**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 June 30, 2008




**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 August 8, 2008Common
                Stock, $0.0001 par value
            131,422,086





Traditional
      Small Business Disclosure Format (Check one):





Yes oNox









**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
            
            14ITEM
                3. CONTROLS AND PROCEDURES
            
            17**PART
                II - OTHER INFORMATION**
            
            17ITEM
                1. LEGAL PROCEEDINGS
            
            17ITEM
                2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
                PROCEEDS
            
            18ITEM
                3. DEFAULTS UPON SENIOR SECUTIRIES
            
            18ITEM
                4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
            
            18ITEM
                5. OTHER INFORMATION
            
            18ITEM
                6. EXHIBITS
            
            18SIGNATURES
            
            19










**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.




**PART
      1. FINANCIAL INFORMATION**




**Item
      1. Financial Statements**






**SINOBIOMED
                    INC.****AND
                    CONSOLIDATED SUBSIDIARIES****INDEX
                    TO CONSOLIDATED FINANCIAL STATEMENTS*****Unaudited
                    - Prepared by Management***PageConsolidated
                    Balance Sheet
                
                
                1Consolidated
                    Statements of Operations
                
                
                2Consolidated
                    Statements of Cash Flows
                
                
                3Consolidated
                    Statement of Stockholders' (Deficit)
                
                
                4Notes
                    to Consolidated Financial Statements
                
                
                5
  **SINOBIOMED
                        INC.****AND
                        CONSOLIDATED SUBSIDIARIES*****Consolidated
                        Balance Sheet******(Expressed
                        in US Dollars)******Unaudited-
                        Prepared by Management***Note
                        1 - Basis of Presentation - going concern
                    
                    **June
                        30**
                    
                    **December
                        31****2008**
                    
                    **2007**ASSETSCURRENT
                        ASSETSCash
                        - unrestricted
                    
                    $
                    102,301
                    
                    $
                    64,866Cash
                        - restricted (Note 3)
                    
                    
                    197
                    
                    
                    184Accounts
                        receivable (Note 4)
                    
                    
                    397,418
                    
                    
                    48,071Inventory
                        (Note 6)
                    
                    
                    1,261,529
                    
                    
                    893,402Prepaid
                        expenses and deposits
                    
                    
                    151,258
                    
                    
                    428,841Total
                        current assets
                    
                    
                    1,912,703
                    
                    
                    1,435,364Fixed
                        assets (Note 7)
                    
                    
                    6,700,170
                    
                    
                    6,658,831Total
                        assets
                    
                    $
                    8,612,873
                    
                    $
                    8,094,195LIABILITIES
                        AND STOCKHOLDERS' (DEFICIT)CURRENT
                        LIABILITIESShort-term
                        loans (Notes 8 and 9)
                    
                    $
                    6,483,271
                    
                    $
                    7,105,118Accounts
                        payable
                    
                    
                    1,023,442
                    
                    
                    824,706Interest
                        payable
                    
                    
                    2,267,520
                    
                    
                    1,918,408Unearned
                        revenue
                    
                    
                    265,487
                    
                    
                    170,471Shareholder
                        loans (Note 10)
                    
                    
                    3,818,968
                    
                    
                    2,176,526Other
                        current liabilities
                    
                    
                    2,246,458
                    
                    
                    1,986,284Total
                        current liabilities
                    
                    
                    16,105,146
                    
                    
                    14,181,513COMMITMENTS
                        AND CONTINGENCIES (Notes 1, 2, 3, 5, 8, 9, 10, 11, 12, 13,
                        14,16
                        and 18)STOCKHOLDERS'
                        (DEFICIT)Common
                        stock (Note 13)Authorized
                        250,000,000 shares at par value of $ 0.0001 eachIssued
                        and outstanding 131,422,086 shares (2007 - 131,312,086)
                    
                    
                    13,143
                    
                    
                    13,132Additional
                        paid-in capital
                    
                    
                    28,104,787
                    
                    
                    26,127,797Accumulated
                        (deficit)
                    
                    
                    (33,836,555
                    )
                    
                    (30,761,870
                    )Accumulated
                        other comprehensive income (loss)
                    
                    
                    (1,773,648
                    )
                    
                    (1,466,377
                    )Total
                        stockholders' (deficit)
                    
                    
                    (7,492,273
                    )
                    
                    (6,087,318
                    )Total
                        liabilities and stockholders' (deficit)
                    
                    $
                    8,612,873
                    
                    $
                    8,094,195The
                        accompanying notes to the consolidated financial statements
                        are an
                        integral part of these
                        statements.
  1
 
 **SINOBIOMED
                            INC.****AND
                            CONSOLIDATED
                            SUBSIDIARIES*****Consolidated
                            Statements of
                            Operations******(Expressed
                            in US Dollars)******Unaudited-
                            Prepared by
                            Management***Three
                            Months Ended June 30
                        
                        Six
                            Months Ended June 302008
                        
                        2007
                        
                        2008
                        
                        2007REVENUESales
                        
                        $
                        359,228
                        
                        $
                        346,495
                        
                        $
                        533,321
                        
                        $
                        562,497Cost
                            of goods sold
                        
                        
                        171,762
                        
                        
                        232,722
                        
                        
                        233,863
                        
                        
                        388,786Gross
                            profit
                        
                        
                        187,466
                        
                        
                        113,773
                        
                        
                        299,458
                        
                        
                        173,711Other
                            income
                        
                        
                        482,955
                        
                        
                        848
                        
                        
                        482,955
                        
                        
                        157,046670,421
                        
                        
                        114,621
                        
                        
                        782,413
                        
                        
                        330,757EXPENSESAdvertising
                            and promotion
                        
                        
                        276
                        
                        
                        1,142
                        
                        
                        508
                        
                        
                        2,665Depreciation
                        
                        
                        43,005
                        
                        
                        22,825
                        
                        
                        107,499
                        
                        
                        44,610General
                            and administration
                        
                        
                        391,402
                        
                        
                        1,138,815
                        
                        
                        850,065
                        
                        
                        1,610,439Repairs
                            and maintenance
                        
                        
                        12,055
                        
                        
                        12,293
                        
                        
                        26,118
                        
                        
                        17,899Research
                            and development
                        
                        
                        99,583
                        
                        
                        203,370
                        
                        
                        187,738
                        
                        
                        696,144Salaries
                            and benefits
                        
                        
                        170,059
                        
                        
                        169,477
                        
                        
                        365,798
                        
                        
                        271,260Stock-based
                            compensation (Note 14)
                        
                        
                        917,158
                        
                        
                        699,074
                        
                        
                        1,834,316
                        
                        
                        1,153,610Travel
                        
                        
                        28,595
                        
                        
                        113,154
                        
                        
                        46,161
                        
                        
                        138,420Total
                            expenses
                        
                        
                        1,662,133
                        
                        
                        2,360,150
                        
                        
                        3,418,203
                        
                        
                        3,935,047Net
                            (loss) for the period from operations
                        
                        
                        (991,712
                        )
                        
                        (2,245,529
                        )
                        
                        (2,635,790
                        )
                        
                        (3,604,290
                        )OTHER
                            INCOME AND EXPENSESInterest
                            and bank charges (Notes 8, 9 and 10)
                        
                        
                        (138,364
                        )
                        
                        (327,669
                        )
                        
                        (273,658
                        )
                        
                        (681,660
                        )Losses
                            on loans and guarantees to other parties (Note 5)
                        
                        
                        (85,703
                        )
                        
                        (74,480
                        )
                        
                        (165,237
                        )
                        
                        (147,111
                        )Net
                            (loss) for the period before minority interests(1,215,779
                        )
                        
                        (2,647,678
                        )
                        
                        (3,074,685
                        )
                        
                        (4,433,061
                        )Minority
                            interest in loss for the period
                        
                        
                        -
                        
                        
                        -
                        
                        
                        -
                        
                        
                        8,039Net
                            (loss) for the period
                        
                        $
                        (1,215,779
                        )
                        $
                        (2,647,678
                        )
                        $
                        (3,074,685
                        )
                        $
                        (4,425,022
                        )Other
                            comprehensive income (loss)Foreign
                            currency translation
                        
                        $
                        (112,889
                        )
                        
                        (279,913
                        )
                        $
                        (307,271
                        )
                        
                        (455,781
                        )Comprehensive
                            (loss)
                        
                        
                        (1,328,668
                        )
                        $
                        (2,927,591
                        )
                        
                        (3,381,956
                        )
                        $
                        (4,880,803
                        )Net
                            (loss) per common share - basic and fully diluted:Net
                            (loss) for the period
                        
                        $
                        (0.01
                        )
                        $
                        (0.02
                        )
                        $
                        (0.02
                        )
                        $
                        (0.03
                        )Weighted
                            average number of common stock outstanding131,422,086
                        
                        
                        119,402,613
                        
                        
                        131,408,261
                        
                        
                        141,238,584The
                            accompanying notes to the consolidated financial statements
                            are an
                            integral part of these
                            statements.
  2
 
 **SINOBIOMED
                                INC.****AND
                                CONSOLIDATED SUBSIDIARIES*****Consolidated
                                Statements of Cash Flows******(Expressed
                                in US Dollars)******Unaudited-
                                Prepared by Management***Three
                                Months Ended June 30
                            
                            Six
                                Months Ended June 302008
                            
                            2007
                            
                            2008
                            
                            2007Cash
                                from (used in) operating activities:Net
                                (loss)
                            
                            $
                            (1,215,779
                            )
                            $
                            (2,647,678
                            )
                            $
                            (3,074,685
                            )
                            $
                            (4,425,022
                            )Adjustments
                                to reconcile net loss to net cash used in operating
                                activities:Depreciation
                            
                            
                            211,377
                            
                            
                            191,638
                            
                            
                            413,369
                            
                            
                            375,801Loss
                                on disposition of fixed assets
                            
                            
                            -
                            
                            
                            6,699
                            
                            
                            -
                            
                            
                            6,699Imputed
                                interest expense on shareholders' loans
                            
                            
                            49,107
                            
                            
                            28,894
                            
                            
                            84,935
                            
                            
                            56,333Minority
                                interest in net income (loss)
                            
                            
                            -
                            
                            
                            -
                            
                            
                            -
                            
                            
                            (8,039
                            )Shares
                                issued for services
                            
                            
                            14,437
                            
                            
                            -
                            
                            
                            28,875
                            
                            
                            85,400Stock-based
                                compensation
                            
                            
                            917,158
                            
                            
                            699,074
                            
                            
                            1,834,316
                            
                            
                            1,153,610Net
                                change in operating assets and liabilities:Accounts
                                receivable
                            
                            
                            (258,724
                            )
                            
                            (69,879
                            )
                            
                            (349,347
                            )
                            
                            (48,972
                            )Inventory
                            
                            
                            (225,203
                            )
                            
                            12,932
                            
                            
                            (368,127
                            )
                            
                            100,120Prepaid
                                expenses and deposits
                            
                            
                            185,923
                            
                            
                            39,242
                            
                            
                            306,458
                            
                            
                            (73,505
                            )Accounts
                                payable
                            
                            
                            139,902
                            
                            
                            325,288
                            
                            
                            198,736
                            
                            
                            231,669Interest
                                payable
                            
                            
                            220,645
                            
                            
                            268,954
                            
                            
                            349,112
                            
                            
                            629,080Unearned
                                revenue
                            
                            
                            60,792
                            
                            
                            (13,906
                            )
                            
                            95,016
                            
                            
                            3,033Other
                                current liabilities
                            
                            
                            207,724
                            
                            
                            (195,768
                            )
                            
                            260,174
                            
                            
                            (48,958
                            )Net
                                cash (used in) from operating activities307,359
                            
                            
                            (1,354,510
                            )
                            
                            (221,168
                            )
                            
                            (1,962,751
                            )Cash
                                (used in) investing activities:Purchases
                                of fixed assets
                            
                            
                            (12,156
                            )
                            
                            (71,219
                            )
                            
                            (16,947
                            )
                            
                            (93,427
                            )Proceeds
                                of disposition of fixed assets
                            
                            
                            -
                            
                            
                            -
                            
                            
                            -
                            
                            
                            3,911Net
                                cash (used in) investing activities(12,156
                            )
                            
                            (71,219
                            )
                            
                            (16,947
                            )
                            
                            (89,516
                            )Cash
                                from (used in) financing activities:Loans
                                made to unrelated parties
                            
                            
                            -
                            
                            
                            -
                            
                            
                            -
                            
                            
                            (499,683
                            )Repayments
                                of loans by unrelated parties
                            
                            
                            
                            
                            
                            650,395
                            
                            
                            
                            
                            
                            650,395Share
                                subscriptions received
                            
                            
                            -
                            
                            
                            9,754,001
                            
                            
                            -
                            
                            
                            10,170,001Finders
                                fees paid in cash
                            
                            
                            
                            
                            
                            (871,875
                            )
                            
                            
                            
                            
                            (871,875
                            )Short-term
                                loans received
                            
                            
                            
                            
                            
                            743,906
                            
                            
                            
                            
                            
                            743,906Repayments
                                of short-term loans
                            
                            
                            (322,794
                            )
                            
                            (8,446,512
                            )
                            
                            (1,057,601
                            )
                            
                            (9,281,952
                            )Loans
                                received from shareholders
                            
                            
                            96,990
                            
                            
                            816,017
                            
                            
                            1,482,710
                            
                            
                            898,693Repayments
                                of loans from shareholders
                            
                            
                            (308
                            )
                            
                            (492,480
                            )
                            
                            (20,800
                            )
                            
                            (492,480
                            )Net
                                cash from (used in) financing activities
                            
                            
                            (226,112
                            )
                            
                            2,153,452
                            
                            
                            404,309
                            
                            
                            1,317,005Effect
                                of other comprehensive income (loss) on cash
                            
                            
                            (31,530
                            )
                            
                            125,592
                            
                            
                            (128,746
                            )
                            
                            (119,775
                            )Increase
                                (decrease) in cash
                            
                            
                            37,561
                            
                            
                            853,315
                            
                            
                            37,448
                            
                            
                            (855,037
                            )Cash,
                                beginning of period
                            
                            
                            64,937
                            
                            
                            437,928
                            
                            
                            65,050
                            
                            
                            2,146,280Cash,
                                end of period
                            
                            $
                            102,498
                            
                            $
                            1,291,243
                            
                            $
                            102,498
                            
                            $
                            1,291,243The
                                accompanying notes to the consolidated financial
                                statements are an
                                integral part of these
                                statements.
  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
                                
                                Cumulative
                                    Other Comprehensive Income (loss)
                                
                                Accumulated
                                    (Deficit)
                                
                                Stockholders'
                                    (Deficit)Balance
                                    December 31, 2007
                                
                                
                                131,312,086
                                
                                $
                                13,132
                                
                                $
                                26,127,797
                                
                                $
                                (1,466,377
                                )
                                $
                                (30,761,870
                                )
                                $
                                (6,087,318
                                )Issue
                                    of shares for services
                                
                                
                                110,000
                                
                                
                                11
                                
                                
                                57,739
                                
                                
                                -
                                
                                
                                -
                                
                                
                                57,750Stock-based
                                    compensation
                                
                                
                                -
                                
                                
                                -
                                
                                
                                917,158
                                
                                
                                -
                                
                                
                                -
                                
                                
                                917,158Imputed
                                    interest on shareholders' loans
                                
                                
                                -
                                
                                
                                -
                                
                                
                                35,828
                                
                                
                                -
                                
                                
                                -
                                
                                
                                35,828Net
                                    (loss) for the period
                                
                                
                                -
                                
                                
                                -
                                
                                
                                -
                                
                                
                                (194,382
                                )
                                
                                (1,858,906
                                )
                                
                                (2,053,288
                                )Balance
                                    March 31, 2008
                                
                                
                                131,422,086
                                
                                $
                                13,143
                                
                                $
                                27,138,522
                                
                                $
                                (1,660,759
                                )
                                $
                                (32,620,776
                                )
                                $
                                (7,129,870
                                )Stock-based
                                    compensation
                                
                                
                                -
                                
                                
                                -
                                
                                
                                917,158
                                
                                
                                -
                                
                                
                                -
                                
                                
                                917,158Imputed
                                    interest on shareholders' loans
                                
                                
                                -
                                
                                
                                -
                                
                                
                                49,107
                                
                                
                                -
                                
                                
                                -
                                
                                
                                49,107Net
                                    (loss) for the period
                                
                                
                                -
                                
                                
                                -
                                
                                
                                -
                                
                                
                                (112,889
                                )
                                
                                (1,215,779
                                )
                                
                                (1,328,668
                                )BalanceJune
                                    30,2008
                                
                                
                                131,422,086
                                
                                $
                                13,143
                                
                                $
                                28,104,787
                                
                                $
                                (1,773,648
                                )
                                $
                                (33,836,555
                                )
                                $
                                (7,492,273
                                )
  4
 
 **SINOBIOMED
                              INC.**
 **AND
                              CONSOLIDATED SUBSIDIARIES**
 ***Notes
                              to Consolidated Financial Statements***
 ***June
                              30, 2008***
 ***(Expressed
                              in US Dollars)***
 ***(Unaudited
                              - Prepared by Management)***
 
  **1.
                              BASIS OF PRESENTATION**
  The
                              unaudited financial statements as of June 30, 2008
                              included herein have been
                              prepared without audit pursuant to the rules and regulations
                              of the Securities
                              and Exchange Commission. Certain information and footnote
                              disclosures normally
                              included in financial statements prepared in accordance
                              with United States
                              generally accepted accounting principles have been
                              condensed or omitted pursuant
                              to such rules and regulations. In the opinion of management,
                              all adjustments
                              (consisting of normal recurring accruals) considered
                              necessary for a fair
                              presentation have been included. It is suggested that
                              these financial statements
                              be read in conjunction with the December 31, 2007 audited
                              financial statements
                              and notes thereto.
  **2.
                              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
                              $33,836,555 and has negative working capital and a
                              stockholders’ deficit as of
                              June 30, 2008, 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 achieve 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.
 
 **3.
                              CASH - RESTRICTED**
 
 Restricted
                              cash consists of $197 on deposit pursuant to agreement
                              with a bank to maintain
                              funds on deposit to ensure payment of interest on debt.
  5
 
 **SINOBIOMED
                                  INC.**
 **AND
                                  CONSOLIDATED SUBSIDIARIES**
 ***Notes
                                  to Consolidated Financial Statements***
 ***June
                                  30, 2008***
 ***(Expressed
                                  in US Dollars)***
 ***(Unaudited
                                  - Prepared by Management)***
 
 
 **4.
                              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
                              $9,198.
 
 **5.
                              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 8). The company
                              has $5,360,868
                              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. $161,461
                              has been charged to
                              income in the six months ended June 30, 2008 (2007
                              - $146,862) in respect of the
                              provision. The increase in the amount of the loan receivable
                              and the
                              corresponding provision from year to year arises due
                              to the interest accruing on
                              the debt guaranteed. Under the terms of the guarantee
                              agreements, the other
                              companies had until December 31, 2007 to pay the Company,
                              but nothing has been
                              paid.
 
 The
                              Company has fully provided for $14,065 of additional
                              loans receivable from sales
                              agents and employees. $602 has been charged to expense
                              in the six months ended
                              June 30, 2008 (2007 - $516 recovery) in respect of
                              the provision.
 
 The
                              Company has fully provided for $136,259 of loans receivable
                              from minority
                              shareholders of Wanxing Cosmetic.
 
 **6.
                              INVENTORY**
 
 Inventory
                              consists of the following:
 June
                                        30,
                                        2008
                                    
                                    December
                                        31,
                                        2007Raw
                                        materials
                                    
                                    $
                                    158,997
                                    
                                    $
                                    74,007Goods
                                        in process
                                    
                                    
                                    697,786
                                    
                                    
                                    550,198Finished
                                        goods
                                    
                                    
                                    404,746
                                    
                                    
                                    269,197$
                                    1,261,529
                                    
                                    $
                                    893,402
  6
 
  **SINOBIOMED
                                  INC.**
 **AND
                                  CONSOLIDATED SUBSIDIARIES**
 ***Notes
                                  to Consolidated Financial Statements***
 ***June
                                  30, 2008***
 ***(Expressed
                                  in US Dollars)***
 ***(Unaudited
                                  - Prepared by Management)***
 
 
 **7.
                              FIXED ASSETS**
 
 Fixed
                              assets consist of the following:
  June
                                        30,
                                        2008
                                    
                                    December
                                        31,
                                        2007Buildings
                                    
                                    $
                                    6,636,792
                                    
                                    $
                                    6,220,810Climate
                                        control equipment
                                    
                                    
                                    1,349,147
                                    
                                    
                                    1,265,923Computer
                                        software
                                    
                                    
                                    2,043
                                    
                                    
                                    1,917Land
                                        license
                                    
                                    
                                    2,451,120
                                    
                                    
                                    2,299,920Manufacturing
                                        equipment
                                    
                                    
                                    2,261,339
                                    
                                    
                                    2,119,775Office
                                        furniture and equipment
                                    
                                    
                                    174,546
                                    
                                    
                                    156,532Other
                                        equipment
                                    
                                    
                                    30,958
                                    
                                    
                                    29,048Road
                                    
                                    
                                    36,725
                                    
                                    
                                    34,460Vehicles
                                    
                                    
                                    747,654
                                    
                                    
                                    701,53513,690,324
                                    
                                    
                                    12,829,920Less:
                                        Accumulated depreciation
                                    
                                    
                                    6,990,154
                                    
                                    
                                    6,171,089$
                                    6,700,170
                                    
                                    $
                                    6,658,831
 
 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.
 
 **8.
                              SHORT-TERM LOANS**
 
 The
                              Company has obligations under the following loan agreements.
  Name
                                        of Lender
                                    
                                    Principal
                                        amount
                                      June
                                        30, 2008
                                    
                                    Principal
                                        amount
                                      December
                                        31, 2007
                                    
                                    Due
                                        date
                                    
                                    Interest
                                        rate
                                      Not
                                        due/ overdue
                                    
                                    Security
                                      (1)China
                                        Construction Bank
                                    
                                    $1,925,880
                                    
                                    $1,957,670
                                    
                                    October
                                        16, 2004
                                    
                                    5.31%
                                        / 7.56%
                                    
                                    Building
                                        mortgage (2)Shenzhen
                                        Development Bank
                                    
                                    817,040
                                    
                                    766,640
                                    
                                    June
                                        6, 2005
                                    
                                    6.372%
                                        / 9.56%
                                    
                                    GuaranteeIndustrial
                                        Bank
                                    
                                    2,689,871
                                    
                                    3,395,128
                                    
                                    December
                                        19, 2005
                                    
                                    6.138%
                                        / NA
                                    
                                    Guarantee
                                        (3)Zheda
                                        Haina S&T Holding
                                    
                                    612,780
                                    
                                    574,980
                                    
                                    -
                                    
                                    -
                                    
                                    (4)Luoyang
                                        Zonghong
                                    
                                    437,700
                                    
                                    410,700
                                    
                                    -
                                    
                                    -$6,483,271
                                    
                                    $7,105,118
  7
 
  **SINOBIOMED
                                  INC.**
 **AND
                                  CONSOLIDATED SUBSIDIARIES**
 ***Notes
                                  to Consolidated Financial Statements***
 ***June
                                  30, 2008***
 ***(Expressed
                                  in US Dollars)***
 ***(Unaudited
                                  - Prepared by Management)***
 
 (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 $3,647,500 (25,000,000 Chinese
                                        yuan) plus interest. The
                                        Company’s debt to the Industrial Bank 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
                                        5).
 (2)
                                    Buildings
                                        with carrying value of $3,920,368 have been
                                        mortgaged as
                                        security.
 (3)
                                    A
                                        payment on the Industrial Bank loan in the
                                        six months ended June 30, 2008
                                        was provided by the minority shareholder
                                        of Wanxing Bio-Pharmaceuticals
                                        pursuant to a guarantee provided by the minority
                                        shareholder. The
                                        corresponding debt to the minority shareholder
                                        is included in Shareholder
                                        Loans (Note 10).
 (4)
                                    The
                                        debt to Zheda Haina arose upon the payment
                                        by Zheda Haina of part of the
                                        Company’s loan from Shenzhen Development Bank pursuant
                                        to guarantees
                                        provided to the bank by Zheda Haina in
                                        2004.
 
 The
                              bank
                              loans are all delinquent at June 30, 2008. The Company
                              has been involved in
                              litigation over some of its bank loans. Two of the
                              suits have been settled, and
                              a further one is outstanding as at June 30, 2008 as
                              more fully described in Note
                              9.
 
 On
                              April
                              3, 2008, Wanxin Bio-pharmaceuticals agreed to a revised
                              payment schedule for the
                              bank loan with the China Construction Bank. Under this
                              agreement, Wanxin
                              Bio-pharmaceuticals agreed to pay 4 Million yuan (approximately
                              $567,000) by
                              June 30, 2008 and the balance of principal and interest
                              by September 30, 2008.
                              Wanxin Bio-pharmaceuticals paid 1,200,000 yuan by June
                              30, 2008
 
 On
                              April
                              8, 2008, Wanxin Bio-pharmaceuticals agreed to a revised
                              payment schedule for the
                              bank loan with the Industrial Bank. Under this agreement,
                              Wanxin
                              Bio-pharmaceuticals agreed to pay 3 Million yuan (approximately
                              $425,000) by
                              April 30, 2008, 10 Million yuan (approximately $1,417,000)
                              by June 30, 2008 and
                              the balance of principal and interest by September
                              30, 2008. Wanxin
                              Bio-pharmaceuticals paid 1 Million yuan by April 30,
                              2008 and another 600,000
                              yuan by June 30, 2008.
 
 **9.
                              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 2,437,000 at December 31, 2007 exchange
                              rates). Under the
                              terms of the settlement agreement, the Company was obligated to pay the bank 5
                              million yuan (approximately $US 685,000) before October
                              30, 2006, 3 million yuan
                              (approximately $US 411,000) before March 20, 2007,
                              3 million yuan (approximately
                              $US 411,000) before June 20, 2007, 3 million yuan (approximately
                              $US 411,000)
                              before September 20, 2007 and 3.8 million yuan (approximately
                              $US 522,000) 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, defaulted
                              on the two payments due
                              by
                              June 20, 2007 and September 20, 2007, made payments
                              of 4,200,000 yuan after
                              September 30, 2007, and has defaulted on the payment
                              due December 20,
                              2007 .
  8
 
  **SINOBIOMED
                                  INC.**
 **AND
                                  CONSOLIDATED SUBSIDIARIES**
 ***Notes
                                  to Consolidated Financial Statements***
 ***June
                                  30, 2008***
 ***(Expressed
                                  in US Dollars)***
 ***(Unaudited
                                  - Prepared by Management)***
 
 
 **10.
                              SHAREHOLDER LOANS**
 
 The
                              loans
                              from shareholders in the aggregate amount of $3,818,968
                              do not bear interest.
                              $1,962,972 payable to a minority shareholder of a subsidiary
                              was due December
                              31, 2007, $500,000 is payable on demand, 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.
 
 **11.**  **RELATED
                              PARTY TRANSACTIONS**
 
 The
                              Company is indebted to a company related to a shareholder
                              in the amount of
                              $300,000 and to the minority shareholder of a subsidiary
                              in the amount of
                              $2,882,142, and to four individual shareholders in
                              the aggregate amount of
                              $636,826 for shareholders’ loans.
 
 The
                              Company has paid or accrued finders’ fees to shareholders and a company related
                              to a shareholder in the amounts of $1,295,875 and 20,000
                              shares.
 
 The
                              Company has incurred fees and associated expenses in
                              the amount of $40,420 to a
                              company related to a shareholder for services. The
                              Company has committed to pay
                              that company $2,000 per month plus expenses for services.
                              The arrangement may be
                              terminated by either party on one month notice.
 
 The
                              Company has committed to purchase consulting services
                              from a shareholder at the
                              rate of $10,000 per month for five years from June
                              30, 2007. The Company is
                              indebted to the shareholder in the amount of $90,000
                              at March 31, 2008 in
                              respect of these fees.
 
 The
                              Company is indebted to two persons who are shareholders
                              and directors, in
                              amounts of $4,845 and $65,000 for shareholders’ loans.
 
 Two
                              minority shareholders of a subsidiary are indebted
                              to the Company in the amount
                              of $136,259. The Company has provided an allowance
                              for the full amount of this
                              indebtedness (Note 5).
 
 **12.
                              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 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:
  Six
                                        months ended June 30, 2008Loss
                                        for the period
                                    
                                    $
                                    (3,074,685
                                    )Average
                                        statutory tax rate in China
                                    
                                    
                                    33
                                    %Expected
                                        income tax provision
                                    
                                    $
                                    (1,014,646
                                    )Non-deductible
                                        stock-based compensation and imputed interest
                                        expenses
                                    
                                    
                                    633,353Tax
                                        basis of deferred expenses in excess of book
                                        cost
                                    
                                    
                                    (43,064
                                    )Unrecognized
                                        tax losses
                                    
                                    
                                    424,357Income
                                        tax expense
                                    
                                    $
                                    --
  Significant
                              components of deferred income tax assets are as follows:
  June
                                        30, 2008Operating
                                        losses carried forward
                                    
                                    
                                    4,406,033Excess
                                        of tax basis over book cost of deferred expenses
                                        in China
                                    
                                    $
                                    4,704,201Valuation
                                        allowance
                                    
                                    
                                    (9,110,204
                                    )Net
                                        deferred income tax assets
                                    
                                    $
                                    -
  9
 
  **SINOBIOMED
                                  INC.**
 **AND
                                  CONSOLIDATED SUBSIDIARIES**
 ***Notes
                                  to Consolidated Financial Statements***
 ***June
                                  30, 2008***
 ***(Expressed
                                  in US Dollars)***
 ***(Unaudited
                                  - Prepared by Management)***
  The
                              Company has tax losses carried forward for Chinese
                              tax purposes of approximately
                              $13,350,000 which will expire in 2013 if not utilized.
 
 **13.
                              COMMON STOCK**
 
 On
                              January 23, 2008, the Company issued 110,000 shares
                              of common stock in return
                              for the services of the Company’s Chief Financial Officer for the 12 months
                              commencing January 1, 2008. The Company recognized
                              an issue price for the shares
                              of $0.525 per share, reflecting a discount from market
                              price on that date due to
                              there being a hold period before the shares can be
                              sold.
 
 Warrants
                              outstanding and exercisable as of June 30, 2008 are
                              as follows:
 
 Exercise
                                        Price
                                    
                                    Number
                                        of Warrants
                                    
                                    Expiry
                                        Date$
                                        1.25
                                    
                                    1,012,334
                                    
                                    May
                                        14, 2009$
                                        1.75
                                    
                                    4,061,500
                                    
                                    May
                                        14 to May 30, 2009$
                                        2.00
                                    
                                    2,624,400
                                    
                                    September
                                        11, 2009$
                                        2.00
                                    
                                    274,169
                                    
                                    December
                                        5, 20097,972,403
 
 **14.
                              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.
  10
 
  **SINOBIOMED
                                  INC.**
 **AND
                                  CONSOLIDATED SUBSIDIARIES**
 ***Notes
                                  to Consolidated Financial Statements***
 ***June
                                  30, 2008***
 ***(Expressed
                                  in US Dollars)***
 ***(Unaudited
                                  - Prepared by Management)***
 
 On
                              November 29, 2007, 1,000,000 stock options were granted
                              under the Plan with the
                              exercise price of $1.67 per share. 50,000 of 1,000,000
                              options vested on
                              November 29, 2007 with the reminder to vest in equal
                              monthly proportions on the
                              first day of each of the next 19 months.
 
 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, 2008
                                    
                                    
                                    8,000,000
                                    
                                    
                                    0.82
                                    
                                    
                                    0.825
                                    
                                    $
                                    6,597,922Options
                                        granted:
                                    
                                    
                                    -**Options
                                        Outstanding**,
                                        June 30, 2008
                                    
                                    
                                    8,000,000
                                    
                                    
                                    0.82
                                    
                                    
                                    0.825
                                    
                                    $
                                    6,597,922
 
 Compensation
                              cost related to options to vest in the future will
                              be recognized as the related
                              options vest. Outstanding options vest as follows:
  Weighted
                                    
                                    Compensation
                                    
                                    AggregateRange
                                        of Exercise
                                    
                                    
                                    
                                    Average
                                    
                                    Expense
                                        to be
                                    
                                    IntrinsicVested
                                        at
                                    
                                    Prices
                                    
                                    Number
                                    
                                    Exercise
                                    
                                    Recognized
                                    
                                    Valueof
                                        Shares
                                    
                                    PriceMarch
                                        31,2008 and earlier
                                    
                                    0.50
                                        to 1.90
                                    
                                    5,450,000
                                    
                                    0.58
                                    
                                    
                                    
                                    $4,291,830Remainder
                                        of 2008
                                    
                                    0.50
                                    
                                    1,200,000
                                    
                                    0.79
                                    
                                    $1,048,894
                                    
                                    1,048,8942009
                                    
                                    1.90
                                    
                                    850,000
                                    
                                    1.81
                                    
                                    842,734
                                    
                                    842,7342011
                                    
                                    1.90
                                    
                                    500,000
                                    
                                    1.91
                                    
                                    414,464
                                    
                                    414,4648,000,000
                                    
                                    
                                    
                                    
                                    
                                    $6,597,922
 
 Non-vested
                              options are as follows:
  Number
                                        outstanding
                                    
                                    Total
                                        fair value
                                    
                                    Weighted
                                        average grant-date fair valueNon-vested
                                        options outstanding, January 1, 2008
                                    
                                    
                                    4,650,000
                                    
                                    $
                                    4,037,450
                                    
                                    
                                    -Non-vested
                                        options outstanding, June 30, 2008
                                    
                                    
                                    2,550,000
                                    
                                    $
                                    2,304,200
                                    
                                    
                                    0.90Options
                                        vested in six months ended June 30, 2008
                                    
                                    
                                    2,100,000
                                    
                                    $
                                    1,733,250
                                    
                                    $
                                    0.825
  11
 
  **SINOBIOMED
                                  INC.**
 **AND
                                  CONSOLIDATED SUBSIDIARIES**
 ***Notes
                                  to Consolidated Financial Statements***
 ***June
                                  30, 2008***
 ***(Expressed
                                  in US Dollars)***
 ***(Unaudited
                                  - Prepared by Management)***
 
 If
                              not
                              previously exercised or canceled, options outstanding
                              at June 30, 2008 will
                              expire as follows:
  Range
                                      of Exercise Prices
                                    
                                    Number
                                    
                                    Weighted
                                        averageExpiry
                                        Date
                                    
                                    High
                                    
                                    Low
                                    
                                    of
                                        Shares
                                    
                                    exercise
                                        priceYear
                                        Ending December 31,2012
                                    
                                    
                                    1.90
                                    
                                    
                                    0.50
                                    
                                    
                                    8,000,000
                                    
                                    
                                    0.82
 
 The
                              fair
                              values of the options granted in March, May and November,
                              2007 were estimated at
                              values of $0.758 per share, $0.829 per share and $1.223,
                              respectively, using the
                              Black-Scholes Option Pricing Model with the following
                              weighted average
                              assumptions:
 
 March
                                        and May, 2007
                                    
                                    November,
                                        2007Volatility:
                                    41.0%
                                    
                                    94%Risk-free
                                        interest rate:
                                    4.92%
                                    
                                    3.42%Dividend
                                        yield:
                                    --
                                    
                                    --Expected
                                        lives(years):
                                    5
                                    
                                    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.
 
 **15.
                              OTHER INCOME**
  Other
                              income consists of $162,955 in government grant revenue
                              to support clinical
                              trials of the Company’s malaria vaccine and $320,000 contract revenue from
                              hiring out part of the Company’s research and manufacturing facilities and staff
                              to another company.
 
 **16.
                              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 $1,605,000) 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.
  12
 
  **SINOBIOMED
                                  INC.**
 **AND
                                  CONSOLIDATED SUBSIDIARIES**
 ***Notes
                                  to Consolidated Financial Statements***
 ***June
                                  30, 2008***
 ***(Expressed
                                  in US Dollars)***
 ***(Unaudited
                                  - Prepared by Management)***
 
 20
                              Million yuan (approximately $2,918,000) 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 $365,000) 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 $146,000) will
                              be due by the time of upon
                              completion of Phase II trials and 1.5 Million yuan
                              (approximately $219,000) 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.
 
 **17.
                              SEGMENTED INFORMATION**
 
 The
                              Company is operating in a single geographic market,
                              the People’s Republic of
                              China. The Company has two operating segments, the
                              cosmetics business and the
                              pharmaceuticals business. Segment revenues, net loss
                              and assets are as
                              follows:
 
 Revenues
                                    
                                    Net
                                        loss (income)
                                    
                                    Total
                                        assetsPharmaceuticals
                                    
                                    $
                                    496,854
                                    
                                    $
                                    1,123,034
                                    
                                    $
                                    7,907,753Cosmetics
                                    
                                    
                                    359,422
                                    
                                    
                                    (149,124
                                    )
                                    
                                    505,674Parent
                                        company administration
                                    
                                    
                                    
                                    
                                    
                                    2,260,775
                                    
                                    
                                    39,446Total
                                        consolidated
                                    
                                    $
                                    856,276
                                    
                                    $
                                    3,234,685
                                    
                                    $
                                    8,452,873
 
 **18.
                              SUBSEQUENT EVENTS**
 
 On
                              July
                              30, 2008 the Company closed an initial $100,000 portion
                              of a $500,000 financing
                              pursuant to a Non-U.S. and Non-Canadian Private Placement
                              Subscription
                              Agreement, dated June 30, 2008, between the Company
                              and an Asian-based
                              investment fund. The Company issued a $100,000 principal
                              amount convertible
                              debenture due July 1, 2011, convertible into shares
                              of th Company’s common
                              stock, par value $0.0001, at a price of $0.30 per share
                              together with 300,000
                              common share purchase warrants (each a “Warrant”) and 600,000 common share
                              purchase piggyback warrants (each a “Piggyback Warrant”). Each Warrant entitles
                              the holder thereof to acquire one additional share
                              of common stock in the
                              capital of the Company at a price of $0.33 per share
                              (each a “ *Warrant
                              Share* ”)
                              for
                              the period ending at 4:00 p.m. (Pacific Standard Time)
                              on December 1, 2008 (the
“ *Warrant
                              Exercise Period* ”).
                              Each
                              Piggyback Warrant, which will only be available for
                              exercise by the holder
                              thereof if the Warrants have been exercised in full
                              (unless subsequently waived
                              in writing by the Company), entitles the holder thereof
                              to acquire one
                              additional share of common stock in the capital of
                              the Company at a price of
                              $0.37 per share (each a “ *Piggyback
                              Warrant Share* ”)
                              for
                              the period ending at 4:00 p.m. (Pacific Standard Time)
                              on July 1, 2010 (the
“ *Piggyback
                              Warrant Exercise Period* ”).
 
 Interest
                              is payable on the principal amount of the convertible
                              debenture outstanding at
                              8% per annum, calculated and payable quarterly in arrears.
                              Interest payable
                              under the convertible debenture shall be paid on the
                              last day of September,
                              December, March and June of each year. The holder of
                              the convertible debenture
                              has the option to convert any accrued and unpaid interest
                              due at the time of a
                              conversion.
  13





**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 filed with the SEC on EDGAR on April 14, 2008.




**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. (“Shanghai Wanxing”), a Sino-Foreign Joint
      Venture company incorporated with limited liability under the laws of the
      People’s Republic of China. Shanghai Wanxing’s business is research,
      development, manufacture and sale of pharmaceutical products, primarily for
      the
      Chinese market. There are currently 10 products approved or in development:
      three on the market, four in clinical trials and three in R&D. Shanghai
      Wanxing’s products respond to a wide range of diseases, including malaria and
      hepatitis. Currently manufactured product lines include 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.





Shanghai
      Wanxing 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.





During
      the quarter ended March 31, 2008, Shanghai Wanxing was approved to receive
      grants from government funding of RMB 9 million (US$1.24 million) to continue
      the clinical trial of its recombinant malaria vaccine and advance its
      development with partner Second Military Medical University (“SMMU”). The
      funding is the largest the Chinese government has ever granted to a
      biopharmaceutical company.




The
      grant
      from China’s Ministry of Science and Technology, awarded jointly to Shanghai
      Wanxing and SMMU, is part of the key “863 Program” to support technology
      development as part of the government’s 11th five-year plan. Two-thirds of the
      fund will support Shanghai Wanxing’s planned Phase II Clinical Trial of the
      patented PfCP2.9 vaccine to be conducted in epidemic areas. The current research
      schedule calls for the application to the Chinese Food and Drug Administration
      (SFDA) for the Phase II Clinical trial in malaria endemic areas to be submitted
      by end of 2008.




The
      balance of the fund will support the joint development by Shanghai Wanxing
      and
      SMMU of a multistage, multivalent vaccine based on PfCP2.9. The multistage,
      multivalent vaccine, which seeks to improve immunogenicity and extend the immune
      period, is expected to enter into clinical trials in 2009.




14





**Revenues**





The
      Company has revenues from the Wanferon/Wanferin product line, aFGF, and the
      cosmetics products in the three months ended June 30, 2008. Shanghai Wanxing
      is
      involved in a dispute with the company which manufactures the Leflunomide
      product under license. Should this dispute not be resolved, we may not realize
      further sales of the Leflunomide product. The Company also sells a relatively
      small amount of reagent, which is a product completed only to the stage where
      it
      can still be made into various different recombinant protein based
      pharmaceutical products.





Wanferon/Wanferin
      and interferon reagent sales accounted for $137,645 of sales revenue and $55,102
      of cost of sales in the six months ended June 30, 2008, as compared to $452,899
      of sales revenue and $325,145 of cost of sales in the six months ended June
      30,
      2007. The market for this product line is very competitive, and selling prices
      and volume have been decreasing through the 2006, 2007 years and to date in
      2008
      due to increased competition.





There
      has
      been no sales of the Leflunomide product and therefore no revenue or costs
      attributable to the product for the six months ended June 30, 2008 ***.***





aFGF
      sales accounted for $36,254 of sales revenue and $57,328 of cost of sales in
      the
      six months ended June 30, 2008. There was no sales revenue or cost of sales
      of
      aFGF in the six months ended June 30, 2007 as the product was awaiting
      regulatory approval at the time.





Cosmetics
      sales accounted for $359,422 of sales revenue and $121,433 of cost of sales
      in
      the six months ended June 30, 2008, as compared to $109,598 of sales revenue
      and
      $63,641 of cost of sales in the six months ended June 30, 2007.


Other
        income in the six months ended June 30, 2008 consists of $162,955 in government
        grant revenue to support clinical trials of the Company’s malaria vaccine and
        $320,000 contract revenue from hiring out part of the Company’s research and
        manufacturing facilities and staff to another company. Other income in the
        six
        months ended June 30, 2007 included $129,600 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.




**Operating
      Expenses**





Operating
      expenses decreased from $3,935,047 for the six months ended June 30, 2007 to
      $3,418,204 for the six months ended June 30, 2008. This decrease was primarily
      due to (1) a decrease in General and Administrative expenses charged to
      operations due to the closure of the manufacturing facility for government
      inspection and recertification for most of the six months ended June 30, 2007,
      which resulted in far less expense charged to cost of goods manufactured in
      2007
      than would otherwise have be charged, and (2) reduction in research and
      development activity so far in 2008, partly offset by (3) an increase in
      expenses relating to Stock-Based Compensation on options issued to employees
      and
      consultants .




**Stock-based
      compensation**





Stock-based
      compensation expense of $1,834,316 was recognized in the six months ended June
      30, 2008 compared to $1,153,610 in the comparable period in the previous year.
      The expense represents:


·
            $1,363,610
                as recognition of six months amortization 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;


·
            $103,614
                as recognition of six months amortization pertaining to 1 million
                options
                with an aggregate value of $828,928 granted on May 30, 2007 in accordance
                with 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; and


·
            $367,092
                as recognition of six months amortization pertaining to 1 million
                options
                with an aggregate value of $1,223,630 granted on November 29, 2007
                in
                accordance with the terms of 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 thereafter
                starting on January 1 2008.




15




**Other
      Income and Expenses**





During
      the six month period ending June 30, 2008, the Company's interest expense
      (included in other income and expenses) was reduced from $681,660 from that
      in
      the comparable period to $273,658, attributable to a substantial reduction
      of
      its bank debt in 2007.




**Net
      Loss**


As
        a
        combined result of (1) the decrease in our operating expenses, and (2) the
        reduction in other income and expenses, our net loss for the six months ended
        June 30, 2008, was $3,074,685, compared to a net loss of $4,425,022 for the
        six
        months ended June 30, 2007 and the related cash used in operating activities
        in
        the six months ended June 30, 2008, was $221,168, compared to cash used of
        $1,962,751 for the six months ended June 30, 2007.




**Liquidity
      and Capital Resources**





At
      June
      30, 2008, we had $102,498 of cash on hand and a working capital deficiency
      of
      $14,192,442. 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 June 30, 2008, and the funds it expects to raise from
      additional equity and/or debt 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.





On
      July
      30, 2008 the Company closed an initial $100,000 portion of a $500,000 financing
      pursuant to a Non-U.S. and Non-Canadian Private Placement Subscription
      Agreement, dated June 30, 2008, between the Company and Accelera Evolution
      Limited (“Accelera”), an Asian-based investment fund. The Company issued
      Accelera a $100,000 principal amount convertible debenture due July 1, 2011,
      convertible into shares of our common stock, par value $0.0001, at a price
      of
      $0.30 per share together with 300,000 common share purchase warrants (each
      a
“Warrant”) and 600,000 common share purchase piggyback warrants (each a
“Piggyback Warrant”). Each Warrant entitles the holder thereof to acquire one
      additional share of common stock in the capital of the Company at a price of
      $0.33 per share (each a “ *Warrant
      Share* ”)
      for
      the period ending at 4:00 p.m. (Pacific Standard Time) on December 1, 2008
      (the
“ *Warrant
      Exercise Period* ”).
      Each
      Piggyback Warrant, which will only be available for exercise by the holder
      thereof if the Warrants have been exercised in full (unless subsequently waived
      in writing by the Company), entitles the holder thereof to acquire one
      additional share of common stock in the capital of the Company at a price of
      $0.37 per share (each a “ *Piggyback
      Warrant Share* ”)
      for
      the period ending at 4:00 p.m. (Pacific Standard Time) on July 1, 2010 (the
      “ *Piggyback
      Warrant Exercise Period* ”).





Interest
      is payable on the principal amount of the convertible debenture outstanding
      at
      8% per annum, calculated and payable quarterly in arrears. Interest payable
      under the convertible debenture shall be paid on the last day of September,
      December, March and June of each year. The holder of the convertible debenture
      has the option to convert any accrued and unpaid interest due at the time of
      a
      conversion.





The
      proceeds from the transaction will be used to fund the business of Sinobiomed
      Inc. and for general corporate purposes.





The
      foregoing description of the Convertible Debenture of Sinobiomed Inc. in the
      principal sum of $100,000 issued to Accelera Evolution Limited does not purport
      to be complete and is qualified in its entirety by reference to the Convertible
      Debenture of Sinobiomed Inc. in the principal sum of $100,000 issued to Accelera
      Evolution Limited, which was attached as Exhibit 10.2 to the Form 8-K filed
      on
      August 8, 2008, which is incorporated herein by reference.





16




**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
      II - OTHER INFORMATION**




**Item
      1. Legal Proceedings**




The
      Company, through Shanghai 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 2,437,000 at December 31, 2007
      exchange rates). Under the terms of the settlement agreement, the Company was
      obligated to pay the bank 5 million yuan (approximately $US 685,000) before
      October 30, 2006, 3 million yuan (approximately $US 411,000) before March 20,
      2007, 3 million yuan (approximately $US 411,000) before June 20, 2007, 3 million
      yuan (approximately $US 411,000) before September 20, 2007 and 3.8 million
      yuan
      (approximately $US 522,000) 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, defaulted on the two payments due
      by
      June 20, 2007 and September 20, 2007, made payments of 4,200,000 yuan after
      September 30, 2007, and has defaulted on the payment due December 20,
      2007 .





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
      July
      30, 2008 the Company closed an initial $100,000 portion of a $500,000 financing
      pursuant to a Non-U.S. and Non-Canadian Private Placement Subscription
      Agreement, dated June 30, 2008, between the Company and Accelera Evolution
      Limited (“Accelera”), an Asian-based investment fund. The Company issued
      Accelera a $100,000 principal amount convertible debenture due July 1, 2011,
      convertible into shares of our common stock, par value $0.0001, at a price
      of
      $0.30 per share together with 300,000 common share purchase warrants (each
      a
“Warrant”) and 600,000 common share purchase piggyback warrants (each a
“Piggyback Warrant”). Each Warrant entitles the holder thereof to acquire one
      additional share of common stock in the capital of the Company at a price of
      $0.33 per share (each a “ *Warrant
      Share* ”)
      for
      the period ending at 4:00 p.m. (Pacific Standard Time) on December 1, 2008
      (the
“ *Warrant
      Exercise Period* ”).
      Each
      Piggyback Warrant, which will only be available for exercise by the holder
      thereof if the Warrants have been exercised in full (unless subsequently waived
      in writing by the Company), entitles the holder thereof to acquire one
      additional share of common stock in the capital of the Company at a price of
      $0.37 per share (each a “ *Piggyback
      Warrant Share* ”)
      for
      the period ending at 4:00 p.m. (Pacific Standard Time) on July 1, 2010 (the
      “ *Piggyback
      Warrant Exercise Period* ”).




17




Interest
      is payable on the principal amount of the convertible debenture outstanding
      at
      8% per annum, calculated and payable quarterly in arrears. Interest payable
      under the convertible debenture shall be paid on the last day of September,
      December, March and June of each year. The holder of the convertible debenture
      has the option to convert any accrued and unpaid interest due at the time of
      a
      conversion.





The
      proceeds from the transaction will be used to fund the business of Sinobiomed
      Inc. and for general corporate purposes.





The
      foregoing description of the Convertible Debenture of Sinobiomed Inc. in the
      principal sum of $100,000 issued to Accelera Evolution Limited does not purport
      to be complete and is qualified in its entirety by reference to the Convertible
      Debenture of Sinobiomed Inc. in the principal sum of $100,000 issued to Accelera
      Evolution Limited, which was attached as Exhibit 10.2 to the Form 8-K filed
      on
      August 8, 2008, which is incorporated herein by reference.




**Item
      3. Defaults Upon Senior Securities**




N/A




**Item
      4. Submission of Matters to a Vote of Security Holders**




N/A




**Item
      5. Other Information**




N/A




**Item
      6. Exhibits**




(a)
            Exhibit
                List




31.1
            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. §1350




32.2
            Certificate
                pursuant to 18 U.S.C. §1350




18




**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 ____ day of August,
      2008




**SINOBIOMED
                INC.**
              (Registrant)By:Ban
                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**President,
                  CEO and Director
              
              August
                  14, 2008Ban
                  Jun YangSecretary,
                  Treasurer and Director
              
              August
                  14, 2008Ka
                  YuChief
                  Financial Officer
              
              August
                  14, 2008Asher
                  Zwebner




19