SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter ended June 30, 2008

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 333-128399

SINOBIOMED INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	20-1945139
(State or other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)
Lane 4705, No. 58, North Yang Gao Rd. Pudong New Area Shanghai, China	201206
(Address of Principal Executive Offices)	(Zip Code)
011-86-21-58546923 (Registrant's Telephone Number, Including Area Code)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act).

Yes o No x

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

Yes o No o

Applicable only to corporate issuers:

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

Class	Outstanding as of August 8, 2008
Common Stock, $0.0001 par value	131,422,086

Traditional Small Business Disclosure Format (Check one):

Yes o No x

TABLE OF CONTENTS

		Page
FORWARD-LOOKING STATEMENTS		1
USE OF NAMES		1
PART I - FINANCIAL INFORMATION		1
ITEM 1. FINANCIAL STATEMENTS		1
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION		14
ITEM 3. CONTROLS AND PROCEDURES		17

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

Forward Looking Statements

This quarterly report on Form 10-QSB and other reports that we file with the SEC contain statements that are considered forward-looking statements. Forward-looking statements give the Company’s current expectations, plans, objectives, assumptions or forecasts of future events. All statements other than statements of current or historical fact contained in this annual report, including statements regarding the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “estimate,” “plans,” “potential,” “projects,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” and similar expressions. These statements are based on the Company’s current plans and are subject to risks and uncertainties, and as such the Company’s actual future activities and results of operations may be materially different from those set forth in the forward looking statements. Any or all of the forward-looking statements in this periodic report may turn out to be inaccurate and as such, you should not place undue reliance on these forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. The forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and assumptions due to a number of factors, including:

·	dependence on key personnel;

·	competitive factors;

·	degree of success of research and development programs

·	the operation of our business; and

·	general economic conditions in the United States and China

These forward-looking statements speak only as of the date on which they are made, and except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the cautionary statements contained in this annual report.

Use of Names

In this quarterly report, the terms “Sinobiomed”, “Company”, “we”, or “our”, unless the context otherwise requires, mean Sinobiomed Inc. and its subsidiaries.

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

SINOBIOMED INC.
AND CONSOLIDATED SUBSIDIARIES


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

*Unaudited - Prepared by Management*


	Page

Consolidated Balance Sheet		1

Consolidated Statements of Operations		2

Consolidated Statements of Cash Flows		3

Consolidated Statement of Stockholders' (Deficit)		4

Notes to Consolidated Financial Statements		5

SINOBIOMED INC.
AND CONSOLIDATED SUBSIDIARIES
*Consolidated Balance Sheet*
*(Expressed in US Dollars)*
*Unaudited- Prepared by Management*

Note 1 - Basis of Presentation - going concern	June 30			December 31
	2008			2007

ASSETS

CURRENT ASSETS
Cash - unrestricted	$	102,301		$	64,866
Cash - restricted (Note 3)		197			184
Accounts receivable (Note 4)		397,418			48,071
Inventory (Note 6)		1,261,529			893,402
Prepaid expenses and deposits		151,258			428,841
Total current assets		1,912,703			1,435,364

Fixed assets (Note 7)		6,700,170			6,658,831

Total assets	$	8,612,873		$	8,094,195


LIABILITIES AND STOCKHOLDERS' (DEFICIT)

CURRENT LIABILITIES
Short-term loans (Notes 8 and 9)	$	6,483,271		$	7,105,118
Accounts payable		1,023,442			824,706
Interest payable		2,267,520			1,918,408
Unearned revenue		265,487			170,471
Shareholder loans (Note 10)		3,818,968			2,176,526
Other current liabilities		2,246,458			1,986,284
Total current liabilities		16,105,146			14,181,513

COMMITMENTS AND CONTINGENCIES (Notes 1, 2, 3, 5, 8, 9, 10, 11, 12, 13, 14, 16 and 18)

STOCKHOLDERS' (DEFICIT)
Common stock (Note 13)
Authorized 250,000,000 shares at par value of $ 0.0001 each
Issued and outstanding 131,422,086 shares (2007 - 131,312,086)		13,143			13,132
Additional paid-in capital		28,104,787			26,127,797
Accumulated (deficit)		(33,836,555	)		(30,761,870	)
Accumulated other comprehensive income (loss)		(1,773,648	)		(1,466,377	)
Total stockholders' (deficit)		(7,492,273	)		(6,087,318	)

Total liabilities and stockholders' (deficit)	$	8,612,873		$	8,094,195

The accompanying notes to the consolidated financial statements are an integral part of these statements.

SINOBIOMED INC.
AND CONSOLIDATED SUBSIDIARIES
*Consolidated Statements of Operations*
*(Expressed in US Dollars)*
*Unaudited- Prepared by Management*

	Three Months Ended June 30						Six Months Ended June 30
	2008			2007			2008			2007

REVENUE
Sales	$	359,228		$	346,495		$	533,321		$	562,497
Cost of goods sold		171,762			232,722			233,863			388,786
Gross profit		187,466			113,773			299,458			173,711
Other income		482,955			848			482,955			157,046
		670,421			114,621			782,413			330,757

EXPENSES
Advertising and promotion		276			1,142			508			2,665
Depreciation		43,005			22,825			107,499			44,610
General and administration		391,402			1,138,815			850,065			1,610,439
Repairs and maintenance		12,055			12,293			26,118			17,899
Research and development		99,583			203,370			187,738			696,144
Salaries and benefits		170,059			169,477			365,798			271,260
Stock-based compensation (Note 14)		917,158			699,074			1,834,316			1,153,610
Travel		28,595			113,154			46,161			138,420
Total expenses		1,662,133			2,360,150			3,418,203			3,935,047

Net (loss) for the period from operations		(991,712	)		(2,245,529	)		(2,635,790	)		(3,604,290	)

OTHER INCOME AND EXPENSES
Interest and bank charges (Notes 8, 9 and 10)		(138,364	)		(327,669	)		(273,658	)		(681,660	)
Losses on loans and guarantees to other parties (Note 5)		(85,703	)		(74,480	)		(165,237	)		(147,111	)
Net (loss) for the period before minority interests
		(1,215,779	)		(2,647,678	)		(3,074,685	)		(4,433,061	)

Minority interest in loss for the period		-			-			-			8,039

Net (loss) for the period	$	(1,215,779	)	$	(2,647,678	)	$	(3,074,685	)	$	(4,425,022	)

Other comprehensive income (loss)
Foreign currency translation	$	(112,889	)		(279,913	)	$	(307,271	)		(455,781	)

Comprehensive (loss)		(1,328,668	)	$	(2,927,591	)		(3,381,956	)	$	(4,880,803	)

Net (loss) per common share - basic and fully diluted:

Net (loss) for the period	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.03	)
Weighted average number of common stock outstanding
		131,422,086			119,402,613			131,408,261			141,238,584

The accompanying notes to the consolidated financial statements are an integral part of these statements.

SINOBIOMED INC.
AND CONSOLIDATED SUBSIDIARIES
*Consolidated Statements of Cash Flows*
*(Expressed in US Dollars)*
*Unaudited- Prepared by Management*

	Three Months Ended June 30						Six Months Ended June 30
	2008			2007			2008			2007
Cash from (used in) operating activities:

Net (loss)	$	(1,215,779	)	$	(2,647,678	)	$	(3,074,685	)	$	(4,425,022	)
Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation		211,377			191,638			413,369			375,801
Loss on disposition of fixed assets		-			6,699			-			6,699
Imputed interest expense on shareholders' loans		49,107			28,894			84,935			56,333
Minority interest in net income (loss)		-			-			-			(8,039	)
Shares issued for services		14,437			-			28,875			85,400
Stock-based compensation		917,158			699,074			1,834,316			1,153,610
Net change in operating assets and liabilities:
Accounts receivable		(258,724	)		(69,879	)		(349,347	)		(48,972	)
Inventory		(225,203	)		12,932			(368,127	)		100,120
Prepaid expenses and deposits		185,923			39,242			306,458			(73,505	)
Accounts payable		139,902			325,288			198,736			231,669
Interest payable		220,645			268,954			349,112			629,080
Unearned revenue		60,792			(13,906	)		95,016			3,033
Other current liabilities		207,724			(195,768	)		260,174			(48,958	)
Net cash (used in) from operating activities
		307,359			(1,354,510	)		(221,168	)		(1,962,751	)

Cash (used in) investing activities:

Purchases of fixed assets		(12,156	)		(71,219	)		(16,947	)		(93,427	)
Proceeds of disposition of fixed assets		-			-			-			3,911
Net cash (used in) investing activities
		(12,156	)		(71,219	)		(16,947	)		(89,516	)

Cash from (used in) financing activities:
Loans made to unrelated parties		-			-			-			(499,683	)
Repayments of loans by unrelated parties					650,395						650,395
Share subscriptions received		-			9,754,001			-			10,170,001
Finders fees paid in cash					(871,875	)					(871,875	)
Short-term loans received					743,906						743,906
Repayments of short-term loans		(322,794	)		(8,446,512	)		(1,057,601	)		(9,281,952	)
Loans received from shareholders		96,990			816,017			1,482,710			898,693
Repayments of loans from shareholders		(308	)		(492,480	)		(20,800	)		(492,480	)
Net cash from (used in) financing activities		(226,112	)		2,153,452			404,309			1,317,005

Effect of other comprehensive income (loss) on cash		(31,530	)		125,592			(128,746	)		(119,775	)

Increase (decrease) in cash		37,561			853,315			37,448			(855,037	)

Cash, beginning of period		64,937			437,928			65,050			2,146,280
Cash, end of period	$	102,498		$	1,291,243		$	102,498		$	1,291,243


The accompanying notes to the consolidated financial statements are an integral part of these statements.

SINOBIOMED INC.
AND CONSOLIDATED SUBSIDIARIES
*Consolidated Statement of Stockholders' (Deficit)*
*(Expressed in US Dollars)*
*Unaudited- Prepared by Management*


	Common Stock		Amount		Additional paid-in capital		Cumulative Other Comprehensive Income (loss)			Accumulated (Deficit)			Stockholders' (Deficit)

Balance December 31, 2007		131,312,086	$	13,132	$	26,127,797	$	(1,466,377	)	$	(30,761,870	)	$	(6,087,318	)

Issue of shares for services		110,000		11		57,739		-			-			57,750
Stock-based compensation		-		-		917,158		-			-			917,158
Imputed interest on shareholders' loans		-		-		35,828		-			-			35,828
Net (loss) for the period		-		-		-		(194,382	)		(1,858,906	)		(2,053,288	)

Balance March 31, 2008		131,422,086	$	13,143	$	27,138,522	$	(1,660,759	)	$	(32,620,776	)	$	(7,129,870	)

Stock-based compensation		-		-		917,158		-			-			917,158
Imputed interest on shareholders' loans		-		-		49,107		-			-			49,107
Net (loss) for the period		-		-		-		(112,889	)		(1,215,779	)		(1,328,668	)

Balance June 30, 2008		131,422,086	$	13,143	$	28,104,787	$	(1,773,648	)	$	(33,836,555	)	$	(7,492,273	)

SINOBIOMED INC.

AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2008

(Expressed in US Dollars)

(Unaudited - Prepared by Management)

1. BASIS OF PRESENTATION

The unaudited financial statements as of June 30, 2008 included herein have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. It is suggested that these financial statements be read in conjunction with the December 31, 2007 audited financial statements and notes thereto.

2. BASIS OF PRESENTATION - GOING CONCERN

These consolidated financial statements of Sinobiomed Inc. (the “Company”) have been prepared on a going-concern basis which assumes that the Company will be able to realize assets and discharge liabilities in the normal course of business for the foreseeable future.

The Company has experienced losses since commencement of operations amounting to $33,836,555 and has negative working capital and a stockholders’ deficit as of June 30, 2008, which raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to meet its commitments as they become payable is dependent on the ability of the Company to obtain necessary financing or achieve a profitable level of operations. There are no assurances that the Company will be successful in achieving these goals.

The Company is in the process of researching, developing, testing and evaluating proposed new pharmaceutical products and has not yet determined whether these products are technically or economically feasible. The underlying value of the company is entirely dependent on the successful implementation of one or more of these products, the ability of the Company to obtain the necessary financing to complete development and upon future profitable production or sufficient proceeds from the disposition of manufacturing rights. Management’s plan is to actively search for new sources of capital, including government and non-government grants toward research projects and new equity investment.

These financial statements do not give effect to adjustments to the amounts and classifications to assets and liabilities that would be necessary should the Company be unable to continue as a going concern.

3. CASH - RESTRICTED

Restricted cash consists of $197 on deposit pursuant to agreement with a bank to maintain funds on deposit to ensure payment of interest on debt.

SINOBIOMED INC.

AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2008

(Expressed in US Dollars)

(Unaudited - Prepared by Management)

4. ACCOUNTS RECEIVABLE

Trade accounts receivable consists of receivable for sales of product on credit. Accounts receivable are net of allowance for doubtful accounts in the amount of $9,198.

5. LOANS TO UNRELATED PARTIES

The Company has loans receivable from other companies arising from guarantee arrangements under which the Company guaranteed the debt of other companies and has been called on its guarantees (Note 8). The company has $5,360,868 receivable from these companies including interest accrued on the original debts since call of the guarantees, but has provided for the full amount of the receivables due to uncertainty of collectibility. $161,461 has been charged to income in the six months ended June 30, 2008 (2007 - $146,862) in respect of the provision. The increase in the amount of the loan receivable and the corresponding provision from year to year arises due to the interest accruing on the debt guaranteed. Under the terms of the guarantee agreements, the other companies had until December 31, 2007 to pay the Company, but nothing has been paid.

The Company has fully provided for $14,065 of additional loans receivable from sales agents and employees. $602 has been charged to expense in the six months ended June 30, 2008 (2007 - $516 recovery) in respect of the provision.

The Company has fully provided for $136,259 of loans receivable from minority shareholders of Wanxing Cosmetic.

6. INVENTORY

Inventory consists of the following:

	June 30, 2008		December 31, 2007

Raw materials	$	158,997	$	74,007
Goods in process		697,786		550,198
Finished goods		404,746		269,197

	$	1,261,529	$	893,402

SINOBIOMED INC.

AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2008

(Expressed in US Dollars)

(Unaudited - Prepared by Management)

7. FIXED ASSETS

Fixed assets consist of the following:

	June 30, 2008		December 31, 2007

Buildings	$	6,636,792	$	6,220,810
Climate control equipment		1,349,147		1,265,923
Computer software		2,043		1,917
Land license		2,451,120		2,299,920
Manufacturing equipment		2,261,339		2,119,775
Office furniture and equipment		174,546		156,532
Other equipment		30,958		29,048
Road		36,725		34,460
Vehicles		747,654		701,535

		13,690,324		12,829,920
Less: Accumulated depreciation		6,990,154		6,171,089

	$	6,700,170	$	6,658,831

The land license is for the use of the land on which the Company’s buildings are situated, and is for a term of 30 years from September 18, 1996. At the end of the license, the Company expects to have an option to renew the license.

8. SHORT-TERM LOANS

The Company has obligations under the following loan agreements.

Name of Lender	Principal amount June 30, 2008	Principal amount December 31, 2007	Due date	Interest rate Not due/ overdue	Security (1)

China Construction Bank	$1,925,880	$1,957,670	October 16, 2004	5.31% / 7.56%	Building mortgage (2)

Shenzhen Development Bank	817,040	766,640	June 6, 2005	6.372% / 9.56%	Guarantee

Industrial Bank	2,689,871	3,395,128	December 19, 2005	6.138% / NA	Guarantee (3)

Zheda Haina S&T Holding	612,780	574,980	-	-	(4)

Luoyang Zonghong	437,700	410,700	-	-

	$6,483,271	$7,105,118

SINOBIOMED INC.

AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2008

(Expressed in US Dollars)

(Unaudited - Prepared by Management)

(1)

Guarantees have been arranged with various companies under cross-guarantee arrangements where each guarantees a loan for the other, or a loan forward basis where Wanxing Bio-Pharmaceuticals borrows and then loans a specified amount to the guarantor in return for the guarantee. The Company has guaranteed debt of two other companies under such arrangements, up to an amount of $3,647,500 (25,000,000 Chinese yuan) plus interest. The Company’s debt to the Industrial Bank arose upon the Company being called on its two guarantees. The Company recorded a corresponding loan receivable from the other companies and has made a provision for uncollectibility in the full amount of the receivable (Note 5).

(2)

Buildings with carrying value of $3,920,368 have been mortgaged as security.

(3)

A payment on the Industrial Bank loan in the six months ended June 30, 2008 was provided by the minority shareholder of Wanxing Bio-Pharmaceuticals pursuant to a guarantee provided by the minority shareholder. The corresponding debt to the minority shareholder is included in Shareholder Loans (Note 10).

(4)

The debt to Zheda Haina arose upon the payment by Zheda Haina of part of the Company’s loan from Shenzhen Development Bank pursuant to guarantees provided to the bank by Zheda Haina in 2004.

The bank loans are all delinquent at June 30, 2008. The Company has been involved in litigation over some of its bank loans. Two of the suits have been settled, and a further one is outstanding as at June 30, 2008 as more fully described in Note 9.

On April 3, 2008, Wanxin Bio-pharmaceuticals agreed to a revised payment schedule for the bank loan with the China Construction Bank. Under this agreement, Wanxin Bio-pharmaceuticals agreed to pay 4 Million yuan (approximately $567,000) by June 30, 2008 and the balance of principal and interest by September 30, 2008. Wanxin Bio-pharmaceuticals paid 1,200,000 yuan by June 30, 2008

On April 8, 2008, Wanxin Bio-pharmaceuticals agreed to a revised payment schedule for the bank loan with the Industrial Bank. Under this agreement, Wanxin Bio-pharmaceuticals agreed to pay 3 Million yuan (approximately $425,000) by April 30, 2008, 10 Million yuan (approximately $1,417,000) by June 30, 2008 and the balance of principal and interest by September 30, 2008. Wanxin Bio-pharmaceuticals paid 1 Million yuan by April 30, 2008 and another 600,000 yuan by June 30, 2008.

9. LITIGATION

The Company has been sued by the Shenzhen Development Bank to enforce payment under the loan agreement with that bank and judgment was granted in favor of the bank by the 1st Secondary People’s Court of Shanghai. On October 25, 2006 the Company and the bank entered into a settlement agreement to settle the litigation and the debt. The debt at that time had a principal balance of 17,800,000 yuan (approximately $US 2,437,000 at December 31, 2007 exchange rates). Under the terms of the settlement agreement, the Company was obligated to pay the bank 5 million yuan (approximately $US 685,000) before October 30, 2006, 3 million yuan (approximately $US 411,000) before March 20, 2007, 3 million yuan (approximately $US 411,000) before June 20, 2007, 3 million yuan (approximately $US 411,000) before September 20, 2007 and 3.8 million yuan (approximately $US 522,000) plus the balance of accrued interest before December 20, 2007. The Company made a payment of 5 million yuan in compliance with the settlement agreement in December 2006. The Company defaulted on the settlement agreement by not making the scheduled loan payment of 3 million yuan (approximately $US 394,000) on March 20, 2007. The bank granted a waiver of default in respect of this payment until May 30, 2007. The Company made the payment due May 30, defaulted on the two payments due by June 20, 2007 and September 20, 2007, made payments of 4,200,000 yuan after September 30, 2007, and has defaulted on the payment due December 20, 2007.

SINOBIOMED INC.

AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2008

(Expressed in US Dollars)

(Unaudited - Prepared by Management)

10. SHAREHOLDER LOANS

The loans from shareholders in the aggregate amount of $3,818,968 do not bear interest. $1,962,972 payable to a minority shareholder of a subsidiary was due December 31, 2007, $500,000 is payable on demand, and the remainder have no stated repayment terms. Imputed interest has been recorded on the shareholder loans at an interest rate of 5.31%. The net interest calculated is included in interest expense and has been recorded as additional paid-in capital since the imputed interest is not payable.

11. RELATED PARTY TRANSACTIONS

The Company is indebted to a company related to a shareholder in the amount of $300,000 and to the minority shareholder of a subsidiary in the amount of $2,882,142, and to four individual shareholders in the aggregate amount of $636,826 for shareholders’ loans.

The Company has paid or accrued finders’ fees to shareholders and a company related to a shareholder in the amounts of $1,295,875 and 20,000 shares.

The Company has incurred fees and associated expenses in the amount of $40,420 to a company related to a shareholder for services. The Company has committed to pay that company $2,000 per month plus expenses for services. The arrangement may be terminated by either party on one month notice.

The Company has committed to purchase consulting services from a shareholder at the rate of $10,000 per month for five years from June 30, 2007. The Company is indebted to the shareholder in the amount of $90,000 at March 31, 2008 in respect of these fees.

The Company is indebted to two persons who are shareholders and directors, in amounts of $4,845 and $65,000 for shareholders’ loans.

Two minority shareholders of a subsidiary are indebted to the Company in the amount of $136,259. The Company has provided an allowance for the full amount of this indebtedness (Note 5).

12. INCOME TAXES

The Company is subject to Chinese income taxes to the extent of its operations in China and in the United States should it have operations in the United States. The company had no income tax expense during the reported periods due to net operating losses.

A reconciliation of income tax expense to the amount computed at the statutory rates is as follows:

		Six months ended June 30, 2008
Loss for the period	$	(3,074,685	)
Average statutory tax rate in China		33	%

Expected income tax provision	$	(1,014,646	)
Non-deductible stock-based compensation and imputed interest expenses		633,353
Tax basis of deferred expenses in excess of book cost		(43,064	)
Unrecognized tax losses		424,357

Income tax expense	$	--

Significant components of deferred income tax assets are as follows:

		June 30, 2008
Operating losses carried forward		4,406,033
Excess of tax basis over book cost of deferred expenses in China	$	4,704,201
Valuation allowance		(9,110,204	)

Net deferred income tax assets	$	-

SINOBIOMED INC.

AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2008

(Expressed in US Dollars)

(Unaudited - Prepared by Management)

The Company has tax losses carried forward for Chinese tax purposes of approximately $13,350,000 which will expire in 2013 if not utilized.

13. COMMON STOCK

On January 23, 2008, the Company issued 110,000 shares of common stock in return for the services of the Company’s Chief Financial Officer for the 12 months commencing January 1, 2008. The Company recognized an issue price for the shares of $0.525 per share, reflecting a discount from market price on that date due to there being a hold period before the shares can be sold.

Warrants outstanding and exercisable as of June 30, 2008 are as follows:

Exercise Price	Number of Warrants	Expiry Date
$ 1.25	1,012,334	May 14, 2009
$ 1.75	4,061,500	May 14 to May 30, 2009
$ 2.00	2,624,400	September 11, 2009
$ 2.00	274,169	December 5, 2009

	7,972,403

14. STOCK-BASED COMPENSATION

The Company’s 2006 Stock Option and Incentive Plan (the “Plan”) allows the Company to award stock options for up to 10,000,000 (post-forward stock split) shares to its directors, officers, employees, and consultants. The plan is administered by the Company’s Board of Directors, or its assigned committee, who has discretion as to the awards and terms of the options to be issued. Upon exercise of options, shares are issued from treasury.

On March 1, 2007, 6,000,000 stock options were granted under the Plan with the exercise price of $0.50 per share. 300,000 of 6,000,000 options vested on March 1, 2007 with the reminder to vest in equal monthly proportions on the first day of each of the next 19 months.

On May 30, 2007, 1,000,000 stock options were granted under the Plan with the exercise price of $1.90 per share. 500,000 of 1,000,000 options will vest on June 1, 2009 with the reminder to vest on June 1, 2011.

SINOBIOMED INC.

AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2008

(Expressed in US Dollars)

(Unaudited - Prepared by Management)

On November 29, 2007, 1,000,000 stock options were granted under the Plan with the exercise price of $1.67 per share. 50,000 of 1,000,000 options vested on November 29, 2007 with the reminder to vest in equal monthly proportions on the first day of each of the next 19 months.

A summary of the Company’s stock option activities is presented below:


	Number of options		Weighted Average Exercise Price		Weighted Average Grant-date Fair Value		Aggregate Intrinsic Value

Options Outstanding, January 1, 2008		8,000,000		0.82		0.825	$	6,597,922
Options granted:		-
Options Outstanding, June 30, 2008		8,000,000		0.82		0.825	$	6,597,922

Compensation cost related to options to vest in the future will be recognized as the related options vest. Outstanding options vest as follows:

			Weighted	Compensation	Aggregate
	Range of Exercise		Average	Expense to be	Intrinsic
Vested at	Prices	Number	Exercise	Recognized	Value
		of Shares	Price

March 31,2008 and earlier	0.50 to 1.90	5,450,000	0.58		$4,291,830
Remainder of 2008	0.50	1,200,000	0.79	$1,048,894	1,048,894
2009	1.90	850,000	1.81	842,734	842,734
2011	1.90	500,000	1.91	414,464	414,464
		8,000,000			$6,597,922

Non-vested options are as follows:

	Number outstanding		Total fair value		Weighted average grant-date fair value

Non-vested options outstanding, January 1, 2008		4,650,000	$	4,037,450		-

Non-vested options outstanding, June 30, 2008		2,550,000	$	2,304,200		0.90

Options vested in six months ended June 30, 2008		2,100,000	$	1,733,250	$	0.825

SINOBIOMED INC.

AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2008

(Expressed in US Dollars)

(Unaudited - Prepared by Management)

If not previously exercised or canceled, options outstanding at June 30, 2008 will expire as follows:

Range of Exercise Prices

Number

Weighted average

Expiry Date

High

Low

of Shares

exercise price

Year Ending December 31,

2012

1.90

0.50

8,000,000

0.82

The fair values of the options granted in March, May and November, 2007 were estimated at values of $0.758 per share, $0.829 per share and $1.223, respectively, using the Black-Scholes Option Pricing Model with the following weighted average assumptions:

	March and May, 2007	November, 2007

Volatility:	41.0%	94%
Risk-free interest rate:	4.92%	3.42%
Dividend yield:	--	--
Expected lives (years):	5	5

Option-pricing models require the use of highly subjective estimates and assumptions including the expected stock price volatility. Changes in the underlying assumptions can materially affect the fair value estimates and therefore, in management’s opinion, existing models do not necessarily provide reliable measure of the fair value of the Company’s stock options.

15. OTHER INCOME

Other income consists of $162,955 in government grant revenue to support clinical trials of the Company’s malaria vaccine and $320,000 contract revenue from hiring out part of the Company’s research and manufacturing facilities and staff to another company.

16. CONTINGENT PATENT RIGHTS COMMITMENTS

The Company has committed to payments for rights to use patented technology, contingent upon successful clinical trials and approval of products for production as follows:

11 Million yuan (approximately $1,605,000) will be payable upon completion of both Phase III clinical trials and approval of new drug certificate for Ethelphazine, an anti-tumor drug entering Phase III clinical trials.

SINOBIOMED INC.

AND CONSOLIDATED SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2008

(Expressed in US Dollars)

(Unaudited - Prepared by Management)

20 Million yuan (approximately $2,918,000) will be payable upon completion of both Phase III clinical trials and approval of new drug certificate for the Company’s recombinant malaria vaccine. This drug is expected to enter Phase II clinical trials in 2008.

2.5 Million yuan (approximately $365,000) will be payable in respect of the Company’s recombinant Human Stem Cell factor bio-product in two stages. The first 1 Million yuan (approximately $146,000) will be due by the time of upon completion of Phase II trials and 1.5 Million yuan (approximately $219,000) will be payable upon completion of both Phase III clinical trials and approval of the product for production. This product is in Phase I trials.

17. SEGMENTED INFORMATION

The Company is operating in a single geographic market, the People’s Republic of China. The Company has two operating segments, the cosmetics business and the pharmaceuticals business. Segment revenues, net loss and assets are as follows:

	Revenues		Net loss (income)			Total assets
Pharmaceuticals	$	496,854	$	1,123,034		$	7,907,753
Cosmetics		359,422		(149,124	)		505,674
Parent company administration				2,260,775			39,446

Total consolidated	$	856,276	$	3,234,685		$	8,452,873

18. SUBSEQUENT EVENTS

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

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

Item 2. Management’s Discussion and Analysis or Plan of Operation

You should read the following plan of operation together with our financial statements and related notes appearing elsewhere in this quarterly report. This plan of operation contains forward-looking statements that involve risks, uncertainties, and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those presented under “Risk Factors” in the Form 10-KSB filed with the SEC on EDGAR on April 14, 2008.

Overview

As from the inception of the Company and until the end of November 2006 we were in business of developing a Patent known as the "Car Door Safety Feature", however, we determined to change our business plan from the development of the Car Door Safety Feature Patent and began focusing around the Chinese biopharmaceutical industry. On January 12, 2007, the Company completed the reverse merger of Wanxin Bio-Technology Limited (“Wanxin”) and all the subsidiaries of Wanxin in accordance with the Share Purchase Agreement, whereby the Company acquired 100% of the issued and outstanding shares in the capital of Wanxin (the “Wanxin Capital”), through the issuance of 1,750,000 (pre forward stock split) shares of common stock of the Company in aggregate to the shareholders of Wanxin on a pro rata basis in accordance with each Wanxin shareholder’s percentage of ownership in Wanxin.

Wanxin is a company incorporated under the laws of the British Virgin Islands. Its only asset at the time of the reverse merger was 100% ownership of Manhing Enterprises Limited (“Manhing”), a company incorporated under the laws of Hong Kong. Manhing’s only asset was 82% ownership of Shanghai Wanxing Bio-pharmaceuticals Co., Ltd. (“Shanghai Wanxing”), a Sino-Foreign Joint Venture company incorporated with limited liability under the laws of the People’s Republic of China. Shanghai Wanxing’s business is research, development, manufacture and sale of pharmaceutical products, primarily for the Chinese market. There are currently 10 products approved or in development: three on the market, four in clinical trials and three in R&D. Shanghai Wanxing’s products respond to a wide range of diseases, including malaria and hepatitis. Currently manufactured product lines include Wanferon/Wanferin, formulations of recombinant human interferon for treating hepatitis and viral diseases, Leflunomide, a drug for the treatment of rheumatoid arthritis, and acidic Fibroblast Growth Factor (“aFGF”), a product that treats diabetic ulcers and burns and supports recovery from plastic surgery.

Shanghai Wanxing is also the owner of 50.33% of Shanghai Wanxing Bio-science Cosmetic Co., Ltd. (“Wanxing Cosmetic”). Wanxing Cosmetic manufactures skin-care products under the brand name KaiYing.

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

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

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

Revenues

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

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

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

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

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

Other income in the six months ended June 30, 2008 consists of $162,955 in government grant revenue to support clinical trials of the Company’s malaria vaccine and $320,000 contract revenue from hiring out part of the Company’s research and manufacturing facilities and staff to another company. Other income in the six months ended June 30, 2007 included $129,600 in revenue from product licensing and $27,446 in grant revenue received as funding assistance toward the research and development of the Company’s malaria vaccine.

Operating Expenses

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

Stock-based compensation

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

$1,363,610 as recognition of six months amortization of 6,000,000 options with an aggregate value of $4,545,364 granted on March 1, 2007 in accordance with the Company’s stock option and incentive plan. Under the terms of the grant, 5% of the options vested immediately and another 5% vest on the first day of each subsequent month until October 1, 2008;

$103,614 as recognition of six months amortization pertaining to 1 million options with an aggregate value of $828,928 granted on May 30, 2007 in accordance with the terms of the Company's stock option and incentive plan. Under the terms of the grant, 50% of the options will vest on May 30, 2009 and the remaining 50% on May 30, 2011; and

$367,092 as recognition of six months amortization pertaining to 1 million options with an aggregate value of $1,223,630 granted on November 29, 2007 in accordance with the terms of the Company's stock option and incentive plan. Under the terms of the grant, 5% of the options vested immediately and another 5% vest on the first day of each subsequent month thereafter starting on January 1 2008.

Other Income and Expenses

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

Net Loss

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

Liquidity and Capital Resources

At June 30, 2008, we had $102,498 of cash on hand and a working capital deficiency of $14,192,442. The Company is currently in the process of seeking to raise additional funds from equity and/or debt financing. The Company believes that its cash on hand as at June 30, 2008, and the funds it expects to raise from additional equity and/or debt financing, and its future revenues from its new products currently entering the market will enable the Company to meet its working capital needs and its debt service requirements for the following 12 months.

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

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

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

ITEM 3. Controls and Procedures

Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective.

Internal Control over Financial Reporting. There have been no changes in the Company’s internal controls over the financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

The Company has appointed Chris Metcalf who is a director of the company and a financial expert to serve as the head of the audit committee.

The Company intends to adopt a code of business conduct and ethics as an additional element to its financial controls and procedures in the near future.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company, through Shanghai Wanxing, has been sued by the Shenzhen Development Bank to enforce payment under the loan agreement with that bank and judgment was granted in favor of the bank by the 1st Secondary People’s Court of Shanghai. On October 25, 2006 the Company and the bank entered into a settlement agreement to settle the litigation and the debt. The debt at that time had a principal balance of 17,800,000 yuan (approximately $US 2,437,000 at December 31, 2007 exchange rates). Under the terms of the settlement agreement, the Company was obligated to pay the bank 5 million yuan (approximately $US 685,000) before October 30, 2006, 3 million yuan (approximately $US 411,000) before March 20, 2007, 3 million yuan (approximately $US 411,000) before June 20, 2007, 3 million yuan (approximately $US 411,000) before September 20, 2007 and 3.8 million yuan (approximately $US 522,000) plus the balance of accrued interest before December 20, 2007. The Company made a payment of 5 million yuan in compliance with the settlement agreement in December 2006. The Company defaulted on the settlement agreement by not making the scheduled loan payment of 3 million yuan (approximately $US 394,000) on March 20, 2007. The bank granted a waiver of default in respect of this payment until May 30, 2007. The Company made the payment due May 30, defaulted on the two payments due by June 20, 2007 and September 20, 2007, made payments of 4,200,000 yuan after September 30, 2007, and has defaulted on the payment due December 20, 2007.

Other than the above mentioned litigation and settlement agreements, there are no material pending legal proceedings to which we are a party or to which any of our property is subject and, to the best of our knowledge, no such actions against us are contemplated or threatened.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

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

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

Item 3. Defaults Upon Senior Securities

N/A

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

N/A

Item 5. Other Information

N/A

Item 6. Exhibits

(a)

Exhibit List

31.1

Certificate pursuant to Rule 13a-14(a)

31.2

Certificate pursuant to Rule 13a-14(a)

32.1

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

32.2

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

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this ____ day of August, 2008

	SINOBIOMED INC. (Registrant)
	By:
	Ban Jun Yang
	President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature	Title	Date

	President, CEO and Director	August 14, 2008
Ban Jun Yang

	Secretary, Treasurer and Director	August 14, 2008
Ka Yu

	Chief Financial Officer	August 14, 2008
Asher Zwebner