**U.S.
        S** **ECURITIES** **A** **ND** **E** **XCHANGE** **C** **OMMISSION**
 **W** **ASHINGTON** **,
        D.C. 20549**
  **F** **ORM** **10-QSB**





(check
      one)





**x** QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934





For
      the
      Quarterly Period Ended August 31, 2007





**o** TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF


THE
      EXCHANGE ACT OF 1934





Commission
      File Number 000-25277


**H** **ERBORIUM** **G** **ROUP** **,
        I** **NC** **.**


(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.)





**3
      Oak Street, Teaneck, NJ 07666**


(Address
      Of Principal Executive Offices)





**(201)
      836-2424**


(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
      October 3, 2007, there were 114,067,080 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
      o    No
x**












**H** **ERBORIUM** **G** **ROUP,** **I** **NC.**


**I** **NDEX** **T** **O** **F** **ORM** **10-QSB**





**P****ART****I****-****F****INANCIAL****I****NFORMATION****I****TEM****1.**
            **F****INANCIAL****S****TATEMENTS**Condensed
                Consolidated Balance Sheets as of August 31, 2007 (Unaudited) and
                November
                30, 2006
            
            1Condensed
                Consolidated Statements of Operations for the Three and Nine Months
                Ended
                August 31, 2007 and 2006 (Unaudited)
            
            2Condensed
                Consolidated Statements of Cash Flows for the Nine Months Ended August
                31,
                2007 and 2006 (Unaudited)
            
            3Condensed
                Consolidated Statement of Stockholders’ Deficiency for the Nine Months
                Ended August 31, 2007 (Unaudited)
            
            4Notes
                to Condensed Consolidated Financial Statements as of August 31, 2007
                (Unaudited)
            
            5**ITEM2.**
            Management’s
                Discussion and Analysis or Plan of Operation
            
            9**ITEM
                  3.**
            Controls
                and Procedures
            
            19**P****ART****II****-****O****THER****I****NFORMATION**





**ITEM
                  1.**
            Legal
                Proceedings
            
            20**ITEM2.**
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            20**ITEM
                  3.**
            Defaults
                Upon Senior Securities
            
            20**ITEM
                  4.**
            Submission
                of Matters to a Vote of Security Holders
            
            20**ITEM
                  5.**
            Other
                Information
            
            20**ITEM
                  6.**
            Exhibits
            
            20




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





i


**C** **AUTIONARY** **S** **TATEMENT** **R** **EGARDING** **F** **ORWARD-** **L** **OOKING** **S** **TATEMENTS**
  *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


**H** **ERBORIUM** **G** **ROUP,** **I** **NC.** **A** **ND** **S** **UBSIDIARIES**
 **C** **ONDENSED** **C** **ONSOLIDATED** **B** **ALANCE** **S** **HEETS**


August
                31,
              2007
            
            November
                30,
              2006(Unaudited)
            
            (Note
                1)**ASSETS**Current
                assets:Cash
            
            $
            2,596
            
            $
            4,649Accounts
                receivable
            
            
            4,813
            
            
            5,416Inventory
            
            
            53,899
            
            
            73,890Prepaid
                expenses and other current assets
            
            
            —
            
            
            442Total
                current assets
            
            
            61,308
            
            
            84,397Property
                and equipment, net of accumulated depreciationof
                $20,469; $19,015-2006
            
            
            4,716
            
            
            6,170Other
                assets, net of accumulated amortizationof
                $9,051; $7,269-2006
            
            
            29,666
            
            
            27,728**TOTAL
                ASSETS**
            
            $
            95,690
            
            $
            118,295**LIABILITIES
                AND STOCKHOLDERS’ DEFICIENCY**Current
                liabilities:Accounts
                payable and accrued expenses
            
            $
            524,558
            
            $
            346,008Credit
                cards payable
            
            
            129,412
            
            
            134,126Lines
                of credit payable
            
            
            166,903
            
            
            172,913Due
                to others
            
            
            34,354
            
            
            21,513Due
                to stockholders
            
            
            213,466
            
            
            166,682Total
                current liabilities
            
            
            1,068,693
            
            
            841,242Stockholders’
                deficiency:Common
                stock, $0.001 par value; 500,000,000 sharesauthorized,
                114,067,080 shares
              issued
                and outstanding(108,567,080
                - November 30, 2006)
            
            
            25,500
            
            
            20,000Common
                stock subscribed; no shares issued and outstanding
            
            
            188,500
            
            
            188,500Additional
                paid-in capital
            
            
            449,500
            
            
            180,000Deferred
                consulting fees
            
            
            (125,000
            )
            
            —Accumulated
                deficit
            
            
            (1,511,503
            )
            
            (1,111,447
            )Total
                stockholders’ deficiency
            
            
            (973,003
            )
            
            (722,947
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS’ DEFICIENCY**
            
            $
            95,690
            
            $
            118,295





See
        accompanying notes to condensed consolidated financial statements


1




**H** **ERBORIUM** **G** **ROUP,** **I** **NC.** **A** **ND** **S** **UBSIDIARIES**
 **C** **ONDENSED** **C** **ONSOLIDATED** **S** **TATEMENTS** **O** **F** **O** **PERATIONS**
 **(** **U** **NAUDITED)**
  **For
                        The Three Months Ended August 31,**
                
                **For
                      The Nine Months Ended August 31,****2007**
                
                **2006**
                
                **2007**
                
                **2006****NET
                    SALES**
                
                $
                158,363
                
                $
                181,711
                
                $
                571,041
                
                $
                568,695**COST
                    OF SALES**
                
                
                90,660
                
                
                73,853
                
                
                233,150
                
                
                259,388**GROSS
                    PROFIT**
                
                
                67,703
                
                
                107,858
                
                
                337,891
                
                
                309,307**OPERATING
                    EXPENSES**Marketing
                    and selling
                
                
                63,287
                
                
                53,537
                
                
                212,000
                
                
                151,864General
                    and administrative
                
                
                154,887
                
                
                96,233
                
                
                491,128
                
                
                316,837**TOTAL
                    OPERATING EXPENSES**
                
                
                218,174
                
                
                149,770
                
                
                703,128
                
                
                468,701**LOSS
                    FROM OPERATIONS**
                
                
                (150,471
                )
                
                (41,912
                )
                
                (365,237
                )
                
                (159,394
                )Interest
                    expense
                
                
                (11,753
                )
                
                (11,132
                )
                
                (33,259
                )
                
                (33,081
                )**LOSS
                    BEFORE PROVISION FOR****INCOME
                    TAXES**
                
                
                (162,224
                )
                
                (53,044
                )
                
                (398,496
                )
                
                (192,475
                )Provision
                    for income taxes
                
                
                780
                
                
                624
                
                
                1,560
                
                
                2,135**NET
                    LOSS**
                
                $
                (163,004
                )
                $
                (53,668
                )
                $
                (400,056
                )
                $
                (194,610
                )Net
                    loss per share - basic and dilutive
                
                $
                -
                
                $
                -
                
                $
                -
                
                $
                -Weighted
                    average number of sharesoutstanding
                    during the period - basic and dilutive
                
                
                114,067,080
                
                
                108,567,080
                
                
                112,898,582
                
                
                108,567,080


See
        accompanying notes to condensed consolidated financial statements
  2
  **H** **ERBORIUM** **G** **ROUP,** **I** **NC.** **A** **ND** **S** **UBSIDIARIES**
 **C** **ONDENSED** **C** **ONSOLIDATED** **S** **TATEMENTS** **O** **F** ****C****ASH****F****LOWS****
 **(** **U** **NAUDITED)**





Nine
                months ended
              August
                31,2007
            
            2006**CASH
                FLOWS USED IN OPERATING ACTIVITIES:**Net
                loss
            
            $
            (400,056
            )
            $
            (194,610
            )Adjustments
                to reconcile net loss tonet
                cash used in operating activities:Depreciation
                and amortization
            
            
            3,236
            
            
            3,772Stock-based
                consulting fees
            
            
            150,000
            
            
            —Changes
                in assets (increase) decrease:Accounts
                receivable
            
            
            603
            
            
            18504Inventory
            
            
            19,991
            
            
            (1,740
            )Prepaid
                expenses and other current assets
            
            
            442
            
            
            351Changes
                in liabilities increase (decrease):Accounts
                payable and accrued expenses
            
            
            178,100
            
            
            146,207Net
                cash used in operating activities
            
            
            (47,684
            )
            
            (27,516
            )**CASH
                FLOWS USED IN INVESTING ACTIVITIES:******Purchase
                of equipment
            
            
            —
            
            
            (686
            )Purchase
                of other assets
            
            
            (3,270
            )
            
            (6,640
            )Net
                cash used in investing activities
            
            
            (3,270
            )
            
            (7,326
            )**CASH
                FLOWS PROVIDED BY FINANCING ACTIVITIES:**Repayment
                of lines of credit, net
            
            
            (6,010
            )
            
            (4,617
            )Repayment
                of long-term debt
            
            
            —
            
            
            (3,418
            )Increase
                in other loans
            
            
            12,841
            
            
            13,000Increase
                (decrease) in credit card payable, net
            
            
            (4,714
            )
            
            9,981Increase
                in due to stockholders
            
            
            46,784
            
            
            19,714Net
                cash provided by financing activities
            
            
            48,901
            
            
            34,660**NET
                DECREASE IN CASH**
            
            
            (2,053
            )
            
            (182
            )**CASH,
                BEGINNING OF PERIOD**
            
            
            4,649
            
            
            182**CASH,
                END OF PERIOD**
            
            $
            2,596
            
            $
            —Supplemental
                disclosures of cash flow information:Cash
                paid during the period for:Income
                taxes
            
            $
            -
            
            $
            1,137Interest
            
            
            32,817
            
            
            33,081





Supplemental
                disclosure of non cash information:During
                the nine months ended August 31, 2007, the Company issued 5,500,000
                shares
                of commonstock
                valued at $275,000 for professional services.





See
      accompanying notes to condensed consolidated financial statements




3




**H** **ERBORIUM** **G** **ROUP,** **I** **NC.** **A** **ND** **S** **UBSIDIARIES**
 **C** **ONDENSED** **C** **ONSOLIDATED** **S** **TATEMENTS** **O** **F** ****S****TOCKHOLDERS’****D****EFICIENCY****
 **F** **OR** **T** **HE** **N** **INE** **M** **ONTHS** **E** **NDED** **A** **UGUST** **31,
          2007**
 **(** **U** **NAUDITED)**


**Common
                Stock**
            
            **Common
                Stock Subscribed**
            
            **Additional**
              **Paid-in**
            
            **Deferred**
              **Consulting**
            
            **Accumulated****Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**
            
            **Capital**
            
            **Fees**
            
            **Deficit**
            
            **Total****BALANCE,
                December 1, 2006**
            
            
            108,567,080
            
            $
            20,000
            
            
            —
            
            $
            188,500
            
            $
            180,000
            
            $
            -
            
            
            ($1,111,447
            )
            
            ($722,947
            )Common
                stock issued to consultant for services
            
            
            5,500,000
            
            
            5,500
            
            
            —
            
            
            —
            
            
            269,500
            
            
            (275,000
            )
            
            —
            
            
            —Amortization
                of deferred consulting fees
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            150,000
            
            
            —
            
            
            150,000Net
                loss for the period
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            —
            
            
            (400,056
            )
            
            (400,056
            )**BALANCE,
                August 31, 2007**
            
            
            114,067,080
            
            $
            25,500
            
            
            —
            
            $
            188,500
            
            $
            449,500
            
            $
            (125,000
            )
            
            ($1,511,503
            )
            
            ($973,003
            )





See
        accompanying notes to condensed consolidated financial statements
  4


**H** **ERBORIUM** **G** **ROUP,** **I** **NC.** **A** **ND** **S** **UBSIDIARIES**


**N** **OTES** **T** **O** **C** **ONDENSED** **C** **ONSOLIDATED** **F** **INANCIAL** **S** **TATEMENTS**


**A** **S** **O** **F** **A** **UGUST** **31,
        2007**
 **(U** **NAUDITED** **)**


**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, 2006 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, 2007. The consolidated balance sheet at November 30, 2006
      has been derived from the audited financial statements for fiscal
      2006.





**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 Federal 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 of November 30, 2006. This number of shares was used in
      calculations of net loss per share for all periods presented on a retroactive
      basis for the three and nine months ended August 31, 2006.





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


**H** **ERBORIUM** **G** **ROUP,** **I** **NC.** **A** **ND** **S** **UBSIDIARIES**
 **N** **OTES** **T** **O** **C** **ONDENSED** **C** **ONSOLIDATED** **F** **INANCIAL** **S** **TATEMENTS**
 **A** **S** **O** **F** **A** **UGUST** **31,
          2007**
 **(U** **NAUDITED** **)**





**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 $400,056 for the nine months ended August 31, 2007 and $339,757
      for the year ended November 30, 2006. The Company had a working capital
      deficiency of $1,007,385 and $756,845 as of August 31, 2007 and November 30,
      2006, respectively. Management is pursuing additional capital and debt financing
      and the acquisition of the AcnEase formula (See Note 4). However, there is
      no
      assurance that these efforts will be successful.





Our
      independent auditors have added an explanatory paragraph to their audit reports
      issued in connection with our fiscal 2006 and 2005 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.





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.
            Earnings
                (loss) per share




Basic
      earnings (loss) per share is computed by dividing net loss available to common
      stockholders by the weighted average number of common shares outstanding for
      the
      period. During the three and nine months ended August 31, 2007, the Company
      had
      no securities convertible into common stock. The number of shares used in the
      calculation of net loss per share for the three and nine months ended August
      31,
      2006, was presented on a retroactive basis as described in Note 2.





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


**H** **ERBORIUM** **G** **ROUP,** **I** **NC.** **A** **ND** **S** **UBSIDIARIES**
 **N** **OTES** **T** **O** **C** **ONDENSED** **C** **ONSOLIDATED** **F** **INANCIAL** **S** **TATEMENTS**
 **A** **S** **O** **F** **A** **UGUST** **31,
          2007**
 **(U** **NAUDITED** **)**


h.
            Recent
                accounting pronouncements




On
      June 7, 2005, the FASB issued Statement of Financial Accounting Standards
      No. 154, “Accounting Changes and Error Corrections, (“SFAS 154”). A
      replacement of APB Opinion No. 20, Accounting Changes,” and Statement
      No. 3, “Reporting Accounting Changes in Interim Financial Statements,” SFAS
      154 changes the requirements for the accounting for and reporting of a change
      in
      accounting principle. Previously, most voluntary changes in accounting
      principles required recognition of a cumulative effect adjustment within net
      income of the period of the change. SFAS 154 requires retrospective application
      to prior periods’ financial statements, unless it is impracticable to determine
      either the period-specific effects or the cumulative effect of the change.
      SFAS
      154 is effective for accounting changes made in fiscal years beginning after
      December 15, 2005; however, the Statement does not change the transition
      provisions of any existing accounting pronouncements. The adoption of SFAS
      154
      has not had a material effect on the Company’s financial position, results of
      operations, or cash flows.





In
      September 2006, the 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. Prior to SFAS 157, there were different definitions of fair value
      and limited guidance for applying those definitions in GAAP. Moreover, that
      guidance was dispersed among the many accounting pronouncements that require
      fair value measurements. SFAS 157 clarifies that the exchange price is the
      price
      in an orderly transaction between market participants to sell the asset or
      transfer the liability in the market in which the reporting entity would
      transact for the asset or liability, that is, the principal or most advantageous
      market for the asset or liability. This Statement is effective for financial
      statements issued for fiscal years beginning after November 15, 2007, and
      interim periods within those fiscal years. The Company has evaluated the impact
      that SFAS 157 will have on its financial position, results of operations and
      cash flows and concluded it will not have a material impact.





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. FIN
      48 is
      effective for fiscal years beginning after December 31, 2006. The Company is
      currently evaluating the impact this interpretation may have on its future
      financial position, results of operations, earnings per share, or cash flows.




In
      September 2006, the Securities and Exchange Commission issued SAB No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying
      Misstatements in Current Year Financial Statements.” SAB No. 108 was issued
      to address diversity in practice in quantifying financial statement
      misstatements. Current practice allows for the evaluation of materiality on
      the
      basis of either (1) the error quantified as the amount by which the current
      year income statement was misstated (“rollover method”) or (2) the
      cumulative error quantified as the cumulative amount by which the current year
      balance sheet was misstated (“iron curtain method”). The guidance provided in
      SAB 108 requires both methods to be used in evaluating materiality (“dual
      approach”). SAB No. 108 permits companies to initially apply its provisions
      either by (1) restating prior financial statements as if the dual approach
      had always been used or (2) recording the cumulative effect of initially
      applying the “dual approach” as adjustments to the carrying values of assets and
      liabilities as of January 1, 2006 with an offsetting adjustment recorded to
      the opening balance of retained earnings. There were no matters warranting
      the
      Company’s consideration under the provisions of SAB No. 108 and, therefore,
      it did not have an impact on the Company’s financial position, results of
      operations, net loss per share or cash flows.




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 January 1, 2008. We are currently evaluating the
      impact this new Standard could have on our financial position and results of
      operations.




7


**H** **ERBORIUM** **G** **ROUP,** **I** **NC.** **A** **ND** **S** **UBSIDIARIES**
 ****N****OTES****T****O****C****ONDENSED****C****ONSOLIDATED****F****INANCIAL****S****TATEMENTS****
 **A** **S** **O** **F** **A** **UGUST** **31,
              2007**
 **(U** **NAUDITED** **)**
 **NOTE
          4.** **MAJOR
          SUPPLIER**





The
      Company purchased approximately 90% of its inventory from AH USA, its major
      supplier for the three and nine month periods ended August 31, 2007 and 2006.
      The Company is party to an agreement with AH USA, owner of an acne product
      of
      which the Company, as licensee, is the exclusive worldwide distributor.
      Negotiations between the Company and AH USA are ongoing to acquire the
      intellectual property rights to the product.





**NOTE
          5.** **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
          6.** **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. Repayment is not expected until such time as the
      Company has adequate funds available. For the nine months ended August 31,
      2007,
      the amount due to stockholders, which consists of unsecured demand loans to
      the
      Company with no specified terms, increased by $46,784.





**NOTE
          7.** **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
          8.** **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 will be expensed over the period of
      the
      agreement. Accordingly, consulting expense in the amount of $150,000 was
      recorded during the nine months ended August 31, 2007.





8


**I** **TEM
        2.**  **M** **ANAGEMENT'S** **D** **ISCUSSION** **A** **ND** **A** **NALYSIS** **O** **R** **P** **LAN** **O** **F** **O** **PERATION**





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, 2006. 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
      Federal 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 $400,056 during the nine months ended August 31, 2007. As of
      August 31, 2007, we had cash and current assets of $2,596 and $61,308,
      respectively, and current liabilities of $1,068,693, with obligations
      aggregating $524,558 for trade creditors and accrued expenses, $129,412 for
      credit card obligations, $166,903 payable for line of credit obligations,
      $34,354 for amounts due to others and $213,466 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. While we are actively seeking a
      substantial amount of equity or debt financing, we have received no commitments
      for such financing. Our working capital at August 31, 2007 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 of the sources described above,
      or an entirely new source.





Our
      independent auditors have added an explanatory paragraph to their audit reports
      issued in connection with our fiscal 2006 and 2005 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.




9





**RELATED
      PARTY TRANSACTIONS**





During
      the nine months ended August 31, 2007, the Company's amounts due to stockholders
      increased by $46,784 to $213,466.





**COMPARISON
      OF THE THREE MONTHS ENDED AUGUST 31, 2007 TO THE THREE MONTHS ENDED AUGUST
      31,
      2006**





**Summary
      Results of Operations**





The
      following table sets forth certain selected financial data as a percentage
      of
      sales for the three months ended August 31, 2007 and 2006:


2007
              
              2006Net
                  sales
              
              
              100.0
              %
              
              100.0
              %Cost
                  of sales
              
              
              57.2
              
              
              40.6Gross
                  profit
              
              
              42.8
              
              
              59.4Operating
                  expenses
              
              
              137.8
              
              
              82.5Loss
                  from operations before other expense
              
              
              (95.0
              )
              
              (23.1
              )Other
                  expense
              
              
              (7.4
              )
              
              (6.1
              )Provision
                  for income taxes
              
              
              (0.5
              )
              
              (0.3
              )Net
                  loss
              
              
              (102.9
              )%
              
              (29.5
              )%




**Sales**





Net
      sales
      for the three months ended August 31, 2007, were $158,363 compared to $181,711
      for the three months ended August 31, 2006. The decrease of $23,348, or 12.8%,
      can be attributed to a decrease in internet sales in the United Kingdom due
      to a
      change in local management and a strike by the primary delivery service utilized
      in that country, which more than offset a modest increase in sales in other
      European countries.




**Gross
      Profit**





Gross
      profit decreased to $67,703 for the three months ended August 31, 2007 compared
      to $107,858 for the three months ended August 31, 2006, a decrease of $40,155
      or
      37.2%, with gross margin decreasing to 42.8% from 59.4% for the prior period.
      The decrease in gross profit is attributable to both the decrease in sales
      volume and the lower realized gross margin. This decrease in gross margin is
      a
      result of increased product promotions in general during the quarter, as well
      as
      price incentives offered in response to the delivery problems described
      above.





**Operating
      Expenses**





Total
      operating expenses increased by $68,404, or 45.7%, to $218,174 for the three
      months ended August 31, 2007, from $149,770 for the three months ended August
      31, 2006, principally attributable to increases in consulting expense of $56,250
      to expense a grant of common stock over the term of the consulting agreement,
      and payroll expenses of $22,588 for officer salary expense.





**Other
      Income (Expense)**





Interest
      expense increased to $11,753 from $11,132 for the three months ended August
      31,
      2007 as compared with the three months ended August 31, 2006, or a minor amount
      of $621, as interest rates and debt outstanding were relatively constant during
      both periods.





10




**COMPARISON
      OF THE NINE MONTHS ENDED AUGUST 31, 2007 TO THE NINE MONTHS ENDED AUGUST 31,
      2006**





**Summary
      Results of Operations**





The
      following table sets forth certain selected financial data as a percentage
      of
      sales for the nine months ended August 31, 2007 and 2006:


2007
              
              2006Net
                  sales
              
              
              100.0
              %
              
              100.0
              %Cost
                  of sales
              
              
              40.8
              
              
              45.6Gross
                  profit
              
              
              59.2
              
              
              54.4Operating
                  expenses
              
              
              123.2
              
              
              82.4Loss
                  from operations before other expense
              
              
              (64.0
              )
              
              (28.0
              )Other
                  expense
              
              
              (5.8
              )
              
              (5.8
              )Provision
                  for income taxes
              
              
              (0.3
              )
              
              (0.4
              )Net
                  loss
              
              
              (70.1
              )%
              
              (34.2
              )%




**Sales**





Net
      sales
      for the nine months ended August 31, 2007 were $571,041 compared to $568,695
      for
      the nine months ended August 31, 2006. The increase of $2,345, or 0.4%, can
      be
      attributed to both the change in United Kingdom management and a strike by
      the
      primary delivery service utilized in that country in the current quarter, which
      offset the modest increase in sales in other European countries and the increase
      in sales experienced in the first six months of the current fiscal year due
      to
      increased awareness of AcnEase, the Company’s principal product, resulting from
      web-based promotion activities and growth in distributor orders.




**Gross
      Profit**





Gross
      profit increased to $337,891 for the nine months ended August 31, 2007 compared
      to $309,307 for the nine months ended August 31, 2006, an increase of $28,584
      or
      9.2%, with gross margin increasing to 59.2% from 54.4% for the prior period.
      The
      increase in gross profit is attributable to both the increase in net sales
      and
      the higher realized gross margin. This improvement in gross margin is a result
      of an improvement that commenced in late fiscal 2006 in the average selling
      price received for AcnEase due to a change in the mix of distribution channels
      into which we sell, offset partially by the decrease in gross margin experienced
      in the current quarter.





**Operating
      Expenses**





Total
      operating expenses increased by $234,427, or 50%, to $703,128 for the nine
      months ended August 31, 2007, from $468,701 for the nine months ended August
      31,
      2006, principally attributable to increases in consulting expense of $150,000
      relating to a grant of common stock over the term of the consulting agreement
      and payroll expenses of $78,289 for officer salary expense, partially offset
      by
      a decrease in website development expenses of $18,999.





**Other
      Income (Expense)**





Interest
      expense increased to $33,259 from $33,081 for the nine months ended August
      31,
      2007 as compared with the nine months ended August 31, 2006, or a minor amount
      of $178, as interest rates and debt outstanding were relatively constant during
      both periods.





**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.




11





**LIQUIDITY
      AND CAPITAL RESOURCES**





As
      of
      August 31, 2007, we had a cash balance of $2,596 and a negative cash flow from
      operations of $47,684 for the nine-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. While we are actively seeking a substantial amount of
      equity or debt financing, we have received no commitments for such financing.
      Our working capital at August 31, 2007 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 of the sources described above, or an
      entirely new source.





Our
      independent auditors have added an explanatory paragraph to their audit reports
      issued in connection with our fiscal 2006 and 2005 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 nine months ended August
      31, 2007 and 2006.





**Net
      Cash Used In Operating Activities**





Net
      cash
      used in operating activities was $47,684 and $27,516 in the nine months ended
      August 31, 2007 and 2006, respectively. Cash used in operating activities for
      the nine months ended August 31, 2007 was principally the result of a net loss
      of $400,056 partially offset by an increase in accounts payable and accrued
      expenses of $178,100, and non-cash expenses of 153,236. The use of cash in
      operating activities for the nine months ended August 31, 2006 was principally
      the result of a net loss of $194,610, partially offset by a decrease in accounts
      receivable of $18,504 and an increase in accounts payable and accrued expenses
      of $146,207.





**Net
      Cash Used In Investing Activities**





Net
      cash
      used in investing activities was $3,270 and $7,326 in the nine months ended
      August 31, 2007 and 2006, respectively . During
      the nine months ended August 31, 2007 and 2006, cash used in investing
      activities principally consisted of expenditures for other assets of $3,270
      and
      $6,640, respectively.





**Net
      Cash Provided By Financing Activities**





Net
      cash
      provided by financing activities for the nine months ended August 31, 2007
      and
      2006 amounted to $48,901 and $34,660, respectively. Net cash provided by
      financing activities for the nine months ended August 31, 2007 was principally
      attributable to an increase of $46,784 in due to stockholders and $12,841 in
      amount due to others. Net cash provided by financing activities for the nine
      months ended August 31, 2006 was principally attributable to increases of
      $19,714 in amount due to stockholders, $13,000 in other loans and $9,981 in
      credit card debt.





**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 this 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 $150,000 during
      the nine months ended August 31, 2007.





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.





12





**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 $400,056 during
      the
      nine months ended May 31, 2007 and $339,757 for the year ended November 30,
      2006. 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.





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




We
      have
      expended and will continue to expend substantial funds in the research,
      development, marketing and clinical testing of our herbaceutical supplements.
      In
      addition, 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, 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.




13





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.





***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.




14





***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.





***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.




15





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.





***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.





16




***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:
  ·
                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.
 
 ***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.
  17
 
 ***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.
 
 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.
  18
  ***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.
  **I** **TEM** **3** **.**  **C** **ONTROLS** **A** **ND** **P** **ROCEDURES**
 
 **(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
        the Chief Executive Officer and Chief Financial Officer, of the effectiveness
        of
        the Company’s disclosure controls and procedures. Based on the evaluation, the
        Chief Executive Officer and the Chief Financial Officer have concluded that,
        as
        of August 31, 2007, 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.
 
 **(B)
        Changes In Internal Controls**
 
 During
        the nine months ended August 31, 2007, 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.
  19
  **P** **ART** **II-O** **THER** **I** **NFORMATION** ****
 
 **I** **TEM** **1** **.**  **L** **EGAL** **P** **ROCEEDINGS**
 
 None.
 
 **I** **TEM** **2** **.** **U** **NREGISTERED** **S** **ALES** **O** **F** **E** **QUITY** **S** **ECURITIES** **A** **ND** **U** **SE** **O** **F** **P** **ROCEEDS**
 
 None
 
 **I** **TEM** **3** **.**  **D** **EFAULTS** **U** **PON** **S** **ENIOR** **S** **ECURITIES**
 
 None.
 
 **I****TEM****4****.****S****UBMISSION****O****F****M****ATTERS****T****O****A********V****OTE****O****F****S****ECURITY****H****OLDERS******
 
 None.
 
 **I** **TEM** **5** **.**  **O** **THER** **I** **NFORMATION**
 
 None.
 
 **I** **TEM** **6** **.**  **E** **XHIBITS**
  
 **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)31
              
              Rule
                  13a-14(a) Certification of Agnes Olszewski32
              
              Certification
                  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.
 
 20
  SIGNATURES
 In
        accordance with the requirements of the Exchange Act, the registrant caused
        this
        report to be signed on its behalf by the undersigned, thereunto duly authorized.
  **H** **ERBORIUM** **G** **ROUP** **,
          I** **NC.**
  *By: 
                /s/ Agnes Olszewski.**Name:
                  Agnes Olszewski.*
                *Title:
                    Chief Executive Officer (Principal Executive Officer)
                    and*
                  *Chief
                    Financial Officer (Principal Accounting Officer)**Date:
                October
                22, 2007*
  21