**U.S.
        SECURITIES AND EXCHANGE COMMISSION**
 **WASHINGTON,
        D.C. 20549**
 
 **FORM
        10-QSB**
 
 (check
        one)
 
 **x** QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES
        EXCHANGE ACT OF 1934
 
 For
        the
        Three Months Ended February 28, 2007
 
 **o** TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
 THE
        EXCHANGE ACT OF 1934
 
 Commission
        File Number 000-25277
 
 **HERBORIUM
        GROUP, INC.**
 (Exact
        Name Of Small Business Issuer As Specified In Its Charter)
 
 **Nevada**
 (State
        Or
        Other Jurisdiction Of
 Incorporation
        Or Organization)
 
 **88-0353141**
 (I.R.S.
        Employer Identification No.)
 
 **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
        April 11, 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**
 
 Transmittal
        Small Business Disclosure Format (Check One):
 **Yes
        o No x**
 
 
 
 
  
    **HERBORIUM
        GROUP, INC.**
 **INDEX
        TO FORM 10-QSB**
 
 
 
 
 **ITEM
                  1.**
              Condensed
                  Consolidated Financial Statements (Unaudited)Condensed
                  Consolidated Balance Sheets as of February 28, 2007 (Unaudited)
                  and
                  November 30, 2006Condensed
                  Consolidated Statements of Operations for the Three Months Ended
                  February
                  28, 2007 and 2006 (Unaudited)Condensed
                  Consolidated Statements of Cash Flows for the Three Months Ended
                  February
                  28, 2007 and 2006 (Unaudited)Condensed
                  Consolidated Statement of Changes in Stockholders’ Deficiency for the
                  Three Months Ended February 28, 2007 (Unaudited)Notes
                  to Condensed Consolidated Financial Statements as of February 28,
                  2007
                  (Unaudited)**ITEM
                  2.**
              Management’s
                  Discussion and Analysis or Plan of Operation**ITEM
                  3.**
              Controls
                  and Procedures
 
 
 
 **ITEM
                  1.**
              Legal
                  Proceedings**ITEM
                  2.**
              Unregistered
                  Sales of Equity Securities and Use of Proceeds**ITEM
                  3.**
              Defaults
                  Upon Senior Securities**ITEM
                  4.**
              Submission
                  of Matters to a Vote of Security Holders**ITEM
                  5.**
              Other
                  Information**ITEM
                  6.**
              Exhibits
 
 
 *In
        this report, the terms the “Company”, “we”, “our” and “us” refer to Herborium
        Group, Inc., a Nevada corporation.*
 
  i
  
 
 *Certain
        statements in the "Management’s Discussion and Analysis or Plan of Operation"
        and elsewhere in this quarterly report constitute "forward-looking statements"
        (within the meaning of the Private Securities Litigation Reform Act of 1995
        (the
        "Act")) relating to us and our business, which represent our current
        expectations or beliefs including, but not limited to, statements concerning
        our
        operations, performance, financial condition and growth. All statements,
        other
        than statements of historical facts, included in this quarterly report that
        address activities, events or developments that we expect or anticipate will
        or
        may occur in the future, including such matters as our projections, future
        capital expenditures, business strategy, competitive strengths, goals,
        expansion, market and industry developments and the growth of our businesses
        and
        operations are forward-looking statements. Without limiting the generality
        of
        the foregoing, words such as "may,” “believes,” ”expects,” "anticipates,”
"could,” "estimates,” “grow,” “plan,” "continue," “will,” “seek,” “scheduled,”
“goal” or “future” or the negative or other comparable terminology are intended
        to identify forward-looking statements. These statements by their nature
        involve
        substantial risks and uncertainties, such as credit losses, dependence on
        management and key personnel, variability of quarterly results, our ability
        to
        continue our growth strategy and competition, certain of which are beyond
        our
        control. Any or all of our forward-looking statements may turn out to be
        wrong.
        They may be affected by inaccurate assumptions that we might make or by known
        or
        unknown risks or uncertainties. Should one or more of these risks or
        uncertainties materialize or should the underlying assumptions prove incorrect,
        actual outcomes and results could differ materially from those indicated
        in the
        forward-looking statements.*
  *Because
        of the risks and uncertainties associated with forward-looking statements,
        you
        should not place undo reliance on them. Further, any forward-looking statement
        speaks only as of the date on which it is made, and we undertake no obligation
        to update any forward-looking statement to reflect events or circumstances
        after
        the date on which the statement is made or to reflect the occurrence of
        unanticipated events.*
 
 
  ii
 **HERBORIUM
                GROUP, INC. AND SUBSIDIARIES**
 **CONDENSED
                CONSOLIDATED BALANCE SHEETS**
   February,
                  28,
                2007
              
              November
                  30,
                2006(Unaudited)
              
              (Audited)**ASSETS**Current
                  assets:Cash
              
              $
              1,973
              
              $
              4,649Accounts
                  receivable
              
              
              4,112
              
              
              5,416Inventory
              
              
              80,884
              
              
              73,890Prepaid
                  expenses and other current assets
              
              
              398
              
              
              442Total
                  current assets
              
              
              87,367
              
              
              84,397Property
                  and equipment, net of accumulated depreciation
                of
                  $19,500; $19,015-2006
              
              
              5,685
              
              
              6,170Other
                  assets, net of accumulated amortization
                of
                  $7,817; $7,269-2006
              
              
              29,180
              
              
              27,728**TOTAL
                  ASSETS**
              
              $
              122,232
              
              $
              118,295**LIABILITIES
                  AND STOCKHOLDERS’ DEFICIENCY**Current
                  liabilities:Accounts
                  payable and accrued expenses
              
              $
              410,639
              
              $
              344,655Credit
                  cards payable
              
              
              136,628
              
              
              134,126Lines
                  of credit payable
              
              
              171,123
              
              
              172,913Due
                  to others
              
              
              33,856
              
              
              34,513Current
                  portion of long-term debt
              
              
              1,200
              
              
              1,353Due
                  to stockholders
              
              
              148,902
              
              
              153,682Total
                  current liabilities
              
              
              902,348
              
              
              841,242Stockholders’
                  deficiency:Common
                  stock, $0.001 par value; 500,000,000 shares
                authorized,
                  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
              
              
              624,500
              
              
              180,000Deferred
                  compensation
              
              
              (412,500
              )
              
              -Accumulated
                  deficit
              
              
              (1,206,116
              )
              
              (1,111,447
              )Total
                  stockholders’ deficiency
              
              
              (780,116
              )
              
              (722,947
              )**TOTAL
                  LIABILITIES AND STOCKHOLDERS' DEFICIENCY**
              
              $
              122,232
              
              $
              118,295
 
 
 
  See
            accompanying notes to condensed consolidated financial statements
 1
 **HERBORIUM
                GROUP, INC. AND SUBSIDIARIES**
 **CONDENSED
                CONSOLIDATED STATEMENTS OF OPERATIONS**
 **(UNAUDITED)**
   Three
                  months ended
                February
                  28,2007
              
              2006**NET
                  SALES**
              
              $
              215,359
              
              $
              163,213**COST
                  OF SALES**
              
              
              76,005
              
              
              71,455**GROSS
                  PROFIT**
              
              
              139,354
              
              
              91,758**OPERATING
                  EXPENSES**Marketing
                  and selling
              
              
              75,715
              
              
              76,898General
                  and administrative
              
              
              146,834
              
              
              63,861**TOTAL
                  OPERATING EXPENSES**
              
              
              222,549
              
              
              140,759**LOSS
                  FROM OPERATIONS**
              
              
              (83,195
              )
              
              (49,001
              )Interest
                  expense
              
              
              10,694
              
              
              10,809**LOSS
                  BEFORE PROVISION FOR INCOME TAXES**
              
              
              (93,889
              )
              
              (59,810
              )Provision
                  for income taxes
              
              
              780
              
              
              500**NET
                  LOSS**
              
              $
              (94,669
              )
              $
              (60,310
              )Net
                  loss per share, basic and diluted
              
              $
              0.00
              
              $
              0.00Weighted
                  average number of common shares outstanding - basic and
                  diluted
              
              
              110,522,636
              
              
              108,567,080
 
 
  See
            accompanying notes to condensed consolidated financial statements
 2
 **HERBORIUM
              GROUP, INC. AND SUBSIDIARIES**
 **CONDENSED
              CONSOLIDATED STATEMENT OF CASH FLOWS**
 **(UNAUDITED)**
   
 Three
                    months ended
                  February
                    28,2007
                
                2006(Unaudited)**CASH
                    FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:**Net
                    loss
                
                $
                (94,669
                )
                $
                (60,310
                )Adjustments
                    to reconcile net loss to
                  net
                    cash used in operating activities:Depreciation
                    and amortization
                
                
                1,033
                
                
                668Amortization
                    of deferred compensation
                
                
                37,500
                
                
                -Changes
                    in assets (increase) decrease:Accounts
                    receivable
                
                
                1,304
                
                
                18,865Inventory
                
                
                (6,994
                )
                
                4,455Prepaid
                    expenses and other current assets
                
                
                44
                
                
                1,408Changes
                    in liabilities increase (decrease):Accounts
                    payable and accrued expenses
                
                
                65,984
                
                
                25,615Net
                    cash provided by (used in) operating activities
                
                
                4,202
                
                
                (9,299
                )**CASH
                    FLOWS USED IN INVESTING ACTIVITIES:**Purchase
                    of amortizable assets
                
                
                (2,000
                )
                
                (2,747
                )**CASH
                    FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:**Repayment
                    of lines of credit
                
                
                (1,790
                )
                
                (255
                )Proceeds
                    from (repayment of) debt
                
                
                (153
                )
                
                3,735Decrease
                    in other loans
                
                
                (657
                )
                
                (2,481
                )Increase
                    in credit card payable
                
                
                2,502
                
                
                2,849Increase
                    (decrease) in due to stockholders
                
                
                (4,780
                )
                
                11,194Net
                    cash provided by (used in) financing activities
                
                
                (4,878
                )
                
                15,042**NET
                    INCREASE (DECREASE) IN CASH**
                
                
                (2,676
                )
                
                2,996**CASH,
                    BEGINNING OF PERIOD**
                
                
                4,649
                
                
                182**CASH,
                    END OF PERIOD**
                
                $
                1,973
                
                $
                3,178Supplemental
                    disclosures of cash flow information:Cash
                    paid during the period for:Income
                    taxes
                
                $
                -
                
                $
                -Interest
                
                
                10
                    562
                
                
                10,650
 
 Supplemental
                  disclosure of non-cash information:During
                  the three months ended February 28, 2007, the Company issued 5,500,000
                  shares of common stockand agreed to issue 3,500,000 shares of common stock valued at
                  $450,000
                  for professional services.
 
  See
            accompanying notes to condensed consolidated financial statements
 3
 **HERBORIUM
                GROUP, INC. AND SUBSIDIARIES**
 **CONDENSED
                CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIENCY**
 **FOR
                THE THREE MONTHS ENDED FEBRUARY 28, 2007**
 **(UNAUDITED)**
   
 
 
 **Common
                  Stock**
              
              **Common
                  Stock Subscribed**
              
              **Additional**
                **Paid
                  in**
              
              **Deferred**
              
              **Accumulated****Shares**
              
              **Amount**
              
              **Shares**
              
              **Amount**
              
              **Capital**
              
              **Compensation**
              
              **Deficit**
              
              **Total****BALANCE,
                  DECEMBER 1, 2006**
              
              
              108,567,080
              
              $
              20,000
              
              
              -
              
              $
              188,500
              
              $
              180,000
              
              $
              -
              
              
              ($1,111,447
              )
              
              ($722,947
              )Common
                  stock issued/to be issued to consultant for services
              
              
              5,500,000
              
              
              5,500
              
              
              -
              
              
              -
              
              
              444,500
              
              
              (412,500
              )
              
              -
              
              
              37,500Net
                  loss for the period
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (94,669
              )
              
              (94,669
              )**BALANCE,
                  FEBRUARY 28, 2007**
              
              
              114,067,080
              
              $
              25,500
              
              
              -
              
              $
              188,500
              
              $
              624,500
              
              $
              (412,500
              )
              
              ($1,206116
              )
              
              ($780,116
              )
 
 
  See
            accompanying notes to condensed consolidated financial statements
 4
 **HERBORIUM
                GROUP, INC.** **AND
                SUBSIDIARIES**
 **NOTES
                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
                OF FEBRUARY 28, 2007**
 **(UNAUDITED)**
  **NOTE
                  1.**
              **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.
 
 Although
        PMIC is deemed the legal acquirer, the Company is deemed the accounting acquirer
        since generally accepted accounting principles require that the entity whose
        stockholders retain a majority interest in a combination be treated as the
        acquirer under purchase accounting rules. 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.
 
 **NOTE
                  2.**
              **BASIS
                  OF ACCOUNTING AND SIGNIFICANT ACCOUNTING
                  POLICIES**
 
 a.  Basis
        of
        Accounting
 
 The
        Company's 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 $94,669 for the three months ended February 28, 2007 and $339,757 for
        the
        year ended November 30, 2006. The Company had a working capital deficiency
        of
        $814,981 and $756,845 as of February 28, 2007 and November 30, 2006,
        respectively. These conditions raise substantial doubt about the Company’s
        ability to continue as a going concern. The Company’s ability to continue as a
        going concern is dependent upon it achieving profitability and generating
        sufficient cash flows to meet its obligations as they come due. Management
        is
        pursuing additional capital and debt financing and acquisition of profitable
        businesses. However, there is no assurance that these efforts will be
        successful. The consolidated financial statements do not include any adjustments
        that might result from the outcome of this uncertainty.
  5
 **HERBORIUM
            GROUP, INC.** **AND
            SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
            OF FEBRUARY 28, 2007**
 **(UNAUDITED)**
  
 b.  Principles
        of consolidation
 
 The
        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.
 
 b.  Estimates
 
 The
        preparation of consolidated 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.
 
 c.  Interim
        condensed consolidated financial statements
  The
        accompanying consolidated financial statements have been prepared in accordance
        with generally accepted accounting principles 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, and are
        not
        necessarily indicative of the results to be expected for the full
        year.
 
 d.  Cash
        and
        cash equivalents
  The
        Company maintains its cash accounts in two commercial banks. The balance
        is
        insured by the Federal Deposit Insurance Corporation up to $100,000 at each
        bank.
 
 e.  Inventory
  Inventory,
        consisting of finished botanical therapeutic products, is stated at the lower
        of
        cost or market and is valued on the first-in, first-out method. When net
        realizable value has fallen below cost, inventory is written down.
 
 f.  Shipping
        and handling costs
  Shipping
        and handling costs associated with outbound freight are charged to cost of
        sales.
 
 g.  Property
        and equipment
  Depreciation
        and amortization are computed using the straight-line method over the estimated
        useful lives of the assets ranging from five to seven years.
  Maintenance
        and repairs are charged to expense when incurred. When property and equipment
        are retired or otherwise disposed of, the applicable cost and accumulated
        depreciation are removed from the accounts and any gain or loss is credited
        or
        charged directly to income.
 
 h.  Advertising
  It
        is the
        Company’s policy to expense advertising costs as they are incurred.
 
 i.  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.
  6
 **HERBORIUM
            GROUP, INC.** **AND
            SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
            OF FEBRUARY 28, 2007**
 **(UNAUDITED)**
  
 
 j.  Revenue
  The
        Company recognizes revenue when inventory is shipped to its
        customers.
 
 k.  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. Diluted earnings per share reflect the potential dilution of securities,
        using the treasury stock method, that could share in the earnings of an entity.
        During the three months ended February 28, 2007 and 2006, the Company had
        no
        securities convertible into common stock that would, in any event, have been
        excluded from the calculation of diluted loss per share, as their effect
        would
        have been anti-dilutive.
 
 The
        number of shares used in the calculation of net loss per share for the three
        months ended February 28, 2006, was presented on a retroactive basis as
        described in Note 1.
 
 l.  Fair
        value of financial instruments
  The
        carrying amounts of the Company’s accounts payable, accrued expenses, credit
        cards payable, lines of credit payable, amounts payable to others and
        stockholders approximate fair value due to the relatively short period to
        maturity for these instruments.
 
 m.  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.
 
 n.  Recent
        accounting pronouncements
  On
        June 7, 2005, the Financial Accounting Standards Board (“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.
  7
 **HERBORIUM
            GROUP, INC.** **AND
            SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
            OF FEBRUARY 28, 2007**
 **(UNAUDITED)**
  
 
 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 is currently evaluating the impact, if any, that SFAS
        157
        will have on its financial position, results of operations and cash
        flows.
 
 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.
 
 **NOTE
                  3.**
              **DUE
                  TO STOCKHOLDERS**
 
 For
        the
        three months ended February 28, 2007 and 2006, the amount due to stockholders,
        which consists of unsecured demand loans to the Company with no specified
        terms,
        increased (decreased) by $(4,780) and $11,194, respectively.
 
 
 **NOTE
                  4.**
              **STOCKHOLDERS’
                  DEFICIENCY**
 
 On
        January 19, 2007, 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 Plan. 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 certain transactions
        are
        consummated, 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, an expense charge of $37,500 was recorded during
        the
        three months ended February 28, 2007.
 
 
  8
 **HERBORIUM
              GROUP, INC.** **AND
              SUBSIDIARIES**
 **NOTES
              TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
              OF FEBRUARY 28, 2007**
 **(UNAUDITED)**
   **ITEM
        2.**  **MANAGEMENT'S
        DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**
 
 The
        following is management's discussion and analysis of certain significant
        factors
        that will or have affected our financial condition and results of operations.
        The discussion should be read in conjunction with our financial statements
        and
        the related notes and the other financial information appearing elsewhere
        in
        this report and included in the Company’s 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:
 
 Ÿ  owning
        and/or marketing unique products with established clinical history in their
        country of origin, and
 
 Ÿ  a
        proactive approach to meeting the regulatory changes and challenges of the
        new
        healthcare marketplace.
 
 
 **FINANCIAL
        CONDITION**
 
 We
        had
        net losses of $94,669 during the three months ended February 28, 2007 and
        $339,757 during the year ended November 30, 2006. As of February 28, 2007,
        we
        had cash and current assets of $1,973 and $87,367, respectively, and current
        liabilities of $902,348, with obligations aggregating $410,639 for trade
        creditors and accrued expenses, $136,628 for credit card obligations, $171,123
        payable for line of credit obligations, $33,856 for amounts due to others
        and
        $148,902 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 February 28, 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 opinions
        issued in connection with our fiscal 2006 and 2005 financial statements,
        which
        states that our ability to continue as a going concern depends upon our ability
        to resolve liquidity problems by generating sufficient operating profits
        to
        provide additional working capital. Our ability to 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. Without 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 three months ended February 28, 2007, the Company's due to stockholders
        decreased by to $4,780.
 
 **COMPARISON
        OF THE THREE MONTHS ENDED FEBRUARY 28, 2007 TO THE THREE MONTHS ENDED FEBRUARY
        28, 2006**
 
 **Summary
        Results of Operations**
 
 The
        following table sets forth certain selected financial data as a percentage
        of
        sales for the three months ended February 28, 2007 and 2006:
 
 2007
              
              2006Net
                  sales
              
              
              100.0
              %
              
              100.0
              %Cost
                  of sales
              
              
              35.3
              
              
              43.8Gross
                  profit
              
              
              64.7
              
              
              56.2Operating
                  expenses
              
              
              103.3
              
              
              86.2Loss
                  from operations before other expense
              
              
              (38.6
              )
              
              (30.0
              )Other
                  expense
              
              
              (5.0
              )
              
              (6.6
              )Provision
                  for income taxes
              
              
              (0.4
              )
              
              (0.3
              )Net
                  loss
              
              
              (44.0
              )%
              
              (36.9
              )%
 .
 **Sales**
 
 Net
        sales
        for the three months ended February 28, 2007 were $215,359 compared to $163,213
        for the three months ended February 28, 2006. The increase of $52,146, or
        31.9%,
        can be attributed to an increase in sales of AcnEase in both the United States
        and in the United Kingdom due to increased awareness of this product resulting
        from web-based promotion activities and general product awareness as more
        consumers use the product for treatment of acne.
  **Gross
        Profit**
 
 Gross
        profit increased to $139,354 for the three months ended February 28, 2007
        compared to $91,758 for the three months ended February 28, 2006, an increase
        of
        $47,596 or 51.9%, with gross margin increasing to 64.7% from 56.2% for the
        periods. 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.
 
 **Operating
        Expenses**
 
 Total
        operating expenses increased by $81,789, or 58.1%, to $222,549 for the three
        months ended February 28, 2007, from $140,759 for the three months ended
        February 28, 2006, principally attributable to an increase in payroll expenses
        of $33,114 for officer salary expense accrued but not paid and an increase
        in
        non-cash professional fees of $37,500.
 
 **Other
        Income (Expense)**
 
 Interest
        expense decreased to $10,694 from $10,809 for the three months ended February
        28, 2007 as compared with the three months ended February 28, 2006, or a
        minor
        $115, 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.
  10
  
 **LIQUIDITY
        AND CAPITAL RESOURCES**
 
 As
        of
        February 28, 2007, we had a cash balance of $1,973 and a negative cash flow
        from
        operations of $4,202 for the three-month period then ended. We have been
        operating at a loss since inception and have been funding these losses in
        a
        number of ways, including lines of credit, credit card debt, advances from
        stockholders and entering into subscription agreements with “friends and family”
for investment funds. 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 February 28, 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.
 
 The
        Company has contractual obligations of $491,709 as of February 28, 2007.
        These
        contractual obligations, along with the dates on which such payments are
        due,
        are described below:
 
 **Contractual
                  Obligations****(as
                  of February 28, 2007)****Total**
              
              **1
                    Year or Less**
              
              **More
                  Than 1 Year**Credit
                  Cards payable
              
              $
              136,628
              
              $
              136,628
              
              $
              --Lines
                  of Credit Payable
              
              
              171,123
              
              
              171,123
              
              
              --Due
                  to Stockholders
              
              
              148,902
              
              
              148,902
              
              
              --Other
              
              
              35,056
              
              
              35,056
              
              
              --**Total
                  Contractual Obligations**
              
              **$**
              **491,709**
              
              **$**
              **491,709**
              
              **$**
              **--**
 
  
 Below
        is
        a discussion of our sources and uses of funds for the three months ended
        February 28, 2007 and 2006.
 
 **Net
        Cash Provided By (Used In) Operating Activities**
 
 Net
        cash
        provided by (used in) operating activities was $4,202 and $(9,299) in the
        three
        months ended February 28, 2007 and 2006, respectively. Cash provided by
        operating activities for the three months ended February 28, 2007 was
        principally the result of a net loss of $94,669 offset by an increase in
        accounts payable and accrued expenses of $65,985 and non-cash expenses of
        38,533. The use of cash in operating activities for the three months ended
        February 28, 2006 was principally the result of a net loss of $60,310, partially
        offset by a decrease in inventory of $16,300,
 
 **Net
        Cash Used In Investing Activities**
 
 During
        the three months ended February 28, 2007 and 2006, net cash used in investing
        activities consisted of $2,000 and $2,747, respectively, for the acquisition
        of
        other assets, principally expenditures for trademarks.
 
 **Net
        Cash Provided By (Used In) Financing Activities**
 
 Net
        cash
        used in financing activities for the three months ended February 28, 2007
        amounted to $4,878, principally attributable to a decrease of $4,780 in amount
        due to stockholders. Net cash provided by financing activities for the three
        months ended February 28, 2006 amounted to $15,042, principally attributable
        to
        an increase of $11,194 in amount due to stockholders.
 
 **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 charge of $37,500
        during the three months ended February 28, 2007.
  11
  
 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 Registration Statement on Form S-8
        with
        the Securities and Exchange Commission to in connection with the
        Plan
 
 
 **RISK
        FACTORS**
 
  *Our
        business and results of operations are subject to numerous risks, uncertainties
        and other factors that you should be aware of, some of which are described
        below
        and in the section entitled “Cautionary Statement Concerning Forward-Looking
        Statements.” The risks, uncertainties and other factors described below are not
        the only ones facing our company. Additional risks, uncertainties and other
        factors not presently known to us or that we currently deem immaterial may
        also
        impair our business operations. Any of the risks, uncertainties and other
        factors could have a materially adverse effect on our business, financial
        condition or results of operations and could cause the trading price of our
        common stock to decline substantially.*
  **Risks
        Relating to Our Business**
 
 ***We
        have a history of losses, and will incur additional
        losses.***
 
 We
        are a
        company with a limited history of operations, and do not expect to significantly
        increase ongoing revenues from operations in the immediately foreseeable
        future.
        To date, we have not been profitable. We had a net loss of $94,669 during
        the
        three months ended February 28, 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.
  12
  
 
 ***Government
        regulation of the processing, formulation, packaging, labeling and advertising
        of our products can impact our ability to market products.***
 
 Under
        the
        Dietary Supplement Health and Education Act of 1994, companies that manufacture
        and distribute dietary supplements are limited in the statements that they
        are
        permitted to make about nutritional support on the product label without
        FDA
        approval. In addition, a manufacturer of a dietary supplement must have
        substantiation for any such statement made and must not claim to diagnose,
        mitigate, treat, cure or prevent a specific disease or class of disease.
        The
        product label must also contain a prominent disclaimer. These restrictions
        may
        restrict our flexibility in marketing our product.
 
 The
        FDA
        has proposed GMPs (Good Manufacturing Practices) specifically for dietary
        supplements. These new GMPs, when finalized, will be more detailed than the
        GMPs
        that currently apply to dietary supplements and may, among other things,
        require
        dietary supplements to be prepared, packaged and held in compliance with
        certain
        rules (including quality control provisions) similar to the GMPs applicable
        to
        drugs. There can be no assurance that, if the FDA adopts GMPs for dietary
        supplements, we and/or our suppliers will be able to comply with the new
        rules
        without incurring substantial expenses that might have a material adverse
        effect
        on our consolidated financial position or results of operations. As a
        formulator, distributor and marketer of dietary supplements, we are subject
        to
        the risk that one or more of the ingredients in our product may become subject
        to regulatory action in the future.
 
 The
        processing, formulizing, packaging, labeling and advertising of such products,
        however, are subject to regulation by one or more federal agencies including
        the
        FDA, the Federal Trade Commission, the Consumer Products Safety Commission,
        the
        Department of Agriculture and the Environmental Protection Agency. Our
        activities also are subject to regulation by various agencies of the states
        and
        localities in which our products are sold. Among other things, such regulation
        puts a burden on our ability to bring products to market. Any changes in
        the
        current regulatory environment could impose requirements that would make
        bringing new products to market more expensive or restrict the ways we can
        market our products. In addition, the adoption of new regulations or changes
        in
        the interpretation of existing regulation may result in significant compliance
        costs or discontinuation of product sales and may adversely affect our revenue.
        The FDA may implement additional regulations with which we would have to
        comply,
        which would increase expenses.
 
 No
        governmental agency or other third party makes a determination as to whether
        our
        products qualify as dietary supplements or not. We make this determination
        based
        on the ingredients contained in the products and the claims we make for the
        products and if our determination is denied by any regulatory authority we
        could
        face significant penalties that may require us to shut down our operations.
 
 ***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.
  13
  
 
 ***We
        currently have no manufacturing capabilities and we are dependent upon other
        companies to manufacture our products.***
 
 We
        currently have no manufacturing facilities. We are dependent upon relationships
        with independent manufacturers to fulfill our product needs. We use several
        manufacturers for various parts of the manufacturing processes for our products.
        We believe these are small privately held firms.
 
 Because
        the manufacturing processes, which our contract manufacturers perform, are
        fairly standard in the industry, we believe that there are a large number
        of
        manufacturers who could provide us with these services if our current contract
        manufacturers are unavailable for any reason or seek to impose unfavorable
        terms. Our ability to market and sell our products requires that such products
        be manufactured in commercial quantities and in compliance with applicable
        federal and state regulatory requirements. In addition, we must be able to
        manufacture our products at a cost that permits us to charge a price acceptable
        to the customer while also accommodating distribution costs and third-party
        sales compensation. Competitors who do own their own manufacturing may have
        an
        advantage over us with respect to pricing, availability of product and in
        other
        areas through their control of the manufacturing process.
 
 ***We
        are dependent on key management and the loss of their services could have
        a
        material adverse impact on us.***
 
 We
        have
        relied extensively on the services of Drs. Agnes P. Olszewski and James P.
        Gilligan, our co-founders. Drs. Olszewski and Gilligan play key roles in
        our management and the loss of their services would materially and adversely
        affect us and our prospects. Until we raise substantial financing, neither
        of
        these key individuals will spend full-time working for us. Under her employment
        agreement, Dr. Olszewski is not required to do so until we have raised
        $1,250,000, and under his consulting/employment agreement, Dr. Gilligan is
        not
        required to do so until six 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 any 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.
  14
  
 
 Because
        of the complexity of the legal and scientific issues involved in patent
        prosecutions, we cannot be sure that any future patent applications for new
        products will be granted. Nor can we be sure that any patent rights that
        we do
        obtain will provide meaningful protection against others duplicating our
        products because of the complexity of the legal and scientific issues that
        could
        arise in litigation over these issues. Furthermore, patent applications are
        maintained in secrecy in the United States until the patents are approved,
        and
        in most foreign countries for a period of time following the date from which
        priority is claimed. A third party’s pending patent applications may cover any
        technology that we currently are developing. Additionally, if we must resort
        to
        legal proceedings to enforce our intellectual property rights, the proceedings
        could be burdensome and expensive and could involve a high degree of risk
        to our
        proprietary rights if we are unsuccessful in, or cannot afford to pursue,
        such
        proceedings.
 
 We
        rely
        at present completely on trade secrets and contract law to protect our
        proprietary technology. There can be no assurance that any such contract
        will
        not be breached, or that if breached, it will have adequate remedies. Currently,
        all of our products are protected by trade secrets owned by our licensor
        and
        other third parties . We rely on such third parties to adequately protect
        such
        trade secrets. There can be no assurance that these third parties will protect
        and continue to hold the trade secrets relating to our products. Furthermore,
        there can be no assurance that any of these trade secrets will not become
        known
        or independently discovered by third parties.
 
 There
        can
        be no assurance that others will not independently develop substantially
        equivalent proprietary information and techniques or otherwise gain access
        to
        our trade secrets and know-how. In addition, we may be required to obtain
        licenses to patents or other proprietary rights from third parties. There
        can be
        no assurance that any licenses required under any patents or proprietary
        rights
        would be made available on acceptable terms, if at all. If we do not obtain
        required licenses, we may encounter delays in product development or find
        that
        the development, manufacture or sale of products requiring such licenses
        could
        be foreclosed.
 
 ***We
        have limited the liability of our directors and officers for breaches of
        the
        duty of care.***
 
 Our
        articles of incorporation limit the liability of our directors for monetary
        damages for breaches of directors’ fiduciary duty of care. This provision may
        reduce the likelihood of derivative litigation against directors and may
        discourage or deter shareholders or management from suing directors for breaches
        of their duty of care, even though such an action, if successful, might
        otherwise benefit our shareholders and us. In addition, our articles of
        incorporation provide for the indemnification of directors and officers in
        connection with civil, criminal, administrative or investigative proceedings
        when acting in their capacities as agents for us.
 
 ***Our
        results of operations may be affected by changing market prices and requirements
        for dietary supplements.***
 
 Our
        results of operations may be affected by changing resale prices or market
        requirements for dietary supplements, some of which are priced on a commodity
        basis. Sales prices, and market demand for, these materials can be volatile
        due
        to numerous factors beyond our control, which may cause significant variability
        in its period-to-period results of operations.
 
 ***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.
  15
  
 
 ***Other
        companies may claim that we infringed upon their proprietary
        rights.***
 
 We
        do not
        believe that our products or processes violate third-party intellectual property
        rights. Nevertheless, there is no guarantee that such rights are not being,
        and
        will not be, violated. If any of the products or processes are found to violate
        third-party intellectual property rights, we may be required to re-engineer
        or
        cause to be re-engineered one or more of those products or processes or seek
        to
        obtain licenses from third parties to continue offering its products or
        processes without substantial re-engineering, and such efforts may not be
        successful.
 
 ***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.
  16
  
 **Risks
        Related to Our 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 filed 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 filed on March 30, 2007. To date,
        we
        have been delinquent two times in the past 24-month period. Should quotation
        of
        our common stock on the OTC Bulletin Board or a similar facility cease for
        any
        reason, the liquidity of our common stock and our ability to raise equity
        capital would likely decrease.
 
 ***Because
        our shares are “penny stocks,” you may have difficulty selling them in the
        secondary trading market.***
 
 Federal
        regulations under the Exchange Act regulate the trading of so-called “penny
        stocks,” which are generally defined as any security not listed on a national
        securities exchange, priced at less than $5.00 per share and offered by an
        issuer with limited net tangible assets and revenues. Since our common stock
        currently trades on the OTC Bulletin Board at less than $5.00 per share,
        our
        common stock is a “penny stock” and may not be traded unless a disclosure
        schedule explaining the penny stock market and the risks associated therewith
        is
        delivered to a potential purchaser prior to any trade.
 
 In
        addition, because our common stock is not listed on any national securities
        exchange and currently trades at less than $5.00 per share, trading in our
        common stock is subject to Rule 15g-9 under the Exchange Act. Under this
        rule,
        broker-dealers must take certain steps prior to selling a “penny stock,” which
        steps include:
 
 **•**
              obtaining
                  financial and investment information from the investor;**•**
              obtaining
                  a written suitability questionnaire and purchase agreement signed
                  by the
                  investor; and**•**
              providing
                  the investor a written identification of the shares being offered
                  and the
                  quantity of the shares.
 
 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;
 
  17
  
 **•**
              results
                  of research studies of our products or our competitors’
                  products;**•**
              regulatory
                  action or inaction on our products or our competitors’
                  products;**•**
              changes
                  in our financial estimates by securities analysts;**•**
              general
                  market conditions for companies in our industry;**•**
              broad
                  market fluctuations; and**•**
              economic
                  conditions in the United States or abroad.
 
 ***Our
        directors and executive officers own a significant number of shares of our
        common stock to control our company, which could discourage or prevent a
        takeover, even if an acquisition would be beneficial to our stockholders.***
 
 Certain
        of our directors and our current executive officer own or control approximately
        78% of our outstanding voting power. Accordingly, these stockholders,
        individually and as a group, will be able to influence the outcome of
        stockholder votes, involving votes concerning the election of directors,
        the
        adoption or amendment of provisions in our certificate of incorporation and
        bylaws and the approval of certain mergers or other similar transactions,
        such
        as a sale of substantially all of our assets. Such control by existing
        stockholders could have the effect of delaying, deferring or preventing a
        change
        in control of us.
 
 ***We
        do not pay cash dividends, so any return on an investment must come from
        appreciation.***
 
 We
        do not
        intend to pay any cash dividends in the foreseeable future and, therefore,
        any
        return on an investment in our common stock must come from increases in the
        fair
        market value and trading price of our common stock.
 
 ***We
        may issue additional equity securities that will dilute our stockholders.***
 
 We
        may
        issue additional equity securities to raise capital and through the exercise
        of
        options, warrants and convertible debt that is outstanding or may be
        outstanding. These additional issuances will have a dilutive effect on our
        existing stockholders.
 
 
 **ITEM
        3.**  **CONTROLS
        AND PROCEDURES**
 
 **(A)
        Evaluation Of Disclosure Controls And Procedures**
 
 Prior
        to
        the filing of this Report on Form 10-QSB, an evaluation was performed under
        the
        supervision of and with the participation of the Company’s management, including
        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 February 28, 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 three months ended February 28, 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.
  18
 **PART
        II-OTHER INFORMATION**
 
 **ITEM
        1.**  **LEGAL
        PROCEEDINGS**
 
 None.
 
 **ITEM
        2.**  **UNREGISTERED
        SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**
 
 None
 
 **ITEM
        3.**  **DEFAULTS
        UPON SENIOR SECURITIES**
 
 None.
 
 **ITEM
        4.****SUBMISSION
        OF MATTERS TO A VOTE OF SECURITY HOLDERS******
 
 None.
 
 **ITEM
        5.**  **OTHER
        INFORMATION**
 
 None.
 
 **ITEM
        6.**  **EXHIBITS**
 
 **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.
 
 
  19
  **S** **IGNATURES**
 
 In
        accordance with the requirements of the Exchange Act, the registrant caused
        this
        report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 **HERBORIUM
        GROUP, INC.**
 
 *By:
                  /s/Agnes Olszewski.*
                *------------------------*
                *Name:
                  Agnes Olszewski.*
                *Title:
                  Chief Executive Officer (Principal Executive Officer)
                  and*
                *Chief
                  Financial Officer (Principal Accounting Officer)*
                
                *Date:
                  April18, 2007*
 
 
 
 
  20