UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
 WASHINGTON, D.
C.  20549
 
 
 
 xQuarterly report pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended September
30,2008
  or
  oTransition report pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from ______ to
______
 
 000-49764
 (Commission File
No.)
 
 SINOFRESH HEALTHCARE,
INC.
 (Exact name of registrant as specified
in its charter)
  Florida
              
              65 –
  1082270(State or other jurisdiction of
      incorporation or organization)
              
              (I.R.S. Employer Identification
      No.)
  787 Commerce
      Drive
                Venice,Florida34292
              
              34292(Address of principal executive
      offices)
              
              (Zip
  Code.)
 
 (941) 488-6464
 (Issuer's telephone number,
including area code)
 
 Indicate by mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 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.    YesxNoo
  Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer or a smaller reporting company.  See definition
of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act (check one):
  Large accelerated fileroAccelerated
fileroNon-accelerated fileroSmaller Reporting
Companyx
 
 Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YesoNox
 
 As of November 14, 2008 there
were28,871,110shares of
the Company’s common stock outstanding.
 -1-
  Table of
Contents
 
 SINOFRESH HEALTHCARE,
INC.
 
 Index
              
              PagePart I.
              Financial
      InformationItem
      1. Financial StatementsCondensed Balance
      Sheets as of September 30, 2008 (unaudited) and December
      31,  2007
              3Condensed
      Statements of Operations for the three and nine months ended September 30,
      2008 and 2007 ( unaudited )
              4Condensed Statements
      of Cash Flows for the nine months ended September 30, 2008 and 2007
      ( unaudited )
              5Notes to
      Unaudited Condensed Consolidated Financial
      Statements
              6Item 2. Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              9Item 3.
      Quantitative and Qualitative Disclosures About Market
      Risk
              12Item 4T. Controls
      and Procedures
              12Part II.
              Other
      Information
              14Item
      1. Legal Proceedings
              14Item
      2. Unregistered Sales of Equity Securities and Use of
      Proceeds
              14Item 3.
      Defaults on Senior Securities
              14Item 6a.
      Exhibits
              14Signatures
              15Certifications
 
  -2-
 Table of Contents
 
  PART I - FINANCIAL INFORMATIONItem 1. Financial
      StatementsSINOFRESH HEALTHCARE,
      INC.CONDENSED BALANCE
      SHEETS
  September 30,
      2008
              
              
              December 31,
      2007(unaudited)ASSETSCURRENT
      ASSETS:Cash and cash
      equivalents
              
              $
              427
              
              
              $
              919Accounts
      receivable, net of allowances of $7,426 and
    $7,426
              
              
              12,097
              
              
              
              12,796Inventory,
      net
              
              
              13,549
              
              
              
              7,656Other current
      assets
              
              
              93,168
              
              
              
              99,933TOTAL CURRENT
      ASSETS
              
              
              119,241
              
              
              
              121,304FURNITURE AND EQUIPMENT,
      NET
              
              
              -
              
              
              
              17,109PATENTS,
      NET
              
              
              1,653,862
              
              
              
              1,826,939OTHER
      ASSETS
              
              
              4,500
              
              
              
              4,500TOTAL
      ASSETS
              
              $
              1,777,603
              
              
              $
              1,969,852LIABILITIES AND STOCKHOLDERS’
      DEFICITCURRENT
      LIABILITIES:Current
      portion of capital leases
              
              $
              -
              
              
              $
              14,260Short-term
      note payable and advances
              
              
              125,000
              
              
              
              125,000Convertible
      debentures, net of unamortized debt discounts
              
              
              705,000
              
              
              
              705,000Accounts
      payable (including amounts due to related parties of $79,383 and
      $127,213)
              
              
              1,638,438
              
              
              
              1,609,365Accrued
      expenses (including amounts due to related parties of $92,146 and
      $92,146)
              
              
              1,257,132
              
              
              
              1,096,845Deposit
      on sale of licensing and distribution rights
              
              
              892,468
              
              
              
              661,240TOTAL CURRENT
      LIABILITIES
              
              
              4,618,038
              
              
              
              4,211,710COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS’
      EQUITY:Preferred stock, no par value;
      $2 liquidation value per share 200,000,000 shares
      authorized:Series A convertible preferred
      stock, voting; 858,170 shares authorized, 769,377 and 769,377 shares
      issued and outstanding
              
              
              1,538,753
              
              
              
              1,538,753Series B convertible
      preferred stock, voting; 1,500,000 and 1,500,000 shares authorized issued
      and outstanding
              
              
              3,000,000
              
              
              
              3,000,000Series C
      convertible preferred stock, voting; 1,250,000 shares authorized; 755,500
      and 793,000 share issued and outstanding
              
              
              1,355,995
              
              
              
              1,423,301Common stock, no par value;
      500,000,000 shares authorized; 26,616,110 and 24,916,110 shares issued and
      outstanding.
              
              
              7,541,802
              
              
              
              7,028,774Common stock issuable:
      5,297,393 and 4,239,570 shares
              
              
              804,782
              
              
              
              800,254Accumulated
      deficit
              
              
              (17,055,679
              )
              
              
              (16,017,876
              )Deferred
      stock-based compensation
              
              
              (26,088
              )
              
              
              (15,064
              )TOTAL STOCKHOLDERS’
      DEFICIT
              
              
              (2,840,435
              )
              
              
              (2,241,858
              )TOTAL LIABILITIES AND
      STOCKHOLDERS' DEFICIT
              
              $
              1,777,603
              
              
              $
              1,969,852See notes to condensed financial
      statements.
  -3-
 Table of Contents
 
 SINOFRESH HEALTHCARE,
      INC.CONDENSED STATEMENTS
      OF OPERATIONS(unaudited)Three months ended September
      30
              Nine months ended September
      30,2008
              
              
              2007
              
              
              2008
              
              
              2007REVENUE,
net
              
              $
              37,974
              
              
              $
              40,280
              
              
              $
              138,419
              
              
              $
              344,696COST OF
    REVENUE
              
              
              8,265
              
              
              
              16,924
              
              
              
              30,973
              
              
              
              121,268GROSS
PROFIT
              
              
              29,709
              
              
              
              23,356
              
              
              
              107,446
              
              
              
              223,428OPERATING
      EXPENSESSalaries and other
      compensation expense
              
              
              59,157
              
              
              
              119,918
              
              
              
              376,836
              
              
              
              459,903Professional
      fees
              
              
              97,002
              
              
              
              48,915
              
              
              
              337,453
              
              
              
              317,487Other general and
      administrative expenses
              
              
              39,986
              
              
              
              76,969
              
              
              
              89,730
              
              
              
              250,451Research and
      development expenses
              
              
              10,851
              
              
              
              -
              
              
              
              45,001
              
              
              
              -Depreciation and
      amortization
              
              
              62,884
              
              
              
              65,450
              
              
              
              190,186
              
              
              
              196,350TOTAL OPERATING
      EXPENSES
              
              
              269,880
              
              
              
              311,252
              
              
              
              1,039,206
              
              
              
              1,224,191LOSS FROM
      OPERATIONS
              
              
              (240,171
              )
              
              
              (287,896
              )
              
              
              (931,760
              )
              
              
              (1,000,763
              )OTHER INCOME
      (EXPENSE):Interest
      expense , net
              
              
              (35,169
              )
              
              
              (94,322
              )
              
              
              (109,724
              )
              
              
              (261,073
              )Other
      income
              
              
              1,103
              
              
              
              571
              
              
              
              3,681
              
              
              
              50,583TOTAL OTHER INCOME (EXPENSE),
      NET
              
              
              (34,066
              )
              
              
              (93,751
              )
              
              
              (106,043
              )
              
              
              (210,490
              )LOSS BEFORE INCOME
      TAXES
              
              
              (274,237
              )
              
              
              (381,647
              )
              
              
              (1,037,803
              )
              
              
              (1,211,253
              )PROVISION FOR INCOME
      TAXES
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -NET LOSS
              
              $
              (274,237
              )
              
              $
              (381,647
              )
              
              $
              (1,037,803
              )
              
              $
              (1,211,253
              )NET LOSS PER COMMON
      SHARE-basic and
      diluted
              
              $
              (0.01
              )
              
              $
              (0.02
              )
              
              $
              (0.04
              )
              
              $
              (0.07
              )WEIGHTED AVERAGE
      COMMONSHARES
      OUTSTANDING-basic and
      diluted
              
              
              26,116,110
              
              
              
              19,580,696
              
              
              
              25,610,292
              
              
              
              17,850,617See notes to condensed financial
      statements.
  
 -4-
 Table of Contents
 SINOFRESH HEALTHCARE,
      INC.CONDENSED STATEMENTS OF
      CASH FLOWS (unaudited)Nine Months Ended September 30,
      2008
              
              
              Nine Months Ended September
      30, 2008CASH FLOWS FROM OPERATING
      ACTIVITIES:Net Loss
              
              $
              (1,037,803
              )
              
              $
              (1,211,253
              )Adjustments to reconcile net loss
      to net cash used in operations:Stock based compensation
      expense
              
              
              176,891
              
              
              
              87,536Amortization and
      depreciation
              
              
              190,184
              
              
              
              196,350Stock issued as payment for
      services
              
              
              64,000
              
              
              
              -Stock issued as payment of
      interest
              
              
              18,000
              
              
              
              -Warrants issued as discount on
      advances
              
              
              -
              
              
              
              8,147Stock issued as settlement
      cost
              
              
              -
              
              
              
              3,900Changes in assets and
      liabilities:Accounts
      receivable
              
              
              699
              
              
              
              153,121Inventory
              
              
              (5,893
              )
              
              
              17,379Other current
      assets
              
              
              6,765
              
              
              
              (12,907
              )Accounts
      payable
              
              
              29,073
              
              
              
              151,023Accrued
      expenses
              
              
              160,288
              
              
              
              254,316NET CASH USED IN OPERATING
      ACTIVITIES
              
              
              (397,796
              )
              
              
              (352,388
              )FINANCING
      ACTIVITIES:Proceeds from common stock
      issuable
              
              
              411,564
              
              
              
              150,000Proceeds from short-term notes
      payable
              
              
              -
              
              
              
              220,000Payments on long-term debt and
      capital leases
              
              
              (14,260
              )
              
              
              (17,594
              )NET CASH PROVIDED BY FINANCING
      ACTIVITIES
              
              
              397,304
              
              
              
              352,406NET INCREASE (DECREASE) IN
      CASH
              
              
              (492
              )
              
              
              18CASH AND CASH EQUIVALENTS -
      beginning of period
              
              
              919
              
              
              
              887CASH AND CASH EQUIVALENTS - end of
      period
              
              $
              427
              
              
              $
              905SUPPLEMENTAL DISCLOSURE OF CASH
      FLOW INFORMATION:Cash paid during the period for
      interest
              
              $
              -
              
              
              $
              19,821NON-CASH
      ACTIVITY:Reduction of accounts payable and
      accrued expenses throughthe issuance of common
      stock
              
              $
              82,000
              
              
              $
              670,847Deposit on sale of licensing and
      distribution rights throughthe issuance of common
      stock
              
              $
              231,228
              
              
              $
              1,229,997Conversion of debentures into
      common stock
              
              $
              -
              
              
              $
              890,000See notes to condensed
      consolidated financial
statements.
  -5-
 Table of Contents
 SinoFresh HealthCare,
Inc.
 Notes to Unaudited Condensed Financial Statements
 September 30, 2008
 
 
 Note 1. Basis of
Presentation
 
 The accompanying unaudited
condensed financial statements of SinoFresh HealthCare, Inc. (the
“Company") have been prepared in accordance with accounting principles generally
accepted in theUnited
Statesand the rules and
regulations of the United States Securities and Exchange Commission for interim
financial information. Accordingly, they do not include all of the information
and footnotes necessary for a comprehensive presentation of financial position
and results of operation.  For further information, refer to the
financial statements and footnotes included in the Company’s Annual Report on
Form 10-KSB as filed with the Securities and Exchange Commission for the year
ended December 31, 2007.
 
 The Company's ability to continue as a
going concern is subject to substantial doubt due to the Company’s history of
losses, current default status on the repayment of debentures, limited financial
resources and need for additional working capital to implement the Company's
business plan.  The Company requires additional funding in order to
repay its debentures and to market and distribute its products, exploit the
technology underlying its patents, further develop existing and new products,
and pay its other existing current liabilities.
 
 On September 30, 2008, the Company had
current assets of approximately $120,000 (including cash and cash equivalents of
$427) and current liabilities of approximately $4,618,000.  As a
result, the Company's current liquidity is extremely limited and the Company
will require a significant amount of additional funding in order to meet its
current working capital requirements, including repayment of its
debentures.  To address these issues, the Company is attempting to
acquire additional funding through the issuance of debt and equity securities,
joint ventures or other arrangements.  Although the Company believes
that it will be able to obtain additional funding, there can be no assurance
that the Company's efforts will be successful.  The accompanying
statements do not include any adjustments that might be necessary if the Company
were unable to continue as a going concern.
 
 In the opinion of management, all
adjustments, consisting of normal recurring adjustments, have been made in the
September 30, 2008 and 2007 financial statements, which are necessary for a fair
financial statement presentation. The results for the three and nine months
ended September 30, 2008 and 2007 are not necessarily indicative of financial
operations for the full year.
 
 The preparation of financial statements
in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the condensed consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates. The Company's significant estimates and assumptions
include, but are not limited to, uncertainties associated with potential future
product returns, the uncollectibility of accounts and other receivables,
inventory obsolescence, patents and goodwill subsequent recoverability
analysis, and estimated accruals relating to legal
contingencies.
 
 Note 2. Notes Payable
 
 On June 9, 2006, the Company entered
into an unsecured loan agreement with a non-affiliated third party in the amount
of $100,000.  According to the loan provisions, the principal and
interest totaling $120,000 was due on July 31, 2006. The Company is currently in
default on the repayment of this loan.
 -6-
 Table of Contents
 
 During 2007, the Company obtained
financing in the total amount of $220,000 through the sale of 18-month Unsecured
10% Convertible Debentures.  The Debentures are convertible into
common shares at prices ranging from $.04 to $.08 per share.  Total
common shares issuable pursuant to these Debentures are 4,387,500 shares. As of
September 30, 2008, holders converted $195,000 of the Debentures into 4,075,000
common shares.  Interest is payable annually in arrears in
cash.  The Company reserved the right to require conversion of the
Debentures and outstanding interest, at any time, if the closing bid price of
the Company’s common stock equals or exceeds $0.10 for a period of 20
consecutive trading days.  The Company also reserved the right to
redeem the Debentures, in whole, at any time or times, not less than thirteen
(13) months after the date of the Debenture, upon payment of one hundred ten
percent (110%) of the principal.
 
 Note 3. Shareholders’ Equity
(Deficit)
 
 During the first nine months of 2008,
the Company issued 400,000 shares of its common stock with a market value of
approximately $56,000 as payment for consulting services and 100,000 shares of
its common stock with a market value of approximately $8,000 as payment for
legal services.  The Company also issued 125,000 shares of common
stock with a market value of approximately $18,000 as payment of interest to two
unrelated parties.  Additionally, the Company issued 1,000,000 common
shares to Investors (as described more fully in Note 4).
 
 Note 4. Deposit onSaleof Licensing and Distribution
Rights
 
 In May 2007, the Company entered into a
Memorandum of Understanding (“MOU”) with Beneficial Healthcare (“Investors”)
that provided for an equity investment of up to $5.0 million in exchange for
25,000,000 common shares of the Company.  Razek Azizi, a director of
the Company, is the President of Beneficial Healthcare and has sole
voting and dispositive power over Beneficial Healthcare.  The MOU
further provided for:
 1.
              Investors to be granted a 50%
      interest in profits generated from all sales outside ofNorth America, including but not limited to
      technology transfer fees, royalties, and licensing fees upon the Company’s
      receipt of the full $5,000,000.2.
              Investors to be granted private
      licensing and distribution rights to sell the Company’s products in all
      territories outside of North America upon their infusion of the full
      $5,000,000 investment.3.
              Settlement and retirement of
      outstanding convertible debentures.4.
              Completion of the Phase II
      components of drug development for Antibiotic Resistant Staphylococcus
      Aureus (MRSA).5.
              Sales and marketing
      budget.6.
              Product manufacturing and
      operations for national distribution.7.
              Settlement and payoff of unsecured
      debt.8.
              Grant of three (3) board seats of
      a five (5)-member board seat of the
  Company.
 
 Investment thereto is subject to mutual
agreement among the parties as to the form and content of the final
documentation with respect to any such investment.  The total
investments contemplated by the MOU were to occur not later than July 9,
2007.  However, by verbal agreement between the Investors and the
Company, the MOU was effectively extended through the end of 2007 and the
Investors continued to make investments in the Company, and the Company
continued to accept the investments, under the same terms and conditions
contained within the MOU. In February 2008, the Company terminated the MOU with
the Investors.  The Company and the Investors are negotiating a new
agreement.
 
 The Company received an initial
investment of $200,500 during the year ended December 31, 2007 in exchange for
1,002,500 issuable common shares.  During the nine months ended
September 30, 2008, the Company received additional investments totaling
$411,565 in exchange for 2,057,823 issuable common shares.  The shares
were recorded at their market price on the date of investment and the difference
between the market price and the $0.20 issuance rate has been treated as a
deposit towards the sale of licensing and distribution
rights.
  -7-
 Table of Contents
 
 In August 2007, the Investors acquired
certain outstanding convertible debentures issued by the Company having a face
value of $1,255,000 plus accrued interest approximating $528,000, directly from
third party debenture holders through a private sale. Such debentures matured on
December 6, 2007 and are currently in default.  As part of the MOU,
the Company and the Investors agreed to convert $855,000 of the debentures, plus
accrued penalties and interest into 3,333,750 shares of common stock. The
issuable shares were recorded at the conversion rate prescribed by the
underlying convertible debenture agreements with the difference from the
converted debentures’ face value, plus related accrued interest and penalties,
being recorded as a deposit towards the sale of licensing and distribution
rights. The deposit will be recognized as revenue upon the Company’s receipt of
the full $5 million anticipated by the MOU and the transfer of the
rights.
 
 At September 30, 2008, 1,836,680 of
these common shares have been issued and 5,297,393 are pending issuance, which
will occur upon direction from the Investors.  During October 2008,
the Company issued 1,500,000 shares of common stock to
Investors.
 
 As of December 31, 2007, the Investors
held remaining convertible debentures with a face value of $400,000, plus
previously accrued interest and penalties that will entitle them to convert the
debentures at $0.20 per share.  In March 2008, the Investors purchased
from a third party, additional convertible debentures having a face value of
$305,000.  As of September 30, 2008, the Investors now own 100% of the
Company’s outstanding secured convertible debentures.  Such debentures
matured on December 6, 2006 and are currently in default.  As a result
of such transaction, the Investors are the sole senior secured debt holders of
the Company with a lien on all assets of the Company.
 
 Note 5. Stock-Based
Compensation
  Effective January 1, 2006, the Company
transitioned from Accounting Principles Board Opinion (APB) No. 25 "Accounting
for Stock Issued to Employees," to Statement of Financial Accounting Standards
No. 123R, "Accounting for Stock-Based Compensation", (SFAS No.
123R).
  The Company recognized stock
compensation expense related to previously issued employee stock options of
approximately $26,000 and $26,000 for the three months ended September 30, 2008
and 2007, respectively.  The Company recognized stock compensation
expense related to previously issued employee stock options of approximately
$177,000 and $87,000 for the nine months ended September 30, 2008 and 2007,
respectively.
  During the nine months
ended September 30, 2008, the Company issued 1,250,000 options to an
employee.  These options have an exercise price of $0.17 (equal to
market value on date of grant, have a five year term and will vest as follows –
600,000 on date of grant, 350,000 vest on July 1, 2008 and 300,000 vest on
January 1, 2009.  No options were issued to employees in
2007.
  The fair value of each stock option or
warrant granted to non-employees is estimated on the measurement date using the
fair value method of SFAS 123R.
  Note
6:Related Party
Information
  The Company leased its former facility
from an entity currently controlled by one of the Company's former officers, and
spouse of the CEO.  Rent related to this facility totaled $71,000 for
the year ended December 31, 2007 .  As of September 30, 2008,
the Company had approximately $79,000 recorded in accounts payable due to this
entity.  This lease agreement was cancelled by mutual agreement in
2007.
  A director of the Company is the
principal owner of a law firm that provided services to the Company through
2007.  The expenses incurred to that law firm were approximately
$101,000 for the year ended December 31, 2007.  As of September 30,
2008, the Company had $92,000 recorded in accrued liabilities due to this
firm.
  -8-
 Table of Contents
 
 Item 2. Management’s
Discussion and Analysisor Plan of Operations
  Forward-Looking Statements and
Associated Risks
 
 THIS QUARTERLY REPORT ON FORM 10-Q
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, 2007, 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 ANNUALREPORTONFORM 10-KSB IN ORDER TO HAVE A MORE
COMPLETE UNDERSTANDING OF THE PRINCIPAL RISKS ASSOCIATED WITH AN INVESTMENT IN
THE COMPANY’S STOCK.
 
 Overview
 
 SinoFresh HealthCare, Inc., aFloridacorporation (“Sinofresh”, “we” “our” or
the “Company“) was incorporated on January 31, 2001 under the name
e-Book.  E-Book operated initially as a division of e-Miracle, Inc.,
which was incorporated in July 1999.  Due to undercapitalization and
credit problems, e-Miracle filed a Chapter 11 Bankruptcy proceeding in the
United States Bankruptcy Court.  As part of the Chapter 11 Plan of
Reorganization of e-Miracle, e-Book was re-incorporated as aFloridacorporation on January 31,
2001.  We acquired SinoFresh Healthcare, Inc., aDelawarecorporation on September 8, 2003
through a merger with our subsidiary SinoFresh Acquisition Corp., aFloridacorporation, whereby SinoFresh
Healthcare, Inc. became our wholly owned subsidiary.  As a result of
the merger, we changed our name to SinoFresh Healthcare,
Inc.
  We are a pharmaceutical company
engaged in the research, development and marketing of novel therapies to treat
diseases and other conditions of the upper respiratory system.  Our
revenues were derived primarily from the sale of SinoFreshTM Nasal and Sinus,
through our existing distribution network in theUnited States.
  The principal outlets for our products
are national drug and food retailers, including CVS, Osco Drug, Publix Super
Markets, Rite Aid, and Sav-on Drugs.
  The Company initiated the New Drug
Application (NDA) process for a therapeutic nasal spray based upon
SinoFreshTMNasal & Sinus
Care.  The Company is seeking Food and Drug Administration (FDA)
approval on its nasal spray for treatment of and/or reduction in the symptoms of
certain diseases.  The Company held its initial meeting with the FDA
in 2005 to discuss an Investigational New Drug Application (an “INDA”) for the
nasal spray and will next seek to gain FDA approval of the required protocol
prior to initiating clinical work.  Assuming that the safety and
efficacy of the nasal spray are demonstrated in these clinical studies, the
Company would seek FDA approval of the nasal spray under an NDA.  The
Company anticipates that conducting the clinical trials and obtaining FDA
approval for the nasal spray will require substantial resources (including
additional capital) and may take several years.  There is no assurance
that FDA will approve an NDA for the Company's therapeutic nasal spray or that
the Company can obtain sufficient funding to underwrite the cost of obtaining
FDA approval.
  The Company currently outsources the
manufacturing of its products to an FDA approved contract-manufacturing
facility.
  Our shares are traded on the
Over-the-Counter-Bulletin Board under the symbol “SFSH.OB.”
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 Results of Operations for the three
month periods ended September 30, 2008 and September 30,
2007.
 
 Revenues decreased from $40,280 to
$37,974 for the three months ended September 30, 2008 and 2007,
respectively.  The Company believes that the decrease was due to a
combination of the lack of marketing and advertising activities, the elimination
of incentive programs such as rebates that were offered in 2007, and the Company
lost distribution to Walgreens in the third quarter of 2007.
 
 Gross profit for the third quarter of
2008 was $29,709 (or 78%), compared to $23,356 (or 58%) for the third quarter of
2007.  The higher gross profit percentage in 2008 is primarily due to
lower product returns and broker fees.
 
 Salaries and other compensation
expenses decreased from $119,918 to $59,157 for the three months ended September
30, 2008 and 2007, respectively.  The decrease is a result of
reductions in personnel in order to streamline its organization and to reduce
administrative costs.
 
 Professional fees were $97,002 and
$48,915 for the three months ended September 30, 2008 and 2007, respectively due
to the Company’s funding initiatives.
  Other general and administrative
expenses decreased from $76,969 to $39,986 for the three months ended September
30, 2008 and 2007, respectively, due to a reduction in certain insurance
premiums, rents, and other costs.
 
 Research and development expenses
were $10,851 and $0 for the three months ended September 30, 2008 and 2007,
respectively.  The increase in the 2008 expenses relates to the
Company’s efforts to validate the use of the Company’s current product -
SinoFresh Nasal and Sinus Care - as a treatment for other pathogens
maladies.
 
 Depreciation and amortization totaled
$62,884 and $65,450 for the three months ended September 30, 2008 and 2007,
respectively.  These expenses principally consist of amortization of
patent costs.
 
 Net interest expense decreased from
$94,322 to $35,169 for the three months ended September 30, 2008 and 2007,
respectively.  The decrease is attributable to lower levels of
interest bearing debentures outstanding in 2008 versus 2007.
 
 As a result of the factors discussed
above, we had a net loss of $274,237 ($0.01 per share) compared to net loss of
$381,647 ($0.02 per share) for the three months ended September 30, 2008 and
2007, respectively.
 
 Results of Operations for the nine month
periods ended September 30, 2008 and September 30, 2007.
 
 Revenues decreased from $344,696 to
$138,419 for the nine months ended September 30, 2008 and 2007,
respectively.  The Company believes that the decrease was due to a
combination of the lack of marketing and advertising activities, the elimination
of incentive programs such as rebates that were offered in 2007, and the Company
lost distribution to Walgreens in the third quarter of 2007.
 
 Gross profit for the first nine months
of 2008 was $107,446 (or 78%), compared to $223,428 (or 65%) for the first nine
months of 2007.  The higher gross profit percentage in 2008 is
primarily due to lower product returns and broker fees.
 
 Salaries and other compensation expenses
decreased to $376,836 from $459,903 for the nine months ended September 30, 2008
and 2007, respectively.  The decrease is a result of reductions in
personnel in order to streamline its organization and to reduce administrative
costs partially offset by increased stock-based compensation associated
with a 2008 option grant.
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 Professional fees were $337,453 and
$317,487 for the nine months ended September 30, 2008 and 2007,
respectively.
  Other general and administrative
expenses were $89,730 and $250,451 for the nine months ended September 30, 2008
and 2007, respectively.  The reduction in these expenses is due to a
lowering of certain insurance premiums, rents, and other
costs.
 
 Research and development expenses were
$45,001 and $0 for the nine months ended September 30, 2008 and 2007,
respectively.  The increase in the 2008 expenses relates to the
Company’s efforts to bring to market a new validate the use of the Company’s
current product - SinoFresh Nasal and Sinus Care - as a treatment for other
pathogens maladies.
 
 Depreciation and amortization totaled
$190,186 and $196,350 for the nine months ended September 30, 2008 and 2007,
respectively.  These expenses principally consist of amortization of
patent costs.
 
 Net interest expense was $109,724 and
$261,073 for the nine months ended September 30, 2008 and 2007,
respectively.  The decrease is attributable to lower levels of
interest bearing debentures outstanding in 2008 versus 2007.
 
 Other income totaled $3,681 and $50,583
for the nine months ended September 30, 2008 and 2007,
respectively.  Other income in 2007 consisted primarily of a
non-refundable deposit that was forfeited by a party interested in acquiring
certain assets of the Company.
  As a result of the factors discussed
above, we had a net loss of $1,037,803 ($0.04 per share) compared to net loss of
$1,211,253 ($0.07 per share) for the nine months ended September 30, 2008 and
2007, respectively.
 
 Liquidity and Capital
Resources
 
 As of September 30, 2008, we had
total assets of approximately $1.8 million, liabilities of approximately $4.6
million and stockholders’ deficit of approximately $2.8 million.  Our
working capital deficit was approximately $4.5 million as of September 30,
2008.
 
 Inflation and currency fluctuations have
not previously had a material impact upon our results of operations and are not
expected to have a material impact in the near future.
  During the first nine months of 2008,
the Company's cash and cash equivalents decreased approximately $500 to $427 at
September 30, 2008. The Company's current liquidity is extremely limited and the
Company will require a significant amount of additional funding in order to meet
its current working capital requirements, including repayment of its
debentures.  To address these issues, the Company is attempting to
obtain additional funding through the issuance of debt and equity securities,
joint ventures or other arrangements.  Although the Company believes
that it will be able to obtain additional funding, there can be no assurance
that the Company's efforts will be successful.
 
 On June 9, 2006, the Company entered
into an unsecured loan agreement with a non-affiliated third party in the amount
of $100,000.  According to the loan provisions, the principal and
interest totaling $120,000 was due on July 31, 2006.  The Company is
currently in default on the repayment of this loan.
 
 During 2007, the Company obtained
financing in the total amount of $220,000 through the sale of 18-month Unsecured
10% convertible debentures (the “Debentures”).  The Debentures are
convertible into common shares at prices ranging from $.04 to $.08 per
share.  Total common shares issuable pursuant to these Debentures are
4,387,500 shares. As of September 30, 2008, holders converted $195,000 of the
Debentures into 4,075,000 common shares.  Interest is payable annually
in arrears in cash.  The Company reserved the right to require
conversion of the Debentures and outstanding interest, at any time, if the
closing bid price of the Company’s common stock equals or exceeds $0.10 for a
period of 20 consecutive trading days.  The Company also reserved the
right to redeem the Debentures, in whole, at any time or times, not less than
thirteen (13) months after of the Debenture, upon payment of one hundred ten
percent (110%) of the principal.
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 Pursuant to a Memorandum of
Understanding (the “MOU”) that was terminated in February 2008, the terms of
which are more fully described in Note 4 to the Financial Statements contained
in this Form 10-Q , the Company received an initial investment of $200,500
during the year ended December 31, 2007 in exchange for 1,002,500 common
shares.  During the nine months ended September 30, 2008, the Company
received additional investments of $411,565, in exchange for 2,057,823 common
shares.  The shares were recorded at their market price on the date of
investment and the difference between the market price and the $0.20 issuance
rate has been treated as a deposit towards the sale of licensing and
distribution rights to sell the Company’s products in all territories in North
America upon the infusion of a total of $5 million.
 
 In August 2007, a group of new investors
(the “Investors”) acquired certain outstanding convertible debentures issued by
the Company having a face value of $1,255,000 plus accrued interest
approximating $528,000, directly from third party debenture holders through a
private sale. Such debentures matured on December 6, 2007 and are currently in
default.  As part of the MOU, the Company and the Investors agreed to
convert $855,000 of the debentures, plus accrued penalties and interest into
3,333,750 shares of common stock. The issuable shares were recorded at the
conversion rate prescribed by the underlying convertible debenture agreements
with the difference from the converted debentures’ face value, plus related
accrued interest and penalties, being recorded as a deposit towards the sale of
licensing and distribution rights to the Company’s products in all territories
outside ofNorth
America. The deposit will
be recognized as revenue upon the Company’s receipt of the full $5 million
anticipated by the MOU and the transfer of the rights.
 
 At September 30, 2008, 1,836,680 of
these common shares have been issued and 5,297,393 are pending conversion,
which will occur upon direction from the investors.   During
October, 2008, the Company issued 1,500,000 shares of common stock to
Investors.
 
 As of December 31, 2007, the Investors
held remaining convertible debentures with a face value of $400,000, plus
previously accrued interest and penalties that, will entitle them to convert the
debentures at $0.20 per share.  In March 2008, the Investors purchased
from a third party, additional convertible debentures having a face value of
$305,000.  At September 30, 2008, the Investors now own 100% of the
Company’s outstanding secured convertible debentures.  Such debentures
matured on December 6, 2006 and are currently in default.  As a result
of such transaction, the Investors are the sole senior secured debt holders of
the Company with a lien on all assets of the Company.
 
 Off-Balance Sheet
Arrangements
 
 The Company had no off-balance sheet
arrangements as of September 30, 2008.
 
 Item 3. Qualitative and
Quantitative Disclosures about Market Risk
 
 Not applicable to smaller reporting
companies
 
 Item 4T. Controls and
Procedures
 
 Disclosure Controls
 
 We carried out an evaluation required by
Rule 13a-15(b) of the Securities Exchange Act of 1934 or the Exchange Act
under the supervision and with the participation of our management, including
our Principal Executive Officer and Principal Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures.
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  Disclosure controls and procedures are
designed with the objective of ensuring that (i) information required to be
disclosed in an issuer's reports filed under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the SEC
rules and forms and (ii) information is accumulated and communicated to
management, including our Principal Executive Officer and Principal Financial
Officer, as appropriate to allow timely decisions regarding required
disclosures.
  The evaluation of our disclosure
controls and procedures included a review of our objectives and processes and
effect on the information generated for use in this Report. This type of
evaluation is done quarterly so that the conclusions concerning the
effectiveness of these controls can be reported in our periodic reports filed
with the SEC. We intend to maintain these controls as processes that may be
appropriately modified as circumstances warrant.
  Based on their evaluation, our Principal
Executive Officer and Principal Financial Officer have concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information which is required to be included in our periodic reports
filed with the SEC as of the filing of this Report.
 
 Changes in Internal
Controls Over Financial Reporting
 
 There have not been  any
changes in our internal controls over financial reporting (as defined in
Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fiscal
quarter ending September 30, 2008 that have materially affected, or are
reasonably likely to materially affect, our internal controls over financial
reporting.
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 PART II - OTHERINFORMATION
 
 Item 1. Legal
Proceedings
 
 From time to time, the Company may be a
party to litigation or proceedings in connection with its business, as either a
plaintiff or defendant. As of the date of this report, there were no such
pending legal proceeding to which the Company is a party that, in the opinion of
management, is likely to have a materially adverse effect on the Company’s
business, financial condition or results of operations.
 
 Item 2. Unregistered Sales of
Equity Securities and Use of Proceeds
 
 During the first nine months of 2008,
the Company issued 400,000 shares of common stock to a consultant in payment for
consulting services and 100,000 shares of common stock to an attorney for legal
services provided to the Company.  These shares had a market value of
approximately $64,000 as of the date of issuance.   The Company also
issued 125,000 shares of common stock (with a market value of approximately
$18,000) as interest payment to two unrelated
parties .  Additionally, the Company issued 1,000,000 common shares
to the Investors.  The issuance of shares of common stock was not
registered under the Securities Act of 1933, as amended (the "Securities Act"),
in reliance upon the exemptions from the registration requirements of the
Securities Act set forth in Section 4(2).
  Item 3.  Defaults on Senior
Securities
 
 The Company is in default on its
principal and interest obligations due under a senior secured debenture
agreement as a result of its failure to repay the debenture on its maturity date
of December 6, 2006.  The total amount due as of September 30, 2008
including principal, interest and penalties was approximately
$1,144,000.   The debentures are collateralized by all of the
Company’s assets.  The notification gives the debenture holders the
right to sell the Company’s assets if a suitable buyer is found.  The
Company will continue to work amicably with the debenture holders in order to
either obtain a modification of the debenture terms or secure additional capital
in order to satisfy the debenture obligation.  However, no assurance
can be made that the Company will be successful in this
effort.
  Item
6.  Exhibits
 
 (a)
              Exhibits
  31.1
              Certification of the Principal
      Executive Officer and Principal Financial Officer pursuant to Rule
      13a-14(a) or Rule15(d)-14(a) on page X-1.
 
 32.1
              Certification pursuant to 18
      U.S.C. §1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of2002 on page
      X-2.
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 SIGNATURES
 
 In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned thereunto duly
authorized.
 
 SINOFRESH HEALTHCARE,
      INCDate: December 1,
      2008
              By:
              /s/ Charles A.
      FustCharles A.
    FustChairman of the
      Board,  Chief Executive Officer (principal executive officer),
      Acting Chief Financial Officer (acting principal financial
      officer)
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