wholly  and  majority  owned
subsidiaries:

*        Niew Industries, Inc., a British Columbia corporation (100%)
*        Energy Medicine Developments Corp., a Delaware corporation (85.74%)

         The  results  of  subsidiaries  acquired  or sold  during  the year are
consolidated  from their effective dates of acquisition  through their effective
dates of sale.

Business Condition

         These accompanying consolidated financial statements have been prepared
on a going concern basis,  which  contemplates the realization of assets and the
satisfaction of liabilities and commitments in the normal course of business. As
of June 30, 2003, the Company has  accumulated  losses since its inception.  The
continuation of the Company is dependent upon the continuing  financial  support
of creditors,  directors and  stockholders  and obtaining long term financing as
well as achieving and maintaining a profitable  level of operations  through the
successful product development or through the acquisition of new businesses.  It
is the intention of the Company to raise new equity  financing of  approximately
$1,000,000  within the upcoming  year.  Amounts  raised will be used for working
capital and to complete  acquisitions.  While the Company is expending  its best
efforts to achieve the above plans, there is no assurance that any such activity
will generate funds that will be available for operations.

         These conditions raise substantial doubt about the Company's ability to
continue  as a going  concern.  These  financial  statements  do not include any
adjustments that might arise from this uncertainty.

Cash and Cash Equivalents

         For purposes of the statement of cash flows, the Company  considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.


<PAGE>

                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(Continued)

Depreciation

         Fixed  assets  are stated at cost.  Depreciation  and  amortization  is
calculated  on a  straight-line  basis over the  estimated  useful  lives of the
assets as follows:

                     Asset                              Rate
------------------------------------------------  -----------------

Machinery & Equipment                                     3-5 years

         Maintenance  and  repairs are charged to  operations;  betterments  are
capitalized.  The  cost  of  property  sold  or  otherwise  disposed  of and the
accumulated  depreciation  thereon are eliminated  from the property and related
accumulated depreciation accounts, and any resulting gain or loss is credited or
charged to income.

         The Company has adopted the Financial  Accounting  Standards Board SFAS
No. 121,  "Accounting  for the  Impairment of  Long-lived  Assets." SFAS No. 121
addresses  the  accounting  for (I)  impairment of  long-lived  assets,  certain
identified  intangibles and goodwill  related to assets to be held and used, and
(ii) long-lived assets and certain  identifiable  intangibles to be disposed of.
SFAS  No.  121  requires  that  long-  lived  assets  and  certain  identifiable
intangibles  held and used by an entity,  be reviewed  for  impairment  whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be  recoverable.  If the sum of the expected  future cash flows from the
used of the  asset  and its  eventual  disposition  (un-discounted  and  without
interest  charges) is less than the carrying  amount of the asset, an impairment
loss is recognized.

Intangible Assets

         As a part of the purchase of Energy Medicine Developments Corp., during
2002,  the  Company  acquired  intangible  assets  of  $18,000  assigned  to the
worldwide  marketing  and  distributions  rights of the  "Enermed  Therapy"  and
"Enermed  Device".  Under  SFAS  121,  these  intangibles  are  not  subject  to
amortization , but are tested for impairment annually.  During 2002, the company
determined  that,  based on estimated  future cash flows, the carrying amount of
these  intangibles  does not exceed their fair value and no impairment  loss has
been recognized.


<PAGE>

                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Foreign Currency Translation

         The  Company's  primary  functional  currency is the  Canadian  dollar.
Monetary  assets  and  liabilities  resulting  from  transactions  with  foreign
suppliers and customers are  translated at year-end  exchange  rates.  All other
assets,  liabilities,  and  stockholders'  equity are  translated  at historical
exchange rates for past  transactions and at year-end exchange rates for current
and future  transactions.  Revenue and expense  accounts are  translated  at the
average exchange rates in effect during the year, except those related to assets
and   liabilities,   which  are   translated  at  historical   exchange   rates.
Re-measurement gains and losses are included in income.

         The  Company's  reporting  currency is the U.S.  dollar.  Balance sheet
accounts  are  translated  at year- end  exchange  rates and revenue and expense
accounts are translated at the average exchange rates in effect during the year.
Translation   gains  and  losses  are  included  as  a  separate   component  of
stockholders' equity.

Pervasiveness of Estimates

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

Concentrations of Credit Risk

         The  Company has no  significant  off-balance-sheet  concentrations  of
credit  risk such as foreign  exchange  contracts,  options  contracts  or other
foreign hedging arrangements.

Earnings (Loss) per Share

         Basic loss per share has been  computed  by  dividing  the loss for the
three and nine months  applicable  to the common  stockholders  by the  weighted
average  number of common shares  outstanding.  There were no common  equivalent
shares outstanding at June 30, 2003 and 2002.

Income Taxes

         The Company  accounts for income taxes under the provisions of SFAS No.
109, "Accounting for Income Taxes." SFAS No.109 requires recognition of deferred
income  tax  assets  and   liabilities   for  the  expected  future  income  tax
consequences,  based on enacted tax laws, of temporary  differences  between the
financial reporting and tax bases of assets and liabilities.


<PAGE>

                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)

Research and Development

         Expenditures  on research and  development  are charged to expense when
incurred.  Research and  development  costs consist of the cost of materials and
services consumed,  salaries and wages of personnel directly engaged in research
and  development,   accrued  consulting  fees  directly  tied  to  research  and
development and the cost of patent applications.

Comprehensive Income

         The Company has adopted SFAS No. 130, "Reporting Comprehensive Income",
which establishes  standards for reporting and display of comprehensive  income,
its  components  and  accumulated  balances.  The  Company  is  disclosing  this
information on its Consolidated Statement of Stockholders' Equity. Comprehensive
income is  comprised  of net income  (loss) and all  changes to capital  deficit
except those resulting from investments by owners and distribution to owners.

Fair Value of Financial Instruments

         The carrying value of the Company's  financial  instruments,  including
cash (bank overdraft),  receivables, accounts payable and accrued liabilities at
June 30, 2003 and September 30, 2002  approximates  their fair values due to the
short-term nature of these financial instruments.

         The fair value of loans  payable to  stockholders  and  directors and a
related party were not practicable to determine.

New Accounting Pronouncements

         In October  2001,  the FASB issued SFAS No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets".  SFAS No. 144 requires that those
long-lived assets be measured at the lower of carrying amount or fair value less
cost to sell,  whether  reported in  continuing  operations  or in  discontinued
operations. Therefore, discontinued operations will no longer be measured at net
realizable  value or include  amounts  for  operating  losses  that have not yet
occurred.  SFAS No. 144 is effective for financial  statements issued for fiscal
years  beginning  after  December  15,  2001 and,  generally,  is to be  applied
prospectively. The implementation of this new standard is not expected to have a
material effect on the Company's financial statements.

         In July 30, 2002,  the FASB issued FASB  Statement No. 146,  Accounting
for the  Costs  Associated  with Exit or  Disposal  Activities.  This  statement
requires   companies  to  recognize  costs  associated  with  exit  or  disposal
activities only when liabilities for those costs are incurred rather than at the
date of a commitment  to an exit or disposal  plan.  FASB No. 146 also  requires
companies to initially measure liabilities for exit


<PAGE>

                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(Continued)

New Accounting Pronouncements (Continued)

and disposal  activities  at their fair values.  FASB No. 146 replaces  Emerging
Issues Task Force ("EITF")  Issue No. 94-3,  Liability  Recognition  for Certain
Employee  Termination  Benefits  and Other Costs to Exit an Activity  (including
Certain Costs Incurred in a Restructuring)  and EITF No. 88-10, Costs Associated
with Lease  Modification  or  Termination.  The  provisions  of FASB No. 146 are
effective for exit or disposal  activities that are initiated after December 31,
2002.

         In  December  2002,  the FASB  issued  SFAS  No.  148,  Accounting  for
Stock-Based  Compensation  -  Transition  and  Disclosure - an amendment of FASB
Statement  No.  123.  This  Statement  amends  SFAS  No.  123,   Accounting  for
Stock-Based  Compensation,  to provide  alternative  methods of transition for a
voluntary  change to the fair value based method of accounting  for  stock-based
employee  compensation.  In  addition,  this  Statement  amends  the  disclosure
requirements  of Statement 123 to require  prominent  disclosures in both annual
and interim financial  statements about the method of accounting for stock-based
employee  compensation  and the effect of the method used on  reported  results.
This Statement also requires that those effects be disclosed more prominently by
specifying the form, content, and location of those disclosures.

Reclassifications

         Certain   reclassifications  have  been  made  in  the  2002  financial
statements to conform with the 2003 presentation.

NOTE 2 - RELATED PARTY TRANSACTIONS

         As at June 30,  2003  and  September  30,  2002,  shareholder  payables
include  amounts owing to major  shareholders  and  Directors.  The advances are
unsecured,  do not bear interest and have no specific  terms of  repayment.  The
advances are summarized as follows:
<TABLE>
<CAPTION>
                                                                         June 30,         September 30,
                                                                           2003                2002
                                                                     -----------------  ------------------
<S>                                                                  <C>                <C>
Cash advances to the Company                                         $          26,064  $           20,821
Repayments                                                                           -                   -
Reimbursable expenses                                                                -                   -
                                                                     -----------------  ------------------

                                                                     $          26,064  $           20,821
                                                                     =================  ==================
</TABLE>

<PAGE>


                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 2 - RELATED PARTY TRANSACTIONS (Continued)

         The Company is party to consulting  agreements  between the Company and
certain of its officers and  shareholders,  and a royalty  agreement between the
Company and a company under common control. (See Note 3- Commitments)

NOTE 3 - COMMITMENTS

         The  Company has signed  consulting  agreements  with three  companies;
Alternative Health Care Research,  owned/controlled  by the Dr. Martha Lappin, a
shareholder of the Company; IHR Integrated Health Research,  owned/controlled by
Fraser Lawrie,  President and CEO of the Company; and CMC Collateral  Management
Canada Ltd.,  owned/Controlled  by Robert Fletcher,  CFO and COO of the Company.
Pursuant to the agreements, the Company has agreed to pay a monthly remuneration
of $7,900 per agreement for services  rendered in connection with the management
and oversight of the continued research and clinical trials of "Enermed Therapy"
and the  "Enermed  Device"  and  management  of the day to day  business  of the
Company.  The  agreements  are  effective  for a period of five years  beginning
January 1, 2002.

         For the nine months  ended June 30,  2003 and the year ended  September
30,  2002,  the Company has accrued  $210,300 and  $213,300,  and during 2nd qtr
2003,  the  Company  paid $3,000 in  connection  with these  agreements.  Future
obligations under these agreements are as follows:

Year Ended September 30,                  Amount

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

         2003                        $         284,400
         2004                                  284,400
         2005                                  284,400
         2006                                  284,400
         2007                                   71,100
                                     -----------------

Total                                $       1,208,700
                                     =================

         Pursuant to the terms of a Royalty Agreement, we were granted the right
to use, distribute, market and sell the Enermed device, and any other derivative
or related product  developed by either our company or by another company Energy
Medicine  Developments  Inc., a company  incorporated in the province of British
Columbia.  Energy Medicine  Developments,  Inc. is currently owned 50% by Fraser
Lawrie, our President & CEO and 50% by Robert Fletcher, our CFO & COO.


<PAGE>


                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 3 - COMMITMENTS (Continued)

         We will pay Energy Medicine  Developments Inc. the following  royalties
during each of our fiscal years, in perpetuity:

         1.       0 - 50,000  devices:  seven  percent (7%) of the selling price
                  for the first 50,000 devices sold each year during the Royalty
                  Agreement;

         2.       Over 50,000  devices:  five percent (5%) of the selling  price
                  for each device sold beyond the initial  50,000  devices  sold
                  each year during the Royalty Agreement; and

         3.       Other Products:  ten percent (10%) of the gross selling price,
                  prior to any  discounts,  of any other  product  manufactured,
                  sold or distributed by our company, payable at the end of each
                  calendar month for sales in the previous month.

As of the June 30, 2003, we have not commenced using, distributing, marketing or
selling the Enermed device under the Royalty Agreement.

NOTE 4 - INCOME TAXES

         As of  September  30,  2002,  the  Company  had a  net  operating  loss
carryforward for income tax reporting purposes of approximately  $55,700 (2001 -
$53,000) that may be offset  against  future  taxable  income  through 2022, and
undeducted  expenditures of $213,300 (2001 - $0) available to be carried forward
indefinitely  to reduce taxable  income of future years.  Current tax laws limit
the amount of loss  available to be offset  against future taxable income when a
substantial  change in  ownership  occurs.  Therefore,  the amount  available to
offset future taxable income may be limited. No tax benefit has been reported in
the financial statements, because the Company believes there is a 50% or greater
chance the  carry-forwards  will expire unused.  Accordingly,  the potential tax
benefits of the loss  carry-forwards are offset by a valuation  allowance of the
same amount.

         The Company  evaluates its valuation  allowance  requirements  based on
projected future operations.  When  circumstances  change and causes a change in
management's  judgement  about the  recoverability  of deferred tax assets,  the
impact of the change on the valuation is reflected in current income.


<PAGE>


                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Continued)

NOTE 5 - DISCONTINUED OPERATIONS

         On September  12, 2002,  the  directors of the  Company's  wholly owned
subsidiary,  Niew  Industries,  Inc. sold the Company's  unfinished trams system
prototype to unrelated  parties for $63,585 with a down payment of $44,509 and a
receivable  of  $18,918  to be paid  within  12  months  of the  agreement.  The
purchaser  is also  required to complete  and sell the trams system and pay Niew
Industries, Inc. one half of the net sale proceeds, as defined in the agreement.

         Following the sale of the incomplete tram system prototype, the Company
decided to completely  dispose of its  subsidiary,  Niew  Industries,  Inc., and
focus  entirely  on  developing  a sales and  marketing  program for the Enermed
device and the Enermed  Therapy  through its majority  owned  subsidiary  Energy
Medicine Developments Corp., a Delaware corporation.

         On January 22,  2003,  we entered  into an agreement to sell our wholly
owned  subsidiary,  Niew  Industries,  Inc to the former  directors  of Niew for
$51,649  (CDN$  70,000).  On January 27, 2003,  we closed on the  agreement  and
received a $36,892 (CDN$ 50,000) down payment, with $7,378 (CDN$ 10,000) paid on
February 3, 2003 and the  remaining  $7,378 (CDN$  10,000)  payable on or before
September 12, 2003.

         The assets and  liabilities  Niew  Industries,  Inc.,  consisted of the
following:
<TABLE>
<CAPTION>
                                                                        January 27,       September 30,
                                                                           2003                2002
                                                                     -----------------  ------------------

<S>                                                                  <C>                <C>
Receivables                                                          $          23,424  $           23,332
Machinery & equipment, net                                                       4,375               4,625
                                                                     -----------------  ------------------
         Total assets                                                $          27,799  $           27,957

Accounts payable & accrued liabilities                               $          69,459  $           65,865
Bank overdraft                                                                   1,508               3,122
Related party loans                                                                  -                   -
Shareholder Payables                                                           228,871             227,717
                                                                     -----------------  ------------------
         Total liabilities                                                     299,838             296,704
                                                                     -----------------  ------------------

         Net liabilities disposed of                                 $        (272,039) $         (268,747)
                                                                     =================  ==================
</TABLE>

         Net  liabilities  disposed of have been  separately  classified  in the
accompanying consolidated balance sheet at September 30, 2002.


<PAGE>



Item 2.           Management's Discussion and Analysis or Plan of Operation.

This  quarterly  report  contains  forward-looking  statements  as that  term is
defined  in  the  Private  Securities  Litigation  Reform  Act  of  1995.  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",
"will", "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.

Our  financial  statements  are stated in United  States  Dollars  (US$) and are
prepared  in  accordance  with  United  States  Generally  Accepted   Accounting
Principles.  In this quarterly report,  unless otherwise  specified,  all dollar
amounts are expressed in United States Dollars.  All references to CDN$ refer to
Canadian Dollars.

As used in this  quarterly  report,  the terms "we",  "us",  "our",  and "Global
Innovative" mean Global Innovative Systems Inc., unless otherwise indicated.

Business Development - General

Global  Innovative was incorporated on September 14, 1995, under the laws of the
State of Nevada,  under the name "Legacy  Bodysentials  Inc.".  On September 25,
1996, we changed our name to "Legacy Minerals Inc.". On May 18, 1998, we changed
our name to "Global  Commonwealth  Inc.".  On November 12, 1999,  we changed our
name to our current name of "Global Innovative Systems Inc."

Our  corporate  offices  are  located  at Suite  104-630  Columbia  Street,  New
Westminster,  BC, Canada V3M 1A5. Our telephone number is (604) 522-8618 and our
facsimile number is (604) 522-9896.

Business Development During Last Three Years

Our company was inactive until January 31, 2000, when we closed a share exchange
agreement with the stockholders of Niew Industries Inc. Following the completion
of the  transaction,  Niew  Industries  became a wholly owned  subsidiary of our
company.  Because the  stockholders  of Niew  Industries  controlled  55% of the
resultant  entity,  and because the business of Niew Industries  represented the
only business  operations of the new entity,  the  transaction was recorded as a
reverse  acquisition.  Following the  accounting for reverse  acquisitions,  the
financial  statements  subsequent to closing of the share exchange are presented
as a continuation  of Niew  Industries  consistent  with the change of business.
Accordingly,  our operations are consolidated with those of Niew Industries from
the date of acquisition.

Niew  Industries  was  incorporated  on January 15, 1997,  under the Company Act
(British  Columbia),  and was inactive  until March 23, 1998,  when it began the
development of a twin rotating asphalt mixing system("Trams System").


<PAGE>



On September 12, 2002,  the directors of Niew sold the  unfinished  trams system
prototype to unrelated parties for $63,585 (CDN$ 100,000) with a down payment of
$44,509  (CDN$70,000) and a receivable of $18,918 (CDN$30,000) to be paid within
12 months of the agreement.  The purchaser is also required to complete and sell
the Trams System and pay Niew  Industries one half of the net sale proceeds,  as
defined in the agreement.

Following  the sale of the  incomplete  tram  system  prototype,  we  decided to
completely  dispose of our  subsidiary  Niew, and focus entirely on developing a
sales and  marketing  program  for the Enermed  device and the  Enermed  Therapy
through our majority owned subsidiary Energy Medicine Developments Corp.,

a Delaware corporation.  (See "Current Business")

On January 22,  2003,  we entered  into an  agreement  to sell our wholly  owned
subsidiary,  Niew  Industries,  Inc to the former  directors of Niew for $51,649
(CDN$  70,000).  On January 27, 2003,  we closed on the agreement and received a
$36,892 (CDN$  50,000) down payment,  with $7,378 (CDN$ 10,000) paid on February
3, 2003 and the remaining  $7,378 (CDN$ 10,000)  payable on or before  September
12, 2003.

Current Business

On October 2, 2001, we entered into a Purchase  Agreement  with Energy  Medicine
Developments  (North  America) Inc., a company  incorporated  in the province of
British Columbia.  Pursuant to the terms of the Purchase Agreement, we agreed to
purchase 100% of Energy Medicine  Developments (North America) Inc.'s issued and
outstanding  shares  for a  purchase  price of  $300,000.  As at the date of our
quarterly report, the acquisition of 100% of Energy Medicine Developments (North
America)  Inc.'s issued and  outstanding  shares had not been  completed and all
parties  had  agreed  to  renegotiate  the  terms of the  acquisition  of Energy
Medicine  Developments (North America) Inc. Energy Medicine  Developments (North
America) Inc.  operates the two treatment centers for the Enermed device and the
Enermed Therapy.  Energy Medicine Developments (North America) Inc. is primarily
involved in the  treatment of multiple  sclerosis and migraine  headaches  using
extremely low frequency (ELF), patient specific,  pulsed electromagnetic fields.
The treatment is identified by the trade name "Enermed Therapy". Energy Medicine
Developments  (North  America) Inc. is also heavily  involved in research  using
this specific  Enermed Therapy,  and is a leader in the clinical  application of
pulsed electromagnetic therapies.

Also on October 2, 2001, we entered into an  Acquisition  Agreement  with Energy
Medicine Developments Corp., a Delaware corporation, pursuant to which we agreed
to  purchase  all of the  issued  and  outstanding  shares  of  Energy  Medicine
Developments  Corp.  in exchange for  18,000,000  of our common  shares.  Energy
Medicine  Developments  Corp.  owns the  world-wide  marketing and  distribution
rights to the Enermed Therapy and the Enermed device as described below.

We have now entered into an Agreement  and Plan of Share  Exchange  with four of
the individual shareholders of each of Energy Medicine Developments Corp. and of
Energy Medicine  Developments  (North America) Inc. for the acquisition of their
respective  interests in both of these  companies  totaling,  in the  aggregate,
approximately  84% of the  issued  and  outstanding  shares  of  each  of  these
companies.

On  February  6,  2002,  April  8,  2003  and May 12,  2003,  pursuant  to these
Agreements and Plans of Share  Exchange,  we have  completed the  acquisition of
approximately  85.74% of the issued and  outstanding  shares of Energy  Medicine
Developments  Corp.,  for which we exchanged an aggregate total of 15,433,579 of
our common shares.  We have not yet closed the  acquisition of any of the shares
of Energy Development (North America) Inc.


<PAGE>



The Enermed Therapy TM

Using  the  proprietary   bioelectric   frequency   analyzer,   Energy  Medicine
Developments (North America) Inc. is able to measure the strength,  or amplitude
of  bioelectromagnetic  fields generated by the human body. The area of interest
to Energy Medicine  Developments (North America) Inc. is between 0.5 and 25.5 hz
(oscillations per second). The bioelectric frequency analyzer software processes
these signals and identifies  those with low amplitudes.  Proprietary  treatment
guidelines  are used in  conjunction  with the  bioelectric  frequency  analyzer
analysis for each patient to select the frequencies that will be programmed into
the Enermed device.

The Enermed  device is housed in a round,  lightweight  plastic casing just over
1.5 inches in diameter.  It consists of a computer  chip and a solenoid coil and
is powered by a  replaceable 3 volt lithium  battery.  Patients wear the Enermed
device  between  four and 24 hours a day.  This  continuous  exposure  to subtle
electromagnetic  fields  (about the  strength  of the earth's  magnetic  field),
pulsing at frequencies appropriate for the unique bioelectromagnetic and symptom
profile of the client is what brings about symptomatic relief.

Treatment Delivery

The Enermed device is not an  over-the-counter  product,  nor one that untrained
technicians or medical practitioners can deliver. Currently all patients seeking
treatment  must visit one of two  treatment  facilities  in  Canada,  either the
Vancouver  Center,  which has been  operating  since 1995, or the Toronto Center
which opened in 1997.  These treatment  centers also function as service centers
for customers who require  repairs to or  replacement  of their Enermed  device.
Training  manuals  and  quality  control  procedures  based on years of clinical
experience and research  results will ensure that new technicians are trained to
the highest standards.

Pursuant to the terms of a Royalty Agreement,  we were granted the right to use,
distribute,  market and sell the Enermed  device,  and any other  derivative  or
related  product  developed by either our company or by another  company  Energy
Medicine  Developments  Inc., a company  incorporated in the province of British
Columbia.  Energy Medicine  Developments,  Inc. is currently owned 50% by Fraser
Lawrie,  our President & CEO and 50% by Robert Fletcher,  our CFO & COO. We will
pay Energy Medicine Developments Inc. the following royalties during each of our
fiscal years, in perpetuity:

         1.       0 - 50,000  devices:  seven  percent (7%) of the selling price
                  for the first 50,000 devices sold each year during the Royalty
                  Agreement;

         2.       Over 50,000  devices:  five percent (5%) of the selling  price
                  for each device sold beyond the initial  50,000  devices  sold
                  each year during the Royalty Agreement; and

         3.       Other Products:  ten percent (10%) of the gross selling price,
                  prior to any  discounts,  of any other  product  manufactured,
                  sold or distributed by our company, payable at the end of each
                  calendar month for sales in the previous month.

As of  the  date  of  this  quarterly  report,  we  have  not  commenced  using,
distributing,  marketing  or  selling  the  Enermed  device  under  the  Royalty
Agreement.


<PAGE>



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 outline  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".

Our  common  shares  are  considered  speculative  during  our  search for a new
business  opportunity.  Prospective investors should consider carefully the risk
factors set out below.

Risks Related to our Current Business Operations

WE ARE A DEVELOPMENT  STAGE COMPANY WITH A LIMITED OPERATING HISTORY WHICH MAKES
IT DIFFICULT TO EVALUATE WHETHER WE WILL OPERATE PROFITABLY.

We are a  development  stage company which is involved in the marketing and sale
of the Enermed device and the Enermed Therapy.  As a relatively new company,  we
do not  have a  historical  record  of sales  and  revenues  nor an  established
business track record. We have not earned any revenues since our formation.

Upon  completion  of the  acquisition  of Energy  Medicine  Developments  (North
America)  Inc., our ability to  successfully  market and sell the Enermed device
and the Enermed Therapy will depend on our ability to, among other things:

         1.       continue to provide  advice and treatment  which is helpful to
                  its users;

         2.       maintain and expand its customer  base for the Enermed  device
                  and the Enermed Therapy; and

         3.       obtain the necessary financing to conduct ongoing research and
                  development and to develop and implement a sales and marketing
                  program.

Given our limited operating history,  lack of sales and operating losses,  there
can be no  assurance  that we will be able to  achieve  any of these  goals  and
develop a sufficiently large customer base to be profitable.

SINCE WE HAVE A HISTORY  OF NET LOSSES AND A LACK OF  ESTABLISHED  REVENUES,  WE
EXPECT TO INCUR NET LOSSES IN THE FUTURE.

We did not generate any revenues and incurred  cumulative  losses for the period
from January 15, 1997 (incorporation) to present. Although we anticipate that we
will be able to  generate  revenues in the  future,  we also expect  development
costs and operating costs to increase as well. Consequently, we expect to incur


<PAGE>



operating  losses and  negative  cash flow until the Enermed  device and Enermed
Therapy gain sufficient market acceptance to generate a commercially  viable and
sustainable  level of sales, and sales of these products are made so that we are
operating in a profitable manner.  These  circumstances  raise substantial doubt
about our ability to continue as a going concern as described in an  explanatory
paragraph  to our  independent  accountant's  report on the  September  30, 2002
audited  financial  statements,  which  forms part of our annual  report on Form
10-KSB.  To the extent  that such  expenses  are not  followed  by revenues in a
timely  manner,  our business,  results of operations,  financial  condition and
prospects would be materially adversely affected.

WE ARE UNCERTAIN THAT WE WILL BE ABLE TO OBTAIN  ADDITIONAL  CAPITAL THAT MAY BE
NECESSARY TO ESTABLISH OUR BUSINESS.

We  incurred  a  cumulative  net loss  for the  period  from  January  15,  1997
(incorporation)  to June 30, 2003. As a result of these losses and negative cash
flows from operations, our ability to continue operations will be dependent upon
the  availability  of capital from outside  sources  unless and until we achieve
profitability.

Our future capital requirements will depend on many factors, including cash flow
from operations,  progress in developing new products,  competing  knowledge and
market  developments  and an ability to  successfully  market our products.  Our
recurring  operating losses and growing working capital needs will require us to
obtain  additional  capital to operate our business  before we have  established
that our business will generate  significant  revenue. We have predicted that we
will require  approximately  $1,000,000  over the next twelve months in order to
accomplish  our goals to maintain  and expand the market for the Enermed  device
and the  Enermed  Therapy.  However,  there is no  assurance  that  actual  cash
requirements will not exceed our estimates.  In particular,  additional  capital
may be required in the event that we:

         1.  incur  delays and  additional  expenses  as a result of  technology
             failure;

         2. are unable to create a substantial market for our Products; or

         3. incur any significant unanticipated expenses.

The occurrence of any of the  aforementioned  events could adversely  affect our
ability to meet our business plans.

We will depend almost  exclusively on outside capital to maintain and expand the
market for the Enermed device and the Enermed Therapy.  Such outside capital may
include the sale of additional stock and/or commercial  borrowing.  There can be
no assurance  that  capital  will  continue to be available if necessary to meet
these continuing  development costs or, if the capital is available,  it will be
on terms acceptable to our company. The issuance of additional equity securities
by our company would result in a significant dilution in the equity interests of
its current stockholders. Obtaining commercial loans, assuming those loans would
be  available,   will  increase  our  company's   liabilities  and  future  cash
commitments.  If we are unable to obtain  financing  in the amounts and on terms
deemed acceptable, our business and future success may be adversely affected.


<PAGE>



OUR  FAILURE TO  EFFECTIVELY  MANAGE OUR GROWTH  COULD HARM OUR FUTURE  BUSINESS
RESULTS AND MAY STRAIN OUR MANAGERIAL AND OPERATIONAL RESOURCES.

As we proceed with the sales and marketing of the Enermed device and the Enermed
Therapy,  we expect to experience  significant and rapid growth in the scope and
complexity  of our  business.  We will need to add staff to market our products,
manage  operations,  handle sales and marketing  efforts and perform finance and
accounting  functions.  We will be required to hire a broad range of  additional
personnel in order to successfully advance our operations. This growth is likely
to place a strain on our management and  operational  resources.  The failure to
develop  and  implement  effective  systems,  or to hire and  retain  sufficient
personnel for the  performance of all of the functions  necessary to effectively
service  and manage our  potential  business,  or the  failure to manage  growth
effectively,  could  have  a  materially  adverse  effect  on our  business  and
financial condition.

FUTURE SALES OF COMMON STOCK BY OUR EXISTING SHAREHOLDERS COULD REDUCE THE PRICE
OF OUR COMMON STOCK.

The market price of our common  stock could  decline as a result of sales by our
existing  stockholders  of shares of common stock in the market.  Likewise,  the
perception  that these sales could occur may result in the decline of the market
price of our common stock.  These sales also might make it more difficult for us
to sell  equity  securities  in the  future  at a time  and at a  price  we deem
appropriate.

UNLESS WE CAN ESTABLISH SIGNIFICANT SALES OF OUR CURRENT PRODUCTS, OUR POTENTIAL
REVENUES MAY BE SIGNIFICANTLY REDUCED.

We expect  that the  Enermed  device and the  Enermed  Therapy  and any  similar
products  we develop  will  account  for a  majority,  if not all, of our future
revenue.  Continued and expanded market acceptance of the Enermed device and the
Enermed Therapy is, therefore, critical to our future success and to our ability
to generate revenues. Failure to achieve market acceptance of the Enermed device
and the Enermed Therapy,  as a result of competition,  technological  change, or
otherwise,   would  significantly  harm  our  business.   Our  future  financial
performance will depend in significant  part on the continued market  acceptance
of the  Enermed  device  and  the  Enermed  Therapy,  and  on  the  development,
introduction  and  market  acceptance  of any future  products.  There can be no
assurance  that we will be successful  in marketing  the Enermed  device and the
Enermed  Therapy  or  any  future  products  and  any  failure  to do  so  would
significantly harm our business.

THE LOSS OF OUR KEY TECHNICAL INDIVIDUALS WOULD HAVE AN ADVERSE IMPACT ON FUTURE
DEVELOPMENT AND COULD IMPAIR OUR ABILITY TO SUCCEED.

Our performance is substantially  dependent on the technical expertise of Robert
Fletcher  and Fraser  Lawrie  (Enermed)  and our ability to continue to hire and
retain such personnel. The loss of any of Robert Fletcher or Fraser Lawrie could
have a  materially  adverse  effect  on  our  business,  development,  financial
condition, and operating results. We do not maintain "key person" life insurance
on any of our  directors  or senior  executive  officers and we do not have life
insurance on any of Robert Fletcher or Fraser Lawrie.


<PAGE>



TRADING OF OUR STOCK MAY BE  RESTRICTED  BY THE SEC'S  PENNY  STOCK  REGULATIONS
WHICH MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK.

The U.S.  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 SEC  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.

SINCE A RELATIVELY  SMALL GROUP OF  STOCKHOLDERS  OWN A LARGE  PERCENTAGE OF OUR
OUTSTANDING SHARES,  THEY ARE ABLE TO SIGNIFICANTLY  INFLUENCE MATTERS REQUIRING
STOCKHOLDER APPROVAL.

Stockholders  owning a significant  percentage of our  outstanding  voting stock
represent the ultimate control over our affairs.  Three  stockholders  currently
control  approximately  73% of the outstanding  shares of our common stock. As a
result of this ownership,  these stockholders will likely be able to approve any
major  transactions  including the election of directors without the approval of
the other shareholders.

WE DO NOT EXPECT TO DECLARE OR PAY ANY DIVIDENDS.

We have not  declared  or paid any  dividends  on our  common  stock  since  our
inception,  and  we  do  not  anticipate  paying  any  such  dividends  for  the
foreseeable future.

BECAUSE OF OUR LIMITED OPERATING HISTORY,  IT IS DIFFICULT TO PREDICT OUR FUTURE
REVENUES.

As a result of our limited  operating  history and the new  technology  which we
seek to  introduce  into the  markets  in which we  compete,  we are  unable  to
accurately  forecast our  revenues.  Our current and future  expense  levels are
based largely on our plan of operation and estimates of future  revenues and are
to a large extent fixed.  Sales and operating  results  generally  depend on our
ability  to  develop a base of  customers  and  businesses.  We may be unable to
adjust spending in a timely manner to compensate for any unexpected


<PAGE>



revenue shortfall.  Accordingly, any significant shortfall in estimated revenues
in relation to our planned  expenditures  would have an immediate adverse effect
on our business, prospects, financial condition and results of operations.

Further, as a strategic response to changes in the competitive  environment,  we
may from time to time make certain pricing,  service or marketing decisions that
could have a materially  adverse effect on our business and financial  condition
and results of operations.

WE EXPECT FLUCTUATIONS IN OUR OPERATING RESULTS IN THE FUTURE.

We expect to experience significant fluctuations in our future operating results
due to a variety of factors, many of which are outside our control. Factors that
may adversely affect our operating results include but are not limited to:

         1.       our  ability to  attract  and retain  customers  and  maintain
                  customer satisfaction;

         2.       the  announcement or introduction of new services and products
                  by us and by our competitors;

         3.       consumer   acceptance  of  the  Enermed  device,  the  Enermed
                  Therapy, or other systems and products offered by us;

         4.       our ability to attract new personnel in a timely and effective
                  manner;

         5.       the  amount  and  timing  of   operating   costs  and  capital
                  expenditures relating to expansion of our business, operations
                  and infrastructure;

         6.       governmental regulation;

         7.       general economic conditions; and

WE WILL HAVE TO EXPEND SUBSTANTIAL FUNDS ON ADVERTISING,  SALES AND MARKETING IN
THE FUTURE.

We have not incurred  significant  advertising,  sales and marketing expenses to
date. To increase  awareness for the Enermed device and the Enermed Therapy,  we
expect to spend  significantly  more on advertising,  sales and marketing in the
future. If our marketing strategy is unsuccessful, we may not be able to recover
these  expenses or even generate any revenues.  We will be required to develop a
marketing and sales campaign that will effectively demonstrate the advantages of
our,  services and products.  To date, our experience  with respect to marketing
our  products  and  services  is very  limited.  We may also elect to enter into
agreements  or  relationships  with third  parties  regarding  the  promotion or
marketing  of the  Enermed  device  and the  Enermed  Therapy.  There  can be no
assurance  that  we  will be able to  establish  adequate  sales  and  marketing
capabilities,  that  we  will be able to  enter  into  marketing  agreements  or
relationships  with third parties on financially  acceptable  terms, or that any
third  parties with whom we enter into such  arrangements  will be successful in
marketing  and promoting the Enermed  device and the Enermed  Therapy,  or other
products and services offered by us.


<PAGE>



OUR FUTURE REVENUES ARE DEPENDENT ON THE ACCEPTANCE OF THE PRODUCTS AND SERVICES
THAT WE OFFER.

Our  future  revenues  and our  ability  to  generate  profits in the future are
substantially  dependent upon the  widespread  acceptance and use of the Enermed
device and the  Enermed  Therapy.  There can be no  assurance  that the  Enermed
device  and  the  Enermed   Therapy  will  become  widely  accepted  or  that  a
sufficiently broad base of consumers will use the Enermed device and the Enermed
Therapy.

THERE MAY BE THE POSSIBILITY OF VOLATILE SHARE PRICES.

The  trading  price of our common  shares  may be subject to wide  fluctuations.
Trading  prices of the common  shares may  fluctuate  in response to a number of
factors, many of which are beyond our control. In addition,  the stock market in
general has experienced  extreme price and volume  fluctuations  that have often
been  unrelated  or  disproportionate  to  the  operating  performance  of  such
companies.  Broad market and industry  factors may  adversely  affect the market
price of the common shares, regardless of our operating performance.

In the past,  following periods of volatility in the market price of a company's
securities,  securities class-action litigation has often been instituted.  Such
litigation,  if  instituted,  could  result  in  substantial  costs for us and a
diversion of management's attention and resources.

OUR CURRENT AND FUTURE SHAREHOLDERS MAY EXPERIENCE DILUTION IN THE FUTURE.

The grant and exercise of warrants to  creditors  or otherwise or stock  options
would likely result in a dilution of the value of our common  shares.  Moreover,
we may seek authorization to increase the number of our authorized shares and to
sell additional securities and/or rights to purchase such securities at any time
in the future.  Dilution of the value of the common  shares would likely  result
from such sales.

Plan of Operation

Our  primary  objective  over the next 12 months,  will be to  proceed  with the
implementation  of a sales and marketing  program for the Enermed device and the
Enermed  Therapy and we anticipate  that we will proceed with the acquisition of
Energy Medicine Developments (North America) Inc.

We anticipate  that we will be able to  accomplish  our plan of operations if we
can raise additional  financing.  Our actual  expenditures and business plan may
differ from our plan of  operations.  Our board of  directors  may decide not to
pursue our plan of operations as set out in this  section.  In addition,  we may
modify our plan of operations based on the amount of available  financing in the
event that we cannot raise the  required  financing  to  accomplish  our plan of
operations.  We do not currently  have any  arrangement in place for any debt or
equity  financing which would enable us to satisfy the cash  requirements of our
plan of operations.

We anticipate  that we will incur further  operating  losses in the  foreseeable
future.  We base this  expectation in part on the assumption  that we will incur
substantial operating expenses in completing our plan of operations.  Our future
financial  results are also uncertain due to a number of factors,  many of which
are outside of our control.  These factors include,  but are not limited to, the
following:


<PAGE>



         1.       willingness of external  investors to advance capital to us to
                  finance the  implementation  of a sales and marketing  program
                  for the Enermed device and Enermed therapy;

         2.       general  economic  conditions,   government   regulations  and
                  increased industry competition;

         3.       uncertainty with respect to whether our products can:

                  a)  comply   with   regulations   in  other   North   American
                  jurisdictions; and

                  b) continue to meet new regulatory requirements as they arise;

         4.       whether   there  will  be  a  market  for  our  products  once
                  development is complete;

         5.       whether  demand for the  products  will be adequate to support
                  economically viable production;

         6.       whether there will be continued and expanded market acceptance
                  of the Enermed device and the Enermed therapy.

Due to our lack of operating  history,  there exists substantial doubt about our
ability  to  continue  as a  going  concern,  as  described  in our  independent
auditors' report on, and the notes to, the consolidated financial statements for
the year ended September 30, 2002.

Cash Requirements

Over the twelve month period ending June 30, 2003,  we  anticipate  that we will
require a minimum of  approximately  $1,000,000  in  connection  with the recent
acquisition of Energy Medicine  Developments Corp. and the proposed  acquisition
of  Energy  Medicine   Developments   (North  America)  Inc.  We  estimate  that
approximately  $250,000  will be required for  management  expenses and $400,000
will be required to cover the costs of the ongoing development, clinical testing
and  clinical  trials of new  products  related to the  Enermed  technology  and
$350,000 for the implementation of a sales and marketing program for the Enermed
device  and the  Enermed  Therapy.  In light of our lack of funds,  we intend to
apply any available funding first towards our ongoing management expenses,  then
to the  implementation  of a sales and  marketing  program,  and  finally to our
ongoing development.

We do not have sufficient  funds on hand to complete the ongoing  development of
Enermed products.  We intend to obtain our future cash requirements  through the
sale of our equity  securities or by obtaining  further debt  financing.  In the
event that we are not successful in raising additional financing,  we anticipate
that we will not be able to sustain  our  business  operations  without  further
short-term  financing from our  controlling  shareholders.  Deficiencies in cash
will be covered by  additional  loans and advances by our  directors  until such
time that we can attract equity investors. Should we be unable to attract equity
investors,  cutbacks and deferrals of the planned  implementation of a sales and
marketing  program of the Enermed  device and Enermed  Therapy would occur until
such funds were otherwise available  externally.  Alternatively,  we may have to
consider a joint venture in order to proceed with our plans of operations.


<PAGE>



Product Research and Development

During the nine months ended June 30, 2003, we expended $121,581 on research and
development.  During the nine months ended June 30, 2002, we expended  $4,606 on
research and development,  all of which pertained to discontinued operations. If
sufficient  capital is  available,  we will continue to expend time and money in
the next 12 months on research and development  activities on Energy  Medicine's
product and technologies to make them commercially viable in new markets.

Purchase of Significant Equipment

We do not intend to  purchase  any  significant  equipment  over the next twelve
months.  Any monies  raised by our  company  will first be expended on our plans
with respect to the Enermed device and the Enermed Therapy.

Sales and Marketing

We may be required to expend significant monies on the implementation of a sales
and  marketing  program  for the Enermed  Therapy and Enermed  device to develop
sales and a brand name for the product.

Employees

Over the next twelve months, we expect an increase in the number of employees we
retain.  If we are unable to hire  suitable  sales,  marketing  and  operational
personnel,  we may not be able to  successfully  implement a sales and marketing
program and establish acceptance of Energy Medicine's technology. We will likely
hire  a  significant   number  of  additional   personnel  for  Energy  Medicine
Developments Corp. Competition for these individuals in the technology sector is
intense,  and we may not be able to attract,  assimilate,  or retain  additional
highly  qualified  personnel in the future.  The failure to attract,  integrate,
motivate and retain these employees could harm our business.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and the disclosure of contingent  assets and liabilities of the date
of the financial  statements  and the reported  amounts of revenues and expenses
during the reporting  period.  Note 1 to the Consolidated  Financial  Statements
describes  the  significant   accounting   policies  and  methods  used  in  the
preparation of the Consolidated  Financial  Statements.  Estimates are used for,
but not  limited  to,  contingencies  and taxes.  Actual  results  could  differ
materially from those estimates.  The following critical accounting policies are
impacted  significantly  by judgments,  assumptions,  and estimates  used in the
preparation of the Consolidated Financial Statements.

We are subject to various loss  contingencies  arising in the ordinary course of
business.  We consider the  likelihood  of loss or impairment of an asset or the
incurrence  of a liability,  as well as our ability to  reasonably  estimate the
amount of loss in determining loss contingencies.  An estimated loss contingency
is accrued when management  concludes that it is probable that an asset has been
impaired  or a  liability  has been  incurred  and the amount of the loss can be
reasonably estimated.  We regularly evaluate current information available to us
to determine whether such accruals should be adjusted.


<PAGE>



Recently Enacted and Proposed Regulatory Changes

Recently  enacted and  proposed  changes in the laws and  regulations  affecting
public companies, including the provisions of the Sarbanes-Oxley Act of 2002 and
rules proposed by the SEC and NASDAQ could cause us to incur  increased costs as
we evaluate the implications of new rules and respond to new  requirements.  The
new  rules  could  make it more  difficult  for us to  obtain  certain  types of
insurance,  including directors and officers liability insurance,  and we may be
forced to accept  reduced  policy  limits and  coverage  or incur  substantially
higher costs to obtain the same or similar coverage.  The impact of these events
could also make it more difficult for us to attract and retain qualified persons
to serve on the Company's board of directors,  or as executive officers.  We are
presently  evaluating and monitoring  developments with respect to these new and
proposed  rules,  and we cannot predict or estimate the amount of the additional
costs we may incur or the timing of such costs.

Item 3.  Controls and Procedures

         The Company's Chief Executive  Officer and Chief Financial Officer have
concluded,  based on an evaluation  conducted within 90 days prior to the filing
date of this  quarterly  report on Form 10-QSB,  that the  Company's  disclosure
controls and  procedures  have  functioned  effectively  so as to provide  those
officers the information necessary whether:

                  (I) this  quarterly  report on Form 10-QB  contains any untrue
                  statement of a material fact or omits to state a material fact
                  necessary  to  make  the  statements  made,  in  light  of the
                  circumstances  under  which such  statements  were  made,  not
                  misleading   with  respect  to  the  period  covered  by  this
                  quarterly report on Form 10-QSB, and

                  (ii) the financial statements, and other financial information
                  included  in this  quarterly  report  on Form  10-QSB,  fairly
                  present in all  material  respects  the  financial  condition,
                  results of operations and cash flows of the Company as of, and
                  for, the periods  presented in this  quarterly  report on Form
                  10-QSB.

         There  have  been no  significant  changes  in the  Company's  internal
controls or in other factors since the date of the Chief Executive Officer's and
Chief  Financial  Officer's  evaluation  that could  significantly  affect these
internal controls,  including any corrective actions with regards to significant
deficiencies and material weaknesses.


<PAGE>



                           Part II - OTHER INFORMATION

Item 1.           Legal Proceedings.

We are not a party to any pending legal action,  suit, or proceeding  nor is any
of our property the subject of any legal proceeding. 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 2.           Changes in Securities.

None.

Item 3.           Defaults Upon Senior Securities.

None.

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

None.

Item 5.           Other Information.

None.

Item 6.           Exhibits and Reports on Form 8-K.

Exhibits

Exhibits Required by Item 601 of Regulation S-B

(3)      Articles of Incorporation and By-laws

3.1      Charter  (incorporated by reference from our Registration  Statement on
         Form 10-SB filed on April 11, 2000)

3.2      Articles  of   Incorporation   (incorporated   by  reference  from  our
         Registration Statement on Form 10-SB filed on April 11, 2000)

3.3      Bylaws  (incorporated by reference from our  Registration  Statement on
         Form 10-SB filed on April 11, 2000)

(10)     Material Contracts

10.1     Acquisition Agreement between Global Innovative Systems Inc. and Energy
         Medicine  Developments  Corp.,  dated October 2, 2001  (incorporated by
         reference from our Form 10-KSB Annual Report filed on January 15, 2002)


<PAGE>



10.2     Royalty  Agreement  between Global  Innovative  Systems Inc. and Energy
         Medicine  Developments  Inc.,  dated October 4, 2001  (incorporated  by
         reference from our Form 10-KSB Annual Report filed on January 15, 2002)

10.3     Purchase  Agreement between Global  Innovative  Systems Inc. and Energy
         Medicine  Developments  (North  America)  Inc.,  dated  October 2, 2001
         (incorporated  by reference  from our Form 8-K Current  Report filed on
         February 7, 2002)

10.4     Form of Share  Exchange  Agreement  between Global  Innovative  Systems
         Inc., Energy Medicine  Developments Corp., Energy Medicine Developments
         (North  America)  Inc.  and  individual  shareholders  of  both  Energy
         Medicine  Developments  Corp. and Energy Medicine  Developments  (North
         America)  Inc.  (incorporated  by  reference  from our Form 8-K Current
         Report filed on February 7, 2002)

31.1    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.1    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



<PAGE>



                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

GLOBAL INNOVATIVE SYSTEMS, INC.

By: /s/ Fraser Lawrie
Fraser Lawrie, President & CEO
Date: August 14, 2003

By: /s/ Robert Fletcher
Robert Fletcher, COO & CFO
Date: August 14, 2003