**U.S.
      Securities And Exchange Commission**


**Washington,
      D.C. 20549**





**Form
      10-QSB**





(check
      one)





xQUARTERLY
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934





For
      the
      Quarterly Period Ended February 29, 2008





oTRANSITION
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF


THE
      EXCHANGE ACT OF 1934





Commission
      File Number 000-25277





**Herborium
      Group, Inc.**


(Exact
      Name Of Small Business Issuer As Specified In Its Charter)





**Nevada**


(State
      Or
      Other Jurisdiction Of


Incorporation
      Or Organization)





**88-0353141**


(I.R.S.
      Employer Identification No.)





**Park
      80W Plaza II, Suite 200, Saddle Brook, NJ 07663**


(Address
      Of Principal Executive Offices)





**(201)
      291-2602**


(Issuer's
      Telephone Number)





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


**Yes**x**No**o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act)


**Yes**o**No**x





As
      of
      April 7, 2008, there were 119,067,080 shares of the registrant's common stock,
      par value $.001 per share, issued and outstanding.





ISSUERS
      INVOLVED IN BANKRUPTCY PROCEEDINGS


DURING
      THE PRECEDING FIVE YEARS





Check
      whether the issuer has filed all documents and reports required to be
      filed


by
      Section 12, 13 or 15(d) of the Securities Exchange Act after the
      distribution


of
      securities under a plan confirmed by a court.


**Yes**x**No**o




Transitional
      Small Business Disclosure Format (Check One):


**Yes**x**No**o














**HERBORIUM
        GROUP, INC.**
 **INDEX
        TO FORM 10-QSB**


**Part
      I-Financial Information**





**Item
                1.**
            
            **Financial
                Statements**Condensed
                Consolidated Balance Sheets as of February 29, 2008 (Unaudited) and
                November 30, 2007Condensed
                Consolidated Statements of Operations for the Three Months Ended
                February
                29, 2008 and February 28, 2007 (Unaudited)Condensed
                Consolidated Statements of Cash Flows for the Three Months Ended
                February
                29, 2008 and February 28, 2007 (Unaudited)Condensed
                Consolidated Statement of Stockholders’ Deficiency for the Three Months
                Ended February 29, 2008 (Unaudited)Notes
                to Condensed Consolidated Financial Statements as of February 29,
                2008
                (Unaudited)**Item
                2.**
            
            Management’s
                Discussion and Analysis or Plan of Operation**Item
                3.**
            
            Controls
                and Procedures





**Part
      II-Other Information**





**Item
                1.**
            
            Legal
                Proceedings**Item
                2.**
            
            Unregistered
                Sales of Equity Securities and Use of Proceeds**Item
                3.**
            
            Defaults
                Upon Senior Securities**Item
                4.**
            
            Submission
                of Matters to a Vote of Security Holders**Item
                5.**
            
            Other
                Information**Item
                6.**
            
            Exhibits




*In
      this report, the terms the “Company”, “we”, “our” and “us” refer to Herborium
      Group, Inc., a Nevada corporation.*




i


Cautionary
      Statement Regarding Forward-Looking Statements





*Certain
      statements in the "Management’s Discussion and Analysis or Plan of Operation"
      and elsewhere in this quarterly report constitute "forward-looking statements"
      (within the meaning of the Private Securities Litigation Reform Act of 1995
      (the
      "Act")) relating to us and our business, which represent our current
      expectations or beliefs including, but not limited to, statements concerning
      our
      operations, performance, financial condition and growth. All statements, other
      than statements of historical facts, included in this quarterly report that
      address activities, events or developments that we expect or anticipate will
      or
      may occur in the future, including such matters as our projections, future
      capital expenditures, business strategy, competitive strengths, goals,
      expansion, market and industry developments and the growth of our businesses
      and
      operations are forward-looking statements. Without limiting the generality
      of
      the foregoing, words such as "may,” “believes,” ”expects,” "anticipates,”
"could,” "estimates,” “grow,” “plan,” "continue," “will,” “seek,” “scheduled,”
“goal” or “future” or the negative or other comparable terminology are intended
      to identify forward-looking statements. These statements by their nature involve
      substantial risks and uncertainties, such as credit losses, dependence on
      management and key personnel, variability of quarterly results, our ability
      to
      continue our growth strategy and competition, certain of which are beyond our
      control. Any or all of our forward-looking statements may turn out to be wrong.
      They may be affected by inaccurate assumptions that we might make or by known
      or
      unknown risks or uncertainties. Should one or more of these risks or
      uncertainties materialize or should the underlying assumptions prove incorrect,
      actual outcomes and results could differ materially from those indicated in
      the
      forward-looking statements.*




*Because
      of the risks and uncertainties associated with forward-looking statements,
      you
      should not place undo reliance on them. Further, any forward-looking statement
      speaks only as of the date on which it is made, and we undertake no obligation
      to update any forward-looking statement to reflect events or circumstances
      after
      the date on which the statement is made or to reflect the occurrence of
      unanticipated events.*




ii


**HERBORIUM
          GROUP, INC. AND SUBSIDIARIES**
 **CONDENSED
          CONSOLIDATED BALANCE SHEETS**


February
                29,
              2008
            
            November
                30,
              2007(Unaudited)
            
            (Note
                1)**ASSETS**Current
                assets:Cash
            
            $
            109,232
            
            $
            2,077Accounts
                receivable
            
            
            3,661
            
            
            4,772Inventory
            
            
            41,920
            
            
            31,181Prepaid
                expenses and other current assets
            
            
            7,292
            
            
            7,292Total
                current assets
            
            
            162,105
            
            
            45,322Property
                and equipment, net of accumulated depreciation
              of
                $21,302-2008; $20,954-2007
            
            
            3,883
            
            
            4,231Deferred
                financing costs, net of accumulated amortization
              of
                $828-2008
            
            
            37,371
            
            
            —Other
                assets, net of accumulated amortization
              of
                $9,826-2008; $9,213-2007
            
            
            52,584
            
            
            28,997**TOTAL
                ASSETS**
            
            $
            255,943
            
            $
            78,550**LIABILITIES
                AND STOCKHOLDERS’ DEFICIENCY**Current
                liabilities:Accounts
                payable and accrued expenses
            
            $
            654,235
            
            $
            640,403Convertible
                notes payable
            
            
            285,030
            
            
            —Credit
                cards payable
            
            
            108,095
            
            
            129,077Lines
                of credit payable
            
            
            164,165
            
            
            166,372Due
                to others
            
            
            50,033
            
            
            50,895Due
                to related parties
            
            
            20,000
            
            
            35,000Due
                to stockholders
            
            
            193,682
            
            
            201,056Total
                current liabilities
            
            
            1,475,240
            
            
            1,222,803Stockholders’
                deficiency:Preferred
                stock, $0.001 par value, 10,000 shares
              authorized,
                no shares issued and outstanding
            
            
            —
            
            
            —Common
                stock, $0.001 par value; 500,000,000 shares
              authorized,
                119,067,080 shares issued and outstanding
              (115,567,080
                - November 30, 2007)
            
            
            30,500
            
            
            27,000Common
                stock subscribed; no shares issued and outstanding
            
            
            188,500
            
            
            188,500Additional
                paid-in capital
            
            
            516,250
            
            
            500,500Deferred
                consulting fees
            
            
            (41,250
            )
            
            (106,250
            )Accumulated
                deficit
            
            
            (1,913,297
            )
            
            (1,754,003
            )Total
                stockholders’ deficiency
            
            
            (1,219,297
            )
            
            (1,144,253
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS’ DEFICIENCY**
            
            $
            255,943
            
            $
            78,550




See
        accompanying notes to condensed consolidated financial statements
  1


**HERBORIUM
        GROUP, INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS**
 **(UNAUDITED)**


**For
                  The Three Months Ended****February
                  29,**
              
              
              **February
                  28,****2008**
              
              
              **2007****NET
                  SALES**
              
              $
              115,610
              
              $
              215,359**COST
                  OF SALES**
              
              
              53,344
              
              
              76,005**GROSS
                  PROFIT**
              
              
              62,266
              
              
              139,354**OPERATING
                  EXPENSES**Marketing
                  and selling
              
              
              27,745
              
              
              75,715General
                  and administrative
              
              
              179,788
              
              
              147,614**TOTAL
                  OPERATING EXPENSES**
              
              
              207,533
              
              
              223,329**LOSS
                  FROM OPERATIONS**
              
              
              (145,267
              )
              
              (83,975
              )Interest
                  expense
              
              
              (14,027
              )
              
              (10,694
              )**NET
                  LOSS**
              
              $
              (159,294
              )
              $
              (94,669
              )Net
                  loss per share - basic and dilutive
              
              $
              -
              
              $
              -Weighted
                  average number of sharesoutstanding
                  during the period - basic and dilutive
              
              
              116,792,355
              
              
              110,552,636


See
          accompanying notes to condensed consolidated financial statements
  2
 **HERBORIUM
              GROUP, INC. AND SUBSIDIARIES**
 **CONDENSED
              CONSOLIDATED STATEMENT OF CASH FLOWS**
 **(UNAUDITED)**


Three
                months endedFebruary
                29,
            
            
            February
                28,2008
            
            
            2007**CASH
                FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:**Net
                loss
            
            $
            (159,294
            )
            $
            (94,669
            )Adjustments
                to reconcile net loss to
              net
                cash provided by (used in) operating activities:Depreciation
                and amortization
            
            
            1,789
            
            
            1,033Stock-based
                professional and consulting fees
            
            
            65,000
            
            
            37,500Changes
                in assets (increase) decrease:Accounts
                receivable
            
            
            1,111
            
            
            1,304Inventory
            
            
            (10,740
            )
            
            (6,994
            )Prepaid
                expenses and other current assets
            
            
            —
            
            
            44Changes
                in liabilities increase (decrease):Accounts
                payable and accrued expenses
            
            
            (1,136
            )
            
            65,984Net
                cash provided by (used in) operating activities
            
            
            (103,270
            )
            
            4,202**CASH
                FLOWS USED IN INVESTING ACTIVITIES:**Purchase
                of other assets
            
            
            (4,950
            )
            
            (2,000
            )Net
                cash used in investing activities
            
            
            (4,950
            )
            
            (2,000
            )**CASH
                FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:**Issuance
                of convertible notes payable
            
            
            300,000
            
            
            —Deferred
                financing costs
            
            
            (38,199
            )
            
            —Repayment
                of lines of credit, net
            
            
            (2,207
            )
            
            (1,790
            )Repayment
                of long-term debt
            
            
            —
            
            
            (153
            )Increase
                (decrease) in credit card payable, net
            
            
            (20,983
            )
            
            2,502Increase
                (decrease) in due to others
            
            
            (862
            )
            
            9,343Decrease
                in due to related parties
            
            
            (15,000
            )
            
            (10,000
            )Decrease
                in due to stockholders
            
            
            (7,374
            )
            
            (4,780
            )Net
                cash provided by (used in) financing activities
            
            
            215,375
            
            
            (4,878
            )**NET
                INCREASE (DECREASE) IN CASH**
            
            
            107,155
            
            
            (2,676
            )**CASH,
                BEGINNING OF PERIOD**
            
            
            2,077
            
            
            4,649**CASH,
                END OF PERIOD**
            
            $
            109,232
            
            $
            1,973Supplemental
                disclosures of cash flow information:Cash
                paid during the period for:Interest
            
            $
            14,027
            
            $
            10,562





Supplemental
                disclosure of noncash investing and financing
                activities:During
                the three months ended February 29, 2008, the Company
                issued 3,500,000 shares of commonstock
                valued at $19,250 in connection with an asset acquisition.During
                the three months ended February 28, 2007, the Company issued 5,500,000
                shares of common stock and agreed to issue 3,500,000 shares of common
                stock valued at $450,000 for professional
                services.




See
      accompanying notes to condensed consolidated
      financial statements


3


**HERBORIUM
            GROUP, INC. AND SUBSIDIARIES**
 **CONDENSED
            CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY**
 **FOR
            THE THREE MONTHS ENDED FEBRUARY 29, 2008**
 **(UNAUDITED)**


**Common
                Stock**
            
            **Common
                Stock Subscribed****Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**
            
            **Additional**
                **Paid-in**
                  **Capital**
            
            **Deferred**
                  **Consulting
                    Fees**
            
            **Accumulated
                Deficit**
            
            **Total****BALANCE,
                December 1, 2007**
            
            
            115,567,080
            
            $
            27,000
            
            
            —
            
            $
            188,500
            
            $
            500,500
            
            $
            (106,250
            )
            
            ($1,754,003
            )
            
            ($1,144,253
            )Common
                stock issued in connection with an asset acquisition
            
            
            3,500,000
            
            
            3,500
            
            
            —
            
            
            —
            
            
            15,750
            
            
            —
            
            
            —
            
            
            19,250Amortization
                of deferred consulting fees
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            65,000
            
            
            —
            
            
            65,000Net
                loss for the period
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (159,294
            )
            
            (159,294
            )**BALANCE,
                February 29, 2008**
            
            
            119,067,080
            
            $
            30,500
            
            
            -
            
            $
            188,500
            
            $
            516,250
            
            $
            (41,250
            )
            
            ($1,913,297
            )
            
            ($1,219,297
            )




See
      accompanying notes to condensed consolidated
      financial statements




4


**HERBORIUM
            GROUP, INC.** **AND
            SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
            OF FEBRUARY 29, 2008**
 **(UNAUDITED)**


**NOTE
      1. INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**





The
      accompanying condensed consolidated financial statements have been prepared
      in
      accordance with accounting principles generally accepted in the United States
      of
      America and reflect all adjustments which management believes necessary (which
      include only normal recurring accruals) to present fairly the financial
      position, results of operations, and cash flows of the Company. These
      statements, however, do not include all information and footnotes necessary
      for
      a complete presentation of the Company’s consolidated financial position,
      results of operations and cash flows in conformity with accounting principles
      generally accepted in the United States. The interim financial statements should
      be read in conjunction with the consolidated financial statements and notes
      thereto, included in the Company’s audited financial statements for the fiscal
      year ended November 30, 2007 included in its Annual Report on Form 10-KSB,
      and
      are not necessarily indicative of the results to be expected for the full year
      ending November 30, 2008. The consolidated balance sheet at November 30, 2007
      has been derived from the audited financial statements for fiscal
      2007.





**NOTE
          2.** **ORGANIZATION
          AND NATURE OF BUSINESS**





Herborium,
      Inc., (the “Company”) was incorporated in the State of Delaware on June 4, 2002,
      and is the surviving entity following a merger of G.O. International, Inc.,
      a
      New Jersey corporation, with and into the Company effective June 6, 2002. The
      Company provides unique, natural and complementary healthcare related products
      to consumers and healthcare professionals seeking alternative answers to the
      management of healthcare issues not currently met by standard Western medicine.
      Its products are botanical supplements comprised of unique herbal formulations,
      referred to as botanical therapeutics, that have a record of clinical efficacy
      and safety established in China; however, these products have not been evaluated
      according to standards of clinical efficacy and safety applicable to
      pharmaceutical products sold in the United States and other countries, and
      because these products are herbal-based, they are not recognized as
      pharmaceuticals by the Food and Drug Administration (the "FDA"). The Company’s
      business model is based on (i) owning and/or marketing unique products with
      established clinical history in their country of origin, and (ii) a proactive
      approach to meeting the regulatory changes and challenges of the new healthcare
      marketplace. Historically, substantially all of the Company’s revenue has been
      derived from the sale of AcnEase through its corporate website.





On
      September 18, 2006, Herborium was acquired by Pacific Magtron International
      Corporation, Inc. (“PMIC”), a publicly traded Nevada Corporation, pursuant to a
      Merger Agreement and PMIC’s plan of reorganization in bankruptcy. The
      transaction was accomplished by the merger of a PMIC subsidiary into Herborium,
      with Herborium as the surviving corporation (the “Merger”). Under the provisions
      of the Merger Agreement and the plan of reorganization, the stockholders of
      Herborium exchanged 100% of their common stock of the Company for 85% of the
      post-Merger PMIC common stock. The previously outstanding common shares of
      PMIC
      were cancelled under the plan of reorganization, and one new share of the
      Company was issued in exchange for each cancelled shares held by all PMIC
      shareholders, other than its majority shareholder, Advanced Communications
      Technologies, Inc (“ACT”). A total of 11,454,300 shares were issued to the
      shareholders of ACT in exchange for the cancellation of the PMIC shares and
      ACT’s contribution of $50,000 to the bankruptcy. Shares of our common stock have
      been distributed to PMIC shareholders. Following this distribution, as well
      as
      certain other distributions that are included in the plan of reorganization,
      an
      aggregate of 108,567,080 shares of common stock of Herborium Group was issued
      and outstanding as a result of the merger.





The
      Company’s merger with PMIC is treated as a recapitalization with no purchase
      price allocation. In connection with the merger, PMIC changed its name to
      Herborium Group, Inc. and adopted the fiscal year of Herborium Group, Inc.
      which
      is November 30.




5


**HERBORIUM
            GROUP, INC.** **AND
            SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
            OF FEBRUARY 29, 2008**
 **(UNAUDITED)**


**NOTE
          3.** **BASIS
          OF ACCOUNTING AND SIGNIFICANT ACCOUNTING
          POLICIES**





a.  Basis
      of
      Accounting





The
      Company's condensed consolidated financial statements have been prepared on
      a
      going concern basis, which contemplates the realization of assets and the
      settlement of liabilities in the normal course of business. The Company incurred
      net losses of $643,000 and $340,000 for the years ended November 30, 2007 and
      2006, respectively. The Company had an excess of current liabilities over
      current assets of $1,313,000 and $1,177,000 as of February 29, 2008 and November
      30, 2007, respectively. Management is pursuing additional capital and debt
      financing and the acquisition of the AcnEase formula (See Notes 4 and 5).
      However, there is no assurance that these efforts will be successful.





Our
      ability to generate sufficient profits and obtain additional funding and pay
      off
      our obligations will determine our ability to continue as a going concern.
      Our
      financial statements do not include any adjustments that might result from
      the
      outcome of this uncertainty.





b.  Principles
      of consolidation





The
      condensed consolidated financial statements include the accounts of the Company
      and its wholly owned subsidiaries, Herborium, Inc. and Herborium.com, Inc.
      All
      significant intercompany accounts and transactions are eliminated in
      consolidation.





c.  Estimates





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





d. Income
      taxes




Income
      tax expense includes current and deferred federal and state taxes arising from
      temporary differences between income for financial reporting and income tax
      purposes, as well as from the expected realization of net operating loss
      carryforwards. A valuation allowance is established when necessary to reduce
      deferred tax assets to the amounts expected to be realized.





e. Revenue




The
      Company recognizes revenue when inventory is shipped to its
      customers.





f. Loss
      per
      share




Basic
      loss per share is computed by dividing net loss by the weighted average number
      of common shares outstanding for the period. Diluted earnings per share reflect
      the potential dilution of securities, using the treasury stock method, that
      could share in the earnings of an entity. During the three month period ended
      February 29, 2008, the Company had securities convertible into common stock
      which have been excluded from the calculation of diluted loss per share as
      their
      effect, because of the net loss, would have been anti-dilutive. At February
      29,
      2008 and February 28, 2007, potentially dilutive securities totaled 28,846,000
      and -0-, respectively.





At
      February 29, 2008 and February 28, 2007, the Company had an obligation to issue
      common stock pursuant to subscription agreements, as well as an obligation
      to
      grant warrants to purchase shares of common stock. Such shares, had the number
      thereof been determinable, would have been excluded from the calculation of
      diluted loss per share as their effect would have been
      anti-dilutive.





g. Allowance
      for doubtful accounts




The
      Company makes judgments as to its ability to collect outstanding trade
      receivables and provides allowances, if deemed necessary, for the portion of
      receivables when collection becomes doubtful. Provisions are made based upon
      a
      specific review of all significant outstanding invoices.




6


**HERBORIUM
            GROUP, INC.** **AND
            SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
            OF FEBRUARY 29, 2008**
 **(UNAUDITED)**


h.            
      Deferred Financing Costs




Costs
      associated with the Company’s debt obligations are capitalized and amortized
      over the life of the related debt obligation using the interest
      method.





i. Recent
      accounting pronouncements




In
      September 2006, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards No. 157, “Fair Value Measurements”
(“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring
      fair value in generally accepted accounting principles (“GAAP”), and expands
      disclosures about fair value measurements. This Statement is effective for
      financial statements issued for fiscal years beginning after November 15, 2008.
      Management does not believe that the adoption of this pronouncement will have
      a
      material impact on the Company’s financial position or results of
      operations.





In
      June
      2006, the FASB issued Financial Accounting Standards Board Interpretation
      (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes—an
      interpretation of SFAS 109. FIN No. 48 provides a comprehensive model
      for the recognition, measurement and disclosure in the financial statements
      of
      uncertain tax positions taken or expected to be taken on a tax return. The
      Company adopted FIN No. 48 effective beginning on December 1, 2007. The
      adoption of this interpretation did not have an impact on the Company’s
      financial statements.




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
      for Financial Assets and Financial Liabilities—Including an Amendment of FASB
      Statement No. 115.” This Standard allows entities to voluntarily choose, at
      specified election dates, to measure many financial assets and financial
      liabilities (as well as certain non-financial instruments that are similar
      to
      financial instruments) at fair value. The election is made on an
      instrument-by-instrument basis and is irrevocable. If the fair value option
      is
      elected for an instrument, the Statement specifies that all subsequent changes
      in fair value for that instrument shall be reported in earnings. SFAS No. 159
      is
      effective beginning on December 1, 2008. We are currently evaluating the
      impact this new Standard could have on our financial position and results of
      operations.





The
      FASB
      has issued Statement No. 141 (R), “Business Combinations”. This statement
      retains the fundamental requirements in Statement No. 141 that the acquisition
      method of accounting (which Statement No. 141 called the “purchase method”) be
      used, and applies to all business entities, including mutual entities that
      previously used the pooling of interest method of accounting for some business
      combinations. The statement is effective for transactions within the annual
      reporting period beginning on or after December 15, 2008. Management does not
      expect this pronouncement to have a significant impact on the financial
      statements of the Company.





The
      FASB
      has issued Statement No. 160, “Non-controlling Interests in Consolidated
      Financial Statements”. This statement changes the way the consolidated income
      statement is presented when non-controlling interests are present. It requires
      consolidated net income to be reported at amounts that include the amounts
      attributable to both the parent and the non-controlling interest, and is
      effective for periods beginning on or after December 15, 2008. Management does
      not expect this pronouncement to have a significant impact on the financial
      statements of the Company.




**NOTE
          4.** **MAJOR
          SUPPLIER**





For
      the
      three month periods ended February 29, 2008 and February 28, 2007, 100% of
      the
      Company purchases were from AH USA, a China-based business entity owned by
      the individual who is the inventor and sole owner of AcnEase, an acne product.
      The Company is party to a licensing agreement with AH USA under which the
      Company, as licensee, is the exclusive worldwide distributor of AcnEase.




7


**HERBORIUM
            GROUP, INC.** **AND
            SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
            OF FEBRUARY 29, 2008**
 **(UNAUDITED)**


On
      January 10, 2008, the Company and the individual owning the intellectual
      property rights related to AcnEase (the “Seller”) entered into a Purchase
      Agreement (“Agreement”) for the acquisition of all rights related to AcnEase,
      including the formulation thereof, all sourcing information, extraction
      procedures, manufacturing and packaging information as well as all related
      clinical and testing information and trade secrets. Consideration will consist
      of aggregate cash payments of $500,000 and issuances of 5,428,354 shares of
      common stock. In accordance with the Agreement, 3,500,000 shares of the
      Company’s common stock having a value of $19,250 were issued to Seller following
      the Agreement’s signing. Upon obtaining sufficient financing, the Company will
      make an initial payment of $450,000 to the Seller in return for all the
      aforementioned information regarding the acne product. There is no date by
      which
      time the Company is required to obtain financing. The remaining portions of
      the
      purchase price, $50,000 cash and 1,928,354 shares of common stock, will be
      held
      in escrow and released when certain conditions are met, principally the
      successful manufacturing of the acne product on a commercial scale. The
      Agreement also requires the Company to purchase on an as-needed basis at a
      negotiated price any inventory of the acne product in the possession of the
      Seller at the time that the Company has the ability to manufacture the product.
      Included in other assets is $19,250 of costs related to this potential
      acquisition.





**NOTE
      5. CONVERTIBLE NOTES PAYABLE**





Pursuant
      to a private offering, during the month ended February 29, 2008, the Company
      sold Units of its securities consisting of an aggregate $300,000 in principal
      amount of its Convertible Notes (the “Notes”), 300,000 shares of its common
      stock and warrants (the “Warrants”) exercisable for 600,000 shares of common
      stock. In accordance with ETIF
      00-27: Application of Issue No. 98-5, “Accounting for Convertible Securities
      with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios
      to Certain Convertible Instruments”, the
      Company allocated certain amounts to the fair value of the shares of common
      stock and warrants to purchase common stock included in each Unit, as well
      as
      the 20% conversion discount applicable in certain circumstances. Based on this
      allocation, the indicated fair value of each Note (face value - $50,000) amounts
      to $47,505. The resulting discount of $2,495 is attributable to a warrant value
      of $1,662 and a common stock value of $833. At the time the aforementioned
      shares are issued, this amount will be reclassified from accrued expenses and
      credited to common stock and additional paid-in capital.





The
      Warrants are exercisable for a period of five years from issuance. Half of
      the
      Warrants are exercisable at $.025 per share and half are exercisable at $.05
      per
      share, subject to certain adjustments, including, but not limited to,
      adjustments for stock splits, stock dividends, mergers and
      consolidations.





The
      Notes
      are convertible, beginning six months after issuance or, if earlier, the closing
      of a qualified financing or an acquisition of the Company, into shares of common
      stock in whole or in part from time to time at the option of the investors
      at a
      Conversion Price equal to $.025 or 80% of the issuance price in a qualified
      financing or in connection with an acquisition of the Company. The Notes define
      a qualified financing as the date upon which the Company completes the sale
      of
      common stock (or like security) for aggregate gross proceeds of at least $1.5
      million. The Conversion Price is subject to certain customary adjustments,
      including, but not limited to, adjustments for stock splits, stock dividends,
      mergers and consolidation.





The
      Notes
      bear interest at the rate of 10% per annum, payable semi-annually in shares
      of
      the Company’s common stock valued at $.025 per share (currently trading at $.012
      per share).





Unless
      converted to Common Stock, the principal balance of each Note is payable upon
      demand made any time after the first anniversary of the issuance of the Note,
      or
      upon a qualified financing or acquisition of the Company. In addition, the
      Company is required to set aside 5% of its gross revenues for redemption of
      the
      principal amount of the Notes. The set-aside revenues will be distributed to
      the
      Note holders semi-annually, pro rata in accordance with the outstanding
      principal balance of each Note.





Pursuant
      to a Registration Rights Agreement, the Company has agreed to include the shares
      of common stock issuable upon conversion of the Notes and exercise of the
      Warrants, as well as the shares of common stock issued to the investors, in
      any
      registration statement filed by the Company under the Securities Act of 1933
      with respect to the Company’s equity securities to be sold by the Company or any
      other stockholder.





The
      Company’s Board of Directors has authorized the sale of up to an additional
      $200,000 principal amount of the Notes, in Units together with 200,000 shares
      of
      common stock and Warrants exercisable for 400,000 shares of common stock. In
      March 2008, the Company sold additional Units of its securities consisting
      of an
      aggregate $75,000 in principal amount of its Convertible Notes, 75,000 shares
      of
      its common stock and warrants exercisable for 150,000 shares of the common
      stock.




8


**HERBORIUM
          GROUP, INC.** **AND
          SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
          OF FEBRUARY 29, 2008**
 **(UNAUDITED)**


Southridge
      Investment Group LLC is serving as the Company’s placement agent in connection
      with the offer and sale of the Notes, common stock and Warrants. In its capacity
      as placement agent, Southridge is paid a cash fee equal to 10% of the gross
      proceeds received by the Company, as well as an expense allowance equal to
      2% of
      the gross proceeds. In addition, Southridge will be issued Warrants exercisable
      for a number of shares of common stock equal to 10% of the aggregate shares
      issued by the Company in the private placement, assuming conversion and exercise
      of all of the Notes and Warrants. The placement agent warrants will be
      exercisable for 5 years at a price of $.03 per share. In its capacity as the
      Company’s financial advisor, Southridge is entitled to a retainer fee of 750,000
      shares of the Company’s common stock, and one share for each $1 received by the
      Company in the private placement





None
      of
      the aforementioned shares of common stock have been issued as of April 7,
      2008.





**NOTE
          6.** **LINES
          OF CREDIT AND CREDIT CARDS PAYABLE**





The
      Company has entered into four revolving line of credit agreements with
      commercial banks. The credit agreements provide for aggregate borrowings of
      up
      to $187,500 and are payable on demand with no maturity dates set forth in the
      loan agreements. Borrowings under these facilities bear interest at rates
      ranging from prime plus 1.25% to 14%.





The
      Company also has entered into a number of standard credit card agreements that
      it uses for business expenses. Borrowings under these agreements, which have
      no
      set maturity dates, bear interest at rates ranging from 11.2% to
      39.7%.





**NOTE
          7.** **DUE
          TO STOCKHOLDERS**





Due
      to
      stockholders consists of unsecured non-interest bearing demand loans to the
      Company with no specified terms, including the payment of interest, and,
      accordingly, this liability is included in current liabilities and no interest
      expense has been accrued. Substantial repayments of amounts owed are not
      expected until such time as the Company has adequate funds available.





**NOTE
          8.** **KEY
          EMPLOYEES**





The
      Company relies extensively on the services of Drs. Agnes P. Olszewski and James
      P. Gilligan, its co-founders, who play key roles in all aspects of operations
      and management and the loss of their services would materially and adversely
      affect the Company’s prospects. Until the Company raises substantial financing,
      neither of these key individuals will be able to receive cash compensation.





**NOTE
          9.** **CONSULTING
          AGREEMENT**





On
      January 19, 2007, the Board of Directors of the Company approved the Herborium
      Group, Inc. 2007 Stock Plan (“Plan”) which provides for a maximum aggregate of
      20 million shares of common stock to be issued upon grants of restricted stock
      or upon exercise of options granted under the Plan, as compensation and
      incentive to eligible employees, directors, consultants and advisors. On January
      26, 2007, the Company filed a Registration Statement on Form S-8 with the
      Securities and Exchange Commission in connection with the consultant’s shares.




On
      January 1, 2007, the Company entered into a two-year Consulting Agreement with
      an individual and in consideration of the services to be provided pursuant
      to
      the Financial Consulting Agreement, the Company agreed to initially issue up
      to
      9 million shares of the Company’s common stock pursuant and subject to the Plan,
      and when so issued, such shares shall be validly issued, fully paid and
      non-assessable, of which 7.5 million shares will vest immediately, with 5.5
      million shares being issued immediately. The remaining shares will vest over
      the
      term of the Consulting Agreement, and, in the event the Company acquires the
      AcnEase formula, up to an additional 3 million shares could be issued per terms
      of the Consulting Agreement. The shares issued and yet to be issued have been
      valued at $.05 per share based on the market value on the date granted for
      an
      aggregate cost of $450,000, which cost is being expensed over the period of
      the
      agreement. Accordingly, consulting expense in the amount of approximately
      $56,000 and $37,500 was recorded in general and administrative expense during
      the three months ended February 29, 2008 and February 28, 2007,
      respectively.




9


**HERBORIUM
            GROUP, INC.** **AND
            SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
            OF FEBRUARY 29, 2008**
 **(UNAUDITED)**


****  On
      February 14, 2007, the Company entered into a two-year consulting agreement
      with
      a consulting firm and, in consideration of the services to be provided pursuant
      to that agreement, the Company agreed to issue up to 3 million shares of the
      Company’s common stock pursuant and subject to the Plan, and when so issued,
      such shares shall be validly issued, fully paid and non-assessable, of which
      500,000 shares vested and were issuable immediately. Of the remaining shares,
      500,000 will vest upon the occurrence of one or more transactions, as defined,
      and the remaining 2,000,000 will vest ratably on the sixth, ninth, twelfth
      and
      eighteenth month anniversaries of this agreement. The shares, 1,500,000 of
      which
      have been issued as of November 30, 2007, have been valued at $.035 per share
      based on the market value on the date granted for an aggregate cost of $105,000,
      which cost is being expensed over the period of the agreement. Accordingly,
      consulting expense in the amount of approximately $9,000 was recorded in general
      and administrative expense during the three months ended February 29, 2008.




10


**Item
      2.**  **Management's
      Discussion And Analysis Or Plan Of Operation**





The
      following is management's discussion and analysis of certain significant factors
      that will or have affected our financial condition and results of operations.
      The discussion should be read in conjunction with our financial statements
      and
      the related notes and the other financial information appearing elsewhere in
      this report and included in the Company’s Annual Report on Form 10-KSB for the
      year ended November 30, 2007. In addition to historical information, the
      following discussion and other parts of this quarterly report contain words
      such
      as “may,” "estimates," "expects," "anticipates," "believes," “plan,” "grow,"
      "will," “could,” "seek," “continue,” “future,” “goal,” “scheduled” and other
      similar expressions that are intended to identify forward-looking information
      that involves risks and uncertainties. In addition, any statements that refer
      to
      expectations or other characterizations of future events or circumstances are
      forward-looking statements. Actual results and outcomes could differ materially
      as a result of important factors including, among other things, general economic
      conditions, the Company's ability to renew or replace key supply and credit
      agreements, fluctuations in operating results, committed backlog, public market
      and trading issues, risks associated with dependence on key personnel, and
      competitive market conditions in the Company's existing lines of business,
      as
      well as other risks and uncertainties. See “Risk Related To Our Business” and
“Risks Related To Our Stock” below.




**GENERAL**




We
      provide unique, natural and complementary healthcare related products to
      consumers and healthcare professionals seeking alternative answers to the
      management of healthcare issues not currently met by standard Western medicine.
      Our products are botanical supplements comprised of unique herbal formulations.
      We select products that have a record of clinical efficacy and safety
      established in China; however, these products have not been evaluated according
      to standards of clinical efficacy and safety applicable to pharmaceutical
      products sold in the United States and other countries, and because these
      products are herbal-based, they are not recognized as pharmaceuticals by the
      Food and Drug Administration (the "FDA").





Our
      business model is based on:


·  owning
        and/or marketing unique products with established clinical history in their
        country of origin, and


· a
        proactive approach to meeting the regulatory changes and challenges of the
        new
        healthcare marketplace.





**FINANCIAL
      CONDITION**





We
      had
      net losses of $159,000 and $643,000 for the three months ended February 29,
      2008
      and the year ended November 30, 2007, respectively. As of February 29, 2008,
      we
      had cash and current assets of $109,000 and $162,000, respectively, and current
      liabilities of $1,475,000, with obligations aggregating $654,000 for trade
      creditors and accrued expenses, $108,000 for credit card obligations, $164,000
      payable for line of credit obligations, $50,000 for amounts due to others,
      $20,000 for amounts due to related parties and $194,000 for amounts due to
      stockholders. We have been operating at a loss since inception and have been
      funding these losses in a number of ways, including lines of credit, credit
      card
      debt, advances from stockholders and others and entering into subscription
      agreements with “friends and family” for investment funds. As described in Note
      5 to the accompanying consolidated financial statements, we obtained $300,000
      of
      debt financing ($262,000 net of financing costs) during the three month period
      ended February 29, 2008. We continue to actively seek additional substantial
      equity or debt financing; however, we have received no commitments for such
      financing except for an additional $75,000 ($66,000 net of financing costs)
      received in March 2008. Our working capital at February 29, 2008, despite the
      aforementioned financing, is not sufficient to meet our working capital needs
      for the next twelve-month period and we will need to obtain additional financing
      from one or more sources.





Our
      independent registered public accounting firm added an explanatory paragraph
      to
      their audit reports issued in connection with our fiscal 2007 and 2006 financial
      statements, which states that there is substantial doubt about our ability
      to
      continue as a going concern. Our ability to generate sufficient profits and
      obtain additional funding and pay off our obligations will determine our ability
      to continue as a going concern. Our financial statements do not include any
      adjustments that might result from the outcome of this uncertainty.





As
      described above, we merged into and with PMIC and became a publicly traded
      corporation; however, we have not closed, nor obtained a commitment for, the
      financing that was originally contemplated to close contemporaneously with the
      closing of the merger. As a result of this lack of funding, a condition
      unfavorably impacting us since inception, revenue and profitability have not
      increased as we believe would have otherwise been the case. Since we have not
      been able to obtain sufficient financing, we have not been able to (i) acquire
      ownership of several products, particularly the intellectual property rights
      to
      and formulation of, our principal product, AcnEase®, (ii) market and promote our
      products, (iii) conduct certain clinical trials that would further such
      marketing and promotional activities and (iv) hire additional employees.




11


**RELATED
        PARTY TRANSACTIONS**





During
      the three months ended February 29, 2008 and February 28, 2007, the Company's
      due to stockholders obligation decreased by $7,000 and $5,000, respectively.
      During the three months ended February 29, 2008 and February 28, 2007, the
      Company's due to related parties obligation decreased by $15,000 and $10,000,
      respectively.





**COMPARISON
      OF THE THREE MONTHS ENDED FEBRUARY 29, 2008 TO THE THREE MONTHS ENDED FEBRUARY
      28, 2007**





**Summary
      Results of Operations**





The
      following table sets forth certain selected financial data as a percentage
      of
      sales for the three months ended February 29, 2008 and February 28,
      2007:


2008
              
              2007Net
                  sales
              
              
              100.0
              %
              
              100.0
              %Cost
                  of sales
              
              
              46.1
              
              
              35.3Gross
                  profit
              
              
              53.9
              
              
              64.7Operating
                  expenses
              
              
              179.5
              
              
              103.7Loss
                  from operations before other expense
              
              
              (125.7
              )
              
              (39.0
              )Other
                  expense
              
              
              (12.1
              )
              
              (5.0
              )Net
                  loss
              
              
              (137.8
              )%
              
              (44.0
              )%




**Sales**





Net
      sales
      for the three months ended February 29, 2008, were $116,000 compared to $215,000
      for the three months ended February 28, 2007. The decrease of $100,000, or
      46.3%, can be principally attributed to a decrease in internet sales in the
      United States resulting from changes in the Company’s providers of e-commerce,
      hosting and web-managing services, which temporarily decreased internet
      visibility, traffic and conversion rate. These changes were undertaken to
      enhance the Company’s long-term ability to generate online sales
      volume.




**Gross
      Profit**





Gross
      profit decreased to $62,000 for the three months ended February 29, 2008
      compared to $139,000 for the three months ended February 28, 2007, a decrease
      of
      $77,000 or 55.3%, with gross margin decreasing to 53.9% from 64.7% for the
      prior
      period. The decrease in gross profit is principally attributable to decrease
      in
      sales volume and, to a lesser extent, to the lower realized gross margin. This
      decrease in gross margin is a result of increased use of product sales
      promotions in a form of price incentives offered in response to the matters
      described above.





**Operating
      Expenses**





Total
      operating expenses decreased by $16,000, or 7.1%, to $208,000 for the three
      months ended February 29, 2008, from $223,000 for the three months ended
      February 28, 2007. The $48,000 decrease in marketing and selling expenses is
      principally due to a decrease in on-line advertising and promotion expense
      of
      $26,000 during the period of website design and programming described above
      since the effectiveness of such expenses would have been diminished, and smaller
      decreases in a number of expense categories. The $32,000 increase in general
      and
      administrative expenses was principally attributable an increase of $27,000
      in
      noncash consulting expense to expense grants of common stock over the term
      of
      the related consulting agreements.





**Other
      Income (Expense)**





Interest
      expense increased to $14,000 from $11,000 for the three months ended February
      29, 2008 as compared with the three months ended February 28, 2007, or $3,000,
      as interest rates and debt outstanding were relatively constant during both
      periods.




12





**Seasonality**





There
      are
      no seasonality factors that affect the Company.





**Off-Balance
      Sheet Arrangements**





The
      Company has no off-balance sheet arrangements that have or are reasonably likely
      to have a current or future effect on the Company’s financial condition, changes
      in financial condition, revenue or expenses, results of operations, liquidity,
      capital expenditures or capital resources that is material to investors, and
      the
      Company does not have any non-consolidated special purpose
      entities.





**LIQUIDITY
      AND CAPITAL RESOURCES**





As
      of
      February 29, 2008, we had a cash balance of $109,000 and a negative cash flow
      from operations of $103,000 for the three-month period then ended. We have
      been
      operating at a loss since inception and have been funding these losses in a
      number of ways, including lines of credit, credit card debt, advances from
      stockholders and entering into subscription agreements with “friends and family”
for investment funds. As described in Note 5 to the accompanying consolidated
      financial statements, we obtained $300,000 of debt financing ($262,000 net
      of
      financing costs) during the three month period ended February 29, 2008. We
      continue to actively seek additional substantial equity or debt financing;
      however, we have received no commitments for such financing except for an
      additional $75,000 ($66,000 net of financing costs) received in March 2008.
      Our
      working capital at February 29, 2008, despite the aforementioned financing,
      is
      not sufficient to meet our working capital needs for the next twelve-month
      period and we will need to obtain additional financing from one or more
      sources.





Our
      independent registered public accounting firm added an explanatory paragraph
      to
      their audit reports issued in connection with our fiscal 2007 and 2006 financial
      statements, which states that there is substantial doubt about our ability
      to
      continue as a going concern. Our ability to generate profits and obtain
      additional funding and pay off our obligations will determine our ability to
      continue as a going concern. Our financial statements do not include any
      adjustments that might result from the outcome of this uncertainty.




Below
      is
      a discussion of our sources and uses of funds for the three months ended
      February 29, 2008 and February 29, 2007.





**Net
      Cash Provided by (Used In) Operating Activities**





Net
      cash
      provided by (used in) operating activities was $(103,000) and $4,000 in the
      three months ended February 29, 2008 and February 28, 2007, respectively. Cash
      used in operating activities for the three months ended February 29, 2008 was
      principally the result of a net loss of $159,000 and an increase in inventory
      of
      $11,000, partially offset by non-cash expenses of $67,000. Net cash provided
      by
      operating activities for the three months ended February 28, 2007 was
      principally the result of a net loss of $95,000, offset by an increase in
      accounts payable and accrued expenses of $66,000 and noncash expenses of
      $39,000.





**Net
      Cash Used In Investing Activities**





Net
      cash
      used in investing activities was $5,000 and $2,000 in the three months ended
      February 29, 2008 and February 28, 2007, respectively, for the acquisition
      of
      other assets, principally expenditures for trademarks.





**Net
      Cash Provided By (Used In) Financing Activities**





Net
      cash
      provided by (used in) financing activities for the three months ended February
      29, 2008 and February 28, 2007 amounted to $215,000 and $(5,000), respectively.
      Net cash provided by financing activities for the three months ended February
      29, 2008 was principally attributable to proceeds from the issuance of
      convertible notes in the principal amount of $300,000 ($262,000 net of financing
      costs), offset by decreases of $21,000 in credit card payable and $15,000 in
      due
      to related parties. Net cash used in financing activities for the three months
      ended February 28, 2007 was principally attributable to decreases of $10,000
      in
      amount due to related parties and $5,000 in amount due to stockholders, offset
      by an increase of $9,000 in amount due to others.




13





**Stock
      Issuance and Stock Plan**





On
      January 1, 2007, we entered into a two-year consulting agreement with an
      individual and, in consideration of the financial consulting services to be
      provided under the consulting agreement, we agreed to initially issue up to
      nine
      million shares of our common stock pursuant and subject to the Herborium Group,
      Inc. 2007 Stock Plan (the “Plan”). Of these shares, 7.5 million shares vested
      immediately, and we have issued 5.5 million shares. The remaining shares will
      vest over the term of the consulting agreement. In addition, in the event
      certain transactions are consummated, up to an additional three million shares
      could be issued per terms of the agreement. The shares issued and yet to be
      issued have been valued at $.05 per share based on the market value on the
      date
      granted for an aggregate cost of $450,000, which cost will be expensed over
      the
      period of the agreement. Accordingly, we recorded an expense of approximately
      $56,000 during the three months ended February 29, 2008.





**** On
      February 14, 2007, the Company entered into a two-year consulting agreement
      with
      a consulting firm and, in consideration of the services to be provided pursuant
      to that agreement, the Company agreed to issue up to 3 million shares of the
      Company’s common stock pursuant and subject to the Plan, and when so issued,
      such shares shall be validly issued, fully paid and non-assessable, of which
      500,000 shares vested and were issuable immediately. Of the remaining shares,
      500,000 will vest upon the occurrence of one or more transactions, as defined,
      and the remaining 2,000,000 will vest ratably on the sixth, ninth, twelfth
      and
      eighteenth month anniversaries of this agreement. The shares, 1,500,000 of
      which
      have been issued as of February 29, 2008, have been valued at $.035 per share
      based on the market value on the date granted for an aggregate cost of $105,000,
      which cost is being expensed over the period of the agreement. Accordingly,
      consulting expense in the amount of approximately $9,000 was recorded in general
      and administrative expense during the three months ended February 29, 2008.





Our
      Board
      of Directors approved the Plan on January 19, 2007. The Plan provides for a
      maximum aggregate of 20 million shares of common stock to be issued upon grants
      of restricted stock or upon exercise of options granted under the Plan, as
      compensation and incentive to eligible employees, directors, consultants and
      advisors. On January 26, 2007, we filed a Registration Statement on Form S-8
      with the Securities and Exchange Commission to in connection with the
      Plan.





**RISK
      FACTORS**




*Our
      business and results of operations are subject to numerous risks, uncertainties
      and other factors that you should be aware of, some of which are described
      below
      and in the section entitled “Cautionary Statement Concerning Forward-Looking
      Statements.” The risks, uncertainties and other factors described below are not
      the only ones facing our company. Additional risks, uncertainties and other
      factors not presently known to us or that we currently deem immaterial may
      also
      impair our business operations. Any of the risks, uncertainties and other
      factors could have a materially adverse effect on our business, financial
      condition or results of operations and could cause the trading price of our
      common stock to decline substantially.*




**Risks
      Relating to Our Business**





***We
      have a history of losses, and will incur additional
      losses.***





We
      are a
      company with a limited history of operations, and do not expect to significantly
      increase ongoing revenues from operations in the immediately foreseeable future.
      To date, we have not been profitable. We had a net loss of $159,000 during
      the
      three months ended February 29, 2008 and $643,000 for the year ended November
      30, 2007. Our losses have resulted principally from costs incurred in product
      development, including product testing and selection, and from general and
      administrative costs associated with our operations. While we seek to attain
      profitability, we cannot be sure that we will ever achieve product and other
      revenue sufficient for us to attain this objective.





With
      the
      exception of *AcnEase®* ,
      our
      product candidates are in research or various stages of development. For some
      of
      these products we will want to conduct additional research, development and
      clinical trials in order to improve our ability to advertise and differentiate
      these products from others in the market place. We cannot be sure that we will
      successfully research, develop, commercialize, manufacture and market any other
      product candidates. We expect that these activities, together with future
      general and administrative activities, will result in significant expenses
      for
      the foreseeable future.




14





***We
      need additional capital, which may not be available to us.***




We
      will
      require funds in excess of our existing cash resources to fund operating
      deficits, develop new products, purchase additional rights to existing products,
      establish and expand our manufacturing capabilities, marketing and clinical
      testing of our herbaceutical supplements and finance general and administrative
      and research activities. In particular, we will need additional capital
      to:




·acquire
                intellectual property rights relating to*AcnEase**®*and other products;





·conduct
                clinical trials and fund marketing and new product
                launches;





·establish
                U.S. manufacturing capabilities;
                and





·fund
                general working capital requirements if we continue to experience
                deficits.





Due
      to
      market conditions, or due to our own financial condition, it is possible that
      we
      will be unable to obtain additional funding as and when we need it. Even if
      we
      are able to obtain capital, it may be on unfavorable terms or terms that
      excessively dilute existing shareholders or otherwise negatively affect the
      interests of existing shareholders. If we are unable to obtain additional
      funding as and when needed, we could be forced to delay our development,
      marketing and expansion efforts and, if we continue to experience losses,
      potentially cease operations.





***We
      may not be able to obtain or sustain market acceptance for our services and
      products.***





Failure
      to establish a brand and presence in the marketplace on a timely basis could
      adversely affect our financial condition and operating results. Moreover, we
      cannot be sure that we will successfully complete the development and
      introduction of new products or product enhancements or that any new products
      developed will achieve acceptance in the marketplace. We may also fail to
      develop and deploy new products and product enhancements on a timely basis. *AcnEase* *®* is
      currently our only product providing revenues.





***Government
      regulation of the processing, formulation, packaging, labeling and advertising
      of our products can impact our ability to market products.***





Under
      the
      Dietary Supplement Health and Education Act of 1994, companies that manufacture
      and distribute dietary supplements are limited in the statements that they
      are
      permitted to make about nutritional support on the product label without FDA
      approval. In addition, a manufacturer of a dietary supplement must have
      substantiation for any such statement made and must not claim to diagnose,
      mitigate, treat, cure or prevent a specific disease or class of disease. The
      product label must also contain a prominent disclaimer. These restrictions
      may
      restrict our flexibility in marketing our product.





The
      FDA
      has proposed GMPs (Good Manufacturing Practices) specifically for dietary
      supplements. These new GMPs, when finalized, will be more detailed than the
      GMPs
      that currently apply to dietary supplements and may, among other things, require
      dietary supplements to be prepared, packaged and held in compliance with certain
      rules (including quality control provisions) similar to the GMPs applicable
      to
      drugs. There can be no assurance that, if the FDA adopts GMPs for dietary
      supplements, we and/or our suppliers will be able to comply with the new rules
      without incurring substantial expenses that might have a material adverse effect
      on our consolidated financial position or results of operations. As a
      formulator, distributor and marketer of dietary supplements, we are subject
      to
      the risk that one or more of the ingredients in our product may become subject
      to regulatory action in the future.





The
      processing, formulizing, packaging, labeling and advertising of such products,
      however, are subject to regulation by one or more federal agencies including
      the
      FDA, the Federal Trade Commission, the Consumer Products Safety Commission,
      the
      Department of Agriculture and the Environmental Protection Agency. Our
      activities also are subject to regulation by various agencies of the states
      and
      localities in which our products are sold. Among other things, such regulation
      puts a burden on our ability to bring products to market. Any changes in the
      current regulatory environment could impose requirements that would make
      bringing new products to market more expensive or restrict the ways we can
      market our products. In addition, the adoption of new regulations or changes
      in
      the interpretation of existing regulation may result in significant compliance
      costs or discontinuation of product sales and may adversely affect our revenue.
      The FDA may implement additional regulations with which we would have to comply,
      which would increase expenses.





No
      governmental agency or other third party makes a determination as to whether
      our
      products qualify as dietary supplements or not. We make this determination
      based
      on the ingredients contained in the products and the claims we make for the
      products and if our determination is denied by any regulatory authority we
      could
      face significant penalties that may require us to shut down our operations.




15





***We
      face substantial competition.***




The
      dietary supplement industry is growing rapidly and is highly competitive.
      Competition for the sale of nutritional products comes from many sources,
      including specialty retailers, supermarkets, large chain discount retailers,
      drug store chains and independent drug stores, health food stores, on-line
      merchants, mail order companies and a variety of other participants in the
      market for nutritional products. Some of our more prominent competitors include
      General Nutrition Centers, Inc., NBTY, Inc., Invite Health, Vitamin World and
      Vitamin Shoppe. We compete regularly with companies selling nationally
      advertised brand name products and with companies that may have more expanded
      product lines with much larger volume of sales. This competition could have
      a
      material adverse effect on our business, results of operations and financial
      condition since these companies have greater financial and other resources
      available to them and may possess manufacturing, distribution and marketing
      capabilities far greater than our own.




Certain
      existing products may become more mainstream and thereby increase competition
      for those products as more participants enter the market. We may not be able
      to
      compete effectively and our attempt to do so may require us to reduce our
      prices, which may result in lower margins. Failure to compete effectively could
      adversely affect our market share, revenues and growth prospects.




Our
      competitive position will be affected by the continued acceptance of our
      products, our ability to attract and retain qualified personnel, future
      governmental regulations affecting nutritional products, and publication of
      product safety studies by the media, government and authoritative health and
      medical authorities.





***We
      currently have no manufacturing capabilities and we are dependent upon other
      companies to manufacture our products.***





We
      currently have no manufacturing facilities. We are dependent upon relationships
      with independent manufacturers to fulfill our product needs. We use several
      manufacturers for various parts of the manufacturing processes for our products.
      We believe these are small privately held firms.





Because
      the manufacturing processes, which our contract manufacturers perform, are
      fairly standard in the industry, we believe that there are a large number of
      manufacturers who could provide us with these services if our current contract
      manufacturers are unavailable for any reason or seek to impose unfavorable
      terms. Our ability to market and sell our products requires that such products
      be manufactured in commercial quantities and in compliance with applicable
      federal and state regulatory requirements. In addition, we must be able to
      manufacture our products at a cost that permits us to charge a price acceptable
      to the customer while also accommodating distribution costs and third-party
      sales compensation. Competitors who do own their own manufacturing may have
      an
      advantage over us with respect to pricing, availability of product and in other
      areas through their control of the manufacturing process.





***We
      are dependent on key management and the loss of their services could have a
      material adverse impact on us.***





We
      have
      relied extensively on the services of Drs. Agnes P. Olszewski and James P.
      Gilligan, our co-founders. Drs. Olszewski and Gilligan play key roles in
      our management and the loss of their services would materially and adversely
      affect us and our prospects. Until we raise substantial financing, neither
      of
      these key individuals will spend full-time working for us. Under her employment
      agreement, Dr. Olszewski is not required to do so until we have raised
      $1,250,000 in financing, and under his consulting/employment agreement, Dr.
      Gilligan is not required to do so until nine months after we have raised
      $2,500,000 in financing. There is no assurance that we will be able to raise
      such amounts and without such financing and the full-time employment of these
      key executives we will in all likelihood not be able to further develop our
      business and will likely continue to experience losses. The loss of services
      of
      either of these persons could delay or reduce our product development and
      commercialization efforts and harm our ability to compete effectively.





***We
      may be subject to product liability claims and may not have adequate insurance
      to cover such claims.***





Like
      other retailers, distributors and manufacturers of products that are designed
      to
      be ingested, we face an inherent risk of exposure to product liability claims
      in
      the event that the use of our products results in injury. We intend to obtain
      general liability coverage of $3 to $5 million that will include product
      liability coverage. Because our policies will be purchased on a year-to-year
      basis, industry conditions or our own claims experience could make it difficult
      for us to secure the necessary insurance at a reasonable cost. In addition,
      we
      may not be able to secure insurance that will be adequate to cover liabilities.
      We generally do not obtain contractual indemnification from parties supplying
      raw materials or marketing our products. In any event, any such indemnification
      is limited by its terms and, as a practical matter, by the creditworthiness
      of
      the other party. In the event that we do not have adequate insurance or
      contractual indemnification, liabilities relating to defective products could
      require us to pay the injured parties’ damages which may be significant compared
      to our net worth or revenues.





16


***We
      may be adversely affected by unfavorable publicity relating to our product
      or
      similar products manufactured by our competitors.***





We
      believe that the dietary supplement market is affected by national media
      attention regarding the consumption of these products. Future scientific
      research or publicity may be unfavorable to the dietary and nutritional
      supplement market generally or to any particular product and may be inconsistent
      with earlier favorable research or publicity. Adverse publicity associated
      with
      illness or other adverse effects resulting from the consumption of products
      distributed by other companies that are similar to our products could reduce
      consumer demand for our products and consequently our revenues. This may occur
      even if the publicity does not relate to our products. Adverse publicity
      directly concerning our products could be expected to have an immediate negative
      effect on the market for that product.





***We
      depend on trade secrets to protect our proprietary technology, which may be
      inadequate to protect our position.***





Our
      long-term success will substantially depend upon protecting our technology
      from
      infringement, misappropriation, discovery and duplication. We expect that we
      will apply for patent protection with respect to some of our products. Since
      we
      do not currently have patents on our products, a competitor could replicate
      our
      products. Any patents that we might obtain may not provide meaningful protection
      or significant competitive advantages over competing products, due to the
      complexity of the legal and scientific issues involved in patent defense and
      litigation. For these reasons we have elected to protect our current products
      through trade secrets.





Because
      of the complexity of the legal and scientific issues involved in patent
      prosecutions, we cannot be sure that any future patent applications for new
      products will be granted. Nor can we be sure that any patent rights that we
      do
      obtain will provide meaningful protection against others duplicating our
      products because of the complexity of the legal and scientific issues that
      could
      arise in litigation over these issues. Furthermore, patent applications are
      maintained in secrecy in the United States until the patents are approved,
      and
      in most foreign countries for a period of time following the date from which
      priority is claimed. A third party’s pending patent applications may cover any
      technology that we currently are developing. Additionally, if we must resort
      to
      legal proceedings to enforce our intellectual property rights, the proceedings
      could be burdensome and expensive and could involve a high degree of risk to
      our
      proprietary rights if we are unsuccessful in, or cannot afford to pursue, such
      proceedings.





We
      rely
      at present completely on trade secrets and contract law to protect our
      proprietary technology. There can be no assurance that any such contract will
      not be breached, or that if breached, it will have adequate remedies. Currently,
      all of our products are protected by trade secrets owned by our licensor and
      other third parties . We rely on such third parties to adequately protect such
      trade secrets. There can be no assurance that these third parties will protect
      and continue to hold the trade secrets relating to our products. Furthermore,
      there can be no assurance that any of these trade secrets will not become known
      or independently discovered by third parties.





There
      can
      be no assurance that others will not independently develop substantially
      equivalent proprietary information and techniques or otherwise gain access
      to
      our trade secrets and know-how. In addition, we may be required to obtain
      licenses to patents or other proprietary rights from third parties. There can
      be
      no assurance that any licenses required under any patents or proprietary rights
      would be made available on acceptable terms, if at all. If we do not obtain
      required licenses, we may encounter delays in product development or find that
      the development, manufacture or sale of products requiring such licenses could
      be foreclosed.





***We
      have limited the liability of our directors and officers for breaches of the
      duty of care.***





Our
      articles of incorporation limit the liability of our directors for monetary
      damages for breaches of directors’ fiduciary duty of care. This provision may
      reduce the likelihood of derivative litigation against directors and may
      discourage or deter shareholders or management from suing directors for breaches
      of their duty of care, even though such an action, if successful, might
      otherwise benefit our shareholders and us. In addition, our articles of
      incorporation provide for the indemnification of directors and officers in
      connection with civil, criminal, administrative or investigative proceedings
      when acting in their capacities as agents for us.





***Our
      results of operations may be affected by changing market prices and requirements
      for dietary supplements.***





Our
      results of operations may be affected by changing resale prices or market
      requirements for dietary supplements, some of which are priced on a commodity
      basis. Sales prices, and market demand for, these materials can be volatile
      due
      to numerous factors beyond our control, which may cause significant variability
      in its period-to-period results of operations.




17





***Our
      results of operations will fluctuate.***





Our
      revenues and results of operations will vary from quarter to quarter in the
      future. A number of factors, many of which are outside of our control, may
      cause
      variations in our results of operations, including:





·
            demand
                and price for our products;·
            the
                timing and recognition of product sales;·
            unexpected
                delays in developing and introducing products;·
            unexpected
                delays in manufacturing our products;·
            increased
                expenses, whether related to marketing, product development or
                administration or otherwise;·
            insufficient
                demand in the marketplace could cause our distributors to return
                product;·
            the
                mix of revenues derived from products;·
            the
                hiring, retention and utilization of personnel; and·
            general
                economic factors.





***We
      may not succeed in our acquisition of additional
      products.***





As
      part
      of our growth strategy, we intend to acquire and develop additional product
      candidates or approved products. The success of this strategy depends upon
      our
      ability to identify, select and acquire bioherbaceutical products that meet
      the
      criteria we have established. Any product candidate we acquire or license may
      require additional research and development efforts prior to commercial sale,
      including extensive pre-clinical and/or clinical testing. All product candidates
      are prone to the risks of failure inherent in product development, including
      the
      possibility that the product candidate will not be safe, non-toxic and
      effective. In addition, we cannot assure that any approved products that we
      develop, acquire or license will be manufactured or produced economically;
      successfully commercialized; widely accepted in the marketplace or that we
      will
      be able to recover our significant expenditures in connection with the
      development, acquisition or license of such products. In addition, proposing,
      negotiating and implementing an economically viable acquisition or license
      is a
      lengthy and complex process. Other companies, including those with substantially
      greater financial, marketing and sales resources, may compete with us for the
      acquisition or license of product candidates and approved products. We may
      not
      be able to acquire the rights to additional product candidates and approved
      products on terms that we find acceptable, or at all. In addition, if we acquire
      or license product candidates from third parties, we will be dependent on third
      parties to supply such products to us for sale. We could be materially adversely
      affected by the failure or inability of such suppliers to meet performance,
      reliability and quality standards.





***Our
      non-U.S. sales present special risks.***





A
      subcontractor in London handles fulfillment and coordinates market development
      for our products in the U.K. and continental Europe. We anticipate that sales
      outside the U.S. will continue to account for a significant percentage of our
      product sales and we intend to continue to expand our presence in international
      markets. Non-U.S. sales are subject to a number of special risks. For example:





·foreign
                exchange rates;·sales
                agreements may be difficult to enforce;·receivables
                may be difficult to collect through a foreign country’s legal
                system;·foreign
                countries may impose additional withholding taxes or otherwise tax
                foreign
                income, impose tariffs or adopt other restrictions on foreign
                trade;·intellectual
                property rights may be more difficult to enforce in foreign
                countries;·terrorist
                activity or the outbreak of a pandemic disease may interrupt distribution
                channels or adversely impact customers or employees; and
              
              ·regulations
                may change relating to dietary supplements that may negatively impact
                the
                ability to market products in those geographical
                regions.





Any
      of
      these events could harm our operations or operating results.





***Compliance
      with changing regulation of corporate governance and public disclosure will
      result in additional expenses.***





Changing
      laws, regulations and standards relating to corporate governance and public
      disclosure, including the Sarbanes-Oxley Act of 2002 and new Securities and
      Exchange Commission regulations, are creating uncertainty for public companies.
      Our management team will be required to invest significant management time
      and
      financial resources to comply with both existing and evolving standards for
      public companies, which may lead to increased general and administrative
      expenses and a diversion of management time and attention from revenue
      generating activities to compliance activities.




18





***It
      is possible that there are claims of which we are unaware that may come to
      light
      in the future and cost us considerable time, effort and expense to
      resolve.***





It
      is
      possible that a claim, whether valid or not, may be asserted against us in
      the
      future with respect to matters arising prior to the merger. There can be no
      assurance given that some person will not devise a claim and attempt to assert
      it against us in the hopes of obtaining some monetary benefit. To resolve such
      a
      claim, including payment, may cost us considerable time, effort and expense.
      Any
      of these may impair management’s implementation of the business plan with the
      consequence of a loss of opportunity.





**Risks
      Related to Our Common Stock**





***Because
      our common stock is traded on the OTC Bulletin Board, your ability to sell
      your
      shares in the secondary trading market may be limited.***





Our
      common stock currently is traded on the over-the-counter market on the OTC
      Bulletin Board. Consequently, the liquidity of our common stock is limited,
      not
      only in the number of shares that are bought and sold, but also through delays
      in the timing of transactions, and coverage by security analysts and the news
      media, if any, of us. As a result, prices for shares of our common stock may
      be
      lower than might otherwise prevail if our common stock was traded on a national
      securities exchange, such as The New York Stock Exchange or The Nasdaq Stock
      Market, LLC.




***Our
      common stock may be removed from the OTC Bulletin Board, which would likely
      cause the trading price of our common stock to decline and affect our ability
      to
      raise capital in the future.***





Under
      applicable NASD Rules, if we are delinquent in our reporting obligations three
      times in a 24-month period and/or are actually removed from the OTC Bulletin
      Board for failure to file two times in a 24-month period, in each case, we
      would
      be ineligible for quotation on the OTC Bulletin Board for a period of one year.
      On April 5, 2006, we received notice from the OTC Bulletin Board that unless
      we
      cured our delinquency in filing the Annual Report on Form 10-K for the year
      ended December 31, 2005 prior to the expiration of the grace period (May 5,
      2006), our common stock would be removed from the OTC Bulletin Board effective
      May 9, 2006. We cured this delinquency with the filing of our Annual Report
      on
      Form 10-K on May 1, 2006. On March 2, 2007, we received notice from the OTC
      Bulletin Board that unless we cured our delinquency in filing the Annual Report
      on Form 10-K for the year ended November 30, 2006 prior to the expiration of
      the
      grace period (April 2, 2007), our common stock would be removed from the OTC
      Bulletin Board effective April 3, 2007. We cured this delinquency with the
      filing of our Annual Report on Form 10-K on March 30, 2007. To date, we have
      been delinquent two times in the past 24-month period. Should quotation of
      our
      common stock on the OTC Bulletin Board or a similar facility cease for any
      reason, the liquidity of our common stock and our ability to raise equity
      capital would likely decrease.





***Because
      our shares are “penny stocks,” you may have difficulty selling them in the
      secondary trading market.***





Federal
      regulations under the Exchange Act regulate the trading of so-called “penny
      stocks,” which are generally defined as any security not listed on a national
      securities exchange, priced at less than $5.00 per share and offered by an
      issuer with limited net tangible assets and revenues. Since our common stock
      currently trades on the OTC Bulletin Board at less than $5.00 per share, our
      common stock is a “penny stock” and may not be traded unless a disclosure
      schedule explaining the penny stock market and the risks associated therewith
      is
      delivered to a potential purchaser prior to any trade.





In
      addition, because our common stock is not listed on any national securities
      exchange and currently trades at less than $5.00 per share, trading in our
      common stock is subject to Rule 15g-9 under the Exchange Act. Under this rule,
      broker-dealers must take certain steps prior to selling a “penny stock,” which
      steps include:





·
            obtaining
                financial and investment information from the investor;·
            obtaining
                a written suitability questionnaire and purchase agreement signed
                by the
                investor; and·
            providing
                the investor a written identification of the shares being offered
                and the
                quantity of the shares.




19


If
      these
      penny stock rules are not followed by the broker-dealer, the investor has no
      obligation to purchase the shares. The application of these comprehensive rules
      will make it more difficult for broker-dealers to sell our common stock and
      our
      shareholders, therefore, may have difficulty in selling their shares in the
      secondary trading market.





***Our
      stock price has been and may continue to be volatile and an investment in our
      common stock could suffer a decline in value.***





Trading
      of our common stock has been sporadic, and the trading volume has generally
      been
      low. Even a small trading volume on a particular day or over a few days may
      affect the market price of our common stock. The market price of our common
      stock may fluctuate significantly in response to a number of factors, some
      of
      which are beyond our control. These factors include:





·
            announcements
                of research activities and technology innovations or new products
                by us or
                our competitors;·
            changes
                in market valuation of companies in our industry
                generally;·
            variations
                in operating results;·
            changes
                in governmental regulations;·
            results
                of research studies of our products or our competitors’
                products;·
            regulatory
                action or inaction on our products or our competitors’
                products;·
            changes
                in our financial estimates by securities analysts;·
            general
                market conditions for companies in our industry;·
            broad
                market fluctuations; and·
            economic
                conditions in the United States or abroad.





***Our
      directors and executive officers own a significant number of shares of our
      common stock to control our company, which could discourage or prevent a
      takeover, even if an acquisition would be beneficial to our stockholders.***





Certain
      of our directors and our current executive officer own or control approximately
      78% of our outstanding voting power. Accordingly, these stockholders,
      individually and as a group, will be able to influence the outcome of
      stockholder votes, involving votes concerning the election of directors, the
      adoption or amendment of provisions in our certificate of incorporation and
      bylaws and the approval of certain mergers or other similar transactions, such
      as a sale of substantially all of our assets. Such control by existing
      stockholders could have the effect of delaying, deferring or preventing a change
      in control of us.





***We
      do not pay cash dividends, so any return on an investment must come from
      appreciation.***





We
      do not
      intend to pay any cash dividends in the foreseeable future and, therefore,
      any
      return on an investment in our common stock must come from increases in the
      fair
      market value and trading price of our common stock.





***We
      may issue additional equity securities that will dilute our stockholders.***





We
      may
      issue additional equity securities to raise capital and through the exercise
      of
      options, warrants and convertible debt that is outstanding or may be
      outstanding. These additional issuances will have a dilutive effect on our
      existing stockholders.





**Item
      3.**  **Controls
      And Procedures**





**(A)
      Evaluation Of Disclosure Controls And Procedures**





Prior
      to
      the filing of this Report on Form 10-QSB, an evaluation was performed under
      the
      supervision of and with the participation of the Company’s management, including
      our Chief Executive Officer and Chief Financial Officer, of the effectiveness
      of
      the Company’s disclosure controls and procedures. Based on the evaluation of our
      disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
      promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”) as of February 29, 2008, our Chief Executive Officer and Chief Financial
      Officer has concluded that the Company’s disclosure controls and procedures were
      effective to ensure that information required to be disclosed by the Company
      in
      reports that it files or submits under the Securities Exchange Act of 1934,
      as
      amended, is recorded, processed, summarized and reported within the time periods
      specified in SEC rules and forms, and is accumulated and communicated to the
      Company’s management, as appropriate, to allow timely decisions regarding
      required disclosure. It should be noted that the design of any system of
      controls is based in part upon 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, regardless
      of
      how remote.




20





**(B)
      Changes In Internal Controls**





During
      the three months ended February 29, 2008, there were no significant changes
      in
      the Company’s internal control over financial reporting that have materially
      affected, or are reasonably likely to materially affect, the Company’s internal
      control over financial reporting.




21




**Part
      II-Other Information**





**Item
      1.**  **Legal
      Proceedings**





None.





**Item
      2.**  **Unregistered
      Sales Of Equity Securities And Use Of Proceeds**





Pursuant
      to a private offering, in February 2008, we sold Units of our securities
      consisting of an aggregate $300,000 in principal amount of our Convertible
      Notes
      (the “Notes”), 300,000 shares of our Common Stock and warrants (the “Warrants”)
      exercisable for 600,000 shares of our Common Stock.





The
      Warrants are exercisable for a period of five years from issuance. Half of
      the
      Warrants are exercisable at $.025 per share and half are exercisable at $.05
      per
      share, subject to certain adjustments, including, but not limited to,
      adjustments for stock splits, stock dividends, mergers and
      consolidations.





The
      Notes
      are convertible, beginning six months after issuance or, if earlier, the closing
      of a qualified financing or an acquisition of the Company, into shares of Common
      Stock in whole or in part from time to time at the option of the investors
      at a
      Conversion Price equal to


·
            $.025
                or





·
            80%
                of the issuance price in a qualified financing or in connection with
                an
                acquisition of the Company. The Notes define a qualified financing
                as the
                date upon which the Company completes the sale of Common Stock (or
                like
                security) for aggregate gross proceeds of at least $1.5 million.





The
      Conversion Price is subject to certain customary adjustments, including, but
      not
      limited to, adjustments for stock splits, stock dividends, mergers and
      consolidation.





The
      Notes
      bear interest at the rate of 10% per annum, payable semi-annually in shares
      of
      the Company’s common stock valued at $.025 per share (currently trading at $.012
      per share).





Unless
      converted to Common Stock, the principal balance of the each Note is payable
      upon demand made any time after the first anniversary of the issuance of the
      Note, or upon a qualified financing or acquisition of the Company. In addition,
      we are required to set aside 5% of its gross revenues for redemption of the
      principal amount of the Notes. The set-aside revenues will be distributed to
      the
      Note holders semi-annually, pro rata in accordance with the outstanding
      principal balance of each Note.





Pursuant
      to a Registration Rights Agreement, we have agreed to include the shares of
      Common Stock issuable upon conversion of the Notes and exercise of the Warrants,
      as well as the shares of Common Stock issued to the investors, in any
      registration statement filed by the Company under the Securities Act of 1933
      with respect to our equity securities to be sold by us or any other
      stockholder.





Our
      Board
      of Directors has authorized the sale of up to an additional $200,000 principal
      amount of the Notes, in Units together with 200,000 shares of Common Stock
      and
      Warrants exercisable for 400,000 shares of Common Stock.





Southridge
      Investment Group is serving as the placement agent in connection with the offer
      and sale of the Notes, Common Stock and Warrants. In its capacity as placement
      agent, Southridge will be paid a cash fee equal to 10% of the gross proceeds
      received by the Company, as well as an expense allowance equal to 2% of the
      gross proceeds. In addition, Southridge will be issued Warrants exercisable
      for
      a number of shares of Common Stock equal to 10% of the aggregate shares issued
      by the Company in the private placement, assuming conversion and exercise of
      all
      of the Notes and Warrants. The placement agent warrants will be exercisable
      for
      5 years at a price of $.03 per share. In its capacity as the Company’s financial
      advisor, Southridge is entitled to a retainer fee of 750,000 shares of our
      Common Stock, and one share for each $1 received by the Company in the private
      placement.




The
      offer
      and sale of the Notes, Common Stock and Warrants, and the Common Stock into
      which the Notes may be converted and for which the Warrants may be exercised
      (collectively, the “Securities”) by the Company to the investors was exempt from
      registration under the Securities Act in reliance upon Section 4(2) thereof
      and
      Rule 506 of Regulation D promulgated thereunder. Each of the investors
      represented and warranted to us that it was an “accredited investor” as that
      term is defined in Rule 501(a) of Regulation D. Each of the investors further
      represented and warranted that it was purchasing the Securities for its own
      account and not with a present view towards the public sale or distribution
      thereof, except pursuant to sales registered or exempted from registration
      under
      the Securities Act. Any certificates issued representing the Notes, Common
      Stock
      or Warrants will be legended to indicate that they are restricted. No sale
      of
      the Securities involved the use of underwriters.




22




**Item
      3.**  **Defaults
      Upon Senior Securities**





None.





**Item
      4.****Submission
      Of Matters To A Vote Of Security Holders******





None.





**Item
      5.**  **Other
      Information**





None.





**Item
      6.**  **Exhibits**




Exhibits
      are incorporated herein by reference or are filed with this Quarterly Report
      as
      set forth in the Exhibit Index beginning on page 21 hereof.




23




**S** **ignatures**





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





**Herborium
      Group, Inc.**




*By:*
            /s/ *Agnes
              Olszewski.**Name:*
            *Agnes
                Olszewski.**Title:*
            *President
                and Chief Executive Officer (Principal Executive Officer)
                and*
              *Chief
                Financial Officer (Principal Accounting Officer)**Date:*April
              14, 2008


24




Exhibit
      Index


Herborium
      Group, Inc.


Form
      10-Q
      for Quarter Ended February 29, 2008





**Exhibit
                No.**
            
            **Description****(1)**2.1
            
            Fourth
                Amended Plans of Reorganization for Pacific Magtron International
                Corp.
                and LiveWarehouse, Inc. (incorporated by reference to Exhibit 2.1
                to
                Pacific Magtron International Corp.’s Current Report on Form 8-K filed on
                August 16, 2006).2.2
            
            Order
                Approving Fourth Amended Plans of Reorganization for Pacific Magtron
                International Corp. and LiveWarehouse, Inc. entered August 11, 2006
                (incorporated by reference to Exhibit 2.2 to Pacific Magtron International
                Corp.’s Current Report on Form 8-K filed on August 16,
                2006).2.3
            
            Agreement
                and Plan of Merger, dated as of September 18, 2006, by and among
                Pacific
                Magtron International Corp., LiveWarehouse, Inc. and Herborium, Inc.
                (incorporated by reference to Exhibit 2.3 to the Company’s Current Report
                on Form 8-K filed on September 22, 2006)3(i)
            
            Second
                Amended and Restated Articles of Incorporation of Pacific Magtron
                International Corp. (incorporated by reference to Exhibit 3(i) to
                the
                Company’s Current Report on Form 8-K filed on September 22,
                2006)3(ii)
            
            Amended
                and Restated Bylaws of Pacific Magtron International Corp. (incorporated
                by reference to Exhibit 3(ii) to the Company’s Current Report on Form 8-K
                filed on September 22, 2006)4.1
            
            Form
                of Convertible Note (incorporated by reference to Exhibit 4.1 to
                the
                Company’s Current Report on Form 8-K filed on February 25,
                2008)4.2
            
            Form
                of Warrant (incorporated by reference to Exhibit 4.2 to the Company’s
                Current Report on Form 8-K filed on February 25, 2008)4.3
            
            Form
                of Registration Rights Agreement (incorporated by reference to Exhibit
                4.3
                to the Company’s Current Report on Form 8-K filed on February 25,
                2008)10.1
            
            Form
                of Subscription Agreement (incorporated by reference to Exhibit 10.1
                to
                the Company’s Current Report on Form 8-K filed on February 25,
                2008)31
            
            Rule
                13a-14(a) Certification of Chief Executive Officer and Chief Financial
                Officer32
            
            Certification
                of Chief Executive Officer and Chief Financial Officer pursuant to
                Section
                906 of the Sarbanes-Oxley Act of
                2002





**(1)** In the
      case of incorporation by reference to documents filed by the registrant under
      the Securities Exchange Act of 1934, as amended, the registrant’s file number
      under the Exchange Act is 000-25277.




25