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U.S. Securities and Exchange Commission
 Washington, D.C. 20549
 Form 10-QSB
 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2005
 Commission file number 0-49764
 SinoFresh HealthCare, Inc.
  Florida
    
    65-1082270(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)
 
 
  þ o
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Table of Contents
 SINOFRESH HEALTHCARE, INC.
 Index
    
    
    
    PagePart I.
    
    Financial InformationItem 1. Financial StatementsCondensed Consolidated Balance Sheet as of September 30, 2005 (unaudited)
    
    2Condensed Consolidated Statements of Operations  for the three and nine months ended September 30, 2005 and 2004 (unaudited)
    
    3Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2005 and 2004 (unaudited)
    
    4Notes to Unaudited Condensed Consolidated Financial Statements
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    9Item 3. Controls and Procedures
    
    14Part II.
    
    Other Information
    
    15Item 1. Legal Proceedings
    
    15Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    18Item 6. Exhibits
    
    18Signatures
    
    19Certifications
    
    20Ex-4.1 Warrant AgreementEx-4.2 Option AgreementEx-31.1 Section 302 CertificationEx-31.2 Section 302 CertificationEx-32 Section 906 Certification
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PART I  FINANCIAL STATEMENTS
 
 Item 1. Financial Statements
  
  September 30, 2005(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    111,878Accounts receivable, net of allowances of $25,244
    
    
    401,435Inventory
    
    
    143,407Other current assets
    
    
    98,273TOTAL CURRENT ASSETS
    
    
    754,993FURNITURE AND EQUIPMENT, NET
    
    
    86,930PATENTS, NET
    
    
    2,346,177GOODWILL
    
    
    2,409,401DEFERRED DEBT ISSUANCE COSTS, NET
    
    
    226,181OTHER ASSETS
    
    
    6,418TOTAL ASSETS
    
    $
    5,830,100LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current portion of capital leases
    
    $
    23,438Short-term notes payable
    
    
    17,874Accounts payable
    
    
    1,768,702Accrued expenses
    
    
    414,407TOTAL CURRENT LIABILITIES
    
    
    2,224,421CONVERTIBLE DEBENTURES, NET OF UNAMORTIZED DEBT DISCOUNTS
    
    
    1,393,611CAPITAL LEASES, NET OF CURRENT MATURITIES
    
    
    43,922TOTAL LIABILITIES
    
    
    3,661,954COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Common stock, no par value; 500,000,000 shares authorized; 14,478,936 shares
issued and outstanding
    
    
    5,889,954Preferred stock, no par value; $2 liquidation value per share 200,000,000 shares authorized:Series A convertible preferred stock, voting; 858,170 shares authorized, 823,795
shares issued and outstanding
    
    
    1,647,589Series B convertible preferred stock, voting; 1,500,000 shares authorized, issued
and outstanding
    
    
    3,000,000Series C convertible preferred stock, voting; 1,250,000 shares authorized; 869,500
shares issued and outstanding
    
    
    1,560,806Accumulated deficit
    
    
    (9,727,599
    )Deferred stock-based compensation
    
    
    (70,604
    )Subscriptions receivable
    
    
    (132,000
    )TOTAL STOCKHOLDERS EQUITY
    
    
    2,168,146TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    5,830,100
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Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2005
    
    
    2004
    
    
    2005
    
    
    2004REVENUE, net
    
    $
    978,620
    
    
    $
    1,170,425
    
    
    $
    2,299,450
    
    
    $
    3,285,857COST OF REVENUE
    
    
    317,445
    
    
    
    325,651
    
    
    
    692,238
    
    
    
    816,010GROSS PROFIT
    
    
    661,175
    
    
    
    844,774
    
    
    
    1,607,212
    
    
    
    2,469,847OPERATING EXPENSESSalaries and other compensation expense
    
    
    249,605
    
    
    
    301,005
    
    
    
    762,905
    
    
    
    921,442Professional fees
    
    
    (73,275
    )
    
    
    186,294
    
    
    
    410,267
    
    
    
    1,027,617Other general and administrative expenses
    
    
    113,501
    
    
    
    122,746
    
    
    
    351,053
    
    
    
    413,199Marketing and advertising expenses
    
    
    93,903
    
    
    
    93,268
    
    
    
    937,816
    
    
    
    1,066,883Research and development expenses
    
    
    135,883
    
    
    
    15,496
    
    
    
    179,540
    
    
    
    279,744Depreciation and amortization
    
    
    65,448
    
    
    
    65,448
    
    
    
    196,344
    
    
    
    196,250TOTAL OPERATING EXPENSES
    
    
    585,065
    
    
    
    784,257
    
    
    
    2,837,925
    
    
    
    3,905,135INCOME (LOSS) FROM OPERATIONS
    
    
    76,110
    
    
    
    60,517
    
    
    
    (1,230,713
    )
    
    
    (1,435,288
    )OTHER INCOME (EXPENSE):Interest, net
    
    
    (192,780
    )
    
    
    8,228
    
    
    
    (511,992
    )
    
    
    (19,316
    )Other income, net
    
    
    
    
    
    
    338
    
    
    
    2,563
    
    
    
    45,751TOTAL OTHER INCOME (EXPENSE)
    
    
    (192,780
    )
    
    
    8,566
    
    
    
    (509,429
    )
    
    
    26,435NET INCOME (LOSS) BEFORE INCOME TAXES
    
    
    (116,670
    )
    
    
    69,083
    
    
    
    (1,740,142
    )
    
    
    (1,408,853
    )PROVISION FOR INCOME TAXES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    NET INCOME (LOSS)
    
    $
    (116,670
    )
    
    $
    69,083
    
    
    $
    (1,740,142
    )
    
    $
    (1,408,853
    )NET INCOME (LOSS) PER COMMON SHARE-basic
    
    $
    (0.01
    )
    
    $
    0.01
    
    
    $
    (0.12
    )
    
    $
    (0.11
    )-diluted
    
    $
    (0.01
    )
    
    $
    0.00
    
    
    $
    (0.12
    )
    
    $
    (0.11
    )WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING-basic
    
    
    14,395,686
    
    
    
    13,314,323
    
    
    
    14,283,450
    
    
    
    13,313,639-diluted
    
    
    14,395,686
    
    
    
    19,833,085
    
    
    
    14,283,450
    
    
    
    13,313,639
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Nine Months Ended September 30,2005
    
    
    2004CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (1,740,142
    )
    
    $
    (1,408,853
    )Adjustments to reconcile net loss to net cash
provided by (used in) operations:Stock, options and warrants issued for services
    
    
    29,488
    
    
    
    21,875Amortization and depreciation
    
    
    196,344
    
    
    
    196,250Stock issued for settlement cost
    
    
    37,500
    
    
    
    Change in allowance for discounts and returns
    
    
    11,000
    
    
    
    6,083Amortization of debt discount
    
    
    248,194
    
    
    
    Amortization of deferred debt issuance costs
    
    
    166,881
    
    
    
    Changes in assets and liabilities:Accounts receivable
    
    
    (183,162
    )
    
    
    37,489Inventory
    
    
    (100,283
    )
    
    
    162,987Other current assets
    
    
    248,437
    
    
    
    63,422Other assets
    
    
    
    
    
    
    800Accounts payable
    
    
    (37,334
    )
    
    
    1,087,770Accrued expenses
    
    
    (75,977
    )
    
    
    (130,421
    )NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    (1,199,054
    )
    
    
    37,402INVESTING ACTIVITIES:Payments for furniture and equipment
    
    
    
    
    
    
    (2,947
    )NET CASH (USED IN) INVESTING ACTIVITIES
    
    
    
    
    
    
    (2,947
    )FINANCING ACTIVITIES:Payments received on warrant subscriptions receivable
    
    
    
    
    
    
    120,000Payments on long-term debt and capital leases
    
    
    (21,492
    )
    
    
    (401,618
    )NET CASH (USED IN) FINANCING ACTIVITIES
    
    
    (21,492
    )
    
    
    (281,618
    )NET DECREASE IN CASH
    
    
    (1,220,546
    )
    
    
    (247,163
    )CASH AND CASH EQUIVALENTS  beginning of period
    
    
    1,332,424
    
    
    
    368,394CASH AND CASH EQUIVALENTS  end of period
    
    $
    111,878
    
    
    $
    121,231SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid during the period for interest
    
    $
    105,297
    
    
    $
    41,914NON-CASH ACTIVITY:Conversion of accounts payable to a short term note payable
    
    $
    22,875
    
    
    $
    Warrants issued in connection with a services agreeement
increasing other current assets and common stock
    
    $
    23,242
    
    
    $
    Conversion of debentures into common stock
    
    $
    100,000
    
    
    $
    
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Note 1
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Note 2
         Note 3
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2005
    
    
    2004Net income (loss), as reported
    
    $
    (116,670
    )
    
    $
    69,083Additional stock-based employee compensation costs that would
have been included in the determination of net loss if the
fair value method (SFAS No. 123) had been applied to all awards
    
    
    (42,329
    )
    
    
    (94,255
    )Pro forma net loss, as if the fair value method had
been applied to all awards
    
    $
    (158,999
    )
    
    $
    (25,172
    )Net loss per common share, as reported-basic
    
    $
    (0.01
    )
    
    $
    0.01-diluted
    
    $
    (0.01
    )
    
    $
    0.00Pro forma net loss per common share, as if the fair
value method had been applied to all awards-basic
    
    $
    (0.01
    )
    
    $
    0.00-diluted
    
    $
    (0.01
    )
    
    $
    0.00
  2005
    
    
    2004Net loss, as reported
    
    $
    (1,740,142
    )
    
    $
    (1,408,853
    )Additional stock-based employee compensation costs that would
have been included in the determination of net loss if the
fair value method (SFAS No. 123) had been applied to all awards
    
    
    (124,726
    )
    
    
    (405,718
    )Pro forma net loss, as if the fair value method had
been applied to all awards
    
    $
    (1,864,868
    )
    
    $
    (1,814,571
    )Net loss per common share, as reported-basic
    
    $
    (0.12
    )
    
    $
    (0.11
    )-diluted
    
    $
    (0.12
    )
    
    $
    (0.11
    )Pro forma net loss per common share, as if the fair
value method had been applied to all awards-basic
    
    $
    (0.13
    )
    
    $
    (0.14
    )-diluted
    
    $
    (0.13
    )
    
    $
    (0.14
    )
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Note 4:
    Note 5:
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Statements and Associated Risks
 THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS FORWARD-LOOKING STATEMENTS THAT HAVE BEEN MADE
PURSUANT TO THE PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE
FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENTS CURRENT EXPECTATIONS, ESTIMATES AND
PROJECTIONS, BELIEFS AND ASSUMPTIONS. WORDS SUCH AS ANTICIPATES, EXPECTS, INTENDS,
PLANS, BELIEVES, SEEKS, ESTIMATES, VARIATIONS OF SUCH WORDS AND SIMILAR EXPRESSIONS ARE
INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE
PERFORMANCE AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO
PREDICT; THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR FORECASTED IN ANY
SUCH FORWARD-LOOKING STATEMENTS. THESE RISKS AND UNCERTAINTIES INCLUDE THOSE DISCUSSED IN PART II
- ITEM 6  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS 
RISK FACTORS CONTAINED IN THE COMPANYS FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2004, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. UNLESS REQUIRED BY LAW, THE COMPANY UNDERTAKES NO
OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE. INVESTORS SHOULD REVIEW THIS QUARTERLY REPORT IN
COMBINATION WITH THE COMPANYS ANNUAL REPORT ON FORM 10-KSB IN ORDER TO HAVE A MORE COMPLETE
UNDERSTANDING OF THE PRINCIPAL RISKS ASSOCIATED WITH AN INVESTMENT IN THE COMPANYS STOCK.
 Overview
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TM
     Results of Operations
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Inflation and Currency Fluctuation
  Cash and Sources of Liquidity
    
 Item 3. Controls and Procedures
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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Hawkins et al. v. Charles Fust et al.
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(1)
    
    The failure to provide proper advice and counsel with regard to the removals of
Messrs. Bannon and Otto as directors;(2)
    
    The failure to recognize and act upon a conflict of interest in representing all
defendants in the lawsuit initially filed February 19, 2004, and;
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(3)
    
    The failure to give proper advice and counsel to the three remaining directors with
regard to supposed Board actions, in particular the removal of Scott Salberg as the
Company auditor.
  Sargon Capital, Inc., and Andrew M. Badolato vs SinoFresh HealthCare, Inc., Charles A. Fust and
John Hallman
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
   
 Item 6. Exhibits.
 ExhibitNumber
    
    Description4.1
    
    Warrant Agreement dated August 26, 2005 between CAM-Global and the Company4.2
    
    Option Agreement dated August 30, 2005 between the Company and Cynthia Dunn31.1
    
    Certifications of CEO pursuant to Section 302 of the Sarbanes-Oxley Act31.2
    
    Certifications of CFO pursuant to Section 302 of the Sarbanes-Oxley Act32
    
    Certifications of CEO and CFO pursuant to Section 906 of the Sarbanes-Oxley Act
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SIGNATURES
  SINOFRESH HEALTHCARE, INC.November 14, 2005
    
    By:
    
    /s/ Charles A. FustCharles A. Fust, Chairman of the Board and ChiefExecutive Officer (principal executive officer)November 14, 2005
    
    By
    
    /s/ Scott M. KleinScott M. Klein, Chief Financial Officer(principal accounting officer)
 19