**SECURITIES
        AND EXCHANGE COMMISSION**
 **WASHINGTON, D.C.
        20549**
 
 **FORM
        10-QSB**
  **x QUARTERLY
        REPORT
        PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF 1934**
 For
        Quarter ended September 30, 2007
  **OR**
  **o TRANSITION
        REPORT
        PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF 1934**
 For
        the
        transition period
        from                to
   Commission
        File Number 333-128399
  
 **SINOBIOMED
        INC.**
 (Exact
        Name of Registrant as Specified in its Charter)
  **Delaware**
              **20-1945139**(State
                  or other Jurisdiction of Incorporation or Organization)
              (IRS
                  Employer
                Identification
                  Number)**Lane
                  4705, No. 58, North Yang Gao Rd.**
                **Pudong
                  New Area Shanghai, China**
              **201206**(Address
                  of Principal Executive Offices)
              (Zip
                  Code)**011-86-21-58546923**
                (Registrant's
                  Telephone Number, Including Area
                  Code)
 
 Indicate
        by check mark whether the issuer (1) filed all reports required to be filed
        by
        Section 13 or 15(d) of the Exchange Act of 1934 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
 
 **Applicable
        only to issuers involved in bankruptcy proceedings during the preceding five
        years:**
 
 Check
        whether the registrant filed all documents and reports required to be filed
        by
        Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
        under a plan confirmed by a court.
 
 Yes o No o
 
 **Applicable
        only to corporate issuers:**
 
 Indicate
        the number of shares outstanding of each of the issuer’s classes of common
        equity, as of the latest practicable date.
 
 Class
              Outstanding
                  as of November 19, 2007Common
                  Stock, $0.0001 par value
              130,763,748
 
 Traditional
        Small Business Disclosure Format (Check one):
 
 Yes o No
        x
 
 ii
  **TABLE
        OF CONTENTS**
  **Page**FORWARD-LOOKING
                  STATEMENTS
              
              
              1USE
                  OF NAMES
              
              
              1**PART
                  I - FINANCIAL INFORMATION**
              
              
              1ITEM
                  1. FINANCIAL STATEMENTS
              
              
              1ITEM
                  2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
                  OPERATION
              
              
              2ITEM
                  3. CONTROLS AND PROCEDURES
              
              
              5**PART
                  II - OTHER INFORMATION**
              
              
              5ITEM
                  1. LEGAL PROCEEDINGS
              
              
              5ITEM
                  2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
                  PROCEEDS
              
              
              7ITEM
                  3. DEFAULTS UPON SENIOR SECUTIRIES
              
              
              7ITEM
                  4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
              
              
              7ITEM
                  5. OTHER INFORMATION
              
              
              8ITEM
                  6. EXHIBITS
              
              
              8SIGNATURES
              
              
              9
  iii
  **Forward
        Looking Statements**
  This
        quarterly report on Form 10-QSB and other reports that we file with the SEC
        contain statements that are considered forward-looking statements.
        Forward-looking statements give the Company’s current expectations, plans,
        objectives, assumptions or forecasts of future events. All statements other
        than
        statements of current or historical fact contained in this annual report,
        including statements regarding the Company’s future financial position, business
        strategy, budgets, projected costs and plans and objectives of management
        for
        future operations, are forward-looking statements. In some cases, you can
        identify forward-looking statements by terminology such as “anticipate,”
“estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management
        believes,” “we believe,” “we intend,” and similar expressions. These statements
        are based on the Company’s current plans and are subject to risks and
        uncertainties, and as such the Company’s actual future activities and results of
        operations may be materially different from those set forth in the forward
        looking statements. Any or all of the forward-looking statements in this
        periodic report may turn out to be inaccurate and as such, you should not
        place
        undue reliance on these forward-looking statements. The Company has based
        these
        forward-looking statements largely on its current expectations and projections
        about future events and financial trends that it believes may affect its
        financial condition, results of operations, business strategy and financial
        needs. The forward-looking statements can be affected by inaccurate assumptions
        or by known or unknown risks, uncertainties and assumptions due to a number
        of
        factors, including:
  ·
            dependence
                on key personnel;  ·
            competitive
                factors;  ·
            degree
                of success of research and development
                programs  ·
            the
                operation of our business; and  ·
            general
                economic conditions in the United States and
                China   These
        forward-looking statements speak only as of the date on which they are made,
        and
        except to the extent required by federal securities laws, we undertake no
        obligation to update any forward-looking statements to reflect events or
        circumstances after the date on which the statement is made or to reflect
        the
        occurrence of unanticipated events. In addition, we cannot assess the impact
        of
        each factor on our business or the extent to which any factor, or combination
        of
        factors, may cause actual results to differ materially from those contained
        in
        any forward-looking statements. All subsequent written and oral forward-looking
        statements attributable to the Company or persons acting on its behalf are
        expressly qualified in their entirety by the cautionary statements contained
        in
        this annual report.
  **Use
        of Names**
  In
        this
        quarterly report, the terms “Sinobiomed”, “Company”, “we”, or “our”, unless the
        context otherwise requires, mean Sinobiomed Inc. and its
        subsidiaries.
  **SINOBIOMED
                    INC.****AND
                    CONSOLIDATED SUBSIDIARIES****INDEX
                    TO CONSOLIDATED FINANCIAL STATEMENTS*****Unaudited-
                    Prepared by
                    Management***
  PageConsolidated
                    Balance Sheet
                
                F-1Consolidated
                    Statements of Operations
                
                F-2Consolidated
                    Statements of Cash Flows
                
                F-3Consolidated
                    Statement of Stockholders' (Deficit)
                
                F-4Notes
                    to Consolidated Financial Statements
                
                F-5
 **PART
          1. FINANCIAL INFORMATION**
  **Item
          1. Financial Statements**
 **SINOBIOMED
                    INC.****AND
                    CONSOLIDATED SUBSIDIARIES*****Consolidated
                    Balance Sheet******(Expressed
                    in US Dollars)******Unaudited-
                    Prepared by
                    Management***
  Note
          1 -
          Basis of Presentation - going concern
  **September
                    30****2007**ASSETSCURRENT
                    ASSETSCash
                    - unrestricted
                
                $
                1,755,450Cash
                    - restricted (Note 4)
                
                
                178Accounts
                    receivable (Note 5)
                
                
                5,436,631Loans
                    to unrelated parties (Note 6)
                
                
                1,367Inventory
                    (Note 7)
                
                
                1,835,411Prepaid
                    expenses
                
                
                296,775Total
                    current assets
                
                
                9,325,812Fixed
                    assets (Note 8)
                
                
                7,419,530Total
                    assets
                
                $
                16,745,342LIABILITIES
                    AND STOCKHOLDERS' (DEFICIT)CURRENT
                    LIABILITIESShort-term
                    loans (Notes 9 and 10)
                
                $
                10,136,520Accounts
                    payable
                
                
                4,334,753Interest
                    payable
                
                
                1,628,868Unearned
                    revenue
                
                
                332,649Shareholder
                    loans (Note 11)
                
                
                1,972,899Liability
                    for purchase of subsidiary
                
                
                1,961,499Liabilities
                    of discontinued operations (Note 3)
                
                
                34,378Other
                    current liabilities
                
                
                2,307,129Total
                    current liabilities
                
                
                22,708,695LONG-TERM
                    LIABILITIESDonation
                    commitment (Note 2)
                
                
                199,800Total
                    liabilities
                
                
                22,908,495COMMITMENTS
                    AND CONTINGENCIES (Notes 9, 10 and 17)MINORITY
                    INTEREST
                
                
                52,146STOCKHOLDERS'
                    (DEFICIT)Common
                    stockAuthorized
                    250,000,000 shares at par value of $ 0.0001 eachIssued
                    and outstanding 130,631,468 shares
                
                
                13,063Additional
                    paid-in capital
                
                
                24,530,713Subscriptions
                    received
                
                
                337,500Accumulated
                    (deficit)
                
                
                (29,746,969
                )Accumulated
                    other comprehensive income (loss)
                
                
                (1,349,606
                )Total
                    stockholders' (deficit)
                
                
                (6,215,299
                )Total
                    liabilities and stockholders' (deficit)
                
                $
                16,745,342
  The
          accompanying notes to the consolidated financial statements are an integral
          part
          of these statements.
  F-1
 
 **SINOBIOMED
                    INC.****AND
                    CONSOLIDATED SUBSIDIARIES*****Consolidated
                    Statements of Operations******(Expressed
                    in US Dollars)******Unaudited-
                    Prepared by
                    Management***
  Three
                    Months Ended September 30
                
                Nine
                    Months Ended September 302007
                
                2006
                
                2007
                
                2006REVENUESales
                
                $
                4,099,940
                
                $
                183,076
                
                $
                4,662,437
                
                $
                533,600Cost
                    of goods sold
                
                
                3,772,761
                
                
                157,795
                
                
                4,161,547
                
                
                429,909Gross
                    profit
                
                
                327,179
                
                
                25,281
                
                
                500,890
                
                
                103,691Other
                    income (Note 15)
                
                
                33,533
                
                
                848,057
                
                
                190,579
                
                
                1,696,114360,712
                
                
                873,338
                
                
                691,469
                
                
                1,799,805EXPENSESAdvertising
                    and promotion
                
                
                562
                
                
                4,513
                
                
                3,227
                
                
                9,073Depreciation
                
                
                51,575
                
                
                9,389
                
                
                96,185
                
                
                43,314Freight
                
                
                769
                
                
                4,636
                
                
                3,804
                
                
                11,744General
                    and administration
                
                
                669,432
                
                
                65,313
                
                
                1,941,636
                
                
                177,238Repairs
                    and maintenance
                
                
                13,980
                
                
                4,237
                
                
                31,879
                
                
                12,103Research
                    and development
                
                
                246,252
                
                
                518,903
                
                
                942,396
                
                
                1,442,731Salaries
                    and benefits
                
                
                229,528
                
                
                85,910
                
                
                500,788
                
                
                258,928Stock-based
                    compensation (Note 16)
                
                
                733,612
                
                
                -
                
                
                1,887,222
                
                
                -Travel
                
                
                117,694
                
                
                12,232
                
                
                256,114
                
                
                34,502Total
                    expenses
                
                
                2,063,404
                
                
                705,133
                
                
                5,663,251
                
                
                1,989,633Net
                    (loss) for the period from operations
                
                
                (1,702,692
                )
                
                168,205
                
                
                (4,971,782
                )
                
                (189,828
                )OTHER
                    INCOME AND EXPENSESInterest
                    and bank charges (Notes 9 and 10)
                
                
                (189,711
                )
                
                (463,211
                )
                
                (871,371
                )
                
                (1,331,312
                )Gain
                    on forgiveness of interest on debt
                
                
                2,284,194
                
                
                -
                
                
                2,284,194
                
                
                -Write-down
                    of goodwill
                
                
                (1,483,905
                )
                
                -
                
                
                (1,483,905
                )
                
                -Losses
                    on loans and guarantees to other parties (Note 6)
                
                
                (75,938
                )
                
                (80,512
                )
                
                (223,049
                )
                
                (207,753
                )Net
                    (loss) for the period before minority interests
                
                
                (1,168,052
                )
                
                (375,518
                )
                
                (5,265,913
                )
                
                (1,728,893
                )Minority
                    interest in loss for the period
                
                
                3,355
                
                
                (684
                )
                
                11,394
                
                
                1,195Net
                    (loss) for the period
                
                $
                (1,164,697
                )
                $
                (376,202
                )
                $
                (5,254,519
                )
                $
                (1,727,698
                )Other
                    comprehensive income (loss)Foreign
                    currency translation
                
                $
                (78,658
                )
                
                (101,627
                )
                $
                (534,439
                )
                
                (304,537
                )Comprehensive
                    (loss)
                
                
                (1,243,355
                )
                $
                (477,829
                )
                
                (5,788,958
                )
                $
                (2,032,235
                )Net
                    (loss) per common share - basic and fully diluted:Net
                    (loss) for the period
                
                $
                (0.01
                )
                $
                (0.01
                )
                $
                (0.04
                )
                $
                (0.02
                )Weighted
                    average number of common stock outstanding126,478,571
                
                
                70,000,000
                
                
                136,622,638
                
                
                70,000,000
  The
          accompanying notes to the consolidated financial statements are an integral
          part
          of these statements.
  F-2
 
 **SINOBIOMED
                    INC.****AND
                    CONSOLIDATED SUBSIDIARIES*****Consolidated
                    Statements of Cash Flows******(Expressed
                    in US Dollars)******Unaudited-
                    Prepared by
                    Management***
  Three
                    Months Ended September 30
                
                Nine
                    Months Ended September 302007
                
                2006
                
                2007
                
                2006Cash
                    from (used in) operating activities:Net
                    (loss)
                
                $
                (1,164,697
                )
                $
                (376,202
                )
                $
                (5,254,519
                )
                $
                (1,727,698
                )Adjustments
                    to reconcile net loss to net cash used in operating
                    activities:Depreciation
                
                
                201,283
                
                
                159,621
                
                
                577,084
                
                
                487,154Loss
                    on disposition of fixed assets
                
                
                145
                
                
                10,416
                
                
                6,844
                
                
                20,833Imputed
                    interest expense on shareholders' loans
                
                
                30,086
                
                
                37,059
                
                
                86,419
                
                
                111,283Minority
                    interest in net income (loss)
                
                
                (3,355
                )
                
                684
                
                
                (11,394
                )
                
                (1,195
                )Shares
                    issued for services
                
                
                -
                
                
                -
                
                
                85,400
                
                
                -Stock-based
                    compensation
                
                
                733,612
                
                
                -
                
                
                1,887,222
                
                
                -Write-down
                    of goodwill
                
                
                1,483,905
                
                
                -
                
                
                1,483,905
                
                
                -Gain
                    on forgiveness of interest on debt
                
                
                (2,284,194
                )
                
                -
                
                
                (2,284,194
                )
                
                -Net
                    change in operating assets and liabilities:Notes
                    receivable
                
                
                -
                
                
                (6,890,070
                )
                
                -
                
                
                (6,890,070
                )Accounts
                    receivable
                
                
                (107,525
                )
                
                3,120,427
                
                
                (156,497
                )
                
                3,211,856Inventory
                
                
                (492,439
                )
                
                63,057
                
                
                (392,319
                )
                
                169,417Prepaid
                    expenses
                
                
                (73,565
                )
                
                66,904
                
                
                (147,070
                )
                
                (4,866
                )Accounts
                    payable
                
                
                431,095
                
                
                1,320
                
                
                327,564
                
                
                (1,168
                )Interest
                    payable
                
                
                (334,903
                )
                
                474,620
                
                
                294,177
                
                
                1,380,894Unearned
                    revenue
                
                
                254,473
                
                
                (403,597
                )
                
                257,506
                
                
                (808,805
                )Other
                    current liabilities
                
                
                (140,441
                )
                
                (44,779
                )
                
                (189,399
                )
                
                197,088Net
                    cash (used in) operating activities
                
                
                (1,466,520
                )
                
                (3,780,540
                )
                
                (3,429,271
                )
                
                (3,855,277
                )Cash
                    (used in) investing activities:Purchases
                    of fixed assets
                
                
                (27,206
                )
                
                (84,847
                )
                
                (120,633
                )
                
                (185,232
                )Proceeds
                    of disposition of fixed assets
                
                
                -
                
                
                -
                
                
                3,911
                
                
                -Cash
                    acquired with purchase of subsidiary
                
                
                498,671
                
                
                -
                
                
                498,671
                
                
                -Payment
                    made on account of purchase of subsidiary
                
                
                (132,480
                )
                
                -
                
                
                (132,480
                )
                
                -Net
                    cash (used in) investing activities
                
                
                338,985
                
                
                (84,847
                )
                
                249,469
                
                
                (185,232
                )Cash
                    from (used in) financing activities:Loans
                    made to unrelated parties
                
                
                -
                
                
                138,682
                
                
                (499,683
                )
                
                -Repayments
                    of loans by unrelated parties
                
                
                -
                
                
                5,025,050
                
                
                650,395
                
                
                5,186,500Share
                    subscriptions received
                
                
                6,407,500
                
                
                -
                
                
                16,577,501
                
                
                -Finders'
                    fees paid in cash
                
                
                (488,500
                )
                
                -
                
                
                (1,360,375
                )
                
                -Loans
                    made to shareholders
                
                
                -
                
                
                2,081
                
                
                -
                
                
                -Repayments
                    of loans by shareholders
                
                
                -
                
                
                102,081
                
                
                -
                
                
                200,230Increase
                    in short-term loans
                
                
                180,794
                
                
                (171,828
                )
                
                924,700
                
                
                -Repayments
                    of short-term loans
                
                
                (3,369,936
                )
                
                (579,013
                )
                
                (12,651,888
                )
                
                (833,462
                )Loans
                    received from shareholders
                
                
                -
                
                
                (22,391
                )
                
                898,693
                
                
                -Repayments
                    of loans from shareholders
                
                
                (463,935
                )
                
                (1,058,139
                )
                
                (956,415
                )
                
                (1,073,985
                )Net
                    cash from (used in) financing activities
                
                
                2,265,923
                
                
                3,436,523
                
                
                3,582,928
                
                
                3,479,283Effect
                    of other comprehensive income (loss) on cash
                
                
                (674,003
                )
                
                294,821
                
                
                (793,778
                )
                
                (3,857
                )Increase
                    (decrease) in cash
                
                
                464,385
                
                
                (134,043
                )
                
                (390,652
                )
                
                (565,083
                )Cash,
                    beginning of period
                
                
                1,291,243
                
                
                348,076
                
                
                2,146,280
                
                
                779,116Cash,
                    end of period
                
                $
                1,755,628
                
                $
                214,033
                
                $
                1,755,628
                
                $
                214,033
  The
          accompanying notes to the consolidated financial statements are an integral
          part
          of these statements.
  F-3
 
 **SINOBIOMED
                    INC.****AND
                    CONSOLIDATED SUBSIDIARIES*****Consolidated
                    Statement of Stockholders' (Deficit)******(Expressed
                    in US Dollars)******Unaudited-
                    Prepared by
                    Management***
  Common
                    Stock
                
                Amount
                
                Additional
                    paid-in capital
                
                Subscriptions
                    received
                
                Common
                    Stock to be issued
                
                Cumulative
                    Other Comprehensive Income (loss)
                
                Accumulated
                    (Deficit)
                
                Stockholders'
                    (Deficit)Balance
                    December 31, 2006
                
                
                70,000,000
                
                $
                7,000
                
                $
                7,660,082
                
                $
                -
                
                $
                -
                
                $
                (815,167
                )
                $
                (24,492,450
                )
                $
                (17,640,535
                )Cancellation
                    of shares
                
                
                (76,000,000
                )
                
                (7,600
                )
                
                7,600
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -Capital
                    changes to give effect to reverse take-over
                
                
                121,000,000
                
                
                12,100
                
                
                (74,073
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (61,973
                )Issue
                    of shares for services
                
                
                100,000
                
                
                10
                
                
                85,390
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                85,400Stock-based
                    compensation
                
                
                -
                
                
                -
                
                
                454,536
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                454,536Subscriptions
                    received for units pursuant to private placements
                
                
                -
                
                
                -
                
                
                -
                
                
                416,000
                
                
                -
                
                
                -
                
                
                -
                
                
                416,000Finders
                    fees payable in shares
                
                
                -
                
                
                -
                
                
                (15,375
                )
                
                -
                
                
                15,375
                
                
                -
                
                
                -
                
                
                -Finders
                    fees payable in cash
                
                
                -
                
                
                -
                
                
                (11,375
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (11,375
                )Imputed
                    interest on shareholders' loans
                
                
                -
                
                
                -
                
                
                27,439
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                27,439Net
                    (loss) for the period
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (175,868
                )
                
                (1,777,344
                )
                
                (1,953,212
                )Balance
                    March 31, 2007
                
                
                115,100,000
                
                $
                11,510
                
                $
                8,134,224
                
                $
                416,000
                
                $
                15,375
                
                $
                (991,035
                )
                $
                (26,269,794
                )
                $
                (18,683,720
                )Stock-based
                    compensation
                
                
                -
                
                
                -
                
                
                699,074
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                699,074Subscriptions
                    received for units pursuant to private placement
                
                
                -
                
                
                -
                
                
                -
                
                
                9,754,001
                
                
                -
                
                
                -
                
                
                -
                
                
                9,754,001Shares
                    issued pursuant to subscriptions
                
                
                10,197,668
                
                
                1,020
                
                
                9,677,981
                
                
                (9,679,001
                )
                
                -
                
                
                -
                
                
                -
                
                
                -Finders
                    fees paid in cash
                
                
                -
                
                
                -
                
                
                (860,500
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (860,500
                )Shares issued
                    as finders' fees
                
                
                85,000
                
                
                8
                
                
                15,367
                
                
                -
                
                
                (15,375
                )
                
                -
                
                
                -
                
                
                -Imputed
                    interest on shareholders' loans
                
                
                -
                
                
                -
                
                
                28,894
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                28,894Net
                    (loss) for the period
                
                
                -
                
                
                -
                
                
                0
                
                
                -
                
                
                -
                
                
                (279,913
                )
                
                (2,312,478
                )
                
                (2,592,391
                )Balance
                    June 30, 2007
                
                
                125,382,668
                
                $
                12,538
                
                $
                17,695,040
                
                $
                491,000
                
                $
                -
                
                $
                (1,270,948
                )
                $
                (28,582,272
                )
                $
                (11,654,642
                )Stock-based
                    compensation
                
                
                -
                
                
                -
                
                
                733,612
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                733,612Subscriptions
                    received for units pursuant to private placement
                
                
                -
                
                
                -
                
                
                -
                
                
                6,407,500
                
                
                -
                
                
                -
                
                
                -
                
                
                6,407,500Shares
                    issued pursuant to subscriptions
                
                
                5,248,800
                
                
                525
                
                
                6,560,475
                
                
                (6,561,000
                )
                
                -
                
                
                -
                
                
                -
                
                
                -Finders
                    fees paid
                
                
                -
                
                
                -
                
                
                (488,500
                )
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (488,500
                )Imputed
                    interest on shareholders' loans
                
                
                -
                
                
                -
                
                
                30,086
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                30,086Net
                    (loss) for the period
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (78,658
                )
                
                (1,164,697
                )
                
                (1,243,355
                )Balance
                    September 30, 2007
                
                
                130,631,468
                
                $
                13,063
                
                $
                24,530,713
                
                $
                337,500
                
                $
                -
                
                $
                (1,349,606
                )
                $
                (29,746,969
                )
                $
                (6,215,299
                )
  F-4
 **SINOBIOMED
            INC.**
 **AND
            CONSOLIDATED SUBSIDIARIES**
 ***Notes
            to Consolidated Financial Statements***
 ***September
            30, 2007***
 ***(Expressed
            in US Dollars)***
 ***Unaudited
            - Prepared by Management***
 **1.
          BASIS OF PRESENTATION - GOING CONCERN**
  These
          consolidated financial statements of Sinobiomed Inc. (the “Company”) have been
          prepared on a going-concern basis which assumes that the Company will be
          able to
          realize assets and discharge liabilities in the normal course of business
          for
          the foreseeable future.
  The
          Company has experienced losses since commencement of operations amounting
          to
          $29,746,969 and has negative working capital and a stockholders’ deficit as of
          September 30, 2007, which raise substantial doubt about the Company's ability
          to
          continue as a going concern. The ability of the Company to meet its commitments
          as they become payable is dependent on the ability of the Company to obtain
          necessary financing or achieving a profitable level of operations. There
          are no
          assurances that the Company will be successful in achieving these
          goals.
  The
          Company is in the process of researching, developing, testing and evaluating
          proposed new pharmaceutical products and has not yet determined whether
          these
          products are technically or economically feasible. The underlying value
          of the
          company is entirely dependent on the successful implementation of one or
          more of
          these products, the ability of the Company to obtain the necessary financing
          to
          complete development and upon future profitable production or sufficient
          proceeds from the disposition of manufacturing rights. Management’s plan is to
          actively search for new sources of capital, including government and
          non-government grants toward research projects and new equity
          investment.
  These
          financial statements do not give effect to adjustments to the amounts and
          classifications to assets and liabilities that would be necessary should
          the
          Company be unable to continue as a going concern.
  **2.
          SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 **Organization
          and Description of Business**
  The
          Company was incorporated under the laws of the State
          of
          Delaware on November 18, 2004 under the name CDoor Corp. The initial business
          plan of the Company was to develop a commercial application utilizing a
          patent
          pertaining to automobiles. In addition, in 2004, the Company commenced
          a capital
          formation activity to effect a Registration Statement on Form SB-2 with
          the
          Securities and Exchange Commission (“SEC”), and raise capital of up to $100,000
          from a self-underwritten offering of 40.0 million shares of newly issued
          common
          stock (post forward stock split) in the public markets. On May 30, 2006,
          the
          Company successfully completed the capital formation activity of its registered
          common stock.
 
 On
          October 16, 2006, the two Directors, officers, and principal stockholders
          of the
          Company agreed to sell 80.0 million shares of the Company’s common stock (post
          forward stock split), constituting 66% of the Company’s issued and outstanding
          stock, to an unrelated third party. The
          purchase closed on November 2, 2006. At the same time, the Company adopted
          a new
          business plan to pursue a reverse merger with Wanxin Bio-Technology Limited
          (“Wanxin BVI”), a British Virgin Islands company, and entered into a merger
          agreement with Wanxin BVI and its stockholders on December 21, 2006. Under
          the
          merger agreement, the stockholders of Wanxin BVI would transfer all the
          shares
          of Wanxin BVI to the Company in return for the issue of 70 million (post
          forward
          stock split) shares of the Company. The new business plan and focus of
          the
          Company centers around the Chinese biopharmaceutical industry.
  F-5
 **SINOBIOMED
            INC.**
 **AND
            CONSOLIDATED SUBSIDIARIES**
 ***Notes
            to Consolidated Financial Statements***
 ***September
            30, 2007***
 ***(Expressed
            in US Dollars)***
 ***Unaudited
            - Prepared by Management***
 The
          transaction to complete the reverse merger with Wanxin BVI was effected
          on
          January 12, 2007, as a recapitalization of the Company, with the net assets
          of
          Wanxin BVI and the Company brought forward at their historical bases, and
          95
          percent of the voting stock of the former majority shareholder of the Company
          (76.0 million shares of common stock, post forward stock split) being
          surrendered to the Company for cancellation and return to the treasury
          such that
          voting control of the Company was obtained by the former stockholders of
          Wanxin
          BVI. The costs associated with the reverse merger were expensed as incurred.
 
 At
          an
          annual meeting of the stockholders of the Company held on March 1, 2007,
          the
          stockholders voted to complete a forward stock split of forty for one of
          the
          Company’s common stock with an effective date of March 2, 2007. All transactions
          involving the Company’s common stock prior to March 2, 2007 and determinations
          of the weighted average number of common shares outstanding have been restated
          to reflect this forward stock split. At the same meeting, a five-member
          board of
          directors was elected and the Company’s name was changed to its present
          name.
 
 Wanxin
          BVI was
          incorporated under the laws of the British Virgin Islands on July 3, 2002.
          From
          the date of incorporation until October 15, 2006, Wanxin
          BVI remained
          dormant. On October 15, 2006 Wanxin
          BVI acquired
          all the shares of Manhing Enterprises Limited (“Manhing”), a company
          incorporated under the laws of Hong Kong on July 2, 1991, in return for
          750
          shares of Wanxin
          BVI .
          The
          purposes of this transaction were to expatriate the operating companies’
ownership and to align legal and beneficial ownership of the group of companies
          prior to the January 12, 2007 reverse takeover. Accordingly the transaction
          has
          been treated as a reorganization of capital rather than a business
          combination.
 
 On
          June
          28, 1996, Manhing and two other unrelated companies founded Shanghai Pudong
          New
          District Wanxing Living Things Co., Ltd. (“Wanxing Bio-Pharmaceuticals”), a
          Sino-Foreign Joint Venture company incorporated with limited liability
          under the
          laws of the People’s Republic of China. Wanxing Bio-Pharmaceuticals has a term
          of 30 years from the date of incorporation, at which time it is to be
          liquidated. Manhing’s original investment and proportionate interest in Wanxing
          Bio-Pharmaceuticals were $1.3 Million and 52%, respectively. On August
          19, 1996,
          Wanxing Bio-Pharmaceuticals changed its name to Shanghai Wanxing Living
          Things
          Co., Ltd. On the same date Manhing transferred a 1% interest in Wanxing
          Bio-Pharmaceuticals to another company for consideration of $25,000. On
          the same
          date Wanxing Bio-Pharmaceuticals increased its registered capital and Manhing
          contributed an additional $895,500 to keep its interest at 51%. In 1998
          Manhing
          acquired an additional interest in Wanxing Bio-Pharmaceuticals for $1,445,000
          and contributed an additional $2,087,500 upon Wanxing Bio-Pharmaceuticals
          increasing its registered capital. After these transactions Manhing held
          a
          63.33% interest in Wanxing Bio-Pharmaceuticals.
  F-6
  **SINOBIOMED
            INC.**
 **AND
            CONSOLIDATED SUBSIDIARIES**
 ***Notes
            to Consolidated Financial Statements***
 ***September
            30, 2007***
 ***(Expressed
            in US Dollars)***
 ***Unaudited
            - Prepared by Management***
 In
          2000,
          Wanxing Bio-Pharmaceuticals changed it name to its current name, Shanghai
          Wanxing Bio-pharmaceuticals Co., Ltd.
 
 In
          2002
          Manhing transferred an 18% interest in Wanxing Bio-Pharmaceuticals to another
          investor.
 
 In
          2003
          Manhing acquired an additional combined 36.6% interest in Wanxing
          Bio-Pharmaceuticals from other shareholders over three transactions. Subsequent
          to these transactions, Manhing’s interest in Wanxing Bio-Pharmaceuticals was
          82%, or $7.38 Million of Wanxing Bio-Pharmaceuticals’ registered capital of $9.0
          Million. On March 14, 2007, the government of China approved an increase
          in the
          registered capital of Wanxing Bio-Pharmaceuticals to $30 Million. Under
          Chinese
          law, Manhing and the minority shareholder are required to invest the additional
          $21 Million in Wanxing Bio-Pharmaceuticals by March 14, 2009. If the additional
          investment is not made by that date, time extensions are available. In
          the three
          months ended September 30, 2007, Manhing has invested $6,102,753 in Wanxing
          Bio-Pharmaceuticals.
 
 Wanxing
          Bio-Pharmaceuticals’ business is research, development, manufacture and sale of
          pharmaceutical products, primarily for the Chinese market. There are three
          product lines currently manufactured and sold as at September 30, 2007
          and
          several other potential products in various stages of research and development.
          The product lines currently sold are Wanferon/Wanferin, formulations of
          recombinant human interferon for treating hepatitis and viral diseases,
          Leflunomide, a drug for the treatment of rheumatoid arthritis, and acidic
          Fibroblast Growth Factor (“aFGF”), a product that treats diabetic ulcers and
          burns and supports recovery from plastic surgery. aFGF entered
          commercial production upon the receipt of the certificate of Good Manufacturing
          Practices, which was issued August 2, 2007. Wanxing Bio-Pharmaceuticals’ offices
          and manufacturing facility are in owned premises located on land used under
          license in the Pudong New Area of Shanghai, China.
 
 On
          April
          14, 2004, Wanxing Bio-Pharmaceuticals and two other unrelated companies
          founded
          Shanghai Wanxing Bio-science Cosmetic Co., Ltd. (“Wanxing Cosmetic”). Wanxing
          Cosmetic’s registered capital is $3.0 Million and Wanxing Bio-Pharmaceuticals’
interest is 50.33% or $1,510,000. Wanxing Cosmetic has a term of thirty
          years
          from the date of issue of the business license, at which time it is to
          be
          liquidated. Wanxing Cosmetic manufactures skin-care products under the
          brand
          name KaiYing and does contract manufacturing for other companies.
 
 On
          August
          6, 2007, Wanxing Bio-Pharmaceuticals, entered into a formal equity transfer
          contract (the “Equity Transfer Contract”) with the equity owners of Suzhou Boai
          Medical Development Company (“Suzhou Boai”), a pharmaceutical distribution
          company organized under the laws of the P.R. China, to acquire 90% of the
          equity
          in Suzhou Boai in exchange for the payment of a transfer fee (the “Transfer
          Fee”) to the equity owners of Suzhou Boai.
 
 Under
          the
          contract, all the equity owners of Suzhou Boai transferred all of their
          equity
          to Wanxing Bio-Pharmaceuticals, except for one equity owner who will retain
          a
          10% interest, for a net Transfer Fee (after deducting and amount equivalent
          to
          the amont of Suzhou Boai’s estimated bad debts) of RMB 15,725,971 (approximately
          USD$2.077 million plus a commitment for Wanxing Bio-Pharmaceuticals to
          donate
          RMB 100,000 annually to a particular non-profit school in the city of Suzhou). On
          August
          26, 2007, the equity owners of Suzhou Boai holding 90% of the equity of
          Suzhou
          Boai formally transferred their equity ownership of Suzhou Boai to Wanxing
          Bio-Pharmaceuticals .
          Suzhou
          Boai has two wholly-owned operating subsidiaries, Suzhou Boai Vaccine Sales
          Co
          Ltd. (“Boai Vaccine Sales”) which sells vaccines, and Suzhou Boai Medical
          Instrument Co Ltd., (“Boai Instrument”) which sells medical
          instruments.
  F-7
  **SINOBIOMED
            INC.**
 **AND
            CONSOLIDATED SUBSIDIARIES**
 ***Notes
            to Consolidated Financial Statements***
 ***September
            30, 2007***
 ***(Expressed
            in US Dollars)***
 ***Unaudited
            - Prepared by Management***
  **Principles
          of Consolidation**
 
 The
          consolidated financial statements include accounts of the Company and its
          subsidiaries, Wanxin BVI, Manhing, Wanxing Bio-Pharmaceuticals, Wanxing
          Cosmetic, Suzhou
          Boai , Boai
          Vaccine Sales and Boai Instrument.
 
 All
          significant inter-company balances and transactions are eliminated. Minority
          interest represents the other shareholders’ interests in the net assets of the
          subsidiaries after deducting the minority interest share of net losses
          of the
          companies.
 
 **Cash
          and Cash Equivalents**
  Cash
          equivalents comprise certain highly liquid instruments with a maturity
          of three
          months or less when purchased. As at September 30, 2007, the Company did
          not
          have any cash equivalents.
  **Inventory**
 
 Inventory
          is carried at the lower of cost and estimated net realizable value. Raw
          materials cost is determined on the first in, first out basis. Manufacturing
          costs are applied to goods in process on a full cost basis. Cost of finished
          goods on hand at the balance sheet date is determined on the first in,
          first out
          basis.
 
 **Revenue
          recognition**
 
 Revenues
          are recognized in accordance with SEC Staff Accounting Bulletin (SAB) No.
          104,
          "Revenue Recognition." Under SAB 104, product revenues (or service revenues)
          are
          recognized when persuasive evidence of an arrangement exists, delivery
          has
          occurred (or service has been performed), the sales price is fixed and
          determinable and collectibility is reasonably assured.
 
 **Concentrations**
 
 The
          Interferon product line is subject to increasing competition in the marketplace,
          with the result that gross margin per unit on sales has decreased markedly
          over
          the years 2005 and 2006 and the nine months ended September
          30 ,
          2007.
  F-8
  **SINOBIOMED
            INC.**
 **AND
            CONSOLIDATED SUBSIDIARIES**
 ***Notes
            to Consolidated Financial Statements***
 ***September
            30, 2007***
 ***(Expressed
            in US Dollars)***
 ***Unaudited
            - Prepared by Management***
 Approximately
          45% of Suzhou Boai’s sales are to its largest five customers and approximately
          80% of its sales are to its largest twenty customers.
 
 Approximately
          85% of Suzhou Boai’s sales are pursuant to a competitive bid process under which
          Suzhou Boai is invited to bid on a price at which it will sell to state-owned
          institutions. There is significant competition in this business. Prices
          at the
          wholesale and retail levels are also subject to control by the government
          and
          may be changed by government decree.
 
 Suzhou
          Boai purchases its products based on negotiated prices. Due to government
          price
          controls and the openness of the bidding process, the amount of variability
          in
          negotiated purchase prices is very limited. Negotiability for the majority
          of
          products is limited to approximately 1.5 % of the purchase price.
 
 **Research
          and Development Expenditures**
  Expenditures
          on research and development activities, including assets acquired for use
          in
          research and development activities, are charged to operations as incurred.
  **Asset
          Retirement Obligations**
  The
          Company has adopted SFAS No. 143, *Accounting
          for Asset Retirement Obligations* which
          requires that the fair value of a liability for an asset retirement obligation
          be recognized in the period in which it is incurred. The Company has no
          asset
          retirement obligations.
  **Fixed
          Assets**
  Fixed
          assets are carried at cost less a provision for depreciation on a straight-line
          basis over their estimated useful lives. Each asset is estimated to have
          a
          residual value of 10% of cost at the end of its useful life. Estimated
          useful
          lives are as follows:
 Buildings
                  
                  
                  20
                      - 30 yearsClimate
                      control equipment
                  
                  
                  8
                      yearsComputer
                      software
                  
                  
                  4
                      - 5 yearsLand
                      license
                  
                  
                  29
                      yearsManufacturing
                      equipment
                  
                  
                  5
                      - 8 yearsOffice
                      furniture and equipment
                  
                  
                  4
                      - 5 yearsOther
                      equipment and fixtures
                  
                  
                  4
                      - 5 yearsRoad
                  
                  
                  20
                      yearsVehicles
                  
                  
                  5
                      - 10 years
  **Advertising
          Expenses**
  Advertising
          expenses are expensed as incurred.
 
 F-9
 **SINOBIOMED
                INC.**
 **AND
                CONSOLIDATED SUBSIDIARIES**
 ***Notes
                to Consolidated Financial Statements***
 ***September
                30, 2007***
 ***(Expressed
                in US Dollars)***
 ***Unaudited
                - Prepared by Management***
 **Foreign
          Currency**
  The
          parent company’s operation of the Company is located in China. It maintains no
          bank accounts. The functional currency is the U.S. Dollar. Transactions
          in
          foreign currencies, if any, are remeasured into the functional currency
          at the
          rate in effect at the time of the transaction. Remeasurement gains and
          losses
          that arise from exchange rate fluctuations are included in income or loss
          from
          operations. Monetary assets and liabilities denominated in foreign currencies
          are presented in the balance sheet at the rate in effect at the balance
          sheet
          date.
 
 Wanxin
          BVI’s operation of the Company is located in the British Virgin Islands and
          Hong
          Kong. It maintains bank accounts in Hong Kong Dollars and US Dollars. The
          functional currency is the U.S. Dollar. Transactions in foreign currencies,
          if
          any, are remeasured into the functional currency at the rate in effect
          at the
          time of the transaction. Remeasurement gains and losses that arise from
          exchange
          rate fluctuations are included in income or loss from operations. Monetary
          assets and liabilities denominated in foreign currencies are presented
          in the
          balance sheet at the rate in effect at the balance sheet date.
 
 Manhing’s
          operation of the Company is located in Hong Kong. It maintains a bank account
          in
          US Dollars. The functional currency is the U.S. Dollar. Transactions in
          foreign
          currencies, if any, are remeasured into the functional currency at the
          rate in
          effect at the time of the transaction. Remeasurement gains and losses that
          arise
          from exchange rate fluctuations are included in income or loss from operations.
          Monetary assets and liabilities denominated in foreign currencies are presented
          in the balance sheet at the rate in effect at the balance sheet
          date.
 
 The
          operations of Wanxing Bio-Pharmaceuticals and Wanxing Cosmetic and the
          Suzhou
          Boai companies are located in China, and their accounting records are maintained
          in Chinese Renminbi Yuan. The functional currency is the Chinese Renminbi
          Yuan.
          Transactions in foreign currencies other than the functional currency,
          if any,
          are remeasured into the functional currency at the rate in effect at the
          time of
          the transaction. Remeasurement gains and losses that arise from exchange
          rate
          fluctuations are included in income or loss from operations. Monetary assets
          and
          liabilities of the subsidiaries denominated in the functional currency
          are
          translated into U.S. Dollars at the rate in effect at the balance sheet
          date.
          Revenue and expenses denominated in the functional currency are translated
          at
          the average exchange rate. Other comprehensive income includes the foreign
          exchange gains and losses that arise from translating from the functional
          currency into U.S. Dollars.
  **Use
          of Estimates**
  The
          preparation of the Company’s consolidated financial statements in conformity
          with generally accepted accounting principles of the United States of America
          requires management to make estimates and assumptions that affect the reported
          amounts of assets and liabilities and disclosure of contingent assets and
          liabilities at the date of the financial statements and the reported amounts
          of
          revenues and expenses during the reporting period. Management makes its
          best
          estimate of the ultimate outcome for these items based on historical trends
          and
          other information available when the financial statements are prepared.
          Actual
          results could differ from those estimates.
  F-10
 **SINOBIOMED
                INC.**
 **AND
                CONSOLIDATED SUBSIDIARIES**
 ***Notes
                to Consolidated Financial Statements***
 ***September
                30, 2007***
 ***(Expressed
                in US Dollars)***
 ***Unaudited
                - Prepared by Management***
 **Loss
          Per Share**
  Basic
          earnings (loss) per share of common stock is computed by dividing the net
          earnings (loss) by the weighted average number of common shares outstanding
          during the period .
          For
          purposes of determining the weighted average number of common shares
          outstanding, the number of shares outstanding as at September
          30 ,
          2007 is
          given effect on a pro forma basis as if the forward stock split which occurred
          in 2007 had occurred by January 1, 2007. Diluted
          earnings (loss) per share is equal to the basic loss per share for the
          nine
          months ended September 30, 2007 and 2006 because common stock equivalents
          outstanding at September 30, 2007 are anti-dilutive.
 
 **Fair
          Value of Financial Instruments**
  The
          Company’s financial instruments consist of cash, accounts receivable, loans
          receivable, short term loans payable and accounts payable at September
          30, 2007.
          Accounts receivable and loans receivable are carried at estimated net realizable
          values net of provisions for uncollectible amounts. The carrying values
          of the
          remaining financial instruments reflected in these financial statements
          approximate their fair values due to the short-term maturity of the instruments.
 
 **Comprehensive
          Income**
  The
          Company has adopted Statement of Financial Accounting Standards (SFAS)
          No. 130,
“Reporting Comprehensive Income”. Comprehensive income includes net income and
          all changes in equity during a period that arise from non-owner sources,
          such as
          foreign currency items and unrealized gains and losses on certain investments
          in
          equity securities.
 
 **Income
          taxes**
  The
          Company records deferred taxes in accordance with Statement of Financial
          Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." The
          statement requires recognition of deferred tax assets and liabilities for
          temporary differences between the tax bases of assets and liabilities and
          the
          amounts at which they are carried in the financial statements, based upon
          the
          enacted tax rates in effect for the year in which the differences are expected
          to reverse. A valuation allowance is established when necessary to reduce
          deferred tax assets to the amount expected to be realized.
 
 **Impairment
          of Long-Lived Assets**
  The
          Company periodically analyzes its long-lived assets for potential impairment,
          assessing the appropriateness of lives and recoverability of unamortized
          balances through measurement of undiscounted operation cash flows in accordance
          with SFAS No. 144, *Accounting
          for the Impairment or Disposal of Long-lived Assets.* If
          impairment is deemed to exist, the asset will be written down to its fair
          value.
          Fair value is generally determined using a discounted cash flow analysis.
          As at
          December 31, 2006, the Company wrote down $512,400 in intangible assets
          acquired
          in 2006 for rights to produce the Company’s Leflunomide product, due to
          uncertainty about future sales potential and profit margins which makes
          it
          impossible to establish a fair value for the asset.
  F-11
 **SINOBIOMED
                INC.**
 **AND
                CONSOLIDATED SUBSIDIARIES**
 ***Notes
                to Consolidated Financial Statements***
 ***September
                30, 2007***
 ***(Expressed
                in US Dollars)***
 ***Unaudited
                - Prepared by Management***
 **Stock-Based
              Compensation**
 
 As
          of
          July 31, 2006, the Company has implemented the provisions of Statement
          of
          Financial Accounting Standards No. 123 (revised 2004), *Share-
          Based Payment* (“SFAS
          No. 123R”), which replaced Statement of Financial Accounting Standards No. 123, *Accounting
          for Stock-Based Compensation* (“SFAS
          No. 123”) as amended by No. 148, *Accounting
          for Stock-Based Compensation - Transition and Disclosure* .
          Compensation expense is recorded in accordance with the fair value recognition
          provisions of SFAS 123R beginning in 2006 for options issued to
          employees.
 
 **New
          Accounting Pronouncements**
 
 In
          December 2004, the FASB issued SFAS No. 153, “Exchanges of Nonmonetary Assets,
          an amendment of APB No. 29, Accounting for Nonmonetary Transactions”. SFAS No.
          153 requires exchanges of productive assets to be accounted for at fair
          value,
          rather than at carryover basis, unless (1) neither the asset received nor
          the
          asset surrendered has a fair value that is determinable within reasonable
          limits
          or (2) the transactions lack commercial substance. SFAS 153 is effective
          for
          nonmonetary asset exchanges occurring in fiscal periods beginning after
          June 15,
          2005. The adoption of FASB No. 153 does not have a material impact on the
          Company’s consolidated financial statements.
  In
          May
          2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections”.
          SFAS No. 154 replaces APB Opinion No. 20 “Accounting Changes” and SFAS No. 3,
“Reporting Accounting Changes in Interim Financial Statements”. SFAS No. 154
          requires retrospective application to prior periods’ financial statements of
          changes in accounting principle, unless it is impracticable to determine
          either
          the period-specific effects or the cumulative effect of the change. The
          adoption
          of SFAS No. 154 does not have any impact on the Company’s consolidated financial
          statements.
 
 In
          March
          2006, the FASB issued SFAS No. 156, *“Accounting
          for Servicing of Financial Assets,”* (“SFAS
          No. 156”), which amends SFAS No. 140, *”
          Accounting for Transfers and Servicing of Financial Assets and Extinguishments
          of Liabilities.* ”
In
          a
          significant change to current guidance, SFAS No. 156 permits an entity
          to choose
          either of the following subsequent measurement methods for each class of
          separately recognized servicing assets and servicing liabilities: (1)
          Amortization Method or (2) Fair Value Measurement Method. SFAS No. 156
          is
          effective as of the beginning of an entity’s first fiscal year that begins after
          September 15, 2006. The
          adoption of SFAS No. 156 does not have any impact on the Company’s consolidated
          financial statements.
  In
          June
          2006, the FASB issued SFAS Board Interpretation No. 48, “ *Accounting
          for Uncertainty in Income Taxes - an Interpretation of FASB statement No.
          109* ”
(“FIN
          48”), which clarifies the accounting for uncertainty in income taxes recognized
          in an enterprise’s financial statements in accordance with FASB No. 109. The
          interpretation prescribes a recognition threshold and measurement attribute
          for
          the financial statement recognition and measurement of a tax position taken
          or
          expected to be taken in a tax return. This interpretation also provides
          guidance
          on derecognition, classification, interest and penalties, accounting in
          interim
          periods, disclosure, and transition. FIN 48 is effective for fiscal years
          beginning after December 15, 2006. Earlier application of the provisions
          of FIN
          48 is encouraged if the enterprise has not yet issued financial statements,
          including interim financial statements, in the period this Interpretation
          is
          adopted. The
          adoption of FIN 48 does not have any impact on the Company’s consolidated
          financial statements.
  F-12
 **SINOBIOMED
                INC.**
 **AND
                CONSOLIDATED SUBSIDIARIES**
 ***Notes
                to Consolidated Financial Statements***
 ***September
                30, 2007***
 ***(Expressed
                in US Dollars)***
 ***Unaudited
                - Prepared by Management***
 In
          September 2006, the FASB issued SFAS No. 157, “ *Fair
          Value Measurements* .”
This
          statement defines fair value, establishes a framework for measuring fair
          value
          in generally accepted accounting principles, and expands disclosure about
          fair
          value measurements. This statement applies under other accounting pronouncements
          that require or permit fair value measurement, the FASB having previously
          concluded in those accounting pronouncements that fair value is the relevant
          measurement attribute. This statement does not require any new fair value
          measurements. However, for some entities, the application of the statement
          will
          change current practice. 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 reviewing the effect,
          if
          any, that this new pronouncement will have on its financial
          statements.
 
 In
          September 2006, the FASB issued SFAS No. 158, “ *Employers’
          Accounting for Defined Benefit Pension and Other Postretirement Plans -
          an
          amendment of FASB Statements No. 87, 88, 106 and 123(R)* .”
This
          statement improves financial reporting by requiring an employer to recognize
          the
          overfunded or underfunded status of a defined benefit postretirement plan
          (other
          than a multi-employer plan) as an asset or liability in its statement of
          financial position and to recognize changes in that funded status in the
          year in
          which the changes occur through comprehensive income of a business entity
          or
          changes in unrestricted net assets for a not-for-profit organization. This
          statement also improves financial reporting by requiring an employer to
          measure
          the funded status of a plan as of the date of its year-end statement of
          financial position, with limited exceptions. The Company does not expect
          the
          adoption of this pronouncement to have a material impact on its financial
          statements.
 
 There
          were various other accounting standards and interpretations recently issued,
          none of which is expected to have a material impact on the Company's financial
          position, operations or cash flows.
  **3.
          BUSINESS COMBINATION**
 
 A
          condensed balance sheet showing the values assigned to assets and liabilities
          of
          Suzhou Boai and consolidated subsidiaries at the date of acquisition, Aug,.
          6,
          2007 is as follows:
 
 Cash
                
                $
                498,671Accounts
                    receivable
                
                
                5,018,246Inventory
                
                
                999,454Prepaid
                    expenses and deposits
                
                
                120,033Fixed
                    assets
                
                
                794,333Total
                    assets
                
                
                7,430,737Short-term
                    loans
                
                
                2,179,650Accounts
                    payable
                
                
                3,742,767Liabilities
                    of discontinued operations
                
                
                34,094Other
                    current liabilities
                
                
                598,156Total
                    liabilities
                
                
                6,554,667Net
                    assets
                
                $
                876,070
  F-13
 **SINOBIOMED
            INC.**
 **AND
            CONSOLIDATED SUBSIDIARIES**
 ***Notes
            to Consolidated Financial Statements***
 ***September
            30, 2007***
 ***(Expressed
            in US Dollars)***
 ***Unaudited
            - Prepared by Management***
 Liabilities
          of discontinued operations are the liabilities of a dormant subsidiary.
          The
          assets of the dormant subsidiary were written down to their estimated realizable
          value of $ nil by Suzhou Boai prior to the acquisition.
 
 The
          excess of the purchase price for Suzhou Boai over 90% of the value of the
          net
          assets acquired has been allocated to goodwill. Goodwill has been written
          down
          to $nil due to uncertainty of realization in light of losses from operations
          in
          recent years and government control over pricing.
 
 **4.
          CASH - RESTRICTED**
 
 Restricted
          cash consists of $178 on deposit pursuant to agreement with a bank to maintain
          funds on deposit to ensure payment of interest on debt.
  **5.
          ACCOUNTS RECEIVABLE**
 
 Trade
          accounts receivable consists of receivable for sales of product on credit.
          Accounts receivable are net of allowance for doubtful accounts in the amount
          of
          $65,306.
  **6.
          LOANS TO UNRELATED PARTIES**
 
 The
          Company has loans receivable from other companies arising from guarantee
          arrangements under which the Company guaranteed the debt of other companies
          and
          has been called on its guarantees (Note 9). The company has $4,665,728
          receivable from these companies including interest accrued on the original
          debts
          since call of the guarantees, but has provided for the full amount of the
          receivables due to uncertainty of collectibility. $223,049 has been charged
          to
          income in the nine months ended September 30, 2007 (2006 - $217,258) in
          respect
          of the provision. Under the terms of the guarantee agreements, the other
          companies have until December 31, 2007 to pay the Company.
 
 The
          Company has fully provided for $12,376 (92,911 Chinese yuan) of additional
          loans
          receivable from sales agents and employees. $700 recovery has been recognized
          in
          income in the nine months ended September 30, 2007 in respect of the
          provision.
  F-14
 **SINOBIOMED
                INC.**
 **AND
                CONSOLIDATED SUBSIDIARIES**
 ***Notes
                to Consolidated Financial Statements***
 ***September
                30, 2007***
 ***(Expressed
                in US Dollars)***
 ***Unaudited
                - Prepared by Management***
 The
          remaining loans receivable are carried at their face amounts, which approximate
          estimated net realizable values based on collection and settlement experience
          subsequent to September 30, 2007. The remaining loans receivable do not
          bear
          interest and have no stated terms of repayment.
  **7.
          INVENTORY**
 
 Inventory
          consists of the following:
  September
                    30,
                    2007Manufactured
                    inventoryRaw
                    materials
                
                $
                85,618Goods
                    in process
                
                
                548,759Finished
                    goods
                
                
                58,447$
                692,824Wholesale
                    inventorySuzhou
                    Boai (primarily pharmaceuticals)
                
                
                965,733Medical
                    instruments
                
                
                161,409Vaccines
                
                
                15,445$
                1,142,587$
                1,835,411
  **8.
          FIXED ASSETS**
 
 Fixed
          assets consist of the following:
  September
                    30,
                    2007Buildings
                
                $
                6,756,990Climate
                    control equipment
                
                
                1,270,638Computer
                    software
                
                
                13,047Land
                    license
                
                
                2,237,760Manufacturing
                    equipment
                
                
                2,066,095Office
                    furniture and equipment
                
                
                254,713Other
                    equipment
                
                
                69,756Road
                
                
                33,529Vehicles
                
                
                737,97013,440,498Less:
                    Accumulated depreciation
                
                
                6,020,968$
                7,419,530
  F-15
 **SINOBIOMED
                INC.**
 **AND
                CONSOLIDATED SUBSIDIARIES**
 ***Notes
                to Consolidated Financial Statements***
 ***September
                30, 2007***
 ***(Expressed
                in US Dollars)***
 ***Unaudited
                - Prepared by Management***
 The
          land
          license is for the use of the land on which the Company’s buildings are
          situated, and is for a term of 30 years from September 18, 1996. At the
          end of
          the license, the Company expects to have an option to renew the
          license.
 
 **9.
          SHORT-TERM LOANS**
 
 The
          Company has obligations under the following bank loan agreements.
 
 Name
                    of Bank
                
                Principal
                    amount
                  September
                    30, 2007
                
                Due
                    date
                
                Interest
                    rate
                  Not
                    due/ overdue
                
                Security
                  (1)Construction
                    Bank
                
                
                1,904,760
                
                
                October
                    16, 2004
                
                
                5.31%
                    / 7.56
                %
                
                Building
                    mortgage (2
                )Shenzhen
                    Development Bank
                
                
                1,305,360
                
                
                June
                    6, 2005
                
                
                6.372%
                    / 9.56
                %
                
                GuaranteeIndustrial
                    Bank
                
                
                4,262,400
                
                
                December
                    19, 2005
                
                
                6.138%
                    / NA
                
                
                GuaranteeBank
                    of Communications (3)
                
                
                932,400
                
                
                December
                    6, 2007
                
                
                Prime
                    plus 1.1
                %
                
                GuaranteeBank
                    of Communications (3)
                
                
                399,600
                
                
                December
                    29, 2007
                
                
                Prime
                    plus 1.1
                %
                
                GuaranteeCommercial
                    Bank (3)
                
                
                399,600
                
                
                October
                    9, 2007
                
                
                5.61
                %
                
                GuaranteeCommercial
                    Bank (3)
                
                
                466,200
                
                
                November
                    25, 2007
                
                
                7.2
                %
                
                GuaranteeCommercial
                    Bank (3)
                
                
                466,200
                
                
                June
                    15, 2008
                
                
                6.84
                %
                
                Guarantee10,136,520
 
 (1)
                Guarantees
                    have been arranged with various companies under cross-guarantee
                    arrangements where each guarantees a loan for the other, or a
                    loan forward
                    basis where Wanxing Bio-Pharmaceuticals borrows and then loans
                    a specified
                    amount to the guarantor in return for the guarantee. The Company
                    has
                    guaranteed debt of two other companies under such arrangements,
                    up to an
                    amount of $3,330,000 (25,000,000 Chinese yuan) plus interest.
                    $4,262,400
                    of the Company’s debt above arose upon the Company being called on its two
                    guarantees. The Company recorded a corresponding loan receivable
                    from the
                    other companies and has made a provision for uncollectibility
                    in the full
                    amount of the receivable (Note 6).
  F-16
 **SINOBIOMED
                  INC.**
 **AND
                  CONSOLIDATED SUBSIDIARIES**
 ***Notes
                  to Consolidated Financial Statements***
 ***September
                  30, 2007***
 ***(Expressed
                  in US Dollars)***
 ***Unaudited
                  - Prepared by Management***
 (2)
                Buildings
                    with carrying value of $3,749,777 have been mortgaged as
                    security.
 (3)
                Each
                    loan of Suzhou Boai is payable in a lump sum when due. Interest
                    is payable
                    monthly. The loans are guaranteed by commercial guarantee companies
                    for
                    fees of 1.6% to 1.8% of the amount of the principal. The fees
                    are
                    amortized to income over the term of the respective loans. Guarantee
                    fees
                    of $115,250 were paid in the nine months ended September 30,
                    2007 and
                    $229,767 was charged to expense in the nine months ended September
                    30,
                    2007. Under the bank loan and guarantee agreements, the Company
                    agrees to
                    notify and get approval from the banks and guarantors for any
                    change in
                    company structure, senior management, cessation of operations,
                    financial
                    difficulties, major litigation or other events that could be
                    detrimental
                    to the interests of the banks and guarantee companies. The two
                    former
                    largest shareholders of Suzhou Boai have provided secondary guarantees
                    to
                    the guarantee companies. The shareholders have pledged real estate
                    with
                    estimated value of $589,000 as security for the secondary
                    guarantees.
  The
          Company is involved in litigation over some of its bank loans and has negotiated
          payment terms on some of its loans. Two of the suits have been settled,
          and a
          further one is outstanding as at September 30, 2007 as more fully described
          in
          Note 10.
 
 Two
          bank
          loans were settled in the three months ended September 30, 2007 resulting
          in
          forgiveness of outstanding accrued interest. in the amount of RMB 20,053,400
          yuan (approximately $2,616,970). The company incurred consulting fees of
          RMB
          2,550,000 yuan (approximately $332,780) for the services of a consultant
          who
          negotiated one of the settlements on the Company’s behalf. The fees have been
          charged against the gain on forgiveness of interest.
  **10.
          LITIGATION**
 
 The
          Company has been sued by the Shenzhen Development Bank to enforce payment
          under
          the loan agreement with that bank and judgment was granted in favor of
          the bank
          by the 1st Secondary People’s Court of Shanghai. On October 25, 2006 the Company
          and the bank entered into a settlement agreement to settle the litigation
          and
          the debt. The debt at that time had a principal balance of 17,800,000 yuan
          (approximately $US 2,205,000). Under the terms of the settlement agreement,
          the
          Company was obligated to pay the bank 5 million yuan (approximately $US
          620,000)
          before October 30, 2006, 3 million yuan (approximately $US 394,000) before
          March
          20, 2007, 3 million yuan (approximately $US 394,000) before June 20, 2007,
          3
          million yuan (approximately $US 394,000) before September 20, 2007 and
          3.8
          million yuan (approximately $US 499,000) plus the balance of accrued interest
          before December 20, 2007. The Company made a payment of 5 million yuan
          in
          compliance with the settlement agreement in
          December 2006. The
          Company defaulted on the settlement agreement by not making the scheduled
          loan
          payment of 3 million yuan (approximately $US 394,000) on March 20, 2007.
          The
          bank granted a waiver of default in respect of this payment until May 30,
          2007.
          The Company made the payment due May 30 and has defaulted on the two payments
          of 3
          million
          yuan each (approximately $US 394,000 each) due by June 20, 2007 and September
          20, 2007 .
 
 F-17
 **SINOBIOMED
                INC.**
 **AND
                CONSOLIDATED SUBSIDIARIES**
 ***Notes
                to Consolidated Financial Statements***
 ***September
                30, 2007***
 ***(Expressed
                in US Dollars)***
 ***Unaudited
                - Prepared by Management***
 **11.
          SHAREHOLDER LOANS**
 
 The
          loans
          from shareholders do not bear interest. $1,658,903 payable to a shareholder
          of a
          subsidiary is due December 31, 2007 and the remainder have no stated repayment
          terms. Imputed interest has been recorded on the shareholder loans at an
          interest rate of 5.31%. The net interest calculated is included in interest
          expense and has been recorded as additional paid-in capital since the imputed
          interest is not payable.
  **12.**  **RELATED
          PARTY TRANSACTIONS**
 
 The
          Company is indebted to the minority shareholder of a subsidiary in the
          amount of
          $1,658,903.
 
 The
          Company is indebted to two persons who are shareholders and directors,
          in
          amounts of 30,000 yuan (approximately $3,996) and $10,000.
 
 Two
          minority shareholders of a subsidiary are indebted to the Company in the
          amount
          of $124,400. The Company has provided an allowance for the full amount
          of this
          indebtedness.
 
 The
          Company has paid the residential rent in Shanghai as part of the remuneration
          for the Chief Executive Officer of the Company for the months of January
          through
          June 2007 in the amount of 132,000 Chinese yuan (approximately
          $17,000).
  **13.
          INCOME TAXES**
 
 The
          Company is subject to Chinese income taxes to the extent of its operations
          in
          China and in the United States should it ever have operations in the United
          States. The company had no income tax expense during the reported periods
          due to
          net operating losses.
 
 A
          reconciliation of income tax expense to the amount computed at the statutory
          rates is as follows:
 September
                      30, 2007Loss
                      for the nine months to September 30, 2007
                  
                  $
                  (5,254,519
                  )Average
                      statutory tax rate in China
                  
                  
                  33
                  %Expected
                      income tax provision
                  
                  $
                  (1,733,991
                  )Tax
                      basis of deferred expenses in excess of book cost
                  
                  
                  637,205Unrecognized
                      tax losses
                  
                  
                  1,096,786Income
                      tax expense
                  
                  $
                  —
  F-18
 **SINOBIOMED
                  INC.**
 **AND
                  CONSOLIDATED SUBSIDIARIES**
 ***Notes
                  to Consolidated Financial Statements***
 ***September
                  30, 2007***
 ***(Expressed
                  in US Dollars)***
 ***Unaudited
                  - Prepared by Management***
 Significant
              components of deferred income tax assets are as
              follows:
 September
                      30, 2007Operating
                      losses carried forward
                  
                  
                  4,622,772Excess
                      of tax basis over book cost of deferred expenses in China
                  
                  $
                  4,559,116Valuation
                      allowance
                  
                  
                  (9,181,888
                  )Net
                      deferred income tax assets
                  
                  $
                  -
  The
          Company has tax losses carried forward for Chinese tax purposes of approximately
          $14,008,000 which will expire in 2012 if not utilized.
  **14.
          COMMON STOCK**
 
 On
          January 12, 2007 the Company issued 1,750,000 pre forward stock split shares
          of
          common stock (equivalent to 70,000,000 post-forward stock split shares)
          to the
          former shareholders of Wanxin BVI in return for all the outstanding shares
          of
          Wanxin BVI as described in Note 1.
 
 On
          March
          1, 2007 the Company increased its authorized capital from 50,000,000 common
          shares to 250,000,000 common shares.
 
 On
          March
          2, 2007 the Company forward split its common stock on a 40-for-1
          basis.
 
 On
          March
          9, 2007 the Company cancelled 76,000,000 (post forward stock split) common
          shares pursuant to the surrender for cancellation of those shares by the
          former
          majority shareholder of the Company.
  On
          March
          22, 2007, the Company issued 100,000 (post forward stock split) shares
          of common
          stock in return for the services of the Company’s Chief Financial Officer for
          the 12 months commencing January 1, 2007. The Company recognized an issue
          price
          for the shares of $0.854 per share, reflecting a discount from market price
          on
          that date due to there being a one-year hold period before the shares can
          be
          sold.
  F-19
 **SINOBIOMED
                INC.**
 **AND
                CONSOLIDATED SUBSIDIARIES**
 ***Notes
                to Consolidated Financial Statements***
 ***September
                30, 2007***
 ***(Expressed
                in US Dollars)***
 ***Unaudited
                - Prepared by Management***
 On
          May
          14, 2007, the Company issued 2,074,668 units (each a “Unit”) to 36
          individuals/entities due to the closing of the Company’s private placement at
          $0.75 per Unit for total gross proceeds of $1,556,001. Each Unit consists
          of one
          share of common stock of the Company and one-half of one share purchase
          warrant,
          with each whole warrant entitling the holder to purchase one additional
          share of
          common stock of the Company at $1.25 per warrant share until May 14, 2009.
 
 In
          addition, on May 14, 2007, the Company issued 1,623,000 units (each a “Unit”) to
          44 individuals/entities due to the closing of the first part of the Company’s
          private placement at $1.00 per Unit for total gross proceeds of $1,623,000.
          Each
          Unit consists of one share of common stock of the Company and one-half
          of one
          share purchase warrant, with each whole warrant entitling the holder to
          purchase
          one additional share of common stock of the Company at $1.75 per warrant
          share
          until May 14, 2009.
 
 On
          May
          24, 2007, the Company issued 3,500,000 units (each a “Unit”) to 2
          individuals/entities due to the closing of the second traunche of the Company’s
          private placement at $1.00 per Unit for total gross proceeds of $3,500,000.
          Each
          Unit consists of one share of common stock of the Company and one-half
          of one
          share purchase warrant, with each whole warrant entitling the holder to
          purchase
          one additional share of common stock of the Company at $1.75 per warrant
          share
          until May 24, 2009.
 
 In
          addition, on May 30, 2007, the Company issued 3,000,000 units (each a “Unit”) to
          4 individuals/entities due to the closing of the third and fourth traunches
          of
          the Company’s private placement at $1.00 per Unit for total gross proceeds of
          $3,000,000. Each Unit consists of one share of common stock of the Company
          and
          one-half of one share purchase warrant, with each whole warrant entitling
          the
          holder to purchase one additional share of common stock of the Company
          at $1.75
          per warrant share until May 30, 2009.
 
 In
          relation to the private placements entered into with the offshore investors,
          the
          Company has paid cash finders’ fees in the amount of $871,875 and finders’ fees
          in the form of 85,000 shares.
  As
          of
          June 30, 2007, the Company has received payment for subscriptions to purchase
          392,800 units (each a “Unit”) of the Company at a price of $1.25 per Unit for
          total proceeds of $491,000. Each Unit consists of one (post forward stock
          split)
          share of common stock of the Company and one-half of one share purchase
          warrant
          (each a “Warrant”). Each whole Warrant entitles the holder thereof to acquire
          one additional share of common stock of the Company at an exercise price
          of
          $2.00 per share with an expiry date of two years from the date of issuance
          of
          the Warrants.
 
 On
          September 11, 2007, the Company issued 5,248,800 units (each a “Unit”) due to
          the closing of the Company’s private placement at $1.25 per Unit for total gross
          proceeds of $6,561,000. Each Unit consists of one share of common stock
          of the
          Company and one-half of one share purchase warrant, with each whole warrant
          entitling the holder to purchase one additional share of common stock of
          the
          Company at $2.00 per warrant share until September 11, 2009.
  F-20
 **SINOBIOMED
            INC.**
 **AND
            CONSOLIDATED SUBSIDIARIES**
 ***Notes
            to Consolidated Financial Statements***
 ***September
            30, 2007***
 ***(Expressed
            in US Dollars)***
 ***Unaudited
            - Prepared by Management***
 In
          relation to the Company’s private placement offering at $1.25 per Unit entered
          into with offshore investors, the Company will be paying: (i) a cash finder’s
          fee in the amount of $488,500 and; (ii) finders’ fees of 107,280 shares of
          common stock of the Company.
  **15.
          OTHER INCOME**
 
 Other
          income includes $163,133 in revenue from product licensing and $27,446
          in grant
          revenue received as funding assistance toward the research and development
          of
          the Company’s malaria vaccine.
  **16.
          STOCK-BASED COMPENSATION**
 
 The
          Company’s 2006 Stock Option and Incentive Plan (the “Plan”) allows the Company
          to award stock options for up to 10,000,000 (post-forward stock split)
          shares to
          its directors, officers, employees, and consultants. The plan is administered
          by
          the Company’s Board of Directors, or its assigned committee, who has discretion
          as to the awards and terms of the options to be issued. Upon exercise of
          options, shares are issued from treasury.
  On
          March
          1, 2007, 6,000,000 stock options were granted under the Plan with the exercise
          price of $0.50 per share. 300,000 of 6,000,000 options vested on March
          1, 2007
          with the reminder to vest in equal monthly proportions on the first day
          of each
          of the next 19 months.
 
 On
          May
          30, 2007, 1,000,000 stock options were granted under the Plan with the
          exercise
          price of $1.90 per share. 500,000 of 1,000,000 options will vest on June
          1, 2009
          with the reminder to vest on June 1, 2011.
 
 A
          summary
          of the Company’s stock option activities is presented below:
 
 Number
                    of options
                
                Weighted
                    Average Exercise Price
                
                Weighted
                    Average Grant-date Fair Value
                
                Aggregate
                    Intrinsic Value**Options
                    Outstanding**,
                    January 1, 2007Options
                    granted:
                
                
                6,000,000
                
                
                0.50
                
                
                0.758
                
                $
                4,545,364**Options
                    Outstanding**,
                    March 31, 2007
                
                
                6,000,000
                
                
                0.50
                
                
                0.758
                
                $
                4,545,364Options
                    granted:
                
                
                1,000,000
                
                
                1.90
                
                
                0.829
                
                $
                828,928**Options
                    Outstanding**,
                    June 30, 2007
                
                
                7,000,000
                
                
                0.70
                
                
                0.768
                
                $
                5,374,292
  F-21
 **SINOBIOMED
            INC.**
 **AND
            CONSOLIDATED SUBSIDIARIES**
 ***Notes
            to Consolidated Financial Statements***
 ***September
            30, 2007***
 ***(Expressed
            in US Dollars)***
 ***Unaudited
            - Prepared by Management***
 
 Compensation
          cost related to options to vest in the future will be recognized as the
          related
          options vest. Outstanding options vest as follows:
 Exercise
                      Price
                  
                  
                  Number
                      of
                        Shares
                  
                  
                  Weighted
                          Average
                          Exercise
                          Price
                  
                  
                  Aggregate
                        Intrinsic
                        ValueVested
                          at June 30,2007
                          and earlier
                  
                  
                  0.50
                  
                  
                  2,400,000
                  
                  
                  0.50
                  
                  $
                  1,818,146Remainder
                      of 2007
                  
                  
                  0.50
                  
                  
                  900,000
                  
                  
                  0.50
                  
                  
                  681,8042008
                  
                  
                  0.50
                  
                  
                  2,700,000
                  
                  
                  0.50
                  
                  
                  2,045,4142009
                  
                  
                  1.90
                  
                  
                  500,000
                  
                  
                  1.90
                  
                  
                  414,4642011
                  
                  
                  1.90
                  
                  
                  500,000
                  
                  
                  1.90
                  
                  
                  414,4647,000,000
                  
                  
                  
                  
                  $
                  5,374,292
  Non-vested
          options are as follows:
 
 Number
                    outstanding
                
                Total
                    fair value
                
                Weighted
                    average grant-date fair valueNon-vested
                    options outstanding, June 30, 2007
                
                
                5,400,000
                
                $
                4,090,828
                
                
                0.758Non-vested
                    options outstanding, September 30, 2007
                
                
                5,500,000
                
                $
                4,239,928
                
                
                0.771Options
                    vested in three months ended September 30, 2007
                
                
                900,000
                
                $
                682,200
                
                
                0.758
 
 If
          not
          previously exercised or canceled, options outstanding at September 30,
          2007 will
          expire as follows:
  Range
                    of Exercise Prices
                
                Number
                
                Weighted
                    average exerciseExpiry
                    Date
                
                High
                
                Low
                
                of
                    Shares
                
                priceYear
                    Ending December 31,2012
                
                
                1.90
                
                
                0.50
                
                
                7,000,000
                
                
                0.70
  F-22
 **SINOBIOMED
            INC.**
 **AND
            CONSOLIDATED SUBSIDIARIES**
 ***Notes
            to Consolidated Financial Statements***
 ***September
            30, 2007***
 ***(Expressed
            in US Dollars)***
 ***Unaudited
            - Prepared by Management***
 The
          fair
          values of the options granted in March and May,,2007 were estimated at
          values of
          $0.758 per share and $0.829 per share using the Black-Scholes Option Pricing
          Model with the following weighted average assumptions:
 
 Volatility:
                
                
                41.0
                %Risk-free
                    interest rate:
                
                
                4.92
                %Dividend
                    yield:
                
                
                —Expected
                    lives(years):
                
                
                5
  Option-pricing
          models require the use of highly subjective estimates and assumptions including
          the expected stock price volatility. Changes in the underlying assumptions
          can
          materially affect the fair value estimates and therefore, in management’s
          opinion, existing models do not necessarily provide reliable measure of
          the fair
          value of the Company’s stock options.
  **17.
          CONTINGENT PATENT RIGHTS COMMITMENTS**
 
 The
          Company has committed to payments for rights to use patented technology,
          contingent upon successful clinical trials and approval of products for
          production as follows:
 
 11
          Million yuan (approximately $1,420,000) will be payable upon completion
          of both
          Phase III clinical trials and approval of new drug certificate for Ethelphazine,
          an anti-tumor drug entering Phase III clinical trials.
 
 20
          Million yuan (approximately $2,590,000) will be payable upon completion
          of both
          Phase III clinical trials and approval of new drug certificate for the
          Company’s
          recombinant malaria vaccine. This drug is expected to enter Phase II clinical
          trials in 2008.
 
 2.5
          Million yuan (approximately $320,000) will be payable in respect of the
          Company’s recombinant Human Stem Cell factor bio-product in two stages. The
          first 1 Million yuan (approximately $129,000) will be due by the time of
          upon
          completion of Phase II trials and 1.5 Million yuan (approximately $194,000)
          will
          be payable upon completion of both Phase III clinical trials and approval
          of the
          product for production. This product is in Phase I trials.
  **18.
          SEGMENTED INFORMATION**
 
 The
          Company is operating in a single geographic market, the People’s Republic of
          China. The Company has three operating segments, the cosmetics business,
          the
          pharmaceuticals business and the pharmaceutical wholesale business. Segment
          revenues, net loss and assets are as follows:
 
 Revenues
                
                Net
                    loss
                
                Total
                    assetsPharmaceuticals
                
                $
                832,565
                
                $
                680,316
                
                $
                10,454,892Cosmetics
                
                
                142,094
                
                
                7,741
                
                
                106,945Pharmaceutical
                    wholesale
                
                
                3,878,357
                
                
                1,514,108
                
                
                5,946,059Parent
                    company administration
                
                
                
                
                
                3,052,354
                
                
                237,446Total
                    consolidated
                
                $
                4,853,016
                
                $
                5,254,519
                
                $
                16,745,342
 
 F-23
 **SINOBIOMED
            INC.**
 **AND
            CONSOLIDATED SUBSIDIARIES**
 ***Notes
            to Consolidated Financial Statements***
 ***September
            30, 2007***
 ***(Expressed
            in US Dollars)***
 ***Unaudited
            - Prepared by Management***
 
 **19.
          MANUFACTURING SHUT-DOWN**
 
 In
          December 2006, Wanxin Bio-pharmaceuticals temporarily closed its manufacturing
          facility while it underwent inspection and review for the purposes of obtaining
          a Good Manufacturing Practice (“GMP”) certificate in respect of its
          manufacturing processes for its aFGF product and renewal of the GMP
          certification for its Interferon product line. The renewal of the GMP
          certificate for Interferon products was issued May 23, 2007 for a period
          of five
          years and production of this product line was recommenced thereafter. The
          official GMP certificate for the aFGF product was received on August 3,
          2007.
          During the shut-down, the Company continued to sell its Interferon products
          from
          inventory of finished goods in stock. Production of Leflunomide, which
          is
          manufactured under licence by another facility, was not affected.
  **20.
          SUBSEQUENT EVENTS**
 
 As
          of
          November 14 2007, the Company has received payment for subscriptions to
          purchase
          548,338 units (each a “Unit”) of the Company at a price of $1.50 per Unit for
          total proceeds of $822,507. Each Unit consists of one share of common stock
          of
          the Company and one-half of one share purchase warrant (each a “Warrant”). Each
          whole Warrant entitles the holder thereof to acquire one additional share
          of
          common stock of the Company at an exercise price of $2.00 per share with
          an
          expiry date of two years from the date of issuance of the Warrants.
  F-24
 **Item
        2. Management’s Discussion and Analysis or Plan of
        Operation**
  You
        should read the following plan of operation together with our financial
        statements and related notes appearing elsewhere in this quarterly report.
        This
        plan of operation contains forward-looking statements that involve risks,
        uncertainties, and assumptions. The actual results may differ materially
        from
        those anticipated in these forward-looking statements as a result of certain
        factors, including, but not limited to, those presented under “Risk Factors” in
        the Form 10-KSB/A filed with the SEC on EDGAR on April 17, 2007.
 
 
 **Overview**
 
 As
        from
        the inception of the Company and until the end of November 2006 we were in
        business of developing a Patent known as the "Car Door Safety Feature", however,
        we determined to change our business plan from the development of the Car
        Door
        Safety Feature Patent and began focusing around the Chinese biopharmaceutical
        industry. On January 12, 2007, the Company completed the reverse merger of
        Wanxin Bio-Technology Limited (“Wanxin”) and all the subsidiaries of Wanxin in
        accordance with the Share Purchase Agreement, whereby the Company acquired
        100%
        of the issued and outstanding shares in the capital of Wanxin (the “Wanxin
        Capital”), through the issuance of 1,750,000 (pre forward stock split) shares of
        common stock of the Company in aggregate to the shareholders of Wanxin on
        a pro
        rata basis in accordance with each Wanxin shareholder’s percentage of ownership
        in Wanxin.
 
 Wanxin
        is
        a company incorporated
        under the laws of the British Virgin Islands. Its only asset at the time
        of the
        reverse merger was 100% ownership of Manhing Enterprises Limited (“Manhing”), a
        company incorporated under the laws of Hong Kong. Manhing’s only asset was 82%
        ownership of Shanghai
        Wanxing Bio-pharmaceuticals Co., Ltd. (“Wanxing Bio-Pharmaceuticals”), a Sino-
        Foreign Joint Venture company incorporated with limited liability under the
        laws
        of the People’s Republic of China. Wanxing Bio-Pharmaceuticals’ business is
        research, development, manufacture and sale of pharmaceutical products,
        primarily for the Chinese market. There are two product lines currently
        manufactured as at September 30, 2007 and several other potential products
        in
        various stages of research and development. The product lines currently
        manufactured are Wanferon/Wanferin, formulations of recombinant human interferon
        for treating hepatitis and viral diseases and Leflunomide, a drug for the
        treatment of rheumatoid arthritis and acidic Fibroblast Growth Factor (“aFGF”)
        (a product that treats diabetic ulcer burns and supports recovery from plastic
        surgery). In May of 2007 the China SFDA imposed new GMP standards and the
        SFDA
        has completed its evaluation of Wanxing Bio-Pharmaceuticals manufacturing
        facilities. Wanxing Bio-Pharmaceuticals has recived verbal notification of
        the
        GMP certification, and awaits receipt of the formal certificate (expected
        imminently) before sales can commence. Wanxing Bio-Pharmaceuticals’ offices and
        manufacturing facility are in owned premises located on land used under license
        in the Pudong New Area of Shanghai, China.
 
 Wanxing
        Bio-Pharmaceuticals is also the owner of 50.33% of Shanghai Wanxing Bio-science
        Cosmetic Co., Ltd. (“Wanxing Cosmetic”). Wanxing Cosmetic manufactures skin-care
        products under the brand name KaiYing.
 
 
 **Current
        Acquisition**
 
 The
        Company through its 82% owned subsidiary, Shanghai Wanxing Bio-pharmaceuticals
        Co., Ltd. (“Shanghai Wanxing”), entered into a formal equity transfer contract
        (the “Equity Transfer Contract”) with the equity owners of Suzhou Boai Medical
        Development Company (“Suzhou Boai”), a pharmaceutical distribution company
        organized under the laws of the P.R. China, to acquire 90% of the equity
        in
        Suzhou Boai in exchange for the payment of a transfer fee (the “Transfer Fee”)
        to the equity owners of Suzhou Boai.
 
 2
 Under
        the
        contract, all the equity owners of Suzhou Boai will transfer all of their
        equity
        to Shanghai Wanxing, except for one equity owner who will retain a 10% interest,
        for an aggregate Transfer Fee of RMB18 million (approximately USD$2.4
        million).
 
 The
        Transfer Fee, the final determination of which is subject to a due diligence
        report, shall be two times the authorized capital of Suzhou Boai (RMB18 million,
        or approx. USD$2,400,000.00). Shanghai Wanxing shall pay: (i) 30% of the
        Transfer Fee (RMB5.4 million, or approx. USD$720,000) three days after signing
        the Equity Transfer Contract; (ii) 55% of the Transfer Fee (RMB9.9 million,
        or
        approx. USD$1,320,000) one week after registration of the equity alteration;
        and
        (iii) 15% of the Transfer Fee (RMB2.7 million, or approx. USD$360,000) a
        half
        year after registration of the equity alteration. After receiving 30% of
        the
        Transfer Fee, the equity owners of Suzhou Boai shall be responsible for
        obtaining government administrative approval and registering the equity
        alteration.
 
 On
        August
        26, 2007, the equity owners of Suzhou Boai holding 90% of the equity of Suzhou
        Boai formally transferred their equity ownership of Suzhou Boai to Shanghai
        Wanxing. On September 3, 2007, 55% of the Transfer Fee RMB 9.9 million
        (US$1,320,000) was then due to the former equity owners of Suzhou Boai, however,
        the Company has not paid this amount as of October 15, 2007 and has received
        an
        extension from the former equity owners of Suzhou Boai on the payment of
        55% of
        the Transfer Fee until November 25, 2007.
 
 As
        of
        August 26, 2007, Shanghai Wanxing is registered as the 90% equity owner of
        Suzhou Boai.
 
 
 **Revenues** **and related cost of Goods sold**
 
 The
        Company has revenues from the Wanferon/Wanferin product line, Leflunomide
        and
        the cosmetics products in the nine months ended September 30, 2007. The Company
        also sells a relatively small amount of reagent, which is product completed
        only
        to the stage where it can still be made into various different recombinant
        protein based pharmaceutical products. On August 6 2007 the Company acquired
        Suzhou Boai Medical Development Company (“Suzhou Boai”), a pharmaceutical
        distribution company with revenues of $3,878,000 for the two months
        since acquisition, resulting in increased consolidated revenues to $4,662,437
        from $533,600 in the comparative period in the year 2006. As a result of
        the acquisition which contributed cost of goods sold of $3,662,000 for two months, the
        related
        cost of goods sold have also increased to $4,161,547 in relation to $429,909
        in
        the comparative period in the year 2006.
 
 
 **Operating
        Expenses**
 
 Operating
        expenses increased from $1,989,633 for the nine months ended September 30,
        2006
        to $5,663,251 for the nine months ended September 30, 2007. This increase
        was
        primarily due to 1) an increase in General and Administrative Expenses and
        2) an
        expense relating to Stock-Based Compensation, being recorded in
        2007.
 
 1)
        General and Administrative Expenses
 
 General
        and administrative expenses increased to $1,941,636 from $177,238 in the
        comparable period in the previous year, partially due to additional professional
        and reporting costs associated with the reverse take-over which occurred
        in the
        period and in being a public company with operating businesses. The increase
        is
        also partially related to general and administrative expenses included in
        2007
        pertaining to two months of consolidated expenses in conjunction with the
        acquisition of Suzhou Boai acquired on August 6, 2007. Also contributing
        to the
        increase in general and administrative expenses was the fact that the company
        has more administrative activity in 2007 associated with getting the aFGF
        product on line. In addition, the Wanxing Bio-pharmaceuticals manufacturing
        facility was closed down between December of 2006 and May 2007, as required
        by
        Chinese law, while that company goes through the application and review process
        for the purposes of obtaining its GMP certification for manufacturing of
        the
        aFGF product and renewing GMP certification for manufacture of the Interferon
        products. As a result, certain overhead and indirect manufacturing costs
        that
        would normally be absorbed into the cost of manufactured inventory have been
        included in expense.
 
 3
 2)
        Stock-based compensation
 
 Stock-based
        compensation expense of $1,887,222 was recognized in the nine months ended
        September 30, 2007 compared to $nil in the comparable period in the previous
        year. The expense represents 1) $1,818,146 as recognition of 40% of 6,000,000
        options with an aggregate value of $4,545,364 granted on March 1, 2007 in
        accordance with the Company’s stock option and incentive plan. Under the terms
        of the grant, 5% of the options vested immediately and another 5% vest on
        the
        first day of each subsequent month until October 1, 2008. and 2) $69,076
        as
        recognition of 4 months amortization pertaining to 1 million options with
        an
        aggregate value of $828,928 granted on May 30, 2007 in accordance to the
        terms
        of the Company's stock option and incentive plan. Under the terms of the
        grant,
        50% of the options will vest on May 30, 2009 and the remaining 50% on May
        30,
        2011.
 
 **Other
        Income and Expenses**
 
 During
        the nine month period ending September 30, 2007, the Company incurred one-time
        non-recurring income and expenses as follows: (a) income from forgiveness
        of
        interest on debt in the amount of $2,284,194; (b) an expense relating to
        the the
        write down of goodwill in the amount of $1,483,905 arising from the excess
        acquisition price over the fair values of the net assets acquired of Suzhou
        Boai
        acquired on August 6, 2007.
 
 
 **Net
        Loss**
 
 As
        a
        result of (a) the increase in our operating expenses (including the stock
        based
        compensation expense) and (b) the other income and expenses our net loss
        for the
        nine months ended September 30, 2007, was $5,254,519, compared to a net loss
        of
        $1,727,698 for the nine months ended September 30, 2006 (of the Wanxin
        subsidiaries) and the related cash used in operating activities in the nine
        months ended September 30, 2007, was $3,429,271, compared to cash used of
        $3,855,277 for the nine months ended September 30, 2006.
 
 
 **Liquidity
        and Capital Resources**
 
 At
        September 30, 2007, we had $1,755,628 of cash on hand and a working capital
        deficiency of $13,382,883. However subsequent to September 30, 2007, we have
        raised additional gross proceeds of $822,507 from private placements. The
        Company is currently in the process of seeking to raise additional funds
        from
        equity and/or debt financing . The Company believes that its cash on hand
        as at
        September 30, 2007, the funds raised subsequent to September 30 in the amount
        of
        $822,507, and the funds it plans to raise from additional equity financing,
        and
        its future revenues from its new products currently entering the market will
        enable the Company to meet its working capital needs and its debt service
        requirements for the following 12 months.
 
  4
  **ITEM
        3. Controls and Procedures**
  **Disclosure
        Controls and Procedures.** The
        Company’s management, with the participation of the Company’s Chief Executive
        Officer and Chief Financial Officer, has evaluated the effectiveness of the
        Company’s disclosure controls and procedures as of the end of the period covered
        by this report. Based on such evaluation, the Chief Executive Officer and
        Chief
        Financial Officer have concluded that, as of the end of such period, the
        Company’s disclosure controls and procedures were effective.
  **Internal
        Control over Financial Reporting.** There
        have been no changes in the Company’s internal controls over the financial
        reporting that occurred during the most recent fiscal quarter that have
        materially affected, or are reasonably likely to materially affect, our internal
        controls over financial reporting.
 
 The
        Company has appointed Chris Metcalf who is a director of the company and
        a
        financial expert to serve as the head of the audit committee.
 
 The
        Company intends to adopt a code of business conduct and ethics as an additional
        element to its financial controls and procedures in the near
        future.
 
 **PART
        11 - OTHER INFORMATION**
  **Item
        1. Legal Proceedings**
  On
        June
        21, 2004, the Company, through Shanghai Wanxing, was sued by the Agriculture
        Bank of China to enforce payment under the loan agreement with that bank.
        The
        Company’s land, building and equipment, new medicine certificates and a bank
        account were hypothecated by the People’s Court of Yangpu District, Shanghai,
        China pursuant to the action. On September 15, 2006 the Company and the bank
        entered into a settlement agreement to settle the litigation and the debt.
        The
        debt at that time had a principal balance of 21.62 million yuan (approximately
        $US 2,680,000). Under the terms of the settlement agreement, the Company
        was
        obligated to pay the bank 12 million yuan (approximately $US 1,487,000) before
        October 31, 2006, 3 million yuan (approximately $US 388,000) before June
        30,
        2007 and 6.62 million yuan (approximately $US 857,000) before October 31,
        2007.
        The Company’s new medicine certificates and bank account were to be released
        upon payment of the first 12 million by October 31, 2006. If the Company
        completely meets this schedule, the Company’s property, building and equipment
        will be released from hypothecation. The Company paid 10 million yuan
        (approximately $US 1,281,000) pursuant to the settlement on October 25, 2006
        and
        received a waiver from the bank of the default in respect of the remaining
        2
        million yuan due until March 31, 2007. The Company did not make the March
        31,
        2007 payment when due and received another waiver from the bank for an
        unspecified time. The Company has repaid this loan in full by June 30, 2007. On
        July
        2, 2007, the Company received a civil judgment order from the Shanghai Yangpu
        District People’s Court that the execution order of the court dated June 21,
        2004 in respect of the litigation by the
        Agriculture Bank of China has
        been
        completed and the case is closed. A recovery for forgiveness of accrued interest
        in the amount of RMB 4,091,546 (approximately $US 538,000) has
        been recognized in the three months ending September 30, 2007.
 
 The
        Company, through Shanghia Wanxing, has been sued by the Industrial and
        Commercial Bank of China to enforce payment under the loan agreement with
        that
        bank and judgment was granted in favour of the bank by the People’s Court of
        Pudong District. On October 25, 2006 the Company and the bank entered into
        a
        settlement agreement to settle the litigation and the debt. The debt at that
        time had a principal balance of 77.15 million yuan (approximately $US
        9,560,000). Under the terms of the settlement agreement, the Company is
        obligated to pay the bank 3 million yuan (approximately $US 394,000) plus
        interest at the rate of 0.561% per month on the remaining balance of the
        first
        49,145,766 (approximately $US 6,458,000) of the principal on the 21 st day of
        each month. The Company is also obligated to pay the bank quarterly interest
        payments at the rate of 0.5775% per month commencing December 20, 2006 on
        the
        remaining balance of the last 28,000,000 yuan (approximately $US 3,679,000)
        of
        the principal. The payments will continue until the debt principal is paid.
        If
        the Company completely meets this schedule, the bank agrees to apply to the
        upper bank authority for a waiver of the interest accumulated prior to the
        entering of the agreement. The Company has made the payments to December
        31,
        2006 in compliance with the settlement but defaulted by
        not
        making the scheduled loan payments in January, February and March, 2007.
        In
        March 2007 the Company entered a new agreement for payment of debt obligations,
        which calls for payment of 3 million yuan (approximately $US 394,000) on
        April
        28, 2007, 2 million yuan (approximately $US 263,000) on May 10, 2007, 10
        million
        yuan (approximately $US 1,314,000) on May 15, 2007, and the balance of principal
        of 52.94 million yuan (approximately $US 6,956,000) plus interest of 1 million
        (approximately $US 131,000) on June 15, 2007. If the company meets this
        schedule, the debt will be repaid and accrued interest in the amount of
        approximately 17.9 million yuan (approximately $US 2,352,000) will be forgiven.
        If the Company does not meet this schedule, the previously-agreed payment
        schedule will still apply. The Company has paid 42,000,000 yuan on these
        loans
        in the three months ended June 30, 2007, but did not pay the entire balance
        by
        June 15, 2007 in accordance with the revised settlement agreement. The bank
        granted the Company an additional deferral to July 15, 2007 with interest
        at the
        rate of 1.4 times the central bank rate from the settlement due date to the
        actual date of payment, and subsequent to June 30, 2007 has granted the Company
        an additional deferral. The Company missed its payment of the balance of
        25,941,653 yuan principal plus 1 million yuan interest (total approximately
        $US
        3,540,000) due on July 15, 2007 under the deferred schedule to the revised
        settlement agreement with the Industrial and Commercial Bank. The bank has
        granted an additional deferral to August 18, 2007, with interest payable
        from
        the due date under the revised settlement agreement to the actual date of
        payment. By September 30, 2007, the Company has paid all of the debt that
        was
        due to Industrial and Commercial Bank of China on August 18, 2007. In addition,
        the interest of 17.8 million yuan (approximately $US 2,338,000) was forgiven
        by
        the Industrial and Commercial Bank of China.
 
 5
 The
        Company, through Shanghia Wanxing, has been sued by the Shenzhen Development
        Bank to enforce payment under the loan agreement with that bank and judgment
        was
        granted in favor of the bank by the 1st Secondary People’s Court of Shanghai. On
        October 25, 2006 the Company and the bank entered into a settlement agreement
        to
        settle the litigation and the debt. The debt at that time had a principal
        balance of 17,800,000 yuan (approximately $US 2,205,000). Under the terms
        of the
        settlement agreement, the Company is obligated to pay the bank 5 million
        yuan
        (approximately $US 620,000) before October 30, 2006, 3 million yuan
        (approximately $US 394,000) before March 20, 2007, 3 million yuan (approximately
        $US 394,000) before June 20, 2007, 3 million yuan (approximately $US 394,000)
        before September 20, 2007 and 3.8 million yuan (approximately $US 499,000)
        plus
        the balance of accrued interest before December 20, 2007. The Company made
        a
        payment of 5 million yuan in compliance with the settlement agreement in
        December 2006. The
        Company defaulted on the settlement agreement by not making the scheduled
        loan
        payment of 3 million yuan (approximately $US 394,000) on March 20, 2007.
        The
        bank has granted a waiver of default in respect of this payment until May
        30,
        2007. The Company made the payment due May 30 and has defaulted on the payment
        of 3
        million
        yuan (approximately $US 394,000) due before June 20, 2007 .
        However, the Shenzhen Development Bank has granted the Company a waiver of
        default on the remaining 9.8 million yuan (approximately $US 1,287,000) owing
        until December 2007.
 
 The
        Company, through Shanghai Wanxing, has been sued by the Industrial and
        Commercial Bank of China to enforce payment under the loan agreement with
        that
        bank and judgment was granted in favour of the bank by the People’s Court of
        Pudong District. On October 25, 2006, Shanghai Wanxing and the bank entered
        into
        a settlement agreement to settle the litigation and the debt. The debt at
        that
        time had a principal balance of RMB 77.15 million (approximately $US 9,760,000).
        Under the terms of the settlement agreement, Shanghai Wanxing is obligated
        to
        pay the bank RMB 3 million (approximately $US 380,000) plus interest at the
        rate
        of 0.561% per month on the remaining balance of the first RMB 49,145,766
        (approximately $US 6,220,000) of the principal on the 21 st day of
        each month. Shanghai Wanxing is also obligated to pay the bank quarterly
        interest payments at the rate of 0.5775% per month commencing December 20,
        2006
        on the remaining balance of the last RMB 28,000,000 (approximately $US
        3,540,000) of the principal. The payments will continue until the debt principal
        is paid. If Shanghai Wanxing completely meets this schedule, the bank agrees
        to
        apply to the upper bank authority for a waiver of the interest accumulated
        prior
        to the entering of the agreement. Currently there is a principal amount owing
        of
        32 million yuan (approximately $US 4,571,430) with interest of 3 million
        yuan
        (approximately $US 428,570), which is expected to be paid in full in
        December.
 
 6
 Other
        than the above mentioned litigation and settlement agreements, there are
        no
        material pending legal proceedings to which we are a party or to which any
        of
        our property is subject and, to the best of our knowledge, no such actions
        against us are contemplated or threatened.
 
 **Item
        2. Unregistered Sales of Equity Securities and Use of
        Proceeds**
 
 On
        September 11, 2007, the Company issued 5,248,800 units (each a “Unit”) to 69
        individuals/ entities due to the closing of the Company’s private placement at
        $1.25 per Unit for total gross proceeds of $6,561,000. Each Unit consists
        of one
        share of common stock of the Company and one-half of one share purchase warrant,
        with each whole warrant entitling the holder to purchase one additional share
        of
        common stock of the Company at $2.00 per warrant share until September 11,
        2009.
        The Company believes that the issuance is exempt from registration under
        Regulation S promulgated under the Act as the securities were issued to the
        individuals/entities through an offshore transaction which was negotiated
        and
        consummated outside of the United States.
 
 In
        relation to the Company’s private placement offering at $1.25 per Unit entered
        into with offshore investors, the Company will be paying: (i) a cash finder’s
        fee in the amount of $401,000 to an entity in Singapore; (ii) a cash finder’s
        fee in the amount of $87,500 to an individual in Hong Kong; (iii) a finder’s fee
        of 80,000 shares of common stock of the Company to Josephine Tang of Malaysia;
        (iv) a finder’s fee of 20,000 shares of common stock of the Company to an entity
        in Hong Kong; (v) a finder’s fee of 4,000 shares of common stock of the Company
        to Hareton Kam Nang Leung of Hong Kong; and (vi) a finder’s fee 3,280 shares of
        common stock of the Company to Jamie Liu of Taiwan. The Company believes
        that
        the finder’s fee share issuances will be exempt from registration under
        Regulation S promulgated under the Act as the securities will be issued to
        the
        individuals through an offshore transaction which was negotiated and consummated
        outside of the United States.
 
 In
        addition, as of November 14 2007, the Company has received payment for
        subscriptions to purchase 548,338 units (each a “Unit”) of the Company at a
        price of $1.50 per Unit for total proceeds of $822,507.00. Each Unit consists
        of
        one share of common stock of the Company and one-half of one share purchase
        warrant (each a “Warrant”). Each whole Warrant entitles the holder thereof to
        acquire one additional share of common stock of the Company at an exercise
        price
        of $2.00 per share with an expiry date of two years from the date of issuance
        of
        the Warrants.
 
 **Item
        3. Defaults Upon Senior Securities**
 
 N/A
 
 **Item
        4. Submission of Matters to a Vote of Security Holders**
 
 N/A
  7
 **Item
        5. Other Information**
  N/A
  **Item
        6. Exhibits**
 (a)
                Exhibit
                    List31.1
                Certificate
                    pursuant to Rule 13a-14(a)31.2
                Certificate
                    pursuant to Rule 13a-14(a)32.1
                Certificate
                    pursuant to 18 U.S.C. §135032.2
                Certificate
                    pursuant to 18 U.S.C. §1350
  8
 
 **SIGNATURES**
  Pursuant
        to the requirements of Section 13 or 15(d) of the Securities Exchange Act
        of
        1934, the Registrant has duly caused this report to be signed on its behalf
        by
        the undersigned, thereunto duly authorized on this 19 day of
        November, 2007
  **SINOBIOMED
                  INC.**
                (Registrant)By:
                  /s/ Ban
                  Jun YangBan
                  Jun YangPresident
                  and Chief Executive Officer
  Pursuant
        to the requirements of the Securities Exchange Act of 1934, this report has
        been
        signed below by the following persons on behalf of the registrant and in
        the
        capacities and on the dates indicated:
  **Signature**
              
              **Title**
              
              **Date**/s/
                  Ban Jun Yang
                Ban
                  Jun Yang
              
              President,
                  CEO and Director
              
              November
                  19 2007/s/
                  Ka Yu
                Ka
                  Yu
              
              Secretary,
                  Treasurer and Director
              
              November
                  19, 2007/s/
                  Asher Zwebner
                Asher
                  Zwebner
              
              Chief
                  Financial Officer
              
              November
                  19, 2007
  9