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, 2002
                                    -------------

[ ] 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:  36,906,509 common shares issued and
outstanding as at June 30, 2002

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.



DISCLOSURE


To: The Shareholders of Global Innovative Systems, Inc.


It is  the  opinion  of  management  that  the  consolidated  interim  financial
statements for the quarter ended June 30, 2002 include all adjustments necessary
in  order  to  ensure  that  the  consolidated   financial  statements  are  not
misleading.


Prince George, British Columbia
Date: August 6, 2002
/s/ Ken Bergestad
Director of Global Innovative Systems, Inc.



<PAGE>







                         INDEPENDENT ACCOUNTANT'S REPORT



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

        We have reviewed the  accompanying  balance sheets of Global  Innovative
Systems,  Inc. (a  development  stage company) as of June 30, 2002 and September
30, 2001, and the related statements of operations for the three and nine months
ended June 30, 2002 and 2001,  and cash flows for the nine month  periods  ended
June 30, 2002 and 2001. 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 statement 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  for  them to be in
conformity with accounting principles generally accepted in the United States of
America.

                                                   Respectfully submitted



                                                   /S/ ROBISON, HILL & CO.
                                                   Certified Public Accountants

Salt Lake City, Utah
August 6, 2002









<PAGE>



                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                  June 30,      September 30,
                                                                    2002             2001
                                                               ---------------  --------------
ASSETS
Current Assets:
<S>                                                            <C>              <C>
Cash and cash equivalents                                      $             -  $            -
Receivables                                                                153             299
Prepaid expense                                                              -             720
                                                               ---------------  --------------
     Total Current Assets                                                  153           1,019
                                                               ---------------  --------------

Fixed Assets:
Machinery & Equipment                                                   12,652          12,652
Less Accumulated Depreciation                                           (7,748)         (6,740)
                                                               ---------------  --------------
                                                                         4,904           5,912
                                                               ---------------  --------------
     TOTAL ASSETS                                              $         5,057  $        6,931
                                                               ===============  ==============

LIABILITIES
Current Liabilities:
Accounts Payable and Accrued Liabilities                       $        91,842  $       73,200
Bank Overdraft                                                           3,140           2,574
Related Party Loans                                                     31,277          30,092
Shareholder Payables                                                   268,019         219,821
                                                               ---------------  --------------
     Total Current Liabilities                                         394,278         325,687
                                                               ---------------  --------------

     Total Liabilities                                                 394,278         325,687
                                                               ---------------  --------------

STOCKHOLDERS EQUITY
Common Stock - $0.001 par value,  200,000,000
   shares authorized,  36,906,509 and
   21,700,000 shares issued and
   outstanding at June 30, 2002 and September 30, 2001.                 36,907          21,700
Additional Paid-in Capital                                             397,286         412,493
Currency Translation Adjustment                                         (8,965)          5,303
Deficit Accumulated During the
  Development Stage                                                   (814,449)       (758,252)
                                                               ---------------  --------------
     Total Stockholders' Equity                                       (389,221)       (318,756)
                                                               ---------------  --------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $         5,057  $        6,931
                                                               ===============  ==============
</TABLE>




                 See accompanying notes and accountants' report.


<PAGE>



                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                                Cumulative
                                                                                                  Since
                                                                                               January 15,
                                                                                                   1997
                                For the three months ended       For the nine months ended     Inception of
                                         June 30,                        June 30,              Development
                             --------------------------------  -----------------------------
                                  2002             2001            2002            2001           Stage
                             --------------- ----------------  -------------  --------------  --------------
<S>                          <C>             <C>               <C>            <C>             <C>
REVENUES                     $             - $              -  $           -  $            -  $            -

EXPENSES
   Research & Development              2,043            1,535          4,606           4,522         413,036
   General & Administrative           12,675           18,419         51,591          63,950         406,028
                             --------------- ----------------  -------------  --------------  --------------
                                      14,718           19,954         56,197          68,472         819,064
                             --------------- ----------------  -------------  --------------  --------------

Net Loss from Operations             (14,718)         (19,954)       (56,197)        (68,472)       (819,064)
                             --------------- ----------------  -------------  --------------  --------------

Other Income (Expense)
   Interest, Net                           -                -              -               -           4,615
                             --------------- ----------------  -------------  --------------  --------------

NET INCOME (LOSS)            $       (14,718)$        (19,954) $     (56,197) $      (68,472) $     (814,449)
                             =============== ================  =============  ==============  ==============

Loss Per Share               $             - $              -  $           -  $            -
                             =============== ================  =============  ==============
</TABLE>















                 See accompanying notes and accountants' report.


<PAGE>



                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                                Cumulative
                                                                                                  Since
                                                                                               January 15,
                                                                                                   1997
                                                                For the nine months ended      Inception of
                                                                         June 30,              Development
                                                              ------------------------------
                                                                   2002            2001           Stage
                                                              --------------  --------------  --------------
Cash Flows From Operating Activities
<S>                                                           <C>             <C>             <C>
   Net income (loss) for the period                           $      (56,197) $      (68,472) $     (814,449)
Adjustments to reconcile net loss to net cash
   Provided by operating activities
     Currency Translation Adjustment                                  (2,493)          2,929          11,507
     Depreciation and Amortization                                     1,008           1,287           7,748
     Write Down of Assets                                                  -               -          22,799
     Decrease (Increase) in Receivables                                  146            (471)           (153)
     Decrease (Increase) in Prepaid Expense                              720           2,410               -
     Increase in Accounts Payable & Accrued Liabilities               18,642          20,188          91,842
     Increase (Decrease) in Bank Overdraft                               566           2,716           3,140
                                                              --------------  --------------  --------------
Net Cash Provided by (Used in) Operating Activities                  (37,608)        (39,413)       (677,566)
                                                              --------------  --------------  --------------

Cash Flows From Investing Activities
   Cash Acquired on Recapitalization                                       -               -          10,064
   Purchase of Property & Equipment                                        -               -         (13,544)
   Purchase of License                                                     -               -         (19,639)
                                                              --------------  --------------  --------------
Net Cash Used by Investing Activities                                      -               -         (23,119)
                                                              --------------  --------------  --------------

Cash Flows From Financing Activities
   Related Party Loans                                                     -               -          32,095
   Advances from Shareholders & Directors                             37,608          38,687         668,590
                                                              --------------  --------------  --------------
Net Cash Provided by (Used in) Financing Activities                   37,608          38,687         700,685
                                                              --------------  --------------  --------------

Increase (Decrease) in Cash                                                -            (726)              -
Cash at beginning of period                                                -             726               -
                                                              --------------  --------------  --------------
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 Niew Industries and Shareholder payables $            -  $            -  $      420,864
   Licenses acuired by issuance of accounts payable           $            -  $            -  $       31,037
</TABLE>


                 See accompanying notes and accountants' report.


<PAGE>



                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                     FOR THE NINE MONTHS ENDED JUNE 30, 2002


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, 2002 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.  To date,  this has been
Niew's only business activity.

        On February 6, 2002,  the Company  completed the  acquisition  of 84% 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. The
Company intends to operate both subsidiaries.







<PAGE>



                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                     FOR THE NINE MONTHS ENDED JUNE 30, 2002
                                   (Continued)


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

Principles of Consolidation

        The  consolidated  financial  statements for June 30, 2002 and September
30, 2001 and the three and nine months  ended June 30, 2002 and 2001 include the
accounts of Global  Innovative  Systems,  Inc.  and the  following  wholly owned
subsidiaries:

*       Niew Industries, Inc., a British Columbia corporation (100%)
*       Energy Medicine Developments Corp., a Delaware corporation (84%)

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

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
at June 30, 2002, the Company has accumulated  operating losses of approximately
$800,000 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  $1,550,000 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 nine 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 FINANCIAL STATEMENTS
                     FOR THE NINE MONTHS ENDED JUNE 30, 2002
                                   (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-live lived assets and certain identifiable  intangibles to be disposed
of.  SFAS No. 121  requires  that  long-lived  assets and  certain  identifiable
intangibles  be 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.

Foreign currency remeasurement/translation

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



<PAGE>



                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                     FOR THE NINE MONTHS ENDED JUNE 30, 2002
                                   (Continued)

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

Earnings (Loss) per Share

        The  reconciliations  of the  numerators and  denominators  of the basic
income (loss) per share computations are as follows:
<TABLE>
<CAPTION>
                                                                                  Per-Share
                                                   Income          Shares           Amount
                                                   ------          ------           ------
                                                 (Numerator)    (Denominator)

Basic & Diluted Loss per Share                    For the three months ended June 30, 2001
<S>                                            <C>                  <C>         <C>
Loss to common shareholders                    $       (19,954)     21,700,000  $            -
                                               =============== ===============  ==============

Basic & Diluted Loss per Share                    For the three months ended June 30, 2002
Loss to common shareholders                    $       (14,718)     36,906,509  $            -
                                               =============== ===============  ==============

Basic & Diluted Loss per Share                     For the nine months ended June 30, 2001
Loss to common shareholders                    $       (68,472)     21,700,000  $            -
                                               =============== ===============  ==============

Basic & Diluted Loss per Share                     For the nine months ended June 30, 2002
Loss to common shareholders                    $       (56,197)     29,776,717  $            -
                                               =============== ===============  ==============
</TABLE>

        The Company has no outstanding  dilutive  common stock  equivalents  for
June 30, 2002 and 2001.

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.



<PAGE>



                         GLOBAL INNOVATIVE SYSTEMS, INC.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                     FOR THE NINE MONTHS ENDED JUNE 30, 2002
                                   (Continued)

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

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.

Reclassifications

        Certain   reclassifications   have  been  made  in  the  2001  financial
statements to conform with the 2002 presentation.

NOTE 2 - RELATED PARTY TRANSACTIONS

        The  Company  has  borrowed  $31,277  ($47,500  Canadian)  from a person
related to one of the directors.  The loan is unsecured and is without  specific
terms of repayment. Interest is payable at 8%.

        As at June 30, 2002 and September 30, 2001, shareholder payables include
$268,019  ($407,039  Canadian) and $219,821  ($349,925  Canadian) owing to major
shareholders and Directors.




<PAGE>



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

                           FORWARD-LOOKING STATEMENTS

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",  "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 Company's or our industry's  actual results,
levels of activity,  performance or achievements to be materially different from
any future results, level 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.

As used in this  quarterly  report,  the terms  "we",  "us",  "our",  and Global
Innovative mean Global Innovative  Systems,  Inc. and our  subsidiaries,  unless
otherwise  indicated.  All dollar amounts refer to US dollars  unless  otherwise
indicated.  The  following  discussion  should be read in  conjunction  with our
financial  statements  and the  related  notes  that  appear  elsewhere  in this
quarterly report.

Recent Acquisition

As  described in our annual  report on Form 10-KSB for the year ended  September
30, 2001 (filed on January 15,  2002),  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.  At the time that our annual report was filed,
we had issued  15,206,509 of these 18,000,000 of our common shares as an advance
in this transaction but we had not distributed any of these common shares to the
shareholders  of Energy  Medicine  Developments  Corp.  because  we did not have
agreements  detailing  the  terms  of the  share  exchange  directly  with  each
individual  shareholder.  Energy Medicine Developments Corp. owns the world-wide
marketing and distribution  rights to the Enermed Therapy and the Enermed device
as described below.

Also on October  2, 2001,  and also as  described  in our annual  report on Form
10-KSB  for the year  ended  September  30,  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


<PAGE>



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.

Since  the  execution  of  the   Acquisition   Agreement  with  Energy  Medicine
Developments Corp. and the Purchase Agreement with Energy Medicine  Developments
(North  America)  Inc.,  we have been  engaged in  negotiating  the terms of one
comprehensive Agreement and Plan of Share Exchange with each of the shareholders
of each of these companies, which would incorporate and expand upon the terms of
the Acquisition Agreement and the Purchase Agreement.

Two  of  our  directors  are   shareholders  and  officers  of  Energy  Medicine
Developments  Corp. and shareholders,  directors and officers of Energy Medicine
Developments  (North  America)  Inc.  At the date we entered  into the  original
agreements to purchase  Energy Medicine  Developments  Corp. and Energy Medicine
Developments  (North America) Inc., these directors were dealing at arms' length
with our company. They were subsequently appointed in November,  2001. Until the
completion of the transactions (as reported on our Form 8-K filed on February 7,
2002), all of the issued and outstanding shares of Energy Medicine  Developments
Corp. and Energy  Medicine  Developments  (North America) Inc. were owned by the
same 22 shareholders.

We have now entered into an Agreement  and Plan of Share  Exchange with three 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. As at the date of this quarterly report, pursuant to these Agreements
and Plans of Share  Exchange,  we have completed the  acquisition of these three
shareholders' shares of Energy Medicine  Developments Corp. and, as a result, we
now own  approximately  84% of the  issued  and  outstanding  shares  of  Energy
Medicine  Developments  Corp.,  for which we  exchanged  an  aggregate  total of
15,204,649 of our common shares.  We have not yet closed the  acquisition of any
of the shares of Energy Development (North America) Inc.

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.


<PAGE>



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.

Plan of Operation

Our  primary  objective  over the 12 months  ending  June 30,  2003,  will be to
complete development of Phase I and Phase II of our twin rotating asphalt mixing
system (known as the "Trams  System") for  commercial  sale,  and to implement a
sales and marketing  program in connection with the sale of the Trams System. In
addition,  we will  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.

As of the date of this quarterly  report,  Phase I of the Trams System  requires
further development and testing before it can be commercially  released. We have
not yet commenced  development  of Phase II of the Trans System due to a lack of
capital resources.  In addition to the development and testing work that must be
performed  on  both  Phase I and  Phase  II of the  Trams  System,  a sales  and
marketing campaign must be implemented. As at the date of this quarterly report,
because we have  recently  focussed our attention on the  acquisition  of Energy
Medicine  Developments  Corp. and Energy Medicine  Developments  (North America)
Inc.,  we have not returned our focus to the further  development  of Phase I or
Phase II of the Trams System.

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


<PAGE>



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:

        1.      willingness  of external  investors to advance  capital to us to
                finance  continued  development  of the  Trams  System  and  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)      meet British Columbia regulations;

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

                c)      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, 2001.

Cash Requirements

Over the twelve month period ending June 30, 2003,  we  anticipate  that we will
require $550,000 to fund our operations and our goals in connection with further
development of the Trams System.  The cash requirements of $550,000 are based on
our estimates for  operational  costs for the period ending June 30, 2003.  With
respect to the Trams  System,  we estimate  that  approximately  $30,000 will be
required for further  development of Phase I of the Trams System,  $150,000 will
be required for  development  of Phase II of the Trams System,  $120,000 will be
required to hire  marketing and sales persons and to implement our planned sales
and  marketing  program  and  $70,000  will be  required  to support an investor
relations  program.  The balance of $180,000 will be required to support general
corporate and operating expenses.

We will require a minimum of  approximately  $1,000,000  over the twelve  months
ending  June 30,  2003 in  connection  with the  recent  acquisition  of  Energy
Medicine Developments Corp. and the


<PAGE>



proposed  acquisition of Energy  Medicine  Developments  (North America) Inc. We
estimate that  approximately  $250,000 will be required for management  expenses
and  $750,000  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 for the  implementation  of a sales and marketing program for the
Enermed device and the Enermed Therapy.

To date,  we have not raised any monies and  accordingly,  we have not proceeded
with any of our planned  operations.  We do not have sufficient funds on hand to
complete our Phase I Trams  development  or the ongoing  development  of Enermed
products but we believe that we will have access to funds sufficient to complete
the development and negotiate the sale of the Phase I Trams System prototype. 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 development of Phase I and Phase II of the
Trams System,  and the  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.

Product Research and Development

During the nine months ended June 30, 2002,  we expended  $4,606 on research and
development on the Trams System.  During the nine months ended June 30, 2001, we
expended $4,522 on research and  development of the Trams System.  If sufficient
capital is  available,  we will continue to expend time in the next 12 months on
research and development activities on the Trams System, which will include:

        (a)    further  improvement  of Phase I of the  Trams  System to make it
               more efficient and to ensure that it meets  government  standards
               for pollution control; and

        (b)    commencement of the development of Phase II of the Trams System.

We estimate that the completion of Phase I will require  approximately  $30,000,
consisting  of $6,000 for testing,  $14,000 for  materials and $10,000 for labor
and  subcontractors.  At the  completion  of  Phase  I, we  intend  to sell  our
prototype  and use the sale  proceeds  to finance the  construction  of a second
prototype  of the Trams  System.  Phase II of the Trams System will consist of a
second  trailer  which will contain a  self-erecting  silo and separate  storage
tanks to carry and store asphalt, diesel fuel and propane fuel. We estimate that
the cost of  developing  and  completing  the Phase II plant  will be  $150,000,
$84,000 for testing and  materials,  $16,000 for general  corporate and overhead
expenses and $50,000 for labour and subcontractors.

As a result of the  acquisition of Energy Medicine  Developments  Corp. and upon
completion of the  acquisition of Energy Medicine  Developments  (North America)
Inc., we may be required to incur


<PAGE>



significant  monies on Energy  Medicine's  product and technologies to make them
commercially viable in new markets.

To date,  we have not raised any monies and  accordingly,  we have not proceeded
with any of our planned operations.

Purchase of Significant Equipment

We do not intend to purchase any  significant  equipment  over the twelve months
ending June 30, 2003. 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 anticipate that the commercial  version of the Trams System will consist of a
package  of the Phase I plant and the Phase II  trailer  but we also  anticipate
that these  machines will be sold  separately.  Upon  completion of Phase II, we
intend to  transport  the Trams  System  plant to a gravel pit,  the location of
which  has  already  been  determined,  and  to  record  set  up  time,  conduct
anti-pollution equipment testing and record promotional videos.

In connection  with the acquisition of Energy  Medicine  Developments  Corp. and
Energy Medicine  Developments (North America) Inc., 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 twelve  months  ending June 30, 2003,  we anticipate an increase in the
number of  employees  we retain  to five (5),  in the event  that we are able to
proceed with the  development  of Phase II of the Trams  System.  Following  the
completion of the  acquisition of Energy Medicine  Developments  (North America)
Inc., we also expect an increase in the number of employees we retain.  Since we
will  be  relying  on the  technical  expertise  of  Energy  Medicine's  current
management,  we will retain Energy Medicine's  current management team, who will
remain with our company for between  five and ten years,  depending on the final
terms and conditions of the management agreements which are yet to be negotiated
and executed.  If, however, 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.






<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 (a) the  development,
manufacture and marketing of a simplified asphalt mixing system that is intended
to be  compact,  environmentally  friendly  and  easy  to  mobilize  and (b) 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.

Unanticipated  problems,  expenses  and delays  are  frequently  encountered  in
ramping up sales and  developing  new  products.  Our  ability  to  successfully
develop,  produce and sell our Trams System and to eventually generate operating
revenues will depend on our ability to, among other things:

        1.      successfully  design,  develop and market both Phase I and Phase
                II of the Trams System;

        2.      successfully develop our second prototype of the Trams System;

        3.      successfully  develop a customer base for and market  acceptance
                of our Trams System; and

        4.      obtain the  necessary  financing to implement  our business plan
                and plan of operations.



<PAGE>



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 a cumulative  loss of $814,449 for
the period from January 15, 1997  (incorporation) to June 30, 2002.  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  operating  losses  and  negative  cash flow  until the Trams
System and the  Enermed  device  and  Enermed  Therapy  gain  sufficient  market
acceptance to generate a  commercially  viable and  sustainable  level of sales,
additional Trams System prototypes are developed and commercially  released, and
sales of either or both 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, 2001 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, 2002 of  $814,449.  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


<PAGE>



that our business will generate  significant  revenue. We do not have sufficient
funds on hand to complete  our Phase I  development  of the Trams  System but we
believe we have access to funds  sufficient  to  complete  the  development  and
negotiate the sale of the Phase I Trams System prototype. We have predicted that
we will require approximately $1,550,000 over the period ending June 30, 2003 in
order to  accomplish  our  goals of  designing,  developing,  manufacturing  and
marketing the Trams System and to maintain and expand the market for the Enermed
device and the  Enermed  Therapy.  This is broken down into  $1,000,000  for the
Enermed device and the Enermed Therapy and $550,000 in connection with the Trams
project and general  operating  expenses.  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  unexpected  costs in completing  the  development  of our
                Trams  System or  encounter  any  unexpected  technical or other
                difficulties;

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

        3.      are unable to create a substantial  market for our Trams System;
                or

        4.      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 pay for the continued
development  of the Trams  System and 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.

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  development  of our  Trams  System  and 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


<PAGE>



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 a substantial  portion, if not all, of our future revenue will be
derived from the sale of our Trams  System,  the Enermed  device and the Enermed
Therapy.  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.

IF WE ARE UNABLE TO ACHIEVE MARKET  ACCEPTANCE FOR OUR TRAMS SYSTEM,  WE WILL BE
UNABLE TO BUILD OUR TRAMS BUSINESS.

To some extent, our success will depend on the acceptance of our products by the
asphalt industry.  Achieving such acceptance may require a significant marketing
investment.  We cannot assure you that our existing or proposed products will be
accepted by the asphalt industry at sufficient  levels to support our operations
and build 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 Walter Niemi (Trams) and our ability to
continue to hire and retain such personnel.  The loss of any of Robert Fletcher,
Fraser Lawrie or Walter Niemi or any of our key officers 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, Fraser Lawrie


<PAGE>



and Walter Niemi.

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.  Six  stockholders  currently
control  approximately  75% 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.


<PAGE>



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  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 QUARTERLY OPERATING RESULTS IN THE
FUTURE.

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

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

        2.      our  ability  to  develop a base of  manufacturers  and users of
                asphalt  plants  willing to utilize the Trams  System for paving
                applications;

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

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

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

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

        7.      governmental regulation;

        8.      general economic conditions; and

        9.      economic  conditions  specific to the asphalt  manufacturing and
                paving industries.



<PAGE>



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 Trams  System,  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 Trams System, 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 Trams System, the
Enermed device and the Enermed  Therapy,  or other products and services offered
by us.

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 Trams
System,  the Enermed device and the Enermed  Therapy.  There can be no assurance
that the Trams System,  the Enermed  device and the Enermed  Therapy will become
widely  accepted or that a  sufficiently  broad base of  consumers  will use the
Trams System, the Enermed device and the Enermed Therapy.

We will rely on manufacturers  and users of asphalt plants who have historically
used traditional means for asphalt  manufacturing.  To ensure our success, these
manufacturers  and users of asphalt  plants  must  accept and  utilize our novel
Trams System.  The Trams System may not be accepted as a viable  alternative  to
traditional asphalt manufacturing  processes for a number of reasons,  including
potentially  inadequate  development of the necessary  infrastructure or delayed
development of related technologies and performance improvements.

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.


<PAGE>



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.

                           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.

Recent Sales of Unregistered Shares

On November 13, 2001, we issued an aggregate of 15,204,649  common shares in the
capital of our  company to three (3)  individuals  pursuant  to the terms of the
Acquisition Agreement between our company and Energy Medicine Developments Corp.
dated October 2, 2001.  Our company had  reasonable  grounds to believe that the
investors  were  all  capable  of  evaluating  the  merits  and  risks  of their
investment,  and acquired the shares for investment purposes.  12,742,494 of the
shares  were  issued  in  reliance  upon  Regulation  S  promulgated  under  the
Securities  Act of 1933 and 2,462,155 of the shares were issued in reliance upon
Section 4(2) and/or Rule 506 promulgated under the Securities Act of 1933.

Item 3.        Defaults Upon Senior Securities.

None.

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

None.

Item 5.        Other Information.

On February 18, 2002, Helge Freudentheil  resigned as president and was replaced
with Fraser Lawrie as President  and CEO and Robert  Fletcher as COO and CFO. On
April 5, 2002 Walter Niemi resigned as Secretary and Treasurer.



<PAGE>



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

Reports on Form 8-K

On February 7, 2002 (amended April 22, 2002), we filed a Form 8-K Current Report
announcing  the closing of the share  exchange  agreement  with Energy  Medicine
Developments Corp.

On May 15,  2002 we filed a Form 8-K  Current  Report  announcing  the change of
accountants from BDO Dunwoody LLP to Robison, Hill & Co. on May 13, 2002.

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)

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)

99.1    CEO Certification

99.2    CFO Certification


<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 12, 2002

By: /s/ Robert Fletcher
Robert Fletcher, COO & CFO
Date: August 12, 2002