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 March 31, 2010   ̈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 þ  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 May 6, 2010 the registrant had outstanding 154,246,540 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  Consolidated Balance Sheets as of March 31, 2010 (Unaudited) and  December 31, 2009 1  Consolidated Statements of Operations (Unaudited) For the Three Months Ended March 31, 2010 and 2009 2  Consolidated Statement of Stockholders' Equity (Unaudited) For the Three Months Ended March 31, 2010 3  Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, 2010 and 2009 4  Notes to Consolidated Financial Statements (Unaudited) 5-15  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 16-20  Item 3. Quantitative and Qualitative Disclosures About Market Risk 20  Item 4. Controls and Procedures 20  Item 4(T).  Controls and Procedures 20  PART II - OTHER INFORMATION  Item 1. Legal Proceedings 21  Item 1A. Risk Factors 21  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 21  Item 3. Defaults Upon Senior Securities 22  Item 4. Submission of Matters to a Vote of Security Holders 22  Item 5. Other Information 22  Item 6. Exhibits 23  Signatures 23  Item 1.  Financial Statements.  San West, Inc.Consolidated Balance SheetsMarch 31,December 31,ASSETS20102009CURRENT ASSETSCash$          47,804$          50,659Accounts receivable6,694840Inventory (Note B)232,501287,921Other current assets36,76533,897Total current assets323,764373,317Fixed assets (Note C)130,226130,226Accumulated depreciation(37,434)(31,974)Net fixed assets92,79298,252Deposits12,59912,599Goodwill (Note D)234,100234,100Total assets$663,255$718,268LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)CURRENT LIABILITIESAccounts payable (Note E)$725,169$749,257Other current liabilities176,276187,689Floorplan notes payable (Note F )108,679117,962Convertible promissory notes (Note G)150,000-Notes payable (Note H)276,000510,000Subsidiary purchase-current portion (Note I)29,00032,292Total current liabilities1,465,1241,597,200Subsidiary purchase (Note I)227,112223,820Loans from shareholder (Note J)216,950216,950Total liabilities1,909,1862,037,970Commitments and contingenciesSTOCKHOLDERS' DEFICIT(Note K)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 146,446,540 and 124,960,826 at March 31, 2010 and December 31, 2009, respectively.3,032,7432,028,648Common stock payable461,905439,825Accumulated deficit(4,740,579)(3,788,175)Total stockholders' deficit(1,245,931)(1,319,702)Total liabilities and shareholder's deficit$663,255$718,268The accompanying notes are an integral part of these financial statements  1   San West, Inc.Consolidated Statements of Operations (Unaudited)Three Months EndedMarch 31,20102009Revenue$        493,615$       179,423Cost of goods sold358,123113,879Gross profit135,49265,544ExpensesSelling, general and administrative924,442215,547Total expenses924,442215,547Loss from operations(788,950)(150,003)Other income (expense)Other income4-Amortization of beneficial conversion feature(150,000)-Amortization of deferred financing costs(862)-Interest expense(12,596)(10,151)Total other income (expense)(163,454)(10,151)Net loss$      (952,404)$     (160,154)Net (loss) per common share basic$           (0.01)$          (0.00)Weighted average shares outstanding basic and diluted134,487,65176,307,556The 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 notes3,991,3507,727,890The accompanying notes are an integral part of these financial statements  2  San West, Inc.Consolidated Statement of Stockholders' DeficitCommon StockAccumulatedTotal
    Stockholders'SharesAmountPayableDeficitDeficitBalances December 31, 2009124,960,826$  2,028,648$  439,825$  (3,788,175)$  (1,319,702)Issuance of common stock for cashweighted average price of $.070935,71465,500(65,500)-Common stock issued for servicesweighted average price of $.1115,000,000552,925552,925weighted average price of $.0621,300,00080,670(80,670)-weighted average price of $.11989,25089,250Shares exchanged for debtweighted average price of $.01314,250,000155,00079,000234,000Beneficial conversion featureof convertible note150,000150,000Net loss(952,404)(952,404)Balances March 31, 2010 (Unaudited)146,446,540$  3,032,743$  461,905$  (4,740,579)$  (1,245,931)The accompanying notes are an integral part of these consolidated financial statements   3   San West, Inc.Consolidated Statements of Cash Flows (Unaudited)Three Months EndedMarch 31,20102009Cash flows from operating activities:Net loss$ (952,404)$ (160,154)Adjustments to reconcile net loss to netcash used by operating activities:Depreciation5,4605,688Stock compensation expense642,175-Amortization of beneficial conversion feature150,000-Changes in operating assets and liabilities:Change in accounts receivable(5,854)850Change in inventory55,42031,188Change in other current assets(2,868)6,801Change in deposits-(979)Change in accounts payable(24,088)(44,456)Change in floorplan notes payable(9,283)(30,588)Change in other current liabilities(11,413)106,583Net cash used by operating activities(152,855)(85,067)Cash flows from investing activities:Investment in merger-(25,000)Net cash provided by investing activities-(25,000)Cash flows from financing activities:Proceeds from the issuance of common stock-192,500Stock sale offering costs-(68,499)Proceeds from loans150,000-Proceeds from shareholder loans-18,605Payments on notes payable-(6,000)Net cash provided by financing activities150,000136,606Net increase (decrease) in cash(2,855)26,539Cash, beginning of period50,6595,593Cash, end of period$    47,804$    32,132Supplemental disclosure of cash flow information:Cash paid for interest$          -$          -Cash paid for taxes$          -$          -Other non-cash investing and financing activities:Shares issued as compensation$  642,175$          -Shares issued for debt$  234,000$          -The accompanying notes are an integral part of these financial statements  4   SAN WEST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) THREE MONTHS ENDED MARCH 31, 2010 AND 2009   NOTE A  ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited financial statements of San West, Inc. as of March 31, 2010 and for the three months ended March 31, 2010and 2009 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, 2009 as filed with the Securities and Exchange Commission as part of our Form 10-K filed on April 15, 2010.  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 65,396,320 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 no par value and 50,000,000 shares of preferred stock no par value.  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.  The Company has sustained operating losses since inception and has an accumulated deficit of $4,740,579 and $3,788,175 at March 31, 2010 and December 31, 2009, respectively.  In addition, the Company had negative working capital of $1,141,360 and $1,223,883 at March 31, 2010 and December 31, 2009, respectively.  The Company has and will continue to use significant capital to grow and acquire market share.    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.  5  SAN WEST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) THREE MONTHS ENDED
    MARCH 31, 2010 AND 2009  NOTE A  ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Principles of consolidation The consolidated financial statements include the accounts of San West (formerly Human BioSystems, Inc.) and its subsidiary, Buggy World which is 100% consolidated in the financial statements.  All material inter-company accounts and transactions have been eliminated.  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.   6   SAN WEST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) THREE MONTHS ENDED
    MARCH 31, 2010 AND 2009  NOTE A  ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  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 is 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 March 31, 2010 and 2009, the Company incurred approximately $27,659 and $11,675, 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.   7   SAN WEST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) THREE MONTHS ENDED
    MARCH 31, 2010 AND 2009  NOTE A  ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Income Taxes (Continued) 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.   8  SAN WEST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) THREE MONTHS ENDED
    MARCH 31, 2010 AND 2009  NOTE A  ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  In January 2010, the FASB issued ASU 2010-06 - Fair Value Measurements and DisclosuresImproving Disclosures about Fair Value Measurements, which requires new disclosures and reasons for transfers of financial assets and liabilities between Levels 1 and 2.  ASU 2010-06 also clarifies that fair value measurement disclosures are required for each class of financial asset and liability, which may be a subset of a caption in the consolidated balance sheets, and those disclosures should include a discussion of inputs and valuation techniques.  It further clarifies that the reconciliation of Level 3 measurements should separately present purchases, sales, issuances, and settlements instead of netting these changes.  With respect to matters other than Level 3 measurements, ASU 2010- 06 is effective for fiscal years and interim periods beginning on or after December 15, 2009.  New guidance related to Level 3 measurements is effective for fiscal years and interim periods beginning on or after December 15, 2010. We are currently evaluating the impact of ASU 2010-06 on our disclosures.  In January 2010, the FASB issued ASU No. 2010-10  Consolidation (Topic 810) that amends accounting and disclosure requirements for a decrease in ownership in a business under existing GAAP standards for consolidations. It also clarifies the types of businesses that are in the scope of these consolidations. As required by this guidance, we retroactively applied the amendments as of January 1, 2009, which did not have a material impact on our financial statements or footnote disclosures.  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 N, 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.  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.   9   SAN WEST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) THREE MONTHS ENDED
    MARCH 31, 2010 AND 2009  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.   NOTE A  ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Recent Accounting Pronouncements (Continued) 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.  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 March 31, 2010 and December 31, 2009:   20102009Parts$99,244$120,343Vehicles133,257167,578Inventory$232,501$287,921Parts1300-1320Vehicle1325-1345  10   SAN WEST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) THREE MONTHS ENDED
    MARCH 31, 2010 AND 2009  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.    Fixed assets consisted of the following at March 31, 2010 and December 31, 2009:  NOTE C  FIXED ASSETS (Continued)  20102009Computers$8,419$8,419Furniture & fixtures50,00050,000Machinery & equipment62,89162,891Leasehold improvements8,9168,916130,226130,226Accumulated depreciation(37,434)(31,974)Fixed assets, net$92,792$98,252  Depreciation expense for the three months ended March 31, 2010 and 2009 was $5,460 and $5,688, respectively.   NOTE D  GOODWILL  On August 20, 2008, the
  Company executed an Asset Purchase and Stock Transfer Agreement for 100% of
  the outstanding ownership interests in Buggy World, Inc.  The total purchase
  price was $613,202 paid with $350,000 cash and $263,202 of promissory notes
  to Cambio Enterprises. In 2008 the Company impaired $54,889 related to the Buggy World acquisition.  NOTE E  ACCOUNTS PAYABLE  Accounts payable at March 31, 2010 consisted of $651,442 of assumed Human BioSystems accounts, $4,234 of sales tax payable, $22,748 related to professional fees and $46,745 of trade payables.  Accounts payable at December 31, 2009 consisted of $668,642 of assumed Human BioSystems accounts, $6,599 of sales tax payable, $5,000 related to professional fees and $69,016 of trade payables.   NOTE F  FLOORPLAN NOTES PAYABLE  March 31, 2010December 31, 2009InventoryNotesInventoryNotesCostPayableCostPayableVehicles$      133,257$      108,679$      167,578$      117,962Parts and accessories99,244120,343$      232,501$      287,921  The floorplan notes payable, as shown in the above table, will generally be higher than the vehicle inventory cost due to the timing of the sale of a vehicle and payment of the related liability.  In 2010 and 2009, floorplan notes payable is lower than inventory cost as we have paid off floorplan notes with excess cash, including the proceeds from our stock sales.  We evaluate our vehicles at the lower of cost or market value approach for vehicles.  In 2009, due to a shift in consumer demand, we determined certain vehicles were recorded at values higher than book value.  Based on this determination, we recorded an impairment of $11,639 at December 31, 2009.  If the book value of our vehicles is more than fair value, we could experience losses on our used vehicles in future periods.  11   SAN WEST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) THREE MONTHS ENDED
    MARCH 31, 2010 AND 2009  All new vehicles are pledged
  to collateralize floorplan notes payable to floorplan providers. The floorplan
  notes payable bear interest, payable monthly on the outstanding balance, at
  a rate of interest that varies by provider.  The new vehicle floorplan
  notes are payable on demand and are typically paid upon the sale of the related
  vehicle.  As such, these floorplan notes payable are shown as current
  liabilities in the accompanying balance sheets.  NOTE F  FLOORPLAN NOTES PAYABLE (Continued)  During 2009, the Company used Castle Flooring to finance certain vehicles.  During 2009 Castle was paid off and the Company no longer does business with Castle who has since filed for Chapter 7 bankruptcy.  GE Flooring and DSC Flooring provided financing to the former owners of Buggy World.  DSC was paid off in 2009 and the remaining GE balance is a carryover from 2008.  The GE balance is secured by certain vehicles financed by that lender.  Vehicles financed by our
  floorplan lenders are classified as floorplan notes payable and are included
  as an operating activity.  In the future, the Company plans to consign
  and or purchase most of our inventory.  NOTE G  CONVERTIBLE PROMISSORY NOTE  In connection with a Securities purchase Agreement dated February 12, 2010, the Company issued a convertible promissory note (the Note) dated February 4, 2010 generating gross proceeds to the Company of $150,000.  Issuance fees totaled $3,485, which were paid in cash.  The Note bears interest of ten percent (10%) per annum that accrues daily and matures on February 1, 2011 with no payment due before the maturity date.  At any time after the issuance date on February 4, 2010, and prior to maturity, the Note is convertible into the Company's restricted common stock at a conversion price equal to the lesser of (i) $0.04, or (ii) 80% of the lowest closing bid price of the Companys Common Stock during the 10 trading days immediately preceding the applicable conversion date.  Common stock issued pursuant to a conversion carries piggyback registration rights.  The Note provides that the holder may only convert the debenture if the number of shares held by the lender or its affiliates after conversion would not exceed 4.99% of the outstanding shares of the Company's common stock following such conversion.  The issuance costs related to the Note of $3,485 in cash were capitalized to current assets on the balance sheet and are being amortized over the term of the Note which is calculated based upon the effective interest method.  For the three months ended March 31, 2010, the Company recognized $862 as other expense related to the amortization of the issuance costs with a $2,623 balance remaining in current assets.  The Company determined that the Note was issued with a beneficial conversion feature (BCF) due to the conversion price ($0.04) being less than the closing stock price ($0.095) on the date of issuance, and the conversion feature being in-the-money.  Thus, the BCF has been determined based on the gross debenture amount, and recorded as a discount to reduce the carry value of the Note and increase additional-paid-in-capital.  The Company calculated the initial BCF on the closing date of the transaction to be $206,250 using the intrinsic value method.  Since this amount is greater than the $150,000 value of the Note, the Company reduced the initial carry value of the Note to zero effectively recording a BCF of $150,000 as additional-paid-in-capital.  The BCF discount was expensed when the note became convertible which was on the date of issuance.  Thus, during the three months ended March 31, 2010, the Company recognized $150,000 in non-cash amortization expense attributable to the amortization of the beneficial conversion feature discount.  During the three months ended March 31, 2010, the Company recognized $2,277 in interest expense related to the Note.   12   SAN WEST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) THREE MONTHS ENDED
    MARCH 31, 2010 AND 2009  NOTE H  NOTES PAYABLE  Notes payable consists of the following at March 31, 2010:  1. ($54,000) On September 30, 2009 the Company issued an Addendum to the Seacoast Advisors, Inc. February 13, 2009 note increasing the loan balance by $54,000.  The addendum extended the maturity date of the original note and the $54,000 to September 30, 2010.  The addendum also changed the conversion price of the $54,000 to $0.07 per share compared to $0.05 per share for the original note.  All other terms NOTE H  NOTES PAYABLE (Continued)  and conditions are unchanged and include interest at eight percent (8%) per annum and only one principal and interest payment upon maturity.  During the three months ended March 31, 2010, the Company recognized $1,065 of interest expense.  As of March 31, 2010, the total due under this note was $56,279, including $1,065 of accrued interest and $54,000 of principal.  Accrued interest under this note is recorded under other current liabilities.  2. ($222,000) Represents the promissory notes assumed from Dutchess Private Equities L.P. pursuant to the HBS merger.  In November 2006, the HBS 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.  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.  During the three months ended March 31, 2010, $60,000 was converted into 1,150,000 shares of common stock.  On August 10, 2008 the Company issued an unsecured 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 $.01 of outstanding principal 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 year ended December 31, 2009, the Company made a $6,000 payment and recognized $8,528 of interest expense.  As of December 31, 2009, the total balance due under this note was $82,528, including $74,000 of principle and $8,528 of accrued interest.  During the three months ended March 31, 2010, the Company recognized $1,068 of interest expense.  Also during the first quarter, the company received conversion notices and converted $74,000 of principle into 7,400,000 shares of the Companys common stock leaving a balance due of $9,596 which is recorded under other current liabilities.  On February 13, 2009 the Company issued an
  unsecured promissory note to Kelly Clark with a face amount of $100,000 in
  exchange for Ms. Clark retiring 39,520,735 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.  During
  the year ended December 31, 2009, the Company recognized $7,036 of interest
  expense.  As of December 31, 2009, the total due under this note was $107,036,
  including $7,036 of accrued interest and $100,000 of principal.  During
  the three months ended March 31, 2010, the Company   received conversion
  notices and converted $100,000 of principle into 10,000,000 shares of the Companys
  common stock leaving a balance due of $7,036 which is recorded under other
  current liabilities.  13    SAN WEST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) THREE MONTHS ENDED
    MARCH 31, 2010 AND 2009  NOTE I  SUBSIDIARY PURCHASE LOAN  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 Frank J. Drechsler, 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, 2009, the total due under this note was $264,037, including $7,925 of accrued interest and $256,112 of principal.  Accrued interest under this note is recorded under other current liabilities.  Due to the default, the note   NOTE I  SUBSIDIARY PURCHASE LOAN (Continued)  is due on demand as of March 31, 2010.  However, since year end, the note has been brought current.  Thus, we have recorded the current principal of $29,000 due and long term principal portion due of $227,112 according to the terms of the note.  During the three months ended March 31, 2010 and 2009, the Company recorded interest expense of $4,996 and $5,074, respectively related to this note.   NOTE J  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 principal 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 months ended March 31, 2010, the Company recognized $2,140 of interest expense related to this note.   NOTE K  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 8,739,394 shares of commons stock for proceeds of $276,418.  Of the stock issued in 2008, a total of 7,664,430 shares were issued as part of the private placement memorandum.  On November 3, 2009, the Company effected a five-for-one (5:1) forward stock split.  During the year ended December 31, 2009, the Company received gross proceeds of $798,500 in exchange for 33,017,958 shares of common stock of which $67,500 or 964,286 shares were unissued as of December 31, 2009 but were included in the computation of earnings per share.  During the year ended December 31, 2009, the Company received services valued at $434,965 in exchange for 9,480,000 shares of common stock of which 6,000,000 shares, or $372,325 had not been issued as of December 31, 2009 and are included in the equity section of our balance sheet as common stock payable.  During the year ended December 31, 2009, 6,146,270 shares were issued from the existing outstanding shares of our CEO in exchange for $92,200 in gross proceeds.  During the year ended December 31, 2009, the Company converted $368,000 of our Dutchess Notes and issued 15,950,000 shares of common stock.   14   SAN WEST, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) THREE MONTHS ENDED MARCH 31, 2010 AND 2009   During the year ended December 31, 2009, the Company issued 833,333 shares of common stock as an inducement to invest from one of our shareholders.  During the three months ended March 31, 2010, the Company issued 935,714 shares of stock that were payable as of year-end and which had a value of $65,500.  During the three months ended March 31, 2010, the Company issued 14,250,000 upon the conversion of $155,000 of debt and reclassified to common stock payable $79,000 of debt as a result of conversion into 4,300,000 shares of common stock which were issued on April 29, 2010.  NOTE K  COMMON STOCK (Continued)  During the three months ended March 31, 2010, the Company issued 5,000,000 shares to Jesse Gonzales for director services valued at $552,925.  During the three months ended March 31, 2010, the Company issued 1,300,000 of a total 6,000,000 shares due for services performed in 2009, valued at $372,325 and recorded as common stock payable.  The 1,300,000 shares were valued at $80,670 which expense was recognized in 2009.  The balance of shares remaining is 4,700,000 with a corresponding $291,655 recorded as common stock payable.  During the three months ended March 31, 2010, the Company received services valued at $89,250.  Said services were paid with 750,000 shares of the Companys common stock on April 2010.  Hence, the value of said services is recorded as common stock payable as of March 31, 2010.  Common stock issued in a period subsequent to our reporting dates is included in the calculation of weighted average shares outstanding as of the date the expense was recognized or funds received.  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 L  INVESTMENT AGREEMENTS  In December 2008, HBS entered
  into the Investment Agreement with Dutchess effective December 29, 2008 whereby
  the Company could sell up to $10 million of shares to Dutchess based on a certain
  formula.  However, as a result of the reverse merger between San West,
  Inc and Human BioSystems in June 2009, this original Investment Agreement was
  considered void due to the significant change in control.  As
  a result, on January 8, 2010, the Company filed a Post-Effective Amendment
  No.1 to Form S-1 seeking to register for resale up to 8.5 million shares common
  stock by Dutchess Opportunity Fund, II, LP, a selling stockholder pursuant
  to a put right under an investment agreement (the Investment
  Agreement), also referred to as an Equity Line of Credit, that we have
  entered into with Dutchess.  The S-1 is still under review by the SEC.  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.  We will not
  receive any proceeds from the sale of these shares of common stock offered
  by Dutchess.  However, we will receive proceeds from the sale of securities
  pursuant to our exercise of this put right if and when the Company exercises
  its right.  The purchase price of shares purchased under this Investment
  Agreement shall be equal to 92% 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 three trading days prior to the notice of our put, multiplied
  by the average of the three daily closing prices immediately preceding the
  date of the put, or (B) $100,000.  As of the date of this report, the
Company has not put any shares to Dutchess.  NOTE M  SUBSEQUENT EVENTS  On April 6, 2010, the Company issued 4,300,000 shares for $79,000 of debt converted during the quarter ending March 31, 2010.  On April 20, 2010, the Company issued 2,500,000 shares upon the conversion of $87,500 of debt.  On April 29, the Company issued 1,000,000 shares in exchange for services valued at $106,250.  Of the $106,250, $89,250 was recognized as stock compensation expense during the quarter ending March 31, 2010 and $17,000 as expense in April 2010.   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. 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.  16   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. 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. Revenue Recognition Revenue from the sale of inventory is recognized when the earning process is complete and the risk and rewards of ownership have transferred to the customer, which is considered to have occurred after delivery. 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 is 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. Inventories Inventories are
  valued at the lower of cost or market.  Cost is determined on a first-in-first-out
  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 vehicle  17   Results of Operations Three Months Ended March 31, 2010 Compared With Three Months Ended March 31, 2009. Revenues Net Revenue for the three months ended March 31, 2010 and 2009 was $493,615 and $179,423, respectively.  The increase in revenue is due to County Imports which expanded our product lines to include ATVs and Scooters.  We have put an emphasis on advertising the site and the spring and summer season is the main purchasing time for scooters.  The Company acts as dealer and fulfillment house for www.countyimports.com resulting in additional revenue. Gross Profit Gross profit for the three months ended March 31, 2010 and 2009 was $135,492 and $65,544, respectively. Selling General and Administrative Expenses Selling, general and administrative expenses (SG&A) for the three months ended March 31, 2010 were $924,442, an increase of $708,895 from $215,547 for the three months ended March 31, 2009.  The increase in expense is mainly due to the recognition of $642,175 in non-cash stock compensation primarily related to our new director, Jesse Gonzales receiving 5 million shares of restricted common stock valued at $552,925 and $89,250 of stock compensation expense related to the issuance of 750,000 shares to our investor relations firm.  Excluding stock compensation, SG&A was $282,267, or $66,720 higher compared to the three months ended March 31, 2009. Other Income and Expense Other expense increased $153,303 to $163,454 for the three months ended March 31, 2010 compared to $10,151 of expense during the same period last year.  The increase is primarily due to our convertible promissory note related costs, including amortization of the beneficial conversion feature and financing costs of $150,000 and $862, respectively.  Interest expense also increased $2,445 to $12,596 for the three months ended March 31, 2010 compared to $10,151 during the same period last year. Net Loss As a result of
  the foregoing factors, our net loss was $952,404, or $0.01 per share, for the
  three months ended March 31, 2010 compared to a loss of $160,154, or $0.00
  per share for the three months ended March 31, 2009.  Excluding one-time,
  non-cash charges totaling $792,175 related to stock compensation and the expense
  associated with the beneficial conversion feature of our convertible note,
  the Companys loss increased $75 to $160,229 compared to $160,154 last
  year.  18   Financial Condition From inception to March 31, 2010, we have incurred an accumulated deficit of $4,740,579.  This loss has been incurred through a combination of goodwill impairment of $2,186,536, stock compensation of $1,186,473, professional fees and expenses supporting our plans to acquire synergistic businesses as well as past operating losses. Our primary source of liquidity has been cash generated by operations and capital raised through equity sales of our common stock and various loans and notes payable.  During the three months ended March 31, 2010 we had cash on hand of $47,804 and experienced a net decrease in cash of $2,855 compared to cash on hand of $50,659 at December 31, 2009. As of March 31, 2010, we had outstanding liabilities of $1,909,186 compared to $2,037,970 as of December 31, 2009.  Of this amount, approximately $1,465,124 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.  Our available working capital and capital requirements will depend upon numerous factors, including product sales, the timing and cost of expanding into new markets, the status of our competitors, and our ability to attract and retain key employees.  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 percent 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.  The Companys Liquidity Plan Recent operating results give rise to concerns about the Company's ability to generate cash flow from operations sufficient to sustain ongoing viability.  Net loss for the three months ended March 31, 2010 was $952,404, or $160,229 excluding one-time stock compensation and beneficial conversion feature amortization charges, while cash used for operations was $152,855.  During 2008, San West, Inc. issued 8,739,394 shares of common stock in exchange for $276,418. During the year ended December 31, 2009, San West: · Received gross proceeds of $798,500 in exchange for 33,017,959 shares of common stock of which $67,500 or 964,286 shares were unissued as of December 31, 2009; · Received services valued at $434,965 in exchange for 9,480,000 shares of common stock; · Received $60,944 upon the transfer of 6,146,270 shares from the existing outstanding shares of Harry Masuda, our former chief executive officer, net of finders fees of $31,257; · Converted $368,000 of our Dutchess Notes and issued 15,950,000 shares of common stock; and · Canceled 39,520,735 founders shares in exchange for a $100,000 promissory note. · Issued 833,333 shares of common stock as an inducement to invest from one of our shareholders.   19   During the three months ended March 31, 2010, San West:  · Issued a convertible promissory note and received gross proceeds of $150,000. · Issued 935,714 shares of stock that were payable as of year-end and which had a value of $65,500. · Issued 14,250,000 shares upon the conversion of $155,000 of debt and reclassified to common stock payable $79,000 of debt as a result of conversion into 4,300,000 shares of common stock which were issued on April 29, 2010. · Issued 5,000,000 shares to Jesse Gonzales for director services valued at $552,925. · Issued 1,300,000 shares of a total 6,000,000 shares due for services performed in 2009, valued at $372,325 and recorded as common stock payable.  The 1,300,000 shares were valued at $80,670 which expense was recognized in 2009.  The balance of shares remaining is 4,700,000 shares with a corresponding $291,655 recorded as common stock payable. · Received services valued at $89,250 and were paid with 750,000 shares of the Companys common stock during April 2010.  Our independent registered public accountants have indicated that the Company has suffered recurring losses from operations that raises substantial doubt about its ability to continue as a going concern. Management is currently in the process of seeking additional equity financing with potential investors. There can be no assurance that such additional financing will be obtained. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's need to raise additional equity or debt financing and the Company's ability to generate cash flow from operations will depend on its future performance and the Company's ability to successfully implement business and growth strategies.   The Company's performance will also be affected by prevailing economic conditions.   Many of these factors are beyond the Company's control.   If future cash flows and capital resources are insufficient to meet the Company's commitments, the Company may be forced to reduce or delay activities and capital expenditures or obtain additional equity capital.   In the event that the Company is unable to do so, the Company may be left without sufficient liquidity. 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. Item 4.  Controls and Procedures. See Item 4(T) below. Item 4(T).  Controls and Procedures. Evaluation of Disclosure Controls and Procedures Based on managements evaluation (with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO)), as of the end of the period covered by this report, our CEO and CFO have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.  20   Changes in Internal Control over Financial Reporting There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) 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. Inherent Limitations on Effectiveness of Controls Our management, including the CEO and CFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control systems objectives will be met. 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. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.  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 March 31, 2010, San West issued 22,235,714 shares of its common stock in private transactions not involving a public offering, as follows: · We issued to William Miltner and Toby Proescher 892,857 and 42,857, respectively, shares of stock that were payable as of year-end and which had a value of $65,500. · We issued to Brett Maas, Seacoast, and Kelly Clark, 250,000, 4,000,000 and 10,000,000 shares, respectively, upon the conversion of $155,000 of debt. · Issued 5,000,000 shares to Jesse Gonzales for director services valued at $552,925. · Issued 1,300,000 shares to Titan Fidelity Investments for services performed in 2009 valued at $80,670 which expense was recognized in 2009. · Issued 750,000 shares to Outcast Inc. for services in April 2010 valued at $89,250.  All funds received from the sale of our shares were used for working capital purposes. All shares bear a legend restricting their disposition.  21   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. · 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. Effective May 10, 2010, Bryan Britton resigned as a director and chief financial officer of the registrant due to the pressures of other business matters.  There were no disagreements between the registrant and Mr. Britton.  Mr. Britton furnished the registrant with a letter which is filed as Exhibit 17 to this Current Report on Form 10-Q. Mr. Britton did not hold any positions on any committee of the board of directors of the registrant at the time of the directors resignation. The registrant has furnished Mr. Britton with a copy of the disclosures it is making in this Current Report on Form 10-Q no later than the day the registrant file the disclosures with the Commission; The registrant has provided Mr. Britton with the opportunity to furnish the registrant as promptly as possible with a letter addressed to the registrant stating whether he agrees with the statements made by the registrant in response to this Item 5 and, if not, stating the respects in which he does not agree; and file any letter received by the registrant from Mr. Britton with the Commission as an exhibit by an amendment to the previously filed Form 10-Q within two business days after receipt by the registrant. On May 10, 2010, the registrant has appointed Frank J. Drechsler, its president and chief executive officer as the new chief financial officer. Frank J. Drechsler has been our chief executive officer and one of our directors since our inception, and served as our corporate secretary until July 2005.  Following the Merger between San West, Inc. and Human BioSystems in 2009, Mr. Drechsler became our chief executive officer and chairman of the board.  22    Since 2002, Mr. Drechsler has been an officer and director of Krinner USA, Inc., a privately-held Nevada corporation (Krinner) which markets and sells Christmas tree stands designed in Germany.  Mr. Drechsler also works as a sales agent for Krinner but receives no compensation from Krinner when its products are sold on our online store.  Since July 2001, Mr. Drechsler has also been the president, secretary and a director of Finger Tip Drive, Inc., a Nevada corporation, which provides online computer data storage services.  From October 1998 to May 2001, Mr. Drechsler was the president and a director of Pacific Trading Post, Inc., a Nevada corporation, which marketed and sold products on the Internet within the outdoor sports industries, specifically in the areas of skate, surf and snow.  In January 1998, Mr. Drechsler co-founded and developed the business model for skatesurfsnow.com, where he was responsible for the day-to-day operations.  During 1997, Mr. Drechsler was self-employed as a consultant and helped start up companies develop sales and marketing programs.  From 1995 to December 1996, Mr. Drechsler was the international sales manager for Select Distribution. Mr. Drechsler graduated from California State University, Fullerton with a Bachelor of Science degree in International Business in 1992.  Mr. Drechsler was previously an officer and director of Zowcom, Inc. a Nevada corporation, JPAL, Inc., a Nevada corporation, and Expressions Graphics, Inc., a Nevada corporation, all of which are reporting companies.  Mr. Drechsler is not an officer or director of any other reporting company. There is no material plan, contract or arrangement (whether or not written) to which Mr. Drechsler is a party or in which he participates that is entered into or material amendment in connection with the triggering event or any grant or award to any such covered person or modification thereto, under any such plan, contract or arrangement in connection with any such event.  Item 6.  Exhibits. Exhibit No.Identification of Exhibit17Letter of Resignation of Bryan Britton dated May 10, 2010.31.1*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 Frank J. Drechsler, 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 Frank J. Drechsler, 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: May 14,  2010. By/s/ Frank J. Drechsler Frank J. Drechsler, Chief Executive Officer   By/s/ Frank J. Drechsler Frank J. Drechsler, 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. SignatureTitleDate/s/ Frank J. DrechslerChief Executive Officer, Chief Financial Officer and DirectorMay 14, 2010  23