================================================================================


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark one)

|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2005

                                       OR

|_|  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 000-51334
--------------------------------------------------------------------------------


                                HEMOBIOTECH, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

--------------------------------------------------------------------------------

             DELAWARE                                    33-0995817
----------------------------------------  --------------------------------------
  (State or other jurisdiction of                     (I.R.S. Employer
   incorporation or organization)                    Identification No.)


       14221 DALLAS PARKWAY
          DALLAS, TEXAS                                    75254
----------------------------------------  --------------------------------------
(Address of principal executive offices)                (Zip Code)


       Registrant's telephone number, including area code: (214 540-8411)
                                                           --------------


         Indicate by check 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.  Yes [_]  No [X]

         Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).  Yes [_]  No [X]

         As of June 24, 2005, the registrant had outstanding 10,093,550 shares
of Common stock, $0.001 par value per share.

         Transitional Small Business Disclosure Format (check one):
Yes [_]  No [X]


================================================================================


<PAGE>


                                HEMOBIOTECH, INC.
                          (a development stage company)

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I -- FINANCIAL INFORMATION..............................................  2

     ITEM I. -- Financial Statements.........................................  2

         Condensed Balance Sheet.............................................  2

         Condensed Statements of Operations..................................  3

         Condensed Statements of Changes In Stockholders' Equity.............  4

         Condensed Statements of Cash Flows..................................  5

         Condensed Notes to Financial Statements.............................  6

     ITEM 2.  Management's Discussion and Analysis or Plan of Operations..... 11

     ITEM 3.  Controls and Procedures ....................................... 15

PART II -- OTHER INFORMATION................................................. 16

     Item 1.  Legal Proceedings.............................................. 16

     Item 3.  Defaults Upon Senior Securities................................ 16

     Item 6.  Exhibits....................................................... 16

SIGNATURES................................................................... 18




<PAGE>


              CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

         In addition to historical information, this Quarterly Report on Form
10-QSB contains forward-looking statements. Forward-looking statements are those
that predict or describe future events or trends and that do not relate solely
to historical matters. You can generally identify forward-looking statements as
statements containing the words "believe," "expect," "will," "anticipate,"
"intend," "estimate," "project," "assume" or other similar expressions, although
not all forward-looking statements contain these identifying words. All
statements in this report regarding our future strategy, future operations,
projected financial position, estimated future revenues, projected costs, future
prospects, and results that might be obtained by pursuing management's current
plans and objectives are forward-looking statements. You should not place undue
reliance on our forward-looking statements because the matters they describe are
subject to known and unknown risks, uncertainties and other unpredictable
factors, many of which are beyond our control. Our forward-looking statements
are based on the information currently available to us and speak only as of the
date on which this report was filed with the Securities and Exchange Commission
(the "SEC"). We expressly disclaim any obligation to issue any updates or
revisions to our forward-looking statements, even if subsequent events cause our
expectations to change regarding the matters discussed in those statements. Over
time, our actual results, performance or achievements will likely differ from
the anticipated results, performance or achievements that are expressed or
implied by our forward-looking statements, and such difference might be
significant and materially adverse to our stockholders. Many important factors
that could cause such a difference are described in our most recent registration
statement on Form SB-2 under the caption "Risk Factors," all of which you should
review carefully. Please consider our forward-looking statements in light of
those risks as you read this report.



<PAGE>


                         PART I -- FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

                                HEMOBIOTECH, INC.
                          (a development stage company)
                             CONDENSED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                          MARCH 31,             DECEMBER
                                                                            2005                   31,
                                                                         (Unaudited)              2004
                                                                       ----------------    --------------------
<S>                                                                        <C>                     <C>
ASSETS:
CURRENT ASSETS:
     Cash                                                                  $ 2,877,182             $ 3,086,000
     Prepaid Expenses                                                           80,234                 110,000
                                                                       ----------------    --------------------
           Total Current Assets                                              2,957,416               3,196,000


     Equipment, net                                                              3,856                   3,000
     Debt financing costs, net of amortization of
    $449,440 in 2005 and $193,000 in 2004                                      573,960                 830,000
                                                                       ----------------    --------------------

                                                                           $ 3,535,232             $ 4,029,000
                                                                       ================    ====================

LIABILITIES:
CURRENT LIABILITIES:
     Accounts payable and accrued expenses                                 $   129,881              $  132,000
     Accrued interest payable                                                  103,036                  47,000
     Convertible notes payable, net debt discount of $491,932 in
       2005 and $703,000 in 2004                                             1,758,068               1,547,000
                                                                       ----------------    --------------------

        Total current liabilities                                          $ 1,990,985             $ 1,726,000
                                                                       ================    ====================


STOCKHOLDER'S EQUITY:

Common stock, $0.01 par value, 55,000,000 shares authorized,
10,093,550 shares issued and outstanding as of March 31, 2005
and December 31, 2004                                                           10,000                  10,000

Additional paid-in capital                                                   4,420,800               4,417,000

Unearned compensation                                                          (13,000)                (13,000)

Deficit accumulated during the development stage                            (2,873,553)             (2,111,000)
                                                                       ----------------    --------------------
        Total Stockholders' equity                                           1,544,247               2,303,000
                                                                       ----------------    --------------------
                                                                           $ 3,535,232          $    4,029,000
                                                                       ================    ====================
</TABLE>

                  See Notes to Condensed Financial Statements.



                                       2
<PAGE>


                                HEMOBIOTECH, INC.
                          (a development stage company)
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                   October 31, 2001
                                                                  Three Months ended              (Inception) through
                                                                       March 31,                     March 31, 2005
                                                          -----------------------------------    ----------------------
REVENUE                                                         2005               2004
                                                          -----------------    --------------
<S>                                                           <C>                 <C>               <C>
   Operating Expenses:
        Research and development                              $    28,826         $   11,280        $   288,826

        General and administrative                                222,444            130,179          1,662,444
        Other Income (expenses)

        Interest Expense                                          522,898              5,460            942,890
        Interest Income                                           (11,615)                              (20,615)

   Net Loss                                                    $ (762,553)        $ (146,919)       $(2,873,553)
                                                          =================    ==============    ===================

   Basic and diluted loss per common share                         $(0.08)            $(0.02)
                                                          =================    ==============
   Weighted average number of shares outstanding

    basic and diluted                                          10,093,550          6,896,818
                                                          =================    ==============
</TABLE>



                  See Notes to Condensed Financial Statements.


                                       3
<PAGE>

                                HEMOBIOTECH, INC.
                          (a development stage company)
             CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                  (unaudited)
<TABLE>
<CAPTION>
                                                                                          DEFICIT
                                                                                        ACCUMULATED
                                                        ADDITIONAL                      DURING THE
                                 COMMON                  PAID -IN       UNEARNED        DEVELOPMENT
                                 SHARES       AMOUNT      CAPITAL     COMPENSATION         STAGE             TOTAL
                                 ------       ------    ----------    ------------      -----------          -----
<S>                            <C>             <C>         <C>         <C>                <C>                <C>
BALANCE - DECEMBER 31, 2004    10,093,550       10,000     4,417,000         (13,000)        (2,111,000)      2,303,000

Net Loss for the period                                                                        (762,553)       (762,553)

Estimated
fair value of vested options
granted to Board of Advisors                                    3800                                              3,800

BALANCE - MARCH 31, 2005       10,093,550      10,000      4,420,800         (13,000)        (2,873,553)      1,544,247
                              -----------     -------     ----------        --------        -----------      ----------
</TABLE>

                  See Notes to Condensed Financial Statements.


                                       4
<PAGE>

                                HEMOBIOTECH, INC.
                          (a development stage company)

                       CONDENSED STATEMENTS OF CASH FLOWS
                                  (unaudited)

<TABLE>
<CAPTION>
                                                                                                              OCTOBER 3, 2001
                                                                     THREE MONTHS ENDED MARCH 31,                (INCEPTION)
                                                                    -----------------------------                   THROUGH
                                                                      2005                  2004               MARCH 31, 2005
                                                                     ------                ------           -------------------
<S>                                                             <C>                          <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                     $      (762,553)             (146,919)      $          (2,873,553)
   Adjustments to reconcile net loss to net cash used in
         operating activities:
               Estimated fair value of options and
                     compensatory stock                                                                                   150,000
               Notes issued for services -- related party                                                                 354,000
               Expenses paid by stockholder                                                      1350                      14,000
               Amortization of deferred offering costs                  255,840                                           448,840
               Amortization of debt discount                            210,808                                           362,808
               Contribution of salary                                                                                      11,000
               Changes in:
                     Accounts payable and accrued expenses                2,694               140,109                     848,236
                     Accrued interest                                    56,250                  5460                     128,250
                     Prepaid expenses                                    29,079
                                                                                                                          (80,921)
         Net cash used in operating activities                         (207,882)                    0
                                                                                                                         (636,881)
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property and equipment                                      (936)
                                                                                                                           (3,936)
CASH FLOWS FROM FINANCING ACTIVITIES:
   Net proceeds from issuance of common stock and debt                                                                  3,767,000
   Payment of notes                                                                                                      (249,000)
         Net cash provided by financing activities                                                                      3,518,000
INCREASE (DECREASE) IN CASH                                            (208,818)                    0                   2,877,182
Cash -- beginning of period                                           3,086,000                     0                           0
CASH -- END OF PERIOD                                           $     2,877,182                     0       $           2,877,182
SUPPLEMENTARY NON-CASH INVESTING AND FINANCING ACTIVITIES:
   Accrued salary exchanged for note                                                                        $             150,000
   Employees/stockholders contribution of salary                $                                           $             564,000
   Stockholders contribution of convertible note payable
         and related interest                                   $                                           $             280,000
</TABLE>





                  See Notes to Condensed Financial Statements.


                                       5
<PAGE>


                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                  (UNAUDITED)

NOTE A -- THE COMPANY

         Hemobiotech, Inc. (the "Company" refers to Hemobiotech, Inc. or its
predecessor entity) (a development stage company) was incorporated on October
13, 2003 under the laws of Delaware. In December 2003, HemoBioTech, Inc., a
Texas corporation, was merged with and into the Company. The accompanying
financial statements include the predecessor operations of the Texas Corporation
from its inception on October 3, 2001. The historical basis of accounting was
carried over in the merger, including the deficit accumulated in the development
stage. The Company is researching and developing human blood substitute patented
technology licensed exclusively from Texas Tech University Health Service Center
("TTU") (Note C). The Company is in the development stage and its efforts have
been principally devoted to capital raising, organizational infrastructure
development and research and development.

NOTE B -- BASIS OF PRESENTATION

         The interim financial statements presented are unaudited but in the
opinion of management, have been prepared in conformity with accounting
principles generally accepted in the United States of America applied on a basis
of consistent with those of the annual financial statements. Such interim
financial statements reflect all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the financial position and the
results of operations for the interim periods presented. The results of
operations for the interim periods presented are not necessarily indicative of
the results to be expected for the full fiscal years. The interim financial
statements should be read in connection with the audited financial statements
for the year ended December 31, 2004.

         The financial statements have been prepared assuming that the Company
will continue as a going concern which contemplates the realization of assets
and satisfaction of liabilities in the normal course of business. The Company
has incurred cumulative losses of $2,873,553 for the period through March 31,
2005 and has been dependent on funding operations through the issuance of
convertible debt and private sale of equity securities. At March 31, 2005 cash
amounted to approximately $2,877,000. Management believes that current cash
resources will be insufficient to repay convertible notes in October 2005 and
fund operations for the next twelve months. Management's plans include
continuing to finance operations through attempting a private or public
placement of equity securities and monitoring and reducing expenditures.
However, no assurance can be given at this time as to whether the Company will
be able to achieve these objectives. These factors, among others, raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.

NOTE C -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

[1]  LOSS PER COMMON SHARE:

         Basic and diluted loss per common share is based on the net loss
divided by the weighted average number of common shares outstanding during the
period. No effect has been given to outstanding potential common shares such as
options, warrants and convertible instruments in the diluted computation as
their effect would be antidilutive.

[2]  STOCK -BASED COMPENSATION:

         As permitted under SFAS No. 148, "Accounting for Stock-Based
Compensation -- Transition and Disclosure," which amended SFAS No. 123,
"Accounting for Stock-Based Compensation," the Company has elected to continue
to follow the intrinsic value method in accounting for stock-based employee
compensation arrangements as defined by Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" ("APB No. 25") and related
interpretations. Under the provisions of APB No. 25, compensation cost for stock
options is measured as the excess, if any, of the fair price of the Company's
common stock at the date of the grant over the amount an employee must pay to
acquire the stock. If the Company had applied the fair value recognition
provision of SFAS No. 123 to stock-based employee compensation, the effect on
net loss and net loss per share would have been as follows:


                                       6
<PAGE>

<TABLE>
<CAPTION>
                                                                             THREE MONTHS ENDED
                                                                                  MARCH 31,
                                                              -------------------------------------------------
                                                                      2005                       2004
                                                                      ----                       ----
<S>                                                           <C>                        <C>
Net loss                                                      $             (762,553)    $            (146,919)
Total stock-based employee compensation expense
   Determined under fair value based method for
   all awards, net of related tax effects                                     (7,100)                        0
Pro forma net loss attributable to common Stockholders        $             (769,653)    $            (146,919)

Net loss per common share (basic and diluted):
         As reported                                          $                 (.08)    $                (.02)
         Pro forma                                            $                 (.08)    $                (.02)
</TABLE>

The weighted-average fair values at date of grant for options granted during the
three months ended March 31, 2005 and 2004 were $0.71 and $.00 respectively.
There were no options granted for the three months ended March 31, 2004.The
value of the options was estimated using the Black-Scholes option pricing model
with the following weighted-average assumptions:

                                                    THREE MONTHS ENDED MARCH 31,
                                                                2005

       Expected life in years                                  5 - 10
       Interest rate                                        4.16% - 4.33%
       Volatility                                                80%
       Dividend yield                                            0%

[3] USE OF ESTIMATES:
     The preparation of financial statements in conformity with U.S. 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 financial
statements and the reported amounts of revenues and expenses during the
reporting period. Such estimates include the selection of assumptions underlying
the calculation of the fair value of options. Actual results could differ from
those estimates.

[4] DEFERRED FINANCING COSTS:

         Deferred financing costs include costs attributable to issuing
convertible notes in the amount of $1,023,000 and such costs are being amortized
to interest expense over the term of convertible notes.

NOTE D -- ACCOUNTS PAYABLE AND ACCRUED EXPENSES

         Accounts payable and accrued expenses consist of the following:

                                   March 31, 2005       December 31, 2004

Professional fees                         118,053            113,000
Directors' fee                                                12,000
Other                                      11,828              7,000
                                           ------              -----
                                         $129,881            132,000

NOTE E -- AGREEMENTS WITH TEXAS TECH UNIVERSITY HEALTH SERVICE CENTER ("TTU")

         On January 22, 2002, the Company entered into an exclusive license
agreement with TTU with respect to



                                       7
<PAGE>

receiving certain patented rights. The Company is committed to the exploitation
of such patented rights.

         In consideration for entering into the agreement, the Company issued
678,820 shares of common stock to TTU (subject to anti-dilution protection).In
addition, the Company has agreed to fund, over a four year period, $1.2 million
to support efforts in incubating and commercializing other TTU technologies.
Under the agreement, the Company reserves the right of first refusal on
licensing and commercializing other technology developed from such funding. The
shares issued were valued at approximately $1,000, their estimated fair value,
and charged to operations. The funding of the $1.2 million is subject to the
Company obtaining FDA approval of a blood substitute product. As of March 31,
2005, such approval had not been obtained. In addition, the Company has agreed
to reimburse TTU for all intellectual property protection costs and patent
maintenance fees. On May 20, 2004 TTU agreed to waive its antidiltution
protection in exchange for 135,765 shares of common stock. Such shares were
valued at approximately $115,000, their estimated fair value, and charged to
operations.

         In addition, in July 2002, the Company entered into a sponsored
research agreement with TTU for the period September 1, 2002 through August 31,
2006, subject to a two-year extension to be mutually agreed on by the parties in
the second year of the agreement and prior to August 31, 2006. The agreement may
be terminated by either party on 90 days written notice. In November 2004, the
Company agreed to fund the next phase of its research under the sponsored
research agreement through November 30, 2005 for a fixed fee of approximately
$231,000, which was paid in December 2004.

NOTE F -- CONVERTIBLE NOTES PAYABLE

         On October 31, 2003, a $150,000 note was exchanged for services
previously provided by a principal stockholder. The note bears interest at 5%
per annum and was due on December 31, 2003 and was convertible into shares of
common stock at $2.21 per share. Effective July 15, 2004, such note and accrued
interest of approximately $5,000 was forgiven and treated as a capital
contribution.

         On July 15, 2004, a note with principal of $174,000 bearing interest at
5% per annum, due on December 31, 2003 and convertible into shares of common
stock at $2.21 per share was extended to the consummation of a private placement
of $2,500,000 (Note I). On October 13, 2004, such note plus $1,000 of accrued
interest was paid and the balance of accrued interest was forgiven. Such
forgiveness was treated as a capital contribution.

         On October 13, 2004, $75,000 of a note with a principal of $180,000
bearing interest at 5% per annum, due on May 1, 2004 and convertible into shares
of common stock at $2.21 per share was paid. The balance of principal and
accrued interest was forgiven and was treated as a capital contribution.

NOTE G -- CAPITAL DEFICIENCY

[1]  STOCK SPLIT:

         On August 16, 2004, the Board of Directors approved a reverse stock
split of one share of common stock for .543056 shares of common stock. All
common stock and common stock equivalent shares in the accompanying financial
statements have been adjusted to give retroactive effect to the reverse stock
split.

[2]  PRIVATE PLACEMENT:

         On October 27, 2004, the Company completed a private placement of 45
units and raised gross proceeds of $4,500,000. Each unit consists of a $50,000
unsecured convertible promissory note, 58,824 shares of common stock and 117,648
warrants. The notes bear interest at 10% per annum (an effective rate of 77%)
and are convertible at the option of the holder into common stock or securities
, as defined, at a conversion price equal to the fair market value per share
price at the time of conversion.


                                       8
<PAGE>

         The gross proceeds from the sale of each unit was allocated based on
relative fair values to each of the components.

Convertible notes payable                                  $31,000
Common stock                                                31,000
Warrants                                                    38,000
                                                   ---------------------
    Total                                                 $100,000

         Based on the allocation of the relative fair values to the components
of the private placement offering, the debt discount was calculated to be
$855,000, which is being amortized as expense to interest expense over the term
of the notes.

         The interest on the note is convertible into common stock at the
Company's option. The notes are due the earlier of October 27, 2005 or the date
the Company consummates an additional financing having gross proceeds of not
less than $4,000,000. The warrants are exercisable at $1.06 per share through
the fifth anniversary of the effectiveness of a registration statement of shares
underlying the warrants. The warrants are subject to redemption, at the
Company's sole option, after one year from the date of effectiveness of the
registration statement of common stock underlying the warrants if the common
stock price equals or exceeds $2.12 for a period of at least 20 consecutive
trading days at a redemption price of $.001 per warrant.

         Under the terms of the October 2004 private placement, the Company
agreed to file a registration statement on Form SB-2 with the SEC prior to
December 27, 2004 to register for public resale the shares of common stock
issued in the October 2004 private placement and issuable on (i) conversion of
the Company's 10% convertible unsecured promissory notes, (ii) payment, at the
Company's sole option, of accrued but unpaid interest on the notes, and (iii)
exercise of the warrants, and to use its commercially reasonable efforts to have
the registration statement declared effective by the SEC prior to February 24,
2005. The Company agreed that if the registration statement was not filed with
the SEC on or by December 27, 2004, the Company would pay the holders of such
securities liquidated damages equal to an aggregate of $90,000 for each 30
consecutive days (pro-rated daily) after December 27, 2004 during which the
registration statement was not filed with the SEC. In addition, the Company
agreed that, if the registration statement was not declared effective by the SEC
prior to February 24, 2005, the Company would pay to such holders liquidated
damages equal to an aggregate of $90,000 for every 30 consecutive days
(pro-rated daily) after February 24, 2005 during which the registration
statement was not declared effective by the SEC.

         Because the registration statement was filed initially with the SEC on
January 18, 2005, the Company would have been required to pay to the holders of
such securities an aggregate of $66,000 in cash as liquidated damages. However,
under a waiver and extension agreement signed by certain of such holders,
certain security holders waived their right to receive an aggregate of $62,766
of such liquidated damages. The remaining security holders did not agree to
waive their right to receive their pro rata share of such liquidated damages and
the Company is therefore required to pay $3,234 of such liquidated damages to
the non-waiving security holders. Further, since the registration statement was
not declared effective until May 13, 2005, the Company would have been required
to pay such holders an aggregate additional cash liquidated damages payment of
at least $195,000, calculated as of May 1, 2005. However, under the waiver and
extension agreement, certain security holders agreed to waive their right to
receive an aggregate of approximately $186,000 of such additional liquidated
damages. The remaining security holders did not agree to waive their right to
receive their pro rata share of such additional liquidated damages and the
Company is therefore required to pay approximately $9,000 of such additional
liquidated damages to the non-waiving security holders. In addition, since the
registration statement was not declared effective until May 13, 2005, the
Company is required to pay all of the security holders an aggregate of an
additional $36,000 for liquidated damages that accrued between May 1, 2005 and
May 13, 2005. As of June 24, 2005, the Company has not paid any part of these
liquidated damages.

The Company recorded a liquidating damage penalty of $12,000 for the three
months ended March 31, 2005.

[3] STOCK OPTION/STOCK ISSUANCE PLAN:

         During 2003, the Board of Directors of the Company approved a Stock
Option/Stock Issuance Plan (the



                                       9
<PAGE>

"Plan") which provides for the granting of options or stock to purchase up to
3,000,000 shares of common stock (on a pre-reverse stock split basis), under
which, directors, employees and independent contractors are eligible to receive
incentive and non-statutory stock options and common shares (employees). The
Company's stockholders approved the Plan in August 2004.

         On August 16, 2004, the Board of Directors and stockholders of the
Company approved the reduction in the number of shares reserved for under the
Plan to 1,629,168 shares reflecting the effect of the .543056 reverse split
effected by the Company. Options granted under the Plan are exercisable for a
period of up to 10 years from date of grant at an exercise price which is not
less than the fair value of the common stock on date of grant, except that the
exercise period of options granted to a stockholder owning more than 10% of the
outstanding capital stock may not exceed five years and their exercise price may
not be less than 110% of the fair value of the common stock at date of grant.

         Options under the Plan generally vest 25%(partially) on the first
anniversary date of the grant and then, thereafter, equally over thirty-six
months.

         During the years ended December 31, 2004 and 2003, the Company granted
25,860 and 103,179 options, respectively, to purchase common stock to members of
the Company's Board of Advisors. The Company will record additional charges when
these options vest at the then market price.

         During the year ended December 31, 2004, in connection with the change
in status of an option holder from a member of the Board of Advisors to
Director, the Company recorded deferred stock compensation of $13,000,
representing the difference between the exercise price and the market value of
the Company's common stock on the date such stock option holder's status was
changed. Deferred compensation is included as a component of stockholders'
equity (capital deficiency) and is being amortized to expense over the remaining
vesting period of the stock options.

         Stock option activity under the plan is summarized as follows:

<TABLE>
<CAPTION>
                                                                               YEAR ENDED MARCH 31,
                                                                MARCH 31, 2005                       DECEMBER 31,2004
                                                          ---------------------------         -------------------------------
                                                                            WEIGHTED                             WEIGHTED
                                                                            AVERAGE                              AVERAGE
                                                                            EXERCISE                             EXERCISE
                                                             SHARES          PRICE               SHARES           PRICE

<S>                                                         <C>            <C>                  <C>              <C>
Options outstanding at beginning of period                  1,119,387      $     0.23           1,053,527        $   0.19
Granted                                                        10,000            0.85              65,860            0.85
Options outstanding at end of period                        1,129,387            0.23           1,119,387            0.23
                                                           ==========                          ==========
Options exercisable at end of period                          697,923            0.24             664,140            0.23
                                                             ========                            ========
</TABLE>

         At March 31, 2005, 499,781 options were available for grant under the
Plan.

         The following table presents information relating to stock options
outstanding under the Plan as of March 31, 2005:


                                       10
<PAGE>

<TABLE>
<CAPTION>
                                               OPTIONS OUTSTANDING                   OPTIONS EXERCISABLE
                                               -------------------                   -------------------
                                                                     WEIGHTED
                                                      WEIGHTED        AVERAGE                       WEIGHTED
                                                       AVERAGE       REMAINING                       AVERAGE
                    RANGE OF                          EXERCISE        LIFE IN                       EXERCISE
                 EXERCISE PRICE      SHARES             PRICE          YEARS       SHARES             PRICE

<S>                                    <C>             <C>            <C>            <C>             <C>
                      $.18              404,574         $ .18          8.93           222,539         $ .18
                      $.20              651,668           .20          3.83           425,384           .20
                      $.85               73,145           .85          9.72            50,000           .85
                                 ---------------                                --------------
                                      1,129,387           .24          6.01           697,923           .24
                                     ==========                                      ========
</TABLE>

         The weighted average fair value at date of grant for options granted
the first quarter of 2005 was $.71. The fair value of options at date of grant
was estimated using the Black-Scholes option pricing model utilizing the
following assumptions:

                                      MARCH 31,             DECEMBER 31,
                                         2005                   2004
                                   -------------------------------------------
Risk-free interest rates                4.60%              4.05% to 4.40%
Expected option life in years             10                     10
Expected stock price volatility          80%                    80%
Expected dividend yield                   0%                     0%

[4] REVISION:

         The December 31, 2004 financial statements have been changed to reflect
a different method of separately valuing common stock issued during 2004. The
effects of this change was to decrease total liabilities and increase
stockholders' equity by $703,000 at December 31, 2004.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

RECENT DEVELOPMENTS

         In October 2004, we completed a private placement of units, with each
unit consisting of one 10% convertible unsecured promissory note in the
principal amount of $50,000, 58,824 shares of our common stock and a five-year
warrant to purchase 117,648 shares of our common stock at an exercise price of
$1.06 per share. We sold 45 units in the private placement at a price of
$100,000 per unit, and we received gross cash proceeds of $4.5 million. Our net
proceeds were $3.43 million, which includes the aggregate principal amount of
our 10% unsecured convertible promissory notes outstanding.

         On May 13, 2005, we completed the registration of 11,382,431 shares of
our common stock under the Securities Act of 1933, as amended. Such shares
include 2,647,080 presently outstanding shares of our common stock, 3,441,191
shares of our common stock( valued at $.85 per share) issuable on conversion of
$2.25 million principal amount of our 10% convertible unsecured promissory notes
and, in our sole discretion, in payment of accrued interest on such notes, and
5,294,160 shares of common stock (valued at $.85 per share) issuable on the
exercise of outstanding warrants to purchase our common stock. All of the shares
are to be sold by existing security holders of the Company. We will not receive
any of the proceeds from the sale of these shares, but will, however, receive
proceeds in connection with any exercise of the warrants referred to above.


                                       11
<PAGE>

PLAN OF OPERATIONS

         We were founded in 2001 as "HemoBioTech, Inc.," a Texas corporation. In
2003, we incorporated a sister corporation named "Hemobiotech, Inc." in the
State of Delaware. On December 1, 2003, HemoBioTech, Inc. was merged with and
into Hemobiotech, Inc., with Hemobiotech, Inc. as the surviving entity. Our
principal executive offices are located at 14221 Dallas Parkway, Suite 1500,
Dallas, Texas 75254, and our telephone number is (214) 540-8411. Our website is
located at www.hemobiotech.com.

         We are primarily engaged in the research and development of human blood
substitute technology exclusively licensed from Texas Tech University Health
Services Center, although in 2003, 2004 and in the three months ended March 31,
2005 most of our working capital was used to pay for general and administrative
costs, salaries, legal and accounting fees and the cost of raising money. After
reviewing the blood substitute technology developed by researchers at Texas
Tech, in January 2002 we licensed from Texas Tech the exclusive rights to
various alternative compositions of HemoTech, a novel blood substitute that is
based on hemoglobin (which is the key protein in red blood cells that carries
oxygen) of both bovine (cow) and human origin, as well as methods for its
production and use. What makes HemoTech a novel potential blood substitute
product is the fact that it is comprised of hemoglobin that has been isolated
from bovine blood and then chemically modified to make the product non-toxic. We
also have an agreement with Texas Tech that any patent issuing from its patent
application relating to the induction of erythropoiesis (which is the production
of red blood cells by the body) will be included under our exclusive license
with Texas Tech. In addition to our license and patent agreement with Texas
Tech, we entered into a sponsored research agreement with Texas Tech in July
2002, under which we are entitled to use certain of Texas Tech's production and
research and development facilities in Lubbock, Texas.

         Our goal is to address an increasing demand for a safe and inexpensive
human blood substitute product in the United States and around the world through
our licensed technology. We believe that certain initial pre-clinical and early
stage human trials undertaken outside the U.S. by prior holders of this
technology suggest that our licensed technology may possess properties that
diminish the intrinsic toxic effects of hemoglobin and help reduce or eliminate
the abnormal reaction associated with hemorrhagic shock (which is the loss of
blood pressure and the lowering of vital signs resulting from the loss of
blood).

RESEARCH AND DEVELOPMENT OF HEMOTECH

         HemoTech is currently our only potential product. We expect that the
remaining production, development, testing and FDA approval of HemoTech, if
ever, will occur over a period of approximately 8 to 9 years. In other words,
assuming we are able to progress through each phase of clinical trials
efficiently and without significant delay, we believe we could obtain FDA
approval of HemoTech by mid-2012, and possibly even earlier.

         HemoTech must undergo several major stage of production, development,
clinical study and testing before being in a position to submit its NDA
application to the FDA, as follows:

         o    PRODUCTION OF HEMOTECH. In order to produce HemoTech for Phase I
              clinical trials, we must complete certain upgrades of the current
              HemoTech production facilities located at Texas Tech. We expect
              that the initial phase of these upgrades will be completed by the
              end of the second quarter of 2005, although there can be no
              assurance that this will be the case, depending on, among other
              things, worker schedules, available materials and unexpected costs
              associated with construction. We believe such upgrades will cost
              us approximately $85,000 and such upgrades are contemplated by our
              stage 2 sponsored research agreement with Texas Tech. This amount
              was included in the $230,503 that we paid to Texas Tech on
              December 13, 2004 when we entered into our stage 2 sponsored
              research agreement. We anticipate that the second phase of these
              upgrades will be finished by the end of 2005, although there can
              be no assurance that this will be the case, depending on, among
              other things, worker schedules, available materials, unexpected
              costs associated with construction and our ability to raise
              sufficient capital in order to complete such upgrades. We expect
              that such additional upgrades will cost us approximately $120,000.
              We will be required to raise such additional funds, as part of the
              $10-15



                                       12
<PAGE>

              million that we will need to raise within the next eight to nine
              months, in order to pay for these additional upgrades.

         o    PREPARATION AND SUBMISSION OF U.S. IND APPLICATION. We started
              preparing our U.S. IND application on December 13, 2004, when we
              entered into our phase 2 sponsored research agreement with Texas
              Tech. under our stage 2 sponsored research agreement, Texas Tech
              has agreed to assist us in preparing our U.S. IND application by
              providing certain services, including converting all of the
              information contained in the European IND application into digital
              format and analyzing our proposed Phase I U.S. clinical trial
              testing procedures, to be set forth in our U.S. IND application.
              We agreed to pay Texas Tech $110,000 for these services. This
              amount was included in the $230,503 that we paid to Texas Tech on
              December 13, 2004 when we entered into our stage 2 sponsored
              research agreement. We expect to complete the preparation of our
              U.S. IND application and to be in a position to submit our
              application to the FDA by early 2006, although there can be no
              assurance that we will be able to meet this deadline, depending
              on, among other things, the rate of conversion of the information
              contained in the European IND application to digital format, the
              timing and outcome of Texas Tech's analysis of our proposed Phase
              I U.S. clinical trials testing procedure, and the timing and
              outcome of the regulatory analysis to be performed by our
              regulatory consultant, BioLink. We anticipate that the cost of
              submitting our application to the FDA will be approximately
              $400,000. We will be required to raise such additional funds as
              part of the $10.0-15.0 million that we will need to raise within
              the next eight to nine months, in order to pay for the cost of
              submitting our U.S. IND application to the FDA.

         o    PHASE I OF OUR U.S. CLINICAL TRIALS. Once our U.S. IND application
              has been submitted to the FDA and we receive no objections from
              the FDA, we expect to be able to commence our Phase I U.S.
              clinical trials of HemoTech. Depending on whether the FDA accepts
              our U.S. IND application in early 2006, we believe that we could
              begin Phase I clinical trials by the end of the second quarter of
              2006. We estimate that our Phase I clinical trials (including the
              costs of doing additional research and development of HemoTech
              during our Phase I clinical trials, production of the product and
              the operational and overhead costs that we will incur during our
              Phase I clinical trials) will cost approximately $10.0 million.

RESULTS OF OPERATIONS

         We are a development stage company and have not generated any revenue
from inception through March 31, 2005. Through the third quarter of 2004, our
efforts were principally devoted to evaluating the HemoTech technology,
negotiating and entering into our license agreement and sponsored research
agreements with Texas Tech, hiring employees and consultants, establishing our
Board of Advisors, developing a business plan, raising capital, and engaging in
other organizational and infrastructure development. Until the consummation of
our October 2004 private placement, we did not have the financial resources to
engage in any significant research and development activities. However, we used
part of the proceeds of our October 2004 private placement to fund stage 2 of
our sponsored research agreement with Texas Tech, representing our first
significant expenditure of resources on the research and development of
HemoTech.

         Total expenses, and thus our losses, totaled $2,873,553 from October 3,
2001 (inception) through March 31, 2005. Such losses included $617,000 in 2003,
$1,073,000 in 2004, and $762,553 for the three months ended March 31, 2005.

         THREE MONTHS ENDED MARCH 31, 2005 COMPARED TO THREE MONTHS ENDED MARCH
31, 2004

         Costs incurred during the three months ended March 31, 2004 served to
increase current liabilities (see liquidity and capital resources below).

         Total expenses were $762,553 for the three months ended March 31,2005
period compared with $146,919 for the corresponding period in 2004, an increase
of $615,634 resulting primarily from the following:


                                       13
<PAGE>

         We incurred significantly higher total interest costs resulting from
the private placement completed in October, 2004. Total net interest charges
increased $505,823 resulting primarily from amortization of debt issues costs
($255,840) , amortization of debt discount costs ($210,808), and $56,250 related
to our 10% convertible notes in the current period compared to $5,460 in the
same period last year.

         Our research and development expenses increased $17,546 resulting from
higher expenses and spending associated with phase two of our sponsored research
agreement with Texas Tech University entered into in November, 2004.

         Our general and administrative costs increased $92,265 resulting from
increased professional fees, patent costs, office rental and related charges,
which were somewhat offset by lower salary costs.

LIQUIDITY AND CAPITAL RESOURCES

         In October 2004, we completed a private placement of units, with each
unit consisting of one 10% convertible unsecured promissory note in the
principal amount of $50,000, 58,824 shares of our common stock and a five-year
warrant to purchase 117,648 shares of our common stock at an exercise price of
$1.06 per share. We sold 45 units in the private placement at a price of
$100,000 per unit, and we received gross proceeds of $4.5 million. Our net
proceeds were $3.43 million, which includes the aggregate principal amount of
our 10% unsecured convertible promissory notes outstanding. We intend to use the
proceeds of the offering (of which there is approximately $2.9 million remaining
as of March 31, 2005) over the next eight to nine months to pay for the
following costs and expenditures:

         o    our general and administrative expenses (including salaries, legal
              and other professional fees, consulting and advisory fees, and to
              pay for the costs associated with raising additional capital);

         o    preparation of our U.S. IND application and the costs associated
              with making certain upgrades to the HemoTech production facility,

         We believe our current available cash of approximately $2.9 million
will be sufficient to complete our immediate planned operations described above.
If our selling stockholders convert any portion of our 10% convertible unsecured
notes into shares of our common stock (of which there can be no guarantee),
however, we will apply such unused funds to make up any shortfall we may have in
the foregoing operating costs and to further develop HemoTech.

         Following completion of our U.S. IND application, our planned
operations will include submission of our U.S. IND application, commencement and
completion of our Phase I U.S. clinical trials, continuation of our research and
development of HemoTech during Phase I clinical trials, and payment of our
operational and overhead costs that we will incur during our Phase I clinical
trials. In order to complete these additional planned operations, we will need
to raise an additional $10-15 million within the next eight to nine months. If
we fail to generate enough working capital, either from future equity or debt
sales or revenue from operations, there can be no assurance that we will be able
to implement our business plan, complete these planned operations, or continue
our operations beyond the next 12 months.

         We will have to fund our liquidity requirements through public or
private equity offerings or debt financings. We may be unable to obtain any
required additional financing on terms favorable to us, if at all. If adequate
funds are not available on acceptable terms, we will be unable to fund our
expansion, successfully promote our brand, develop our products and respond to
competitive pressures or take advantage of acquisition opportunities, any of
which would have a material adverse effect on our business. If we raise
additional funds through the issuance of equity securities, our stockholders may
experience dilution of their ownership interest, and the newly-issued securities
may have rights superior to those of our common stock. There can be no
assurances that we will be able to secure additional financing, or obtain
favorable terms on such financing if it is available. Continued negative cash
flows create substantial doubt about our ability to fully implement our
operating plan and we may have to reduce the



                                       14
<PAGE>

scope of our planned operations, which may jeopardize our ability to continue
our business. If cash and cash equivalents, together with any cash generated
from operations, are insufficient to satisfy our liquidity requirements, we will
not have sufficient resources to continue operations.

ITEM 3.  CONTROLS AND PROCEDURES

         Disclosure controls and procedures are designed with an objective of
ensuring that information required to be disclosed in our periodic reports filed
with the SEC, such as this Quarterly Report on Form 10-QSB, is recorded,
processed, summarized and reported within the time periods specified by the SEC.
Disclosure controls also are designed with an objective of ensuring that such
information is accumulated and communicated to our management, including our
chief executive officer and chief financial officer, in order to allow timely
consideration regarding required disclosures.

         The evaluation of our disclosure controls by our principal executive
officer and principal financial officer included a review of the controls'
objectives and design, the operation of the controls, and the effect of the
controls on the information presented in this Quarterly Report. Our management,
including our chief executive officer, president and chief financial officer,
does not expect that disclosure controls can or will prevent or detect all
errors and all fraud, if any. A control system, no matter how well designed and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Also, projections of any evaluation of
the disclosure controls and procedures to future periods are subject to the risk
that the disclosure controls and procedures may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

         Based on their review and evaluation as of the end of the period
covered by this Form 10-QSB, and subject to the inherent limitations described
above, our principal executive officer and principal financial officer have
concluded that our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended)
are effective as of the end of the period covered by this report. They are not
aware of any significant changes in our disclosure controls or in other factors
that could significantly affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

         The term internal control over financial reporting is defined as a
process designed by, or under the supervision of, the registrant's principal
executive and principal financial officers, or persons performing similar
functions, and effected by the registrant's board of directors, management and
other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:

         (a) Pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the assets of
the registrant;

         (b) Provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of
the registrant are being made only in accordance with authorizations of
management and directors of the registrant; and

         (c) Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of the registrant's
assets that could have a material adverse effect on the financial statements.

         During the period covered by this Form 10-QSB, there have not been any
changes in our internal control over financial reporting that have materially
affected, or that are reasonably likely to materially affect, our internal
control over financial reporting.


                                       15
<PAGE>

                           PART II --OTHER INFORMATION

           Items 2, 4 and 5 are not applicable and have been omitted.

ITEM 1.  LEGAL PROCEEDINGS.

         We are not party to any litigation or threatened litigation.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.

         In October 2004, we completed a private placement of units, with each
unit consisting of one 10% convertible unsecured promissory note in the
principal amount of $50,000, 58,824 shares of our common stock and a five-year
warrant to purchase 117,648 shares of our common stock at an exercise price of
$1.06 per share. We sold 45 units in the private placement at a price of
$100,000 per unit, and we received gross cash proceeds of $4.5 million. Our net
proceeds were $3.43 million, which includes the aggregate principal amount of
our 10% unsecured convertible promissory notes outstanding. Under the terms of
our October 2004 private placement, we agreed to file a registration statement
on Form SB-2 with the SEC prior to December 27, 2004 to register for public
resale the shares of common stock issued in the October 2004 private placement
and issuable on (i) conversion of our 10% convertible unsecured promissory
notes, (ii) payment, at our sole option, of accrued but unpaid interest on the
notes, and (iii) exercise of the warrants, and to use our commercially
reasonable efforts to have the registration statement declared effective by the
SEC prior to February 24, 2005.

         We agreed that if the registration statement was not filed with the SEC
on or by December 27, 2004, we would pay the holders of such securities
liquidated damages equal to an aggregate of $90,000 for each 30 consecutive days
(pro-rated daily) after December 27, 2004 during which the registration
statement was not filed with the SEC. In addition, we agreed that, if the
registration statement was not declared effective by the SEC prior to February
24, 2005, we would pay to such holders liquidated damages equal to an aggregate
of $90,000 for every 30 consecutive days (pro-rated daily) after February 24,
2005 during which the registration statement was not declared effective by the
SEC.

         Because the registration statement was filed initially with the SEC on
January 18, 2005, we would have been required to pay to the holders of such
securities an aggregate of $66,000 in cash as liquidated damages. However, under
a waiver and extension agreement signed by certain of such holders, certain
security holders agreed to waive their right to receive their pro rata share of
such liquidated damages and we are therefore required to pay $3,234 of such
liquidated damages to the non-waiving security holders. Further, since the
registration statement was not declared effective until May 13, 2005, we would
have been required to pay such holders an aggregate additional cash liquidated
damages payment of at least $195,000, calculated as of May 1, 2005. However,
under the waiver and extension agreement, certain security holders agreed to
waive their right to receive an aggregate of approximately $186,000 of such
additional liquidated damages. The remaining security holders did not agree to
waive their right to receive their pro rata share of such additional liquidated
damages and we are therefore required to pay approximately $9,000 of such
additional liquidated damages to the non-waiving security holders. In addition,
since the registration statement was not declared effective until May 13, 2005,
we are required to pay all of the security holders an aggregate of an additional
$36,000 for liquidated damages that accrued between May 1, 2005 and May 13,
2005. As of June 24, 2005, we have not paid any part of these liquidated
damages.

ITEM 6.  EXHIBITS

         31.1     Certification of Principal Executive Officer required under
                  Rule 13a-14(a) or Rule 15d-14(a) of the Securities and
                  Exchange Act of 1934, as amended.

         31.2     Certification of Principal Financial Officer required under
                  Rule 13a-14(a) or Rule 15d-14(a) of the Securities and
                  Exchange Act of 1934, as amended.


                                       16
<PAGE>

         32.1*    Certification of Principal Executive Officer required under
                  Rule 13a-14(b) or Rule 15d-14(b) of the Securities and
                  Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

         32.2*    Certification of Principal Financial Officer required under
                  Rule 13a-14(b) or Rule 15d-14(b) of the Securities and
                  Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350.

----------------------------------
*        The certifications attached as Exhibits 32.1 and 32.2 accompany this
         Quarterly Report on Form 10-QSB pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002 and shall not be deemed "filed" by
         Hemobiotech, Inc. for purposes of Section 18 of the Securities Exchange
         Act of 1934, as amended.

                                       17
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements 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.



                                HEMOBIOTECH, INC.


Dated June 24, 2005             By: /s/ Arthur Bollon, Ph.D.
                                    -------------------------------------------
                                    Dr. Arthur P. Bollon- Chairman of the Board
                                    And Chief Executive Officer
                                    (PRINCIPAL EXECUTIVE OFFICER)


Dated June 24, 2005            By:  /s/ Mark J. Rosenblum
                                    -------------------------------------------
                                    Mark J. Rosenblum - Chief Financial Officer
                                    and Secretary
                                    (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)


                                       18
<PAGE>

                                  EXHIBIT INDEX

31.1     Certification of Principal Executive Officer required under Rule
         13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934,
         as amended.

31.2     Certification of Principal Financial Officer required under Rule
         13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934,
         as amended.

32.1*    Certification of Principal Executive Officer required under Rule
         13a-14(b) or Rule 15d-14(b) of the Securities and Exchange Act of 1934,
         as amended, and 18 U.S.C. Section 1350.

32.2*    Certification of Principal Financial Officer required under Rule
         13a-14(b) or Rule 15d-14(b) of the Securities and Exchange Act of 1934,
         as amended, and 18 U.S.C. Section 1350.

----------------------------------
*        The certifications attached as Exhibits 32.1 and 32.2 accompany this
         Quarterly Report on Form 10-QSB pursuant to Section 906 of the
         Sarbanes-Oxley Act of 2002 and shall not be deemed "filed" by
         Hemobiotech, Inc. for purposes of Section 18 of the Securities Exchange
         Act of 1934, as amended.