U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

þQuarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2009



 ̈Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



Commission File No. 0-28413



SAN WEST, INC.

(formerly Human BioSystems)

(Exact name of registrant as specified in its charter)



|                                                                                     |                                                   
|------------------------------------------------------------------------------------ | --------------------------------------------------
|                                                                                     |                                                   
|California
(State or other jurisdiction of
incorporation or organization)            | 77-0481056
(I.R.S. Employer Identification Number)
|10350 Mission Gorge Road
Santee, California
(Address of principal executive offices) | 92071
(Zip Code)                                  
|(619) 258-8770
(Registrants telephone number, including area code)                 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days.  Yes þ  No  ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  ̈ No  ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check One):

Large accelerated fileroAccelerated fileroNon-accelerated fileroSmaller reporting companyþ


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12(b)-2 of the Exchange Act) Yes ̈  No þ

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.  At October 28, 2009 the registrant had outstanding 22,298,652 shares of common stock, no par value per share.







SAN WEST, INC.

FORM 10-Q

TABLE OF CONTENTS



PAGE

PART I - FINANCIAL INFORMATION



Item 1.

Financial Statements



Condensed Consolidated Balance Sheets as of September 30, 2009 (Unaudited)

and  December 31, 2008

F-1



Condensed Consolidated Statements of Operations (Unaudited)

For the Three and Nine Months Ended September 30, 2009and 2008

F-2



Condensed Consolidated Statement of Stockholders' Equity (Unaudited)

For the Nine Months Ended September 30, 2009

F-3



Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Nine Months Ended September 30, 2009 and 2008

F-4



Notes to Condensed Consolidated Financial Statements (Unaudited)

F-5-15



Item 2.

Management's Discussion and Analysis of Financial Condition and

Results of Operations

16-21



Item 3.

Quantitative and Qualitative Disclosures About Market Risk

21



Item 4.

Controls and Procedures

22



Item 4(T).  Controls and Procedures

22



PART II - OTHER INFORMATION



Item 1.

Legal Proceedings

23



Item 1A. Risk Factors

23



Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

23



Item 3.

Defaults Upon Senior Securities

24



Item 4.

Submission of Matters to a Vote of Security Holders

24



Item 5.

Other Information

24



Item 6.

Exhibits

24



Signatures

24



Item 1.  Financial Statements.



San West, Inc.(formerly Human BioSystems)Balance Sheets


September 30,December 31,20092008ASSETS(Unaudited)CURRENT ASSETSCash56,179$         6,252Accounts receivable2,66116,201Inventory (Note B)408,392653,546Other current assets8,1572,343Total current assets475,389678,342Fixed assets (Note C)196,186130,226Accumulated depreciation(26,294)(9,230)Net fixed assets169,892120,996Deposits12,59921,365Goodwill (Note D)2,420,636288,989Other Assets (Note D)550,016-Total assets$    3,628,532$   1,109,692LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT LIABILITIESAccounts payable993,285540,263Other current liabilities243,42317,849Loans from shareholder's (Note D)618,475188,345Loans payable (Note D & E)646,50080,000Subsidiary purchase-current portion (Note D)271,11229,816Total current liabilities2,772,795856,273Subsidiary purchase (Note D)-241,296Loans from shareholder's (Note F)216,950-Total liabilities2,989,7451,097,569Commitments and contingenciesSTOCKHOLDERS' EQUITY (DEFICIT) (Note G)Preferred stock, no par value, 10,000,000 shares authorized; none issued and outstanding--Common stock, no par value, 300,000,000 shares authorized; issued and outstanding  22,298,652 and 18,643,784 at September 30, 2009 and December 31, 2008, respectively.1,384,799371,198Common stock payable187,640-Retained (deficit)(933,652)(359,075)Total stockholders' equity (deficit)638,78712,123Total liabilities and shareholders equity (deficit)$    3,628,532$   1,109,692The accompanying notes are an integral part of these financial statements




F-1



San West, Inc.(formerly Human BioSystems)Statements of Operations (Unaudited)


Three Months EndedNine Months EndedSeptember 30,September 30,2009200820092008RevenuesRevenue$   217,099$   141,534$   546,620$   166,219Cost of goods sold181,404108,583400,284146,916Gross profit35,69532,951146,33619,303ExpensesSelling, general and administrative284,867146,802684,462160,781Total expenses284,867146,802684,462160,781Income (loss) from operations(249,172)(113,851)(538,126)(141,478)Other income (expense)Other income2271,32511,6651,325Other expense(2,380)(377)(15,911)(377)Interest expense(10,859)-(32,205)-Total other income (expense)(13,012)948(36,451)948Net loss(262,184)(112,903)(574,577)(140,530)Net (loss) per common share basic$       (0.01)$       (0.01)$       (0.03)$       (0.01)Weighted average shares outstanding basic21,561,41717,920,26817,126,66517,248,858The average shares listed below were not included in the computation of diluted lossesper share because to do so would have been antidilutive for the periods presented:Convertible promissory notes1,609,965-1,617,185-The accompanying notes are an integral part of these financial statements






F-2



San West, Inc.(formerly Human BioSystems)Statement of Stockholder's Equity


TotalCommon StockAccumulatedStockholder'sSharesAmountPayableDeficitEquityBalances December 31, 200818,643,784$     371,198$          -$    (359,075)$       12,123Issuance of common stock for cashweighted average price of $.06(net of offering costs of $61,000)3,739,629235,000235,000Common stock payable for cashweighted average price of $.08(net of offering costs of $53,750)125,000125,000Common stock payable for servicesweighted average price of $.0962,64062,640Issuance of existing shares from CEOfor cash to the Companyweighted average price of $.08(net of offering costs of $31,257)92,20092,200Issuance of common stock for mergerweighted average price of $.145,019,386700,908700,908Founder's shares retired in exchangefor a promissory note(7,904,147)(100,000)(100,000)Shares exchanged for debtweighted average price of $.082,800,000231,500231,500Investment offering costs(146,007)(146,007)Net loss(574,577)(574,577)Balances September 30, 2009 (Unaudited)22,298,652$  1,384,799$  187,640$    (933,652)$     638,787The accompanying notes are an integral part of these financial statements




F-3



San West, Inc.(formerly Human BioSystems)Statements of Cash Flows (Unaudited)


Nine Months EndedSeptember 30,20092008Cash flows from operating activities:Net loss(574,577)$  (140,530)Adjustments to reconcile net loss to netcash used by operating activities:Depreciation17,064524Common stock to be issued for services62,640-Changes in operating assets and liabilities:Change in accounts receivable13,540(2,667)Change in inventory245,154(707,022)Change in other current assets2,343(1,768)Change in deposits8,766(8,000)Change in accounts payable(263,963)532,075Change in other current liabilities175,59122,535Net cash used by operating activities(313,442)(304,853)Cash flows from investing activities:Increase in goodwill-(288,989)Assets acquired in purchase of Buggy World-(115,900)Investment in merger with HBS(28,000)-Cash acquired in merger6,070-Purchase of fixed assets-(381)Net cash provided by investing activities(21,930)(405,270)Cash flows from financing activities:Proceeds from the issuance of common stock452,201254,878Stock sale offering costs(146,007)Proceeds from loans54,000358,202Proceeds from shareholder loans38,60570,034Payments on shareholder loans(7,500)Payments on notes payable(6,000)-Net cash provided by financing activities385,299683,114Net increase (decrease) in cash49,927(27,009)Cash, beginning of period6,25239,753Cash, end of period$      56,179$     12,744Supplemental disclosure of cash flow information:Cash paid for interest$            -$           -Cash paid for taxes$            -$           -Other non-cash investing and financing activities:Shares issued for services$      62,640$           -Shares issued for accrued interest$            -$           -Shares issued for debt$    231,500$           -Founder's shares retired for promissory note$    100,000$           -The accompanying notes are an integral part of these financial statements






F-4





SANWEST, INC.

NOTES TO UNAUDITED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009 AND 2008

(Unaudited)



NOTE A  ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited financial statements of San West, Inc. as of September 30, 2009 and for the three and nine months ended September 30, 2009 and 2008 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting.  Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2008 as filed with the Securities and Exchange Commission as part of our Form 8-K/A filed on August 24, 2009.  In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the interim financial information have been included.  The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year.



Organization

San West, Inc. (formerly Human BioSystems Acquisition Company) (San West, the Company, or we) is a Nevada Corporation, established in July, 2001.  The Company designs, manufacturers, sells and repairs off-road buggies, and additionally provides after market performance products and accessories for buggies. Its products are sold both at a physical location and online while the buggy repair services are sold and fulfilled at the physical location. Its primary service outlet, Letz Go Racing Off-Road Center is located in Huntington Beach, California and provides customers with modification parts, accessories and repair services for off-road buggies built in China for the U.S. market.



In August 2008, the Company purchased 100% of the outstanding stock of Buggy World, Inc. With the acquisition of Buggy World, San West expanded their presence in the southern California retail market.  The accompanying financial statements reflect the activity of Buggy World since its acquisition.



On June 5, 2009, San West completed a reverse merger with Human BioSystems by merging with Human BioSystems Acquisition Company a wholly owned subsidiary of Human BioSystems  Upon becoming effective, 1) 100% of San West outstanding common stock was exchanged for 13,079,264 shares of Human BioSystems common stock, 2) Human BioSystems Acquisition Company became the surviving entity and assumed all San West assets and liabilities and 3) Human BioSystems Acquisition Company changed its name to San West, Inc.  The authorized capital stock of San West, Inc (formerly Human BioSystems Acquisition Company) is 400,000,000 shares of common stock par value $.001 and 50,000,000 shares of preferred stock par value $.001.  The merger was accounted for as a reverse merger, wherein Human BioSystems Acquisition Company and Human BioSystems are treated as the acquiree for accounting purposes meaning the historical earnings, assets and liabilities of San West, Inc (pre merger) shall remain with the assets and liabilities of Human BioSystems Acquisition Company and Human BioSystems accounted for as a purchase by San West thus recapitalizing the previously reported financial position and statements of Human BioSystems.  Human BioSystems changed its name to San West, Inc. on July 31, 2009.  Herein, all references to San West, the Company, or we shall mean San West, Inc. and Human BioSystems, unless the context requires otherwise.  The Company is listed on the OTC Bulletin Board under the ticker symbol SNWT.



Going Concern

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern. Since inception, the Company has been engaged primarily in product research and development, investigating markets for its products, developing manufacturing and supply chain partners, and developing distribution, licensing and other channel relationships.  In the course of funding research and development activities, the Company has sustained operating losses since inception and has an accumulated deficit of $933,652 and $359,075 at September 30, 2009 and December 31, 2008, respectively.  In addition, the Company has negative working capital of $2,297,406 and $177,931 at September 30, 2009 and December 31, 2008, respectively.



F-5





The Company has and will continue to use significant capital to manufacture and commercialize its products.  These factors raise substantial doubt about the ability of the Company to continue as a going concern.  In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of their common stock.  There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.



Accounting estimates

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



Cash and cash equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents.  Cash and cash equivalents may at times exceed federally insured limits.  To minimize this risk, the Company places its cash and cash equivalents with high credit quality institutions.



Accounts Receivable

Accounts receivable are reported at the customers' outstanding balances.  The Company does not have a history of significant bad debt and has not recorded any allowance for doubtful accounts.  Interest is not accrued on overdue accounts receivable.  The Company evaluates receivables on a regular basis for potential reserve.



Inventory

The Company currently utilizes a just-in-time inventory system.  Inventories are valued at the lower of cost or market.  Cost is determined on an average cost basis.  Management performs periodic assessments to determine the existence of obsolete, slow moving and non-salable inventories, and records necessary provisions to reduce such inventories to net realizable value.  The Companys inventory consists primarily of vehicle parts and complete vehicles.



Property and Equipment

Property and equipment are stated at cost.  Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed.  At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts.  Gains or losses from retirements or sales are credited or charged to income.



The Company depreciates its property and equipment on a straight line basis at the following rates as applied to net depreciable value:



Computer equipment and software:

3 years

Furniture and fixtures:

5  7 years

Machinery and equipment

5  7 years

Leasehold improvements

7 years



Long-Lived Assets

Accounting for the Impairment or Disposal of Long-Lived Assets requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may not be recovered.  The Company assesses recoverability of the carrying value of an asset by estimating the fair value of the asset.  If the fair value is less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value.  The Company has never recognized an impairment charge.



F-6



Stock-Based Compensation

The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period.  Stock issued for compensation si valued using the market price of the stock on the date of the related agreement.  We use the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees.  In calculating this fair value, there are certain assumptions that we use consisting of the expected life of the option, risk-free interest rate, dividend yield, volatility and forfeiture rate.  The use of a different estimate for any one of these components could have a material impact on the amount of calculated compensation expense.



Revenue

Revenue from the sale of parts, service and vehicles is recognized when the earning process is complete and the risk and rewards of ownership have transferred to the customer, which is generally considered to have occurred upon the delivery of the equipment and/or service to the customer.  Customer returns and exchanges for unused parts require a receipt, all sales on discounted items are final and the Company does not accept returns on special order or electrical items.  The Company does not provide warranties.  Warranties are generally provided by the manufacturer of the items we sell.



Cost of Goods Sold

Cost of goods sold is recognized with the associated parts, service and vehicle revenue and consists primarily of resale parts and vehicles.



Commissions

Commissions are recorded to different employees when they are earned by; selling parts, buggies and/or service. Rates are different for each employee in different departments.



Advertising Costs

The Company expenses all advertising as incurred.  For the three months ended September 30, 2009 and 2008, the Company incurred approximately $18,837 and $2, respectively in marketing and advertising expense.  For the nine months ended September 30, 2009 and 2008, the Company incurred approximately $34,877 and $4,091, respectively in marketing and advertising expense.



Earnings (Loss) per common share

The Company reports both basic and diluted earnings (loss) per share.  Basic loss per share is calculated using the weighted average number of common shares outstanding in the period.  Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using the treasury stock method and convertible securities using the if-converted method.



Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements.  Under this method, deferred tax assets and liabilities are determined based on differences between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.  The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.



The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized.  In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations.  A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition.  In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance which would reduce the provision for income taxes.



F-7



The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits.  Income tax provisions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods.  Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.



Recent Accounting Pronouncements



On July 1, 2009, the FASB officially launched the FASB ASC 105 - Generally Accepted Accounting Principles, which established the FASB Accounting Standards Codification (the Codification), as the single official source of authoritative, nongovernmental, U.S. GAAP, in addition to guidance issued by the Securities and Exchange Commission.  The Codification is designed to simplify U.S. GAAP into a single, topically ordered structure.  All guidance contained in the Codification carries an equal level of authority.  The Codification is effective for interim and annual periods ending after September 15, 2009.  Accordingly, the Company refers to the Codification in respect of the appropriate accounting standards throughout this document as FASB ASC.  Implementation of the Codification did not have any impact on the Companys consolidated financial statements.



On June 30, 2009, the FASB issued Accounting Standard Update (ASU) No. 2009-01 (Topic 105)  Generally Accepted Accounting Principles  amendments based on  Statement of Financial Accounting Standards No. 168 The FASB Accounting and Standards Codification and the Hierarchy of Generally Accepted Accounting Principles.

Beginning with this Statement the FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts.  Instead, it will issue Accounting Standard Updates.  This ASU includes FASB Statement No. 168 in its entirety.  While ASUs will not be considered authoritative in their own right, they will serve to update the Codification, provide the bases for conclusions and changes in the Codification, and provide background information about the guidance.  The Codification modifies the GAAP hierarchy to include only two levels of GAAP: authoritative and nonauthoritative.  ASU No. 2009-01 is effective for financial statements issued for the interim and annual periods ending after September 15, 2009, and the Company does not expect any significant financial impact upon adoption.



In August 2009, the FASB issued ASU No. 2009-05  Fair Value Measurements and Disclosures (Topic 820)  Measuring Liabilities at Fair Value.  This ASU clarifies the fair market value measurement of liabilities.  In circumstances where a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: a technique that uses quoted price of the identical or a similar liability or liabilities when traded as an asset or assets, or another valuation technique that is consistent with the principles of Topic 820 such as an income or market approach.  ASU No. 2009-05 was effective upon issuance and it did not result in any significant financial impact on the Company upon adoption.



In September 2009, the FASB issued ASU No. 2009-12  Fair Value Measurements and Disclosures (Topic 820)  Investments in Certain Entities That Calculate Net Asset Value per Share (or its equivalent).  This ASU permits use of a practical expedient, with appropriate disclosures, when measuring the fair value of an alternative investment that does not have a readily determinable fair value.  ASU No. 2009-12 is effective for interim and annual periods ending after December 15, 2009, with early application permitted.  Since the Company does not currently have any such investments, it does not anticipate any impact on its financial statements upon adoption.



In May 2009, the FASB issued FASB ASC 855, Subsequent Events.  This Statement addresses accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or available to be issued.  FASB ASC 855 requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date, the date issued or date available to be issued.  The Company adopted this Statement in the second quarter of 2009.  As a result the date through which the Company has evaluated subsequent events and the basis for that date have been disclosed in Note J, Subsequent Events.



In April 2009, the FASB issued an update to FASB ASC 820, Fair Value Measurements and Disclosures, related to providing guidance on when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly.  The update clarifies the methodology to be used to determine fair value when there is no active market or where the price inputs being used represent distressed sales.  The update also
reaffirms the objective of fair value measurement, as stated in FASB ASC 820, which is to reflect how much an asset would be sold in and orderly transaction, and the need to use judgment to determine if a formerly active market has become inactive, as well as to determine fair values when markets have become inactive.  The Company adopted this Statement in the second quarter of 2009 without significant financial impact.



F-8



In April 2009, the FASB ASC 320, Investments  Debt and Equity, amends current other-than-temporary guidance for debt securities through increased consistency in the timing of impairment recognition and enhanced disclosures related to credit and noncredit components impaired debt securities that are not expected to be sold.  Also, the Statement increases disclosures for both debt and equity securities regarding expected cash flows, securities with unrealized losses, and credit losses.  The Company adopted this Statement in the second quarter of 2009 without significant impact to our financial statements.



In April 2009, the FASB issued an update to FASB ASC 825, Financial Instruments, to require interim disclosures about the fair value of financial instruments.  This update enhances consistency in financial reporting by increasing the frequency of fair value disclosures of those assets and liabilities falling within the scope of FASB ASC 825. The Company adopted this update in the second quarter of 2009 without significant impact to the financial statements.



In April 2009, the FASB issued an update to FASB ASC 805, Business Combinations, that clarifies and amends FASB ASC 805, as it applies to all assets acquired and liabilities assumed in a business combination that arise from contingencies.  This update addresses initial recognition and measurement issues, subsequent measurement and accounting, and disclosures regarding these assets and liabilities arising from contingencies in a business combination.  The Company adopted this Statement in the second quarter of 2009 without significant impact to the financial statements.



In November 2008, EITF issued new guidance under FASB ASC 350, Intangibles  Goodwill and Other on accounting for defensive intangible assets.  The new guidance applies to all acquired intangible assets in which the acquirer does not intend to actively use the asset but intends to hold (lock up) the asset to prevent its competitors from obtaining or using the asset (a defensive asset).  This guidance was adopted by the Company in January 2009 without impact to the financial statements.



In May 2008, the FASB issued an update to FASB ASC 470, Debt, with respect to accounting for convertible debt instruments that may be settled in cash upon conversion including partial cash settlement.  This update applies to convertible debt instruments that, by their stated terms, may be settled in cash (or other assets) upon conversion, including partial cash settlement, unless the embedded conversion option is required to be separately accounted for as a derivative under FASB ASC 815, Derivatives  and Hedging.  Additionally, this update specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entitys nonconvertible debt borrowing rate when interest cost recognized in subsequent periods. The update is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years.  The Company does not currently have any debt instruments for which this update would apply.  This update was adopted in January 2009 without significant financial impact.



In December 2007, the FASB issued an update to FASB ASC 805, Business Combinations which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree, and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R is effective for the Company with respect to business combinations for which the acquisition date is on or after January 1, 2009.  The Company adopted this SFAS in the first quarter of 2009.



In December 2007, the FASB issued an update to FASB ASC 810, Consolidation, which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parents ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of noncontrolling owners.  This update is effective for the Company as of January 1, 2009.  The Company adopted this update in January 2009 without significant impact on the consolidated financial position, results of operations, and disclosures.

F-9



NOTE B  INVENTORY



Inventory is comprised of buggy vehicles and parts and stated at the lower of cost or market.  The following table represents the major components of inventory at September 30, 2009 and December 31, 2008:



|          |          |          |     
|--------- | -------- | -------- | ----
|          |          | 2009     | 2008
|Parts     | $169,487 | $199,447
|Vehicles  | 238,905  | 454,099 
|Inventory | $408,392 | $653,546
|          |          |          |     





NOTE C  FIXED ASSETS



Furniture and equipment are depreciated on a straight line basis over their estimated useful life from 3  7 years.  A majority of the fixed assets listed were acquired in the purchase of Buggy World in August of 2008.  The medical research equipment was acquired in the merger with Human BioSystems.  That equipment is not being depreciated and will likely be transferred to certain parties within six months pursuant to the merger agreement (See Note I - Merger).  Fixed assets consisted of the following at September 30, 2009 and December 31, 2008:



| |                            |          |         |          |        
| | -------------------------- | -------- | ------- | -------- | -------
| |                            |          | 2009    |          | 2008   
| | Computers                  | $8,419   |         | $8,419  
| | Furniture & fixtures       | 50,000   |         | 50,000  
| | Machinery & equipment      | 62,891   |         | 62,891  
| | Leasehold improvements     | 8,916    |         | 8,916   
| | Medical research equipment | 65,960   |         | -       
| |                            |          | 196,186 |          | 130,226
| | Accumulated depreciation   | (26,294) |         | (9,230) 
| | Fixed assets, net          | $169,892 |         | $120,996





Depreciation expense for the three months ended September 30, 2009 and 2008 was $5,688 and $171, respectively.  Depreciation expense for the nine months ended September 30, 2009 and 2008 was $17,064 and $524, respectively.



NOTE D  GOODWILL ($2,420,636)



Buggy World ($288,988)

On August 20, 2008, the Company executed an Asset Purchase and Stock Transfer Agreement for Buggy World, Inc., including certain rights, title and interest to a recognized trade name within the industry, Johnsons Bug, which has been active for 31 years in the same industry and locations.



As part of the purchase the Company issued two promissory notes totaling $278,202 as follows:



1.

Secured Promissory Note to Cambio Enterprises in the amount of $263,202 dated August 12th 2008.  The note bears interest of eight percent (8.0%) per annum, requires monthly principal and interest payments of $4,102, matures seven years from the date of the note or August 12, 2015 and is secured by certain assets of the Company.  In addition, the note is personally guaranteed by Frank J. Drechsler, CEO and Bryan Britton, General Manager, of San West, Inc.  The note is currently in default due to non-payment of the required monthly payments.  As of December 31, 2008, this note was current with a total amount due of $256,112 with the current portion of the note totaling $14,816 and the non-current portion totaling $241,296.  As of September 30, 2009, the total due under this note was $270,895, including $14,783 of accrued interest and $256,112 of principle.  Accrued interest under this note is recorded under other current liabilities.  Due to the default, the note is due on demand and thus recorded as a current liability.



F-10



2.

On September 5, 2008, the Company agreed to purchase Johnsons Bug Machine for $15,000.  Payments are due $5,000 after completion of the first referred job is complete and $1,000 per month thereafter.  This obligation is non interest bearing.



During the three and nine months ended September 30, 2009, the Company recorded interest expense of $4,780 and 14,783 on the promissory note above.



Human BioSystems ($2,131,648)

On June 5, 2009, Human BioSystems, Human BioSystems Acquisition Company (together HBS) and San West, Inc. closed their Plan and Agreement of Triangular Merger.  The Merger was accounted for as a reverse merger, as the stockholders of San West own a majority of the outstanding shares of HBS Common Stock immediately following the Merger.  San West is deemed to be the acquirer in the reverse merger.  Consequently, the assets and liabilities and the historical operations of San West prior to the Merger are reflected in the financial statements at historical cost.  Our consolidated financial statements after completion of the Merger include the assets and liabilities of both HBS and San West, and historical operations of San West and HBS operations from the Effective Date of the Merger.  Following is a breakdown of the purchase price paid by San West for the merger:

| |                            |             
| | -------------------------- | ------------
| |                            |             
| |                            | June 5, 2009
| | Assets acquired:           |             
| | Current assets             | 14,228      
| | Fixed assets               | 65,960      
| | Intellectual property      | 550,016     
| | Total assets acquired      | 630,204     
| |                            |             
| | Cash paid                  | (28,000)    
| | Stock issued               | (700,908)   
| | Debt assumed:              |             
| | Shareholder loans          | (615,976)   
| | Dutchess notes + penalty   | (650,000)   
| | Accounts payable           | (716,985)   
| | Russian branch liabilities | (49,983)    
| | Total cost                 | (2,761,852) 
| |                            |             
| | GOODWILL                   | (2,131,648) 
| |                            |             





Shareholder Loans ($615,975)  Represents wages payable to stockholder employees of HBS and is equivalent to the sum of the fixed assets ($65,960) and intellectual property ($550,016) above.  Pursuant to the Plan of Merger these assets will transfer to certain parties in satisfaction of 100% of the shareholder loans ($615,975).  The transfer is to occur six months after the Effective Date of the merger provided that during the first six months from the Effective Date of the merger HBS is unable to sell the assets to any non affiliated third party (See Note I - Merger).

Dutchess Promissory Notes + Penalty ($650,000) Represents original assumed balance and penalties and interest on the November 2006 and May 2007 promissory notes to Dutchess Private Equities L.P.  In order to bring the notes current, HBS, its subsidiary and San West executed an Amendment to the Finance Documents on June 11, 2009 whereby the balance owing to Dutchess was acknowledged to be $650,000 in total or $327,526 greater than the carrying balance on HBS books as of June 5, 2009, the Effective Date of the merger.  In addition, the amendment amended the financing documents to 1) allow Dutchess conversion rights whether or not the Company is in default under Article 4 of the finance documents, and 2) Article 8 No Assignment was deleted from the finance documents.  All other terms and conditions of all previously executed documents is to remain unchanged and in force.



NOTE E  LOANS PAYABLE ($646,500)



Loans payable consists of three loans as follows:

F-11





1.

($74,000) On August 10, 2008 the Company issued a promissory note to Seacoast Advisors, Inc. in exchange for $80,000.  On February 13, 2009 the original promissory note was canceled and replaced with a convertible promissory note.  The terms of the new note and original note did not change except for the addition of a conversion feature in the new note.  The new note accrues interest at eight percent (8%) per annum, is due in one year or August 12, 2009, requires only one principal and interest payment upon maturity and is convertible into common stock of the Company at the rate of 20 shares for each dollar of outstanding principle and interest and upon written notice from Seacoast Advisors, Inc.  On September 30, 2009 the maturity date of the note was extended to September 30, 2010.  During the nine months ended September 30, 2009, the Company made a $6,000 payment.



2.

($54,000) On September 30, 2009 the Company issued an Addendum to the Seacoast Advisors, Inc. February 13, 2009 note above increasing the loan balance by $54,000.  The addendum extended the maturity date of the note above and the $54,000 to September 30, 2009.  The addendum also changed the conversion price of the $54,000 to $0.35 per share compared to $0.05 per share for the original amount above.  All other terms and conditions are unchanged.



3.

($100,000) On February 13, 2009 the Company issued a promissory note to Kelly Clark with a face amount of $100,000 in exchange for Ms. Clark retiring 7,904,147 shares of the Companys common stock that was originally issued to Ms. Clark in 2005.  The note accrues interest at eight percent (8%) per annum, is due in one year or February 13, 2010 and requires only one principal and interest payment upon maturity.  As of September 30, 2009, the total due under this note was $105,019, including $5,019 of accrued interest and $100,000 of principle.  Accrued interest under this note is recorded under other current liabilities.



4.

(418,500) Represents the promissory notes assumed from Dutchess Private Equities L.P. pursuant to the HBS merger effective June 5, 2009 (See Note D  Goodwill).  Based on representations made by Dutchess, the $650,000 debt is governed by the November 2006 promissory note.  In November 2006, the Company entered into a loan transaction with Dutchess Private Equities, LP (Dutchess), and issued to Dutchess a Promissory Note (First Dutchess Note) with a face value of $1,200,000, with net proceeds to the Company from the transaction of $1,000,000 and an imputed annual rate of interest of 43.278%.  The First Dutchess Note matured on August 31, 2007.  Repayment of the face value was to be made monthly in the amount of $120,000, plus 50% of any proceeds raised over $120,000 per month from Puts, issued by the Company as collateral.  Thirty such Puts were issued and are to be used only in the case of a default under the terms of the loan agreement.  If the First Dutchess Notes face value is not paid off by maturity, the Company will be required to pay an additional 10% on the face value of the First Dutchess Note, plus 2.5% per month, compounded daily, until the First Dutchess Note is paid off.  The Company may be required to pay penalties if certain obligations under the First Dutchess Note are not met.  If the Company raises financing of more than $2,000,000, Dutchess may require that the Company use the balance of any amount over $2,000,000 to pay any amounts due on the First Dutchess Note.  The Company issued 6,300 Holder Shares, which will carry piggyback registration rights in the next registration statement.  An additional 6,200 shares will be required each time an eligible registration statement is filed and the shares are not included.  The $200,000 loan discount has been accreted: $40,000 was accreted during the year ended December 31, 2006 and $160,000 was accreted during the year ended December 31, 2007.  During the nine months ended September 30, 2009 $231,500 was converted into 2,800,000 shares of common stock.



During the three and nine months ended September 30, 2009, the Company recorded interest expense of $3,642 and $12,189 on the first two notes above.



NOTE F  SHAREHOLDER LOANS



($216,950) From time to time, the Companys CEO, Frank J. Drechsler has deposited funds and made payments to vendors on behalf of the Company.  On April 1, 2009, the Company and Mr. Drechsler entered into a promissory note for the principle balance then due or $216,950.  The note accrues interest at four percent (4%) per annum, is due in three years or April 1, 2012 and requires only one principal and interest payment upon maturity.  During the three and nine months ended September 30, 2009, the Company recognized $2,187 and $4,333, respectively of interest expense related to this note.



F-12







($2,500) Represents the Companys obligation to Bryan Britton, general manager and cofounder for unpaid salary.



NOTE G  COMMON STOCK



Warrants and stock options

As a result of the merger, all outstanding HBS stock options and warrants existing between HBS and various parties were terminated.  San West, Inc. has no such securities outstanding.



Common stock

In June 2008, the Company undertook a private placement memorandum offering of Six Million Three Hundred Twenty Three Thousand (6,323,000) shares of common stock.  The stock was offered at a price of $0.158 per share.  The private offering was to accredited investors (as defined by Regulation D and Regulation S under the Securities Act of 1993) through a subscription agreement that states the shares were purchased with the intention of holding the securities for investment purposes, with no intention of dividing or allowing others to participate in this investment or to sell the securities for at least one year in the event that the Company becomes registered with the Securities and Exchange Commission.



During 2008, the Company issued 1,747,879 shares of commons stock for proceeds of $276,418.  Of the stock issued in 2008, a total of 1,532,886 shares were issued as part of the private placement memorandum.



During the nine months ended September 31, 2009, the Company received gross proceeds of $360,000 in exchange for 5,350,737 shares of common stock of which $125,000 or 1,611,108 shares were unissued as of September 30, 2009 but were included in the computation of earnings per share.



During the nine months ended September 31, 2009, the Company received services valued at $62,640 in exchange for 696,000 shares of common stock which were unissued as of September 30, 2009 but were included in the computation of earnings per share.



During the nine months ended September 30, 2009, 1,229,253 shares were issued from the existing outstanding shares of our CEO in exchange for $92,200 in gross proceeds.



During the nine months ended September 30, 2009, the Company converted $231,500 of our Dutchess Notes and issued 2,800,000 shares of common stock.



2009 San West Long Term Equity Incentive Plan

On July 21, 2009, the Board of Directors of the Company adopted the 2009 San West Long Term Equity Incentive Plan (the Stock Incentive Plan).  The Stock Incentive Plan provides for equity incentive benefits to awardees in the form of option rights or appreciation rights, restricted stock, restricted stock units, and/or performance shares or performance units.  The total number of shares of Common Stock which may be awarded under the Plan is 50,000,000.  If any awarded shares are forfeited, they become available for future issuance.  An annual aggregate limit of 5,000,000 shares is set for any participant.  The terms of each award are determined by the board and are to be evidenced in writing.  No equity awards have been issued under the 2009 San West Long Term Equity Incentive Plan as of the date of this report.



NOTE H  INVESTMENT AGREEMENTS



In December 2008, HBS entered into the Investment Agreement with Dutchess effective December 29, 2008.  Pursuant to the terms of the Investment Agreement, we may offer, through a series of puts, and Dutchess must purchase from time to time shares of our common stock, provided that Dutchess shall not be required to purchase shares of our stock with an aggregate purchase price in excess of $10,000,000.  The purchase price of shares purchased under this Investment Agreement shall be equal to 95% of the lowest closing best bid price (the highest posted bid price) of the common stock during the five consecutive trading days immediately following the date of our notice to Dutchess of our election to put shares pursuant to this Investment Agreement.  The dollar value that we will be permitted to put pursuant to this Investment Agreement will be either: (A) 200% of the average daily volume in the US market of the common stock for the ten trading days prior to the notice of our put, multiplied by the average of the three daily closing bid prices immediately preceding the date of the put, or (B) $250,000.  We filed a registration statement on Form S-1 in January 2009 to register for resale an aggregate of 36,675,551 shares of common stock issuable under this Investment Agreement; this registration statement was declared effective on January 30, 2009.



F-13





NOTE I  MERGER



On June 5, 2009 (the Effective Date), Human BioSystems, a California corporation (HBS), Human BioSystems Acquisition Company, a Nevada corporation (the Subsidiary), and San West, Inc., a Nevada corporation (San West) closed their Plan and Agreement of Triangular Merger (the Plan of Merger).  In accordance with the Plan of Merger, San West became a wholly-owned subsidiary of HBS through a merger with the Subsidiary.  The San West Stockholders received restricted HBS Common Stock at the rate of 3.16165 shares for each of their 4,136,836 shares issued and outstanding.  As a result, HBS issued 13,079,264 restricted shares in exchange for 100 percent of the outstanding capital stock of San West.  In addition, 817,454 restricted shares of the HBS Common Stock were issued to Dutchess Advisors, LLC as a finders fee.  HBS had 4,201,934 shares outstanding as of the Effective Date of the merger.  In total 18,098,652 shares are outstanding following the Effective Date of Merger.



HBS intends to carry on the business of San West as our sole line of business.  HBS has relocated its principal executive offices to 10350 Mission Gorge Road, Santee, California 92069, and has a telephone number of (714) 724-3355.



The Merger is being accounted for as a reverse merger.  San West is deemed to be the acquirer in the reverse merger.  Consequently, the assets and liabilities and retained deficit of San West prior to the Merger will be reflected in the financial statements.  The following unaudited financial information has been developed by application of pro forma adjustments to the historical financial statements of San West, Inc. appearing elsewhere in this Current Report.  The unaudited pro forma information gives effect to the Merger which has been assumed to have occurred on January 1, 2009 for purposes of the statement of operations for the three and nine months ended September 30, 2009.



The unaudited pro forma financial information is presented for informational purposes only and does not purport to represent what the results of operations or financial position of San West, Inc. would have been had the transactions described above actually occurred on the dates indicated, nor do they purport to project the financial condition of San West, Inc. for any future period or as of any future date.  The unaudited pro forma financial information should be read in conjunction with the San West, Inc. financial statements and notes thereto included elsewhere in this Current Report.



The summarized assets and liabilities of the purchased company (Human BioSystems) on June 5, 2009 were as follows:

Cash$              6,070Other current assets8,157Fixed assets, net65,960$            80,187Current liabilities$       1,733,719Total stockholders equity(1,653,532)$            80,187




The condensed pro forma results of operations for the three and nine months ended September 30, 2009 were as follows:

Three Months EndedNine Months EndedSeptember 30, 2009September 30, 2009SanSanWest, Inc.HBSProWest, Inc.HBSProActualActualFormaActualActualFormaRevenue$         217,099$                -$           217,099$         546,620$                -$           546,620Net income (loss)$       (262,184)$       294,840$             32,656$       (570,882)$       139,311$         (431,571)Weighted average shares outstandingBasic21,561,41717,126,665Net income (loss) per common share (basic and diluted)$                 0.00$               (0.03)












The condensed pro forma results of operations for the three and nine months ended September 30, 2008 were as follows:

Three Months EndedNine Months EndedSeptember 30, 2008September 30, 2008SanSanWest, Inc.HBSProWest, Inc.HBSProActualActualFormaActualActualFormaRevenue$         141,534$                  -$              141,534$         166,219$                  -$              166,219Net income (loss)$       (112,903)$       (396,600)$            (509,503)$       (140,530)$       (761,600)$            (902,130)Weighted average shares outstandingBasic17,920,26817,248,858Net income (loss) per common share (basic and diluted)$                  (0.03)$                  (0.05)






NOTE J  SUBSEQUENT EVENTS



Pursuant to SFAS No. 165, Subsequent Events, the Company evaluated subsequent events through the date the accompanying financial statements were completed on November 9, 2009.



From October 1 through the date of this report, the Company received $281,000.  In exchange, the Company will issue 802,857 shares.



F-15





Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report contains forward-looking statements including statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words expects, anticipates, intends, believes or similar language.  These forward-looking statements involve risks, uncertainties and other factors.  All forward-looking statements included in this quarterly report are based on information available to us on the date hereof and speak only as of the date hereof.  We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.  The factors discussed elsewhere in this quarterly report are among those factors that in some cases have affected our results and could cause the actual results to differ materially from those projected in the forward-looking statements.

The following discussion should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this quarterly report.

Overview

Our goal is to become one of the largest dealers of off-road buggies in the United States through acquisitions and internal growth. We design, manufacture, sell and repair off-road buggies, and additionally provide after market performance products and accessories for buggies.  Our products are sold both at our store and online while our buggy repair services are sold and fulfilled at our store.  Our goal is to address the growing demand for off-road vehicles while offering our customers the highest quality products at the most affordable and competitive prices, following up with customer care and support services.

Our plan of growth is to capitalize on the growth of the U.S. market for Chinese made off-road buggies and go karts, as well as to establish master dealer arrangements with leading brands, continue to expand our online sales and to leverage our equity to negotiate and acquire synergistic businesses.

The motorsports industry is highly fragmented with an estimated 4,000 retail stores throughout the United States.  We are attempting to capitalize upon the consolidation opportunities available and increase our revenues and income by acquiring additional dealers and improving our performance and profitability.

We plan to maximize the operating and financial performance of our dealerships by achieving certain efficiencies that will enhance internal growth and profitability.  By consolidating our corporate and administrative functions, we believe we can reduce overall expenses, simplify dealership management and create economies of scale.

We will specifically target dealers in markets with strong buyer demographics that, due to under-management or under-capitalization, are unable to realize their market share potential and can benefit substantially from our systems and operating strategy.

Buggy World, located in Santee, California, is our primary location to sell buggies, modification parts, and accessories for off-road buggies built in China for the U.S. market.  We currently utilize a just-in-time inventory system which reduces our overall inventory expense and risk.  We ship all requested kits and products within 72 hours of each order.

The Merger

On April 3, 2009 (the Effective Date), Human BioSystems, a California corporation (Human BioSystems), Human BioSystems Acquisition Company, a Nevada corporation (the Subsidiary), and San West, Inc., a Nevada corporation (San West) entered into a Plan and Agreement of Triangular Merger (the Plan of Merger).  On April 7, 2009, Human BioSystems filed an 8-K with respect to the Plan of Merger.  Included in the 8-K, was a copy of the Plan of Merger and a description of the Plan of Merger.  On May 7, 2009, we filed with the Securities and Exchange Commission a Current Report on Form 8-K/A Amendment No. 2.  On June 9, 2009, we filed with the Securities and Exchange Commission a Current Report on Form 8-K/A Amendment No. 3 to report the closing of the Plan of Merger on June 5, 2009.  On August 21, 2009, we filed with the Securities and Exchange Commission a Current Report on Form 8-K/A Amendment No. 4 to report the financial information that was required to be presented as a result of the closing of the Plan of Merger described in our earlier Current Reports referenced herein.  On August 25, 2009, we filed with the Securities and Exchange Commission a Current Report on Form 8-K/A Amendment No. 5 to include a consent of auditors which had been inadvertently omitted in our Current Report on Form 8-K/A Amendment No. 4 referenced herein.  All of our referenced Current Reports on Form 8-K described above are expressly incorporated herein by reference.

16





Accounting Treatment; Change of Control.  The Merger was accounted for as a reverse merger, as the stockholders of San West owned a majority of the outstanding shares of Human BioSystems Common Stock immediately following the Merger.  San West was deemed to be the acquirer in the reverse merger.  Consequently, the assets and liabilities and the historical operations of San West prior to the Merger are reflected in the financial statements and are recorded at the historical cost basis of San West.  Our consolidated financial statements after completion of the Merger include the assets and liabilities of both Human BioSystems and San West, historical operations of San West and our Human BioSystems operations from the Effective Date of the Merger.  As a result of the issuance of the shares of the Human BioSystems Common Stock pursuant to the Merger, a change in control of Human BioSystems occurred on the Effective Date of the Merger.  Except as described herein, no arrangements or understandings existed among present or former controlling stockholders with respect to the election of members of our board of directors and, to our knowledge, no other arrangements exist that might result in a future change of control of Human BioSystems.  Human BioSystems, for the foreseeable future, will continue to be a smaller reporting company, as defined under the Securities Exchange Act of 1934, as amended (the Exchange Act), following the Merger.

On June 5, 2009, in accordance with the Plan of Merger, San West became a wholly-owned subsidiary of Human BioSystems through a merger with the Subsidiary, and the San West Stockholders received 3.16 shares of the Human BioSystems Common Stock for each issued and outstanding share of San West Common Stock.  As a result, at the Effective Date, in exchange for 100 percent of the outstanding capital stock of San West, the San West Stockholders received 13,079,264 shares of the Human BioSystems Common Stock, which represents approximately 72.26 percent of the Human BioSystems Common Stock following the Merger.  In addition, 817,454 shares of the Human BioSystems Common Stock were issued to Dutchess Advisors, LLC as a finders fee.

On the Effective Date of the Merger, there were 3,995,541 shares of the Human BioSystems Common Stock outstanding owned by the Human BioSystems Stockholders who were not affiliates as defined in the Securities Act.  These 3,995,541 shares constituted the public float of Human BioSystems prior to the Merger and will continue to represent the only shares of the Human BioSystems Common Stock that are currently eligible for resale under Rule 144.

The shares of Human BioSystems Common Stock issued to the San West Stockholders in connection with the Merger were not registered under the Securities Act, in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act and/or Regulation D promulgated under that section, which exempts transactions by an issuer not involving any public offering.  These securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.  Certificates representing these shares contain a legend stating the same.

Prior to the Merger, there were no material relationships between Human BioSystems or San West, or any of their respective affiliates, directors or officers, or any associates of their respective officers or directors.

Changes Resulting from the Merger.  Human BioSystems intends to carry on the business of San West as our sole line of business.  Human BioSystems has relocated its principal executive offices to 10350 Mission Gorge Road, Santee, California 92069, and has a telephone number of (714) 724-3355.

We changed our name from Human BioSystems to San West, Inc.  San West was the surviving corporation, and its articles of incorporation and bylaws in existence on the date of such merger are our articles of incorporation and bylaws going forward.  Copies of the San West articles of incorporation and bylaws are have been previously filed as exhibits to our Current Report reporting the Merger.

Description of Business

Except as otherwise indicated by the context, references in this Current Report to we, us, our, the company or San West are to the business of San West, Inc.  Inasmuch as we intend to merge our wholly-owned subsidiary, San West, Inc., into Human BioSystems and change our state of incorporation to Nevada from California and our corporate name to San West, Inc. and cease all operations that were formerly conducted by Human BioSystems, the discussion of our business both past and future will be limited to San West, Inc., except where the context may refer to Human BioSystems in certain specific instances.  Further, as a condition of the Merger, all compensation and option agreements with the former officers and directors of Human BioSystems have been terminated.  However, we remain obligated to pay the debts of Human BioSystems reflected on its financial statements as of the date of the Merger.



17

Change of Control

Effective as of June 5, 2009, a change in control of Human BioSystems occurred.  Prior to the Merger, San West was a privately-held company.  San West was incorporated on July 17, 2001 in the State of Nevada and is located at 10350 Mission Gorge Road, Santee, California 92069.

Overview of Economic Trends.

Effects of U.S. Credit Markets on Vehicle Financing

Beginning in 2007, the U.S. credit markets have been dealing with the effects of numerous defaults by homeowners on sub-prime mortgage loans.  By December 2007 these defaults had also begun to increase with respect to mortgages considered to be of less credit risk than sub-prime mortgages.  Mortgage default rates continued to increase throughout 2008 and the first half of 2009.  While of late the rate of default has leveled off, the rate of default is still at historically high levels.  Additionally, in 2008 and 2009, as a result of these defaults and other global credit problems, several banking institutions that have, in the past, provided vehicle financing for off-road buggies and other powersports equipment have either ceased doing business or have significantly limited the availability of financing for off-road buggies and other powersports equipment.  Furthermore, to the extent that financing continues to be available, it is generally only available to consumers with the highest credit ratings, but at interest rates between 7.3% to 21.1% per year, notwithstanding the Federal Reserves reduction of the federal discount rate to 0.50% effective December 15, 2008, a situation which can be directly attributed to significant tightening of the global credit markets.  During the year ended December 31, 2008, approximately 95% of our off-road buggy sales were financed compared to approximately  75% during the nine months ended September 31, 2009.  We believe that a significant portion of those sales were to customers who do not qualify as having the highest credit ratings and would therefore find it difficult to finance purchases of our products in the current economic environment.

Additionally, since the reduction in the value of the securities markets has reduced the disposable income of many consumers, including those with the highest credit ratings, our sales have also been negatively impacted by the high interest rates being charged to those who can obtain financing.  We believe that our sales will continue to be affected in a negative manner until the credit markets ease and financing becomes more readily available to potential customers for our products.

Effects of Changes in Fuel Costs

Fuel prices rose significantly during the first half of 2008, reaching an all-time high in July 2008, and then fell significantly during the third quarter as a result of a significant reduction in demand caused by a severe weakening of the global economy. Increases in the price of gasoline to over $4.00 per gallon, during the first half of 2008, resulted in a reduction in demand for oil in the second half of 2008. This reduction in demand has continued, to a slightly lesser degree, during the first quarter of 2009 due to the overall weak global economy. Based on current economic forecasts for an extended global recession, we believe that it is reasonable to assume that there will continue to be a lessening of demand for oil throughout at least the first half of 2009, notwithstanding the lower price of oil. To the extent that gas prices remain at their current level of approximately $2.95 per gallon for an extended period of time or fall even further, it is possible that consumers will feel that they have more discretionary income to spend on off-road buggies and other powersports equipment, which may be considered more for entertainment and not essential. Notwithstanding these lower prices, there is no assurance that such lower gas prices will provide potential customers with more disposable income as a result of the overall weakness of the economy.

Effects of Increase in Unemployment

Recently, the rate of unemployment in the United States has reached an historically high level.  In addition to all of the other current economic factors contributing to a reduction in sales, it seems very likely that a continued increase in the unemployment rate will have a negative impact on sales.



18





Overall impact on our Future Earnings

We intend to continue to evaluate and analyze our business decisions through effective inventory management.  As described in the preceding paragraphs, the health of the U.S. economy, particularly the availability of credit and the discretionary spending power of potential customers, all will have an impact on our future earnings.  We believe that we may be able to counter a portion of the reduction in sales by focusing more on sales of used off-road buggies which have smaller ticket prices than new off-road buggies and provide us with profit margins that can be between 30% and 40% greater than sales of new off-road buggies.  Additionally, although our revenue per unit may be less, it appears that we have been able to maintain greater sales levels of smaller off-road buggies which even when sold new sell at prices significantly less than the larger models.  While we are hoping that this strategy will help to increase our sales through the remainder of 2009, until the credit markets are hopefully revived, there is no assurance that we will be successful.  Furthermore, in the event that we are able to successfully integrate additional dealerships and/or new brands into our existing business, we believe that this could result in greater sales margins and an even greater increase in earnings.  These greater sales margins would be created by the consolidation of expenses through the implementation of our superstore business plan, resulting in greater earnings per unit sold.  While it is managements intent to pursue the goals described herein, we are uncertain that these goals will be achieved at any level.

Seasonality.

Our products are subject to seasonality.  Traditionally, the off-road buggy season begins in early September and runs until May.

Impact of Inflation.

General inflation in the economy has driven the operating expenses of many businesses higher, and, accordingly we have experienced increased salaries and higher prices for supplies, goods and services.  We continuously seek methods of reducing costs and streamlining operations while maximizing efficiency through improved internal operating procedures and controls.  While we are subject to inflation as described above, our management believes that inflation currently does not have a material effect on our operating results.  However, inflation may become a factor in the future.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions and estimates that affect the amounts reported.  Note A of Notes to Financial Statements describes the significant accounting policies used in the preparation of the financial statements.  Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations.  Specifically, critical accounting estimates have the following attributes:

·

We are required to make assumptions about matters that are highly uncertain at the time of the estimate; and

·

Different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty.  We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances.  These estimates may change as new events occur, as additional information is obtained and as our operating environment changes.  These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known.  Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our financial statements are fairly stated in accordance with accounting principles generally accepted in the United States, and present a meaningful presentation of our financial condition and results of operations.



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In preparing our financial statements to conform to accounting principles generally accepted in the United States, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes.  These estimates include useful lives for fixed assets for depreciation calculations and assumptions for valuing options and warrants.  Actual results could differ from these estimates.

Critical Accounting Policies - Inventories

Inventories are valued at the lower of cost or market.  Cost is determined on an average cost basis.  Management performs periodic assessments to determine the existence of obsolete, slow moving and non-salable inventories, and records necessary provisions to reduce such inventories to net realizable value.  San Wests inventory consists primarily of vehicle parts and complete vehicles.

Results of Operations

Three and Nine Months Ended September 30, 2009 Compared With Three and Nine Months Ended September 30, 2008.

Revenues

Net Revenue for the three months ended September 30, 2009 and 2008 was $217,099 and $141,534, respectively.  Net revenue for the nine months ended September 30, 2009 and 2008 was $546,620 and $166,219, respectively.  The three and nine month revenue gains compared to the same period last year were $75,565 (53% increase) and $380,401 (229% increase), respectively, and due mainly to the inclusion of Buggy World sales in 2009 as a result of its acquisition in August of 2008.

Gross Profit

Gross profit for the three months ended September 30, 2009 and 2008 was $35,695 and $32,951, respectively.  Gross profit for the nine months ended September 30, 2009 and 2008 was $146,336 and $19,303, respectively.

Selling General and Administrative Expenses

Selling, general and administrative expenses (SG&A) for the three months ended September 30, 2009 were $284,867, an increase of $138,065 from $146,802 for the three months ended September 30, 2008.  For the nine months ended September 30, 2009 SG&A expenses were $684,462, an increase of $523,681 from $160,781 for the nine months ended September 30, 2008.  The increase is due mainly to the purchase of Buggy World in August 2008 and resulting increases in personnel, facility, advertising, insurance and other general operating costs.

Other Income and Expense

We incurred interest expense of $10,859 and $32,205 for the three and nine months ended September 30, 2009 with no interest expense in 2008.  Other income and other expense represent certain non-recurring items associated with our inventory and are expected to decrease substantially moving forward.

Net Loss

As a result of the foregoing factors, our net loss was $262,184, or $0.01 per share, for the three months ended September 30, 2009 compared to a loss of $112,903, or $0.01 per share for the three months ended September 30, 2008.  For the nine months ended September 30, 2009, our net loss was $574,577, or $0.03 per share compared to a loss of $140,530, or $0.01 per share for the nine months ended September 30, 2008.

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Liquidity and Capital Resources

Our primary source of liquidity has been cash generated by operations and capital raised through equity sales of our common stock.  As of September 30, 2009, we had $56,179 in cash and cash equivalents, compared to $6,252 as of December 31, 2008.

As of September 30, 2009, we had outstanding liabilities of $2,989,745.  Of this amount, approximately $2,772,795 is payable within 12 months.  In the event that we are unable to repay all or any portion of these outstanding amounts from cash from operations, we would be required to:

·

Seek one or more extensions for the payment of such amounts;

·

Refinance such debt to the extent available; Raise additional equity capital; or

·

Consummate any combination of the foregoing transactions.

Inventory Management

We believe that successful inventory management is the most important factor in determining our profitability.  In the power sports business, and particularly as it relates to the sale of motorcycles, there is normally a limited timeframe for the sale of current year models.  For example, if we are unable to sell a significant portion of our 2009 models before the 2010 models are released, it could be very difficult for us to sell our remaining inventory of 2009 models.  Therefore, our goal is to limit sales of carryover products (i.e., products that remain in inventory after the release of new models) to no more than 10% of our total sales each year.  This is accomplished by making all of our purchasing decisions based on sales information for the prior year and then utilizing aggressive sales and marketing techniques during the early part of a model year in order to assure the timely sale of our products.

Financing Activities

During 2008, San West, Inc. issued 1,747,879 shares of common stock in exchange for $276,418.

In August 2008, we commenced the process to reverse split our common stock which took effect on March 4, 2009.

During the nine months ended September 30, 2009, San West:

·

Received gross proceeds of $360,000 in exchange for 5,350,737 shares of common stock of which $125,000 or 1,611,108 shares were unissued as of September 30, 2009 and for which we paid $114,750 in finders fees;

·

Received services valued at $62,640 in exchange for 696,000 shares of common stock which were unissued as of September 30, 2009;

·

Received $60,944 upon the transfer of 1,229,253 shares from the existing outstanding shares of our chief executive officer net of finders fees of $31,256;

·

Converted $231,500 of our Dutchess Notes and issued 2,800,000 shares of common stock; and

·

Canceled 7,904,147 founders shares in exchange for a $100,000 promissory note.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

We conduct all of our transactions, including those with foreign suppliers and customers, in U.S. dollars. We are therefore not directly subject to the risks of foreign currency fluctuations and do not hedge or otherwise deal in currency instruments in an attempt to minimize such risks.  Demand from foreign customers and the ability or willingness of foreign suppliers to perform their obligations to us may be affected by the relative change in value of such customer or supplier's domestic currency to the value of the U.S. dollar.  Furthermore, changes in the relative value of the U.S. dollar may change the price of our products relative to the prices of our foreign competitors.



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Item 4.  Controls and Procedures.

See Item 4(T) below.

Item 4(T).  Controls and Procedures.

The term disclosure controls and procedures means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act (15 U.S.C. 78a, et seq.) is recorded, processed, summarized and reported, within the time periods specified in the Commissions rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuers management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The term internal control over financial reporting is defined as a process designed by, or under the supervision of, the issuers principal executive and principal financial officers, or persons performing similar functions, and effected by the issuers board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

·

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;

·

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and

·

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuers assets that could have a material effect on the financial statements.

Our management, including our chief executive officer and chief financial officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud.  A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of inherent limitations in all control systems, internal control over financial reporting may not prevent or detect misstatements, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the registrant have been detected.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Evaluation of Disclosure and Controls and Procedures.  Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act.  Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.  We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report.  The evaluation was undertaken in consultation with our accounting personnel.  Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are currently effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms.  As we develop new business or if we engage in an extraordinary transaction, we will review our disclosure controls and procedures and make sure that they remain adequate.



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Changes in Internal Controls over Financial Reporting.  There were no changes in the internal controls over our financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

This report does not include an attestation report of the registrants registered public accounting firm regarding internal control over financial reporting.  Managements report was not subject to attestation by the registrants registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the registrant to provide only managements report in this report.



PART II -- OTHER INFORMATION

Item 1.  Legal Proceedings.

Not applicable.

Item 1a.  Risk Factors.

Not applicable.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.

During the fiscal quarter ended September 30, 2009, San West issued 5,811,108 shares of its common stock in private transactions not involving a public offering, as follows:

·

On July 1, 2009, San West issued 850,000 shares of common stock  in exchange for a $34,000 reduction of our convertible note payable to Dutchess.

·

On July 10, 2009, San West issued 500,000 shares of common stock to in exchange for a $20,000 reduction of our convertible note payable to Dutchess.

·

On July 20, 2009, San West issued 1,400,000 shares of restricted common stock in exchange for $50,000 from an investor.

·

In connection with a private placement, from July 1, 2009 through September 30, 2009, San West received $125,000 from thirteen separate investors in exchange for 1,611,108 shares of restricted common stock to such investors.  As of September 30, 2009 the related common stock was not issued.

·

From September 16, 2009 through September 30, 2009, San West issued 1,450,000 shares of common stock in exchange for a $177,500 reduction of our convertible note payable to Dutchess.

All funds received from the sale of our shares were used for working capital purposes.

All shares bear a legend restricting their disposition.

The shares were issued in reliance upon an exemption from registration pursuant to Section 4(2) of the Securities Act or Rule 506 of Regulation D promulgated under the Securities Act.  Each investor took his securities for investment purposes without a view to distribution and had access to information concerning us and our business prospects, as required by the Securities Act.  In addition, there was no general solicitation or advertising for the purchase of our shares.  Our securities were sold only to an accredited investor, as defined in the Securities Act with whom we had a direct personal preexisting relationship, and after a thorough discussion.  Finally, our stock transfer agent has been instructed not to transfer any of such shares, unless such shares are registered for resale or there is an exemption with respect to their transfer.

Each purchaser was provided with access to our filings with the SEC, including the following:

·

Our annual report to stockholders for the most recent fiscal year, the definitive proxy statement filed in connection with that annual report, and, if requested by the purchaser in writing, a copy of our most recent Form 10-K under the Exchange Act.

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·

The information contained in an annual report on Form 10-K under the Exchange Act.

·

The information contained in any reports or documents required to be filed by San West under sections 13(a), 14(a), 14(c), and 15(d) of the Exchange Act since the distribution or filing of the reports specified above.

·

A brief description of the securities being offered, the use of the proceeds from the offering, and any material changes in San West affairs that are not disclosed in the documents furnished.

Item 3.  Defaults Upon Senior Securities.

Not applicable.

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

Not applicable.

Item 5.  Other Information.

Not applicable.

Item 6.  Exhibits.

Exhibit No.Identification of Exhibit31.1*Certification of Frank J. Drechsler, Chief Executive Officer of San West, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.31.2*Certification of Bryan Britton, Chief Financial Officer of San West, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.32.1*Certification of Frank J. Drechsler, Chief Executive Officer of San West, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.32.2*Certification of Bryan Britton, Chief Financial Officer of San West, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.




* Filed Herewith



SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SAN WEST, INC.

Date: November 9, 2009



By/s/ Frank J. Drechsler

Frank J. Drechsler, Chief Executive Officer





By/s/ Bryan Britton

Bryan Britton, Chief Financial Officer



Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

|                       |  |                                      |  |                 
|---------------------- |  | ------------------------------------ |  | ----------------
|Signature              |  | Title                                |  | Date            
|/s/ Frank J. Drechsler |  | Chief Executive Officer and Director |  | November 9, 2009
|/s/ Bryan Britton      |  | Chief Financial Officer and Director |  | November 9, 2009