U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

þ Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September~~March 3031, ~~2010~~2011

¨ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File No. 0-28413

SAN WEST, INC.

(formerly Human BioSystems)

(Exact name of registrant as specified in its charter)

California

(State or other jurisdiction of

incorporation or organization)

77-0481056

(I.R.S. Employer Identification Number)

10350 Mission Gorge Road

Santee, California

(Address of principal executive offices)

92071

(Zip Code)

(619) 258-8770

(Registrant’s telephone number, including area code)

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 requirement for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check One):


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12(b)-2 of the Exchange Act) Yes ¨ No þ

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. At ~~November~~May 1115, ~~2010~~2011 the registrant had outstanding ~~178~~228,~~655~~669,~~432~~526 shares of common stock, no par value per share.

-1-

SAN WEST, INC.

FORM 10-Q

TABLE OF CONTENTS

PAGE

PART I - FINANCIAL INFORMATION

Item 1.

Financial Statements

Consolidated Balance Sheets as of ~~September~~March 3031, ~~2010~~2011 (Unaudited)

and December 31, ~~2009~~2010

Consolidated Statements of Operations (Unaudited) For the

Three ~~and Six~~ Months Ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010

Consolidated Statement of Stockholders' Equity (Unaudited)

For the ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2010~~2011

3 5

Consolidated Statements of Cash Flows (Unaudited) For the

Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010

Notes to Consolidated Financial Statements (Unaudited)

57-1419

Item 2.

Management's Discussion and Analysis of Financial Condition and

Results of Operations

1520-1924

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

1924

Item 4.

Controls and Procedures

1924

Item 4(T). Controls and Procedures

1924

ii-2-

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

2026

Item 1A. Risk Factors

2026

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

2026

Item 3.

Defaults Upon Senior Securities

2127

Item 4.

Submission of Matters to a Vote of Security Holders

2327

Item 5.

Other Information

2127

Item 6.

Exhibits

2227

Signatures

2228

Item 1. Financial Statements.

San West, Inc.
Consolidated Balance Sheets
	September 30,	December 31,
	March 31,	December 31,
ASSETS	2010	2009
	2011	2010
CURRENT ASSETS	(Unaudited)
ASSETS	(Unaudited)
Cash	$ 18,589	$ 50,659
CURRENT ASSETS
Accounts receivable	2,390	840
Cash	57,454	11,566
Inventory (Note B)	133,354	287,921
Accounts receivable	6,027	5,079
Other current assets	86,012	33,897
Inventory (Note B)	113,164	131,768
Total current assets	240,345	373,317
Other current assets (Note C)	126,590	113,406
Fixed assets (Note C)	130,226	130,226
Total current assets	303,235	261,819
Accumulated depreciation	(48,322)	(31,974)
Fixed assets (Note D)	130,226	130,226
Net fixed assets	81,904	98,252
Accumulated depreciation	(59,129)	(53,726)
Deposits	19,474	12,599
Net fixed assets	71,097	76,500
Goodwill (Note D)	234,100	234,100
Deposits	19,474	19,474
Total assets	$ 575,823	$ 718,268
Goodwill (Note E)	234,100	234,100
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Total assets	627,906	591,893
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
CURRENT LIABILITIES
Accounts payable (Note E)	$ 822,528	$ 749,257
Accounts payable (Note F)	923,552	891,180
Other current liabilities	~~199~~243,~~008~~302	~~187~~235,~~689~~309
Floorplan notes payable (Note F )	61,353	117,962
Floorplan notes payable (Note G )	4,721	4,721
Convertible promissory notes (Note G)	130,000	-
Convertible promissory notes (Note H)	256,857	194,434
Notes payable (Note H)	89,178	510,000
Subsidiary purchase-current portion (Note I)	37,141	39,176
Subsidiary purchase-current portion (Note I)	26,868	32,292
Total current liabilities	1,465,573	1,364,820
Total current liabilities	1,328,935	1,597,200
Subsidiary purchase (Note I)	174,107	183,280
Subsidiary purchase (Note I)	199,590	223,820
Convertible promissory notes, non-current (Note H)	-	110,000
Notes payable, non-current (Note H)	119,000	-
Loans from shareholder (Note J)	216,950	216,950
Total liabilities	1,~~864~~856,~~475~~630	21,~~037~~875,~~970~~050
Commitments and contingencies	-	-
STOCKHOLDERS' DEFICIT (Note K)
Preferred stock, no par value, 10,000,000 shares authorized; none issued and outstanding	-	-
Preferred stock, no par value, 50,000,000 shares authorized; issued 87,100 and 77,100 at March 31, 2011 and December 31, 2010, respectively.	87,100	77,100
Common stock, no par value, 300,000,000 shares authorized; issued and outstanding 171,667,607 and 124,960,826 at September 30, 2010 and December 31, 2009, respectively.	3,824,584	2,028,648
Common stock, no par value, 300,000,000 shares authorized; issued and outstanding 221,202,859 and 192,742,859 at March 31, 2011 and December 31, 2010, respectively.	2,107,496	1,837,096
Common stock payable	~~342,868~~-	~~439,825~~-
Accumulated deficit	(53,~~456~~423,~~104~~320)	(3,~~788~~197,~~175~~353)
Total stockholders' deficit	(1,~~288~~228,~~652~~724)	(1,~~319~~283,~~702~~157)
Total liabilities and shareholder deficit	~~$ 575~~627,~~823~~906	~~$ 718~~591,~~268~~893
The accompanying notes are an integral part of these financial statements

1 -3-

San West, Inc.
Consolidated Statements of Operations (Unaudited)
	Three Months Ended		~~Nine Months Ended~~
	September 30,		September 30,
	March 31
	2010	2009	2010	2009
	2011	2010
Revenue	$ ~~630~~596,~~412~~486	$ ~~217~~493,~~099~~615	~~$ 2,320,239~~	~~$ 546,620~~
Cost of goods sold	~~601~~477,~~393~~095	~~181~~358,~~404~~123	~~1,849,355~~	~~400,284~~
Gross profit	29119,~~019~~391	35135,~~695~~492	~~470,884~~	~~146,336~~
Expenses
Selling, general and administrative	~~304~~249,~~323~~077	~~284~~924,~~867~~442	~~2,070,695~~	~~684,462~~
Total expenses	~~304~~249,~~323~~077	~~284~~924,~~867~~442	~~2,070,695~~	~~684,462~~
Income (loss) from operations	(~~275~~129,~~304~~686)	(~~249~~788,~~172~~950)	~~(1,599,811)~~	~~(538,126)~~
Other income (expense)
Other income	-	~~227~~4	~~122,622~~	~~11,665~~
Other expense	-	(2,380)	-	(15,911)
Amortization of beneficial conversion feature	(80,000)	(150,000)
Amortization of beneficial conversion feature	(872)		(150,000)	-
Amortization of deferred financing costs	-	(862)
Amortization of deferred financing costs	-		(2,601)	-
Interest expense	(16,281)	(12,596)
Interest expense	(13,109)	(10,859)	(38,139)	(32,205)
Total other income (expense)	(96,281)	(163,454)
Total other income (expense)	(13,981)	(13,012)	(68,118)	(36,451)
Net loss	$ (225,967)	$ (952,404)
Net loss	$ (289,285)	$ (262,184)	$ (1,667,929)	$ (574,577)
Net (loss) per common share basic	$ (0.00)	$ (0.01)
Net (loss) per common share basic	$ (0.00)	$ (0.00)	$ (0.01)	$ (0.01)
Weighted average shares outstanding basic	198,417,970	134,487,651
Weighted average shares outstanding basic	169,103,829	101,655,781	156,399,209	82,967,757
The average shares listed below were not included in the computation of diluted losses
The average shares listed below were not included in the computation of diluted losses
per share because to do so would have been antidilutive for the periods presented:
per share because to do so would have been antidilutive for the periods presented:
Convertible promissory notes	60,642,285	3,991,350
Convertible promissory notes	17,201,629	8,049,825	14,295,412	8,085,925
The accompanying notes are an integral part of these financial statements
The accompanying notes are an integral part of these financial statements

2-4-

San West, Inc.

Consolidated Statement of Stockholder's Deficit

						Total
		Common Stock			Accumulated	Stockholder's
		Shares	Amount	Payable	Deficit	Deficit
Balances December 31, 2009		124,960,826	$ 2,028,648	$ 439,825	$ (3,788,175)	$ (1,319,702)
Common stock issued for cash:
	weighted average price of $.070	964,286	67,500	(67,500)		-
	weighted average price of $.035	275,000	9,500			9,500
	weighted average price of $.010	1,000,000	10,000			10,000
	weighted average price of $.075	2,000,000	15,000			15,000
	weighted average price of $.005	2,000,000	10,000			10,000
Common stock issued for services:
	weighted average price of $.119	750,000	89,250			89,250
	weighted average price of $.111	5,000,000	552,925			552,925
	weighted average price of $.062	1,300,000	80,670	(80,670)		-
	weighted average price of $.068	250,000	17,000	34,000		51,000
	weighted average price of $.0230			17,213		17,213
	weighted average price of $.021	2,000,000	35,700			35,700
	weighted average price of $.0115	1,000,000	9,775			9,775
Common stock issued for PUTS :
	Proceeds applied to debt	751,754	17,863			17,863
	Proceeds paid to Company	373,246	8,688			8,688
Common stock issued for finders fee
	weighted average price of $.191	2,093,145	400,000			400,000
Merger shares canceled		(4,087,270)	(122,618)			(122,618)
Common stock exchanged for debt
	weighted average price of $.013	23,050,000	356,500			356,500
	weighted average price of $.0100	6,700,000	67,000			67,000
	weighted average price of $.0075	2,824,445	21,184			21,184
Beneficial conversion feature
	of convertible note		150,000			150,000
Net loss					(1,667,929)	(1,667,929)
Balances September 30, 2010 (Unaudited)		173,205,432	$ 3,824,584	$ 342,868	$ (5,456,104)	$ (1,288,652)
The accompanying notes are an integral part of these consolidated financial statements

For the Three Months Ended March 31, 2011 (Unaudited)



								Total
		Preferred Stock		Common Stock			Accumulated	Stockholders'
		Shares	Amount	Shares	Amount	Payable	Deficit	Deficit
Balances December 31, 2010		77,100	$ 77,100	192,742,859	$ 1,837,096	$ -	(3,197,353)	$ (1,283,157)

Series A Preferred stock issued for cash		10,000	10,000					10,000
Common stock issued for services:
	weighted average price of $0.0146			5,000,000	73,100			73,100
Common stock exchanged for debt
	weighted average price of $0.0050			23,460,000	117,300			117,300
Beneficial conversion feature
	of convertible note				80,000			80,000
Net loss							(225,967)	(225,967)
Balances March 31, 2011		87,100	$ 87,100	221,202,859	$ 2,107,496	$ -	$ (3,423,320)	$ (1,228,724)


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

~~San West, Inc.~~-5-

Consolidated Statements of Cash Flows (Unaudited)


San West, Inc.
Consolidated Statements of Cash Flows (Unaudited)
				Three Months Ended
				March
				2011	2010
Cash flows from operating activities:
	Net loss			$ (225,967)	$ (952,404)
	Adjustments to reconcile net loss to net
	cash used by operating activities:
		Depreciation		5,403	5,460
		Stock compensation expense		73,100	642,175
		Stock issued for accrued interest		5,553
		Amortization of beneficial conversion feature		80,000	150,000
		Accretion of debt discount		3,170	-
	Changes in operating assets and liabilities:
		Change in accounts receivable		(948)	(5,854)
		Change in inventory		18,604	55,420
		Change in other current assets		(13,184)	(2,868)
		Change in accounts payable		32,372	(24,088)
		Change in other current liabilities		7,993	(11,413)

			Net cash used by operating activities	(13,904)	(143,572)

Cash flows from investing activities:
	Purchase of fixed assets			-	-
			Net cash provided by investing activities	-	-

Cash flows from financing activities:
	Proceeds from the issuance of preferred stock			10,000	-
	Proceeds from loans			61,000	150,000
	Payments on notes payable			(11,208)	-

			Net cash provided by financing activities	59,792	150,000

Net increase in cash				45,888	6,428
Cash, beginning of period				11,566	50,659
Cash, end of period				$ 57,454	$ 57,087

Supplemental disclosure of cash flow information:
	Cash paid for interest			$ 3,928	$ -
	Cash paid for taxes			$ -	$ -

Other non-cash investing and financing activities:
	Shares issued as compensation			$ 73,100	$ 642,175
	Shares issued for accrued interest			$ 5,553	$ -
	Shares issued for debt principle			$ 111,747	$ 234,000

The accompanying notes are an integral part of these financial statements

				Nine Months Ended
				September 30,
				2010	2009
Cash flows from operating activities:
	Net loss			$ (1,667,929)	$ (574,577)
	Adjustments to reconcile net loss to net
	cash used by operating activities:
		Depreciation		16,349	17,064
		Stock compensation expense		1,155,863	62,640
		Stock issued for accrued interest		21,724	-
		Merger shares canceled		(122,618)	-
		Amortization of beneficial conversion feature		150,000	-
	Changes in operating assets and liabilities:
		Change in accounts receivable		(1,550)	13,540
		Change in inventory		154,567	245,154
		Change in other current assets		(52,115)	2,343
		Change in deposits		(6,875)	8,766
		Change in accounts payable		73,271	(263,963)
		Change in floorplan notes payable		(56,609)	-
		Change in other current liabilities		11,318	175,591
			Net cash used by operating activities	(324,604)	(313,442)
Cash flows from investing activities:
	Investment in merger			-	(28,000)
			Net cash provided by investing activities	-	(28,000)
Cash flows from financing activities:
	Proceeds from the issuance of common stock			53,188	452,201
	Stock sale offering costs			-	(146,007)
	Proceeds from loans			269,000	54,000
	Proceeds from shareholder loans			-	38,605
	Payments on shareholder loans			-	(7,500)
	Payments on loans			(29,654)	(6,000)
			Net cash provided by financing activities	292,534	385,299
Net increase (decrease) in cash				(32,070)	43,857
Cash, beginning of period				50,659	6,252
Cash, acquired				-	6,070
Cash, end of period				$ 18,589	$ 56,179
Supplemental disclosure of cash flow information:
	Cash paid for interest			$ 20,537	$ -
Other non-cash investing and financing activities:
	Shares issued as compensation			$ 1,155,863	$ 62,640
	Shares issued for accrued interest			$ 21,724	$ -
	Shares issued for debt			$ 440,822	$ 231,500
	Merger related shares canceled			$ 122,618	$ -
	Founder's shares issued for promissory note			$ -	$ 100,000
The accompanying notes are an integral part of these financial statements

-6-

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2010~~2011 AND ~~2009~~2010

NOTE A – ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited financial statements of San West, Inc. as of September 30, 2010 and for the three and nine months ended September 30, 2010 and 2009 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial reporting. Accordingly, they do not include all of the disclosures required by accounting principles generally accepted in the United States for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2009 as filed with the Securities and Exchange Commission as part of our Form 10-K filed on April 15, 2010. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the interim financial information have been included. The results of operations for any interim period are not necessarily indicative of the results of operations for the entire year.

Organization

San West, Inc. (~~formerly Human BioSystems Acquisition Company) (~~“San West”, “the “Company”, or “we”) is a Nevada Corporation, established in July, 2001. The Company ~~designs, manufacturers,~~ sells and ~~repairs~~services off-road buggies, and ~~additionally~~related ~~provides~~ after market performance products and accessories ~~for buggies~~. Its products are sold both at a physical location and online while the buggy repair services are sold and fulfilled at the physical location. Its primary service outlet, “Letz Go Racing Off-Road Center” is located in Huntington Beach, California and provides customers with modification parts, accessories and repair services for off-road buggies built in China for the U.S. market.

In August 2008, the Company purchased 100% of the outstanding stock of Buggy World, Inc. With the acquisition of Buggy World, San West expanded their presence in the southern California retail market. The accompanying financial statements reflect the activity of Buggy World since its acquisition.

On June 5, 2009, San West completed a reverse merger with Human BioSystems by merging with Human BioSystems Acquisition Company a wholly owned subsidiary of Human BioSystems Upon becoming effective, 1) 100% of San West outstanding common stock was exchanged for 65,396,320 shares of Human BioSystems common stock, 2) Human BioSystems Acquisition Company became the surviving entity and assumed all San West assets and liabilities and 3) Human BioSystems Acquisition Company changed its name to San West, Inc. The authorized capital stock of San West, Inc (formerly Human BioSystems Acquisition Company) is 400,000,000 shares of common stock no par value and 50,000,000 shares of preferred stock no par value. The merger was accounted for as a “reverse merger”, wherein Human BioSystems Acquisition Company and Human BioSystems are treated as the acquiree for accounting purposes meaning the historical earnings, assets and liabilities of San West, Inc (pre merger) shall remain with the assets and liabilities of Human BioSystems Acquisition Company and Human BioSystems accounted for as a purchase by San West thus recapitalizing the previously reported financial position and statements of Human BioSystems. Human BioSystems changed its name to San West, Inc. on July 31, 2009. Herein, all references to “San West”, “the “Company”, or “we” shall mean San West, Inc. and Human BioSystems, unless the context requires otherwise. The Company is listed on the OTC Bulletin Board under the ticker symbol SNWT.

Going Concern

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America, which contemplate continuation of the Company as a going concern. The Company has sustained operating losses since inception and has an accumulated deficit of $53,~~456~~423,~~104~~320 and $3,~~788~~197,~~175~~353 at ~~September~~March 3031, ~~2010~~2011 and December 31, ~~2009~~2010, respectively. In addition, the Company had negative working capital of $1,~~088~~162,~~590~~338 and $1,~~223~~103,~~883~~001 at ~~September~~March 3031, ~~2010~~2011 and December 31, ~~2009~~2010, respectively.

The Company has and will continue to use significant capital to grow and acquire market share. These factors raise substantial doubt about the ability of the Company to continue as a going concern. In this regard, management is proposing to raise any necessary additional funds not provided by operations through loans or through additional sales of their common stock. There is no assurance that the Company will be successful in raising this additional capital or in achieving profitable operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty.

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009

NOTE A – ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The consolidated financial statements include the accounts of San West (formerly Human BioSystems, Inc.) and its subsidiary, Buggy World which is 100% consolidated in the financial statements. All material inter-company accounts and transactions have been eliminated.

Accounting estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. Actual results could differ from those estimates.

-7-

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE MONTHS ENDED MARCH 31, 2011 AND 2010

NOTE A – ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Con't)

Cash and cash equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents may at times exceed federally insured limits. To minimize this risk, the Company places its cash and cash equivalents with high credit quality institutions.

Accounts Receivable

Accounts receivable are reported at the customers' outstanding balances. The Company does not have a history of significant bad debt and has not recorded any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable. The Company evaluates receivables on a regular basis for potential reserve.

Inventory

The Company currently utilizes a “just-in-time” inventory system. Inventories are valued at the lower of cost or market. Cost is determined on an average cost basis. Management performs periodic assessments to determine the existence of obsolete, slow moving and non-salable inventories, and records necessary provisions to reduce such inventories to net realizable value. The Company’s inventory consists primarily of vehicle parts and complete vehicles.

Goodwill

Goodwill and other intangible assets with indefinite useful lives are no longer amortized, but are evaluated for impairment annually, or immediately if conditions indicate that impairment could exist. The evaluation requires a two-step impairment test to identify potential goodwill impairment and measure the amount of a goodwill impairment loss. The first step of the test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of the impairment loss. Both steps of the goodwill impairment testing involve significant estimates.

Property and Equipment

Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance and repairs, which do not improve or extend the lives of the respective assets, are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income.

The Company depreciates its property and equipment on a straight line basis at the following rates as applied to net depreciable value:

Computer equipment and software:

3 years

Furniture and fixtures:

5 – 7 years

Machinery and equipment

5 – 7 years

Leasehold improvements:

7 years

Long-Lived Assets

Accounting for the Impairment or Disposal of Long-Lived Assets requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the historical cost-carrying value of an asset may not be recovered. The Company assesses recoverability of the carrying value of an asset by estimating the fair value of the asset. If the fair value is less than the carrying value of the asset, an impairment loss is recorded equal to the difference between the asset's carrying value and fair value.

6-8-

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2010~~2011 AND ~~2009~~2010

NOTE A – ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Con't)

Stock-Based Compensation

The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement. We use the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. In calculating this fair value, there are certain assumptions that we use consisting of the expected life of the option, risk-free interest rate, dividend yield, volatility and forfeiture rate. The use of a different estimate for any one of these components could have a material impact on the amount of calculated compensation expense.

Revenue

Revenue from the sale of parts, service and vehicles is recognized when the earning process is complete and the risk and rewards of ownership have transferred to the customer, which is generally considered to have occurred upon the delivery of the equipment and/or service to the customer. Customer returns and exchanges for unused parts require a receipt, all sales on discounted items are final and the Company does not accept returns on special order or electrical items. The Company does not provide warranties. Warranties are generally provided by the manufacturer of the items we sell.

Cost of Goods Sold

Cost of goods sold is recognized with the associated parts, service and vehicle revenue and consists primarily of resale parts and vehicles.

Commissions

Commissions are recorded to different employees when they are earned by; selling parts, buggies and/or service. Rates are different for each employee in different departments.

Advertising Costs

The Company expenses all advertising as incurred. ~~For~~During the three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009, the Company incurred approximately $56,284 and $18,837, respectively in marketing and advertising expense. For the nine months ended September 30,~~ 2010 ~~and 2009~~, the Company incurred approximately $~~173~~21,~~697~~503 and $3427,~~877~~659, respectively in marketing and advertising expense.

Earnings (Loss) per common share

The Company reports both basic and diluted earnings (loss) per share. Basic loss per share is calculated using the weighted average number of common shares outstanding in the period. Diluted loss per share includes potentially dilutive securities such as outstanding options and warrants, using the “treasury stock” method and convertible securities using the “if-converted” method.

Income Taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on differences between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. A valuation allowance is established against deferred tax assets that do not meet the criteria for recognition. In the event the Company were to determine that it would be able to realize deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009

NOTE A – ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Income Taxes (Continued)

The Company follows the accounting guidance which provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Income tax provisions must meet a more-likely-than-not recognition threshold at the effective date to be recognized initially and in subsequent periods. Also included is guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

~~Recent~~Stock-Based ~~Accounting Pronouncements~~Compensation

OnThe ~~July~~Company 1,accounts ~~2009~~for all compensation related to stock, ~~the~~options ~~FASB~~or ~~officially~~warrants ~~launched~~using ~~the~~a ~~FASB~~fair ~~ASC~~value ~~105~~based -method ~~Generally~~whereby ~~Accepted~~compensation ~~Accounting~~cost ~~Principles,~~is ~~which~~measured ~~established~~at the ~~FASB~~grant ~~Accounting~~date ~~Standards~~based ~~Codification~~on (“the ~~Codification”),~~value asof the ~~single~~award ~~official~~and ~~source~~is ofrecognized ~~authoritative,~~over ~~nongovernmental,~~the ~~U.S.~~service ~~GAAP~~period, inwhich ~~addition~~is tousually ~~guidance~~the ~~issued~~vesting byperiod. Stock ~~the~~issued ~~Securities~~for ~~and~~compensation ~~Exchange~~is ~~Commission. The~~valued ~~Codification~~using isthe ~~designed~~market toprice ~~simplify~~of ~~U.S.~~the ~~GAAP~~stock ~~into~~on athe ~~single,~~date ~~topically~~of ~~ordered~~the ~~structure~~related agreement. ~~All~~ We ~~guidance~~use ~~contained~~the inBlack-Scholes ~~the~~pricing ~~Codification~~model ~~carries~~to ancalculate ~~equal~~the ~~level~~fair value of ~~authority. The~~options ~~Codification~~and iswarrants ~~effective~~issued ~~for~~to ~~interim~~both employees and ~~annual~~non-employees. In ~~periods~~calculating ~~ending~~this ~~after~~fair ~~September 15~~value, ~~2009. Accordingly,~~there ~~the~~are ~~Company~~certain ~~refers~~assumptions tothat ~~the~~we ~~Codification~~use inconsisting ~~respect~~of the expected life of the ~~appropriate~~option, ~~accounting~~risk-free ~~standards~~interest ~~throughout~~rate, ~~this~~dividend ~~document~~yield, asvolatility ~~“FASB~~and ~~ASC”~~forfeiture rate. ~~Implementation~~ The use of ~~the~~a ~~Codification~~different ~~did~~estimate ~~not~~for any one of these components could have ~~any~~a material impact on the ~~Company’s~~amount ~~consolidated~~of ~~financial~~calculated ~~statements~~compensation expense.

~~On June 30, 2009, the FASB issued Accounting Standard Update (ASU) No. 2009~~-01 (Topic 105) – Generally Accepted Accounting Principles – amendments based on – Statement of Financial Accounting Standards No. 168 –The FASB Accounting and Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. Beginning with this Statement the FASB will no longer issue new standards in the form of Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standard Updates. This ASU includes FASB Statement No. 168 in its entirety. While ASU’s will not be considered authoritative in their own right, they will serve to update the Codification, provide the bases for conclusions and changes in the Codification, and provide background information about the guidance. The Codification modifies the GAAP hierarchy to include only two levels of GAAP: authoritative and nonauthoritative. ASU No. 20099-~~01 is effective for financial statements issued for the interim and annual periods ending after September 15, 2009, and the Company does not expect any significant financial impact upon adoption.~~

In August 2009, the FASB issued ASU No. 2009-05 – Fair Value Measurements and Disclosures (Topic 820) – Measuring Liabilities at Fair Value. This ASU clarifies the fair market value measurement of liabilities. In circumstances where a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the following techniques: a technique that uses quoted price of the identical or a similar liability or liabilities when traded as an asset or assets, or another valuation technique that is consistent with the principles of Topic 820 such as an income or market approach. ASU No. 2009-05 was effective upon issuance and it did not result in any significant financial impact on the Company upon adoption.

In September 2009, the FASB issued ASU No. 2009-12 – Fair Value Measurements and Disclosures (Topic 820) – Investments in Certain Entities That Calculate Net Asset Value per Share (or its equivalent). This ASU permits use of a practical expedient, with appropriate disclosures, when measuring the fair value of an alternative investment that does not have a readily determinable fair value. ASU No. 2009-12 is effective for interim and annual periods ending after December 15, 2009, with early application permitted. Since the Company does not currently have any such investments, it does not anticipate any impact on its financial statements upon adoption.

In January 2010, the FASB issued ASU 2010-06 – “Fair Value Measurements and Disclosures—Improving Disclosures about Fair Value Measurements”, which requires new disclosures and reasons for transfers of financial assets and liabilities between Levels 1 and 2. ASU 2010-06 also clarifies that fair value measurement disclosures are required for each class of financial asset and liability, which may be a subset of a caption in the consolidated balance sheets, and those disclosures should include a discussion of inputs and valuation techniques. It further clarifies that the reconciliation of Level 3 measurements should separately present purchases, sales, issuances, and settlements instead of netting these changes. With respect to matters other than Level 3 measurements, ASU 2010-06 is effective for fiscal years and interim periods beginning on or after December 15, 2009. New guidance related to Level 3 measurements is effective for fiscal years and interim periods beginning on or after December 15, 2010. We are currently evaluating the impact of ASU 2010-06 on our disclosures.

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2010~~2011 AND ~~2009~~2010

NOTE A – ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Con't)

~~Recent~~Earnings ~~Accounting Pronouncements~~ (~~Continued~~Loss) per common share

Recent Accounting Pronouncements

06 is effective for fiscal years and interim periods beginning on or after December 15, 2009. New guidance related to Level 3 measurements is effective for fiscal years and interim periods beginning on or after December 15, 2010. Adoption of ASU 2010-06 did not result in any significant financial impact on the Company upon adoption.

In February 2010, the FASB issued ASU No. 2010-09, which amends subsequent event disclosure requirements for SEC filers. An entity that is an SEC filer is not required to disclose the date through which subsequent events have been evaluated. This ASU was effective upon issuance and adoption of this ASU did not result in a material impact to the Company’s financial statements.

In January 2010, the FASB issued ASU No. 2010-10 – Consolidation (Topic 810) that amends accounting and disclosure requirements for a decrease in ownership in a business under existing GAAP standards for consolidations. It also clarifies the types of businesses that are in the scope of these consolidations. As required by this guidance, we retroactively applied the amendments as of January 1, 2009, which did not have a material impact on our financial statements or footnote disclosures.

In ~~May~~December ~~2009~~2010, the FASB issued ~~FASB~~ASU ~~ASC~~No. ~~855,~~2010-29 ~~“Subsequent~~– ~~Events~~Business Combinations (Topic 805); disclosure of Supplementary Pro Forma Information for Business Combinations.” ~~This~~ASU ~~Statement~~No. ~~addresses~~2010-29 ~~accounting~~requires ~~for~~a public entity that presents comparative financial statements to disclose revenue and ~~disclosure~~earnings of ~~events~~the combined entity as though the business combination(s) that ~~occur~~occurred ~~after~~during the ~~balance~~current ~~sheet~~year ~~date~~had ~~but~~occurred ~~before~~as ~~financial~~of ~~statements~~the ~~are~~beginning ~~issued~~of orthe ~~available~~comparable toprior beannual ~~issued~~reporting period only. ~~FASB~~The ~~ASC~~amendments ~~855~~in ~~requires~~this ~~disclosure~~update ofalso expand the ~~date~~supplemental ~~through~~pro ~~which~~forma andisclosures ~~entity~~under ~~has~~Topic ~~evaluated~~805 ~~subsequent~~to ~~events~~include ~~and~~a description of the ~~basis~~nature ~~for~~and ~~that~~amount ~~date~~of material, ~~the~~nonrecurring ~~date~~pro ~~issued~~forma oradjustments ~~date~~directly ~~available~~attributable to bethe ~~issued~~business. The ~~Company~~amendments ~~adopted~~in this ~~Statement~~update inare ~~the~~effective ~~second~~prospectively ~~quarter~~for ofbusiness ~~2009. As~~combinations afor ~~result~~which the acquisition date ~~through~~is ~~which~~on or after the ~~Company~~beginning ~~has~~of ~~evaluated~~the ~~subsequent~~first ~~events~~annual ~~and~~reporting ~~the~~period ~~basis~~beginning ~~for~~on ~~that~~or ~~date~~after December 15, 2010. Early adoption is permitted. adoption of this ASU did not have ~~been~~a ~~disclosed~~material inimpact ~~Note~~on N,our ~~Subsequent~~financial ~~Events~~statements or footnote disclosures.

In April 2009, the FASB issued an update to FASB ASC 820, “Fair Value Measurements and Disclosures,” related to providing guidance on when the volume and level of activity for the asset or liability have significantly decreased and identifying transactions that are not orderly. The update clarifies the methodology to be used to determine fair value when there is no active market or where the price inputs being used represent distressed sales. The update also reaffirms the objective of fair value measurement, as stated in FASB ASC 820, which is to reflect how much an asset would be sold in and orderly transaction, and the need to use judgment to determine if a formerly active market has become inactive, as well as to determine fair values when markets have become inactive. The Company adopted this Statement in the second quarter of 2009 without significant financial impact.

In April 2009, the FASB ASC 320, “Investments – Debt and Equity,” amends current other-than-temporary guidance for debt securities through increased consistency in the timing of impairment recognition and enhanced disclosures related to credit and noncredit components impaired debt securities that are not expected to be sold. Also, the Statement increases disclosures for both debt and equity securities regarding expected cash flows, securities with unrealized losses, and credit losses. The Company adopted this Statement in the second quarter of 2009 without significant impact to our financial statements.

In April 2009, the FASB issued an update to FASB ASC 825, “Financial Instruments,” to require interim disclosures about the fair value of financial instruments.” This update enhances consistency in financial reporting by increasing the frequency of fair value disclosures of those assets and liabilities falling within the scope of FASB ASC 825. The Company adopted this update in the second quarter of 2009 without significant impact to the financial statements.

In April 2009, the FASB issued an update to FASB ASC 805, “Business Combinations,” that clarifies and amends FASB ASC 805, as it applies to all assets acquired and liabilities assumed in a business combination that arise from contingencies. This update addresses initial recognition and measurement issues, subsequent measurement and accounting, and disclosures regarding these assets and liabilities arising from contingencies in a business combination. The Company adopted this Statement in the second quarter of 2009 without significant impact to the financial statements.

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009

NOTE A – ORGNIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recent Accounting Pronouncements (Continued)

In November 2008, EITF issued new guidance under FASB ASC 350, “Intangibles – Goodwill and Other on accounting for defensive intangible assets.” The new guidance applies to all acquired intangible assets in which the acquirer does not intend to actively use the asset but intends to hold (lock up) the asset to prevent its competitors from obtaining or using the asset (a defensive asset). This guidance was adopted by the Company in January 2009 without impact to the financial statements.

In May 2008, the FASB issued an update to FASB ASC 470, “Debt,” with respect to accounting for convertible debt instruments that may be settled in cash upon conversion including partial cash settlement. This update applies to convertible debt instruments that, by their stated terms, may be settled in cash (or other assets) upon conversion, including partial cash settlement, unless the embedded conversion option is required to be separately accounted for as a derivative under FASB ASC 815, “Derivatives and Hedging.” Additionally, this update specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate when interest cost recognized in subsequent periods. The update is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. The Company does not currently have any debt instruments for which this update would apply. This update was adopted in January 2009 without significant financial impact.

In December 2007, the FASB issued an update to FASB ASC 805, “Business Combinations” which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree, and the goodwill acquired. SFAS 141R also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141R is effective for the Company with respect to business combinations for which the acquisition date is on or after January 1, 2009. The Company adopted this SFAS in the first quarter of 2009.

In December 2007, the FASB issued an update to FASB ASC 810, “Consolidation,” which establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent’s ownership interest, and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of noncontrolling owners. This update is effective for the Company as of January 1, 2009. The Company adopted this update in January 2009 without significant impact on the consolidated financial position, results of operations, and disclosures.

NOTE B – INVENTORY

Inventory is comprised of buggy vehicles and parts and stated at the lower of cost or market. The following table represents the major components of inventory at ~~September~~March 3031, ~~2010~~2011 and December 31, ~~2009~~2010:

	2010	2009
	March 31,	December 31,
Parts	$63,507	$120,343
	2011	2010
Vehicles	69,847	167,578
Parts	$100,790	$113,318
Inventory	$133,354	$287,921
Vehicles	12,374	18,450
Inventory	$113,164	$131,768

~~NOTE C – FIXED ASSETS~~-10-

Furniture and equipment are depreciated on a straight line basis over their estimated useful life from 3 – 7 years. A majority of the fixed assets listed were acquired in the purchase of Buggy World in August of 2008. Fixed assets consisted of the following at September 30, 2010 and December 31, 2009:

	2010	2009
Computers	$ 8,419	$ 8,419
Furniture & fixtures	50,000	50,000
Machinery & equipment	62,891	62,891
Leasehold improvements	8,916	8,916
	130,226	130,226
Accumulated depreciation	(48,322)	(31,974)
Fixed assets, net	$ 81,904	$ 98,252

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2010~~2011 AND ~~2009~~2010

NOTE C – ~~FIXED~~OTHER ~~ASSETS~~CURRENT ~~(Continued)~~ASSETS

~~Depreciation~~Other ~~expense~~current ~~for~~assets ~~the~~of ~~three~~$126,590 ~~months~~and ~~ended~~$113,406 ~~September~~as 30of March 31, ~~2010~~2011 and ~~2009~~December ~~was $5~~31,~~429~~ ~~and $5~~2010,~~688,~~ respectively~~. Depreciation~~ ~~expense~~are ~~for~~comprised ~~the~~solely ~~nine~~of ~~months~~sale ~~ended~~proceeds ~~September~~held ~~30,~~in ~~2010~~reserve ~~and~~by ~~2009~~our ~~was~~credit ~~$16,349~~card ~~and~~processors ~~$17,064,~~as ~~respectively~~a buffer against potential customer chargebacks.

NOTE D – ~~GOODWILL~~FIXED ASSETS

OnFurniture ~~August~~and ~~20,~~equipment ~~2008,~~are ~~the~~depreciated ~~Company~~on ~~executed~~a anstraight ~~Asset~~line ~~Purchase~~basis ~~and~~over ~~Stock~~their ~~Transfer~~estimated ~~Agreement~~useful ~~for~~life ~~100%~~from of3 ~~the~~– ~~outstanding~~7 ~~ownership interests in Buggy World, Inc~~years. ~~The~~A ~~total~~majority ~~purchase~~of ~~price~~the ~~was~~fixed ~~$613,202~~assets ~~paid~~listed ~~with~~were ~~$350,000~~acquired ~~cash~~in ~~and~~the ~~$263,202~~purchase of ~~promissory~~Buggy ~~notes~~World toin ~~Cambio~~August ~~Enterprises. In~~of 2008. Fixed assets consisted of the ~~Company~~following ~~impaired~~at ~~$54~~March 31,~~889~~ ~~related~~2011 toand ~~the~~December ~~Buggy~~31, ~~World~~2010: ~~acquisition.~~

NOTE E – ACCOUNTS PAYABLE


	March 31,	December 31,
	2011	2010
Computers	$8,419	$8,419
Furniture & fixtures	50,000	50,000
Machinery & equipment	62,891	62,891
Leasehold improvements	8,916	8,916
	130,226	130,226
Accumulated depreciation	(59,129)	(53,726)
Fixed assets, net	$71,097	$76,500

~~Accounts~~Depreciation ~~payable~~expense atfor ~~September~~the ~~30,~~three ~~2010~~months ~~consisted~~ended ofMarch ~~$637~~31,~~242~~ of2011 ~~assumed~~and ~~Human~~2010 ~~BioSystems~~was ~~accounts,~~ $35,~~768~~403 ~~of sales tax payable, $15,642 related to professional fees~~ and $~~165~~5,~~876~~460, ~~of trade payables~~respectively.

~~Accounts~~NOTE ~~payable~~E at– ~~December 31, 2009 consisted of $668,642 of assumed Human BioSystems accounts, $6,599 of sales tax payable, $5,000 related to professional fees and $69,016 of trade payables.~~ GOODWILL

~~NOTE~~On FAugust –20, ~~FLOORPLAN~~2008, ~~NOTES~~the ~~PAYABLE~~Company executed an Asset Purchase and Stock Transfer Agreement for 100% of the outstanding ownership interests in Buggy World, Inc. The total purchase price was $613,202 paid with $350,000 cash and $263,202 of promissory notes to Cambio Enterprises (See Note I, Subsidiary Purchase Loan). Identifiable tangible assets acquired were valued at $394,102 leaving $219,100 recorded as goodwill.

	September 30, 2010		December 31, 2009
	Inventory	Notes	Inventory	Notes
	Cost	Payable	Cost	Payable
Vehicles	$ 69,847	$ 61,353	$ 167,578	$ 117,962
Parts and accessories	63,507		120,343
	$ 133,354		$ 287,921

On September 5, 2008, the Company purchased certain rights, title and interest to Johnson’s Bug Machine for $15,000 which was recorded to goodwill. Payments were due $5,000 after completion of the first referred job was complete and $1,000 per month thereafter. This obligation was non-interest bearing. In October 2009, the Company settled this debt for a $5,000 cash payment and full release netting the Company a $10,000 gain on the forgiveness of debt recorded as other income in our 2009 Statement of Operations.

~~The~~As ~~floorplan~~of ~~notes~~March ~~payable~~31, as2011, ~~shown~~we have recorded goodwill of $234,100 in ~~the~~connection ~~above~~with ~~table~~our acquisition of Buggy World, ~~will~~Inc. ~~generally~~on beAugust ~~higher~~20, ~~than~~2008 ~~the~~($219,100) ~~vehicle~~and ~~inventory~~Johnson’s ~~cost~~Bug ~~due~~Machine to($15,000) on September 5, 2008. Goodwill represents the ~~timing~~excess of the ~~sale~~purchase price over the fair value of acurrent ~~vehicle~~financial assets, property and ~~payment~~equipment, ofand ~~the~~separately ~~related~~reportable ~~liability~~intangible assets. InThe ~~2009~~tangible assets, ~~floorplan~~intangible ~~notes~~assets, ~~payable~~and goodwill acquired are then assigned to reporting units. Goodwill is ~~lower~~then ~~than~~tested ~~inventory~~for ~~cost~~impairment asat weleast ~~have~~annually ~~paid~~for ~~off~~each ~~floorplan~~reporting ~~notes~~unit. Step ~~with~~one ~~excess~~of ~~cash~~the goodwill impairment test involves comparing the fair value of the reporting unit to its carrying value. If the fair value significantly exceeds the carrying value, ~~including~~no further testing is required. If the ~~proceeds~~carrying value exceeds the fair value, a step two test must be performed. Step two includes estimating the fair value of all tangible and intangible assets. The fair value of goodwill is then estimated by subtracting the fair value of tangible and intangible assets from ~~our~~the ~~stock~~fair ~~sales~~value of total assets determined in step one. The goodwill impairment is the excess of the recorded goodwill over the estimated fair value of goodwill.

We evaluate our vehicles at the lower of cost or market value approach for vehicles. If the book value of our vehicles is more than fair value, we could experience losses on our used vehicles in future periods. -11-

All new vehicles are pledged to collateralize floorplan notes payable to floorplan providers. The floorplan notes payable bear interest, payable monthly on the outstanding balance, at a rate of interest that varies by provider. The new vehicle floorplan notes are payable on demand and are typically paid upon the sale of the related vehicle. As such, these floorplan notes payable are shown as current liabilities in the accompanying balance sheets.

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2010~~2011 AND ~~2009~~2010

NOTE FE – ~~FLOORPLAN~~GOODWILL ~~NOTES PAYABLE~~ (Continued)

~~During~~We ~~2009,~~performed ~~the~~a ~~Company~~goodwill ~~used~~impairment ~~Castle~~test ~~Flooring~~on toMarch ~~finance~~31, ~~certain~~2011 ~~vehicles~~and December 31, 2010. ~~During~~Pursuant ~~2009~~to ~~Castle~~ASC ~~was~~350-20-35-22 ~~paid~~quoted ~~off~~market ~~and~~prices in an active market are the ~~Company~~best noevidence ~~longer~~of ~~does~~fair ~~business~~value ~~with~~and ~~Castle~~should ~~who~~be ~~has~~used ~~since~~as ~~filed~~the basis for ~~Chapter~~measurement, 7if ~~bankruptcy~~available. GEThere ~~Flooring~~are ~~and~~active ~~DSC~~markets ~~Flooring~~for ~~provided~~our ~~financing~~reporting tounits ~~the~~which ~~former~~are ~~owners~~comprised of ~~Buggy~~our ~~World. DSC~~company ~~was~~as ~~paid~~a ~~off~~whole ingiven ~~2009~~that ~~and~~ the ~~remaining~~goodwill GE balance isrelates adirectly ~~carryover~~to ~~from~~our ~~2008~~existing business. ~~The~~We GEdetermined ~~balance~~the isfair ~~secured~~value byas ~~certain vehicles financed by that lender.~~

of March 31, 2011 to be $3,539,246 (221,202,859 shares outstanding x $0.016 3/31/2011 closing stock price) which exceeded the carrying value of our goodwill balance by 1,512%. We determined the fair value as of December 31, 2010 to be $2,505,657 (192,742,859 shares outstanding x $0.013 12/31/2010 closing stock price) which exceeded the carrying value of our goodwill balance by 1,070%. Accordingly, we determined our goodwill balance passed step one of the goodwill impairment test. Thus, no impairment of goodwill existed as of or has been recorded for the year ended December 31, 2010 or 2009.

~~Vehicles~~We ~~financed~~acknowledge bythe ~~our~~uncertainty ~~floorplan~~surrounding ~~lenders~~the ~~are~~key ~~classified~~assumptions asthat ~~floorplan~~drive ~~notes~~the ~~payable~~estimated ~~and~~fair ~~are~~value. Any ~~included~~material asnegative anchange ~~operating~~in ~~activity. In~~ the ~~future~~fundamental outlook of our business, our industry or the ~~Company~~capital ~~plans~~market environment could cause the business unit to ~~consign~~fail step one. Accordingly, we will be monitoring events and orcircumstances ~~purchase~~each ~~most~~quarter of(prior ~~our~~to ~~inventory~~the annual testing date) to determine whether an additional goodwill impairment test should be performed.

NOTE GF – ~~CONVERTIBLE~~ACCOUNTS ~~PROMISSORY NOTE~~PAYABLE

InAccounts ~~connection~~payable ~~with~~at aMarch ~~Securities purchase Agreement dated February 12~~31, ~~2010,~~2011 ~~the~~consisted ~~Company~~of ~~issued a convertible promissory note (the “Note”) dated February 4~~$637,042 ~~2010~~of ~~generating~~assumed ~~gross~~Human ~~proceeds~~BioSystems ~~to the Company of $150~~accounts,~~000. Issuance~~ ~~fees totaled~~ $36,~~485,~~561 ~~which were paid in cash. The Note bears interest~~ of ~~ten~~sales ~~percent~~tax ~~(10%)~~payable, ~~per~~$45,134 ~~annum~~related ~~that~~to ~~accrues~~professional ~~daily~~fees and ~~matures on February 1~~$234,815 ~~2011~~of ~~with~~trade ~~no payment due before the maturity date~~payables.

Accounts payable at December 31, 2010 consisted of $637,042 of assumed Human BioSystems accounts, $7,437 of sales tax payable, $99,664 related to professional fees and $147,037 of trade payables.

NOTE G – FLOORPLAN NOTES PAYABLE

During 2010, we sold or disposed of all our flooring inventory. The balance of $4,721 represents the interest and fees due to the flooring company as of December 31, 2010. The interest charged by our flooring company was 12% per year.

When we have vehicle inventory we evaluate our vehicles at the lower of cost or market value approach. If the book value of our vehicles is more than fair value, we could experience losses on our vehicles in future periods. All new vehicles are pledged to collateralize floorplan notes payable to floorplan providers. The floorplan notes payable bear interest, payable monthly on the outstanding balance, at a rate of interest that typically varies by provider. Vehicle floorplan notes are typically payable on demand and are typically paid upon the sale of the related vehicle. As such, our floorplan notes payable are shown as current liabilities in the accompanying balance sheets with related cash flows accounted for as Operating Activities.

NOTE H – CONVERTIBLE PROMISSORY NOTES AND NOTES PAYABLE

Gemini

In connection with a Securities purchase Agreement dated February 12, 2010, the Company issued a convertible promissory note (the “Note”) dated February 4, 2010 generating gross proceeds to the Company of $150,000. Issuance fees totaled $3,485, which were paid in cash. The Note bears interest of ten percent (10%) per annum that accrues daily and matures on February 1, 2011 with no payment due before the maturity date. On January 12, 2011, the Note’s maturity date was extended one year to February 12, 2012.

At any time after the issuance date on February 4, 2010, and prior to maturity, the Note is convertible into the Company's restricted common stock at a conversion price equal to the lesser of (i) $0.04, or (ii) 80% of the lowest closing bid price of the Company’s Common Stock during the 10 trading days immediately preceding the applicable conversion date. Common stock issued pursuant to a conversion carries piggyback registration rights.

-12-

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE MONTHS ENDED MARCH 31, 2011 AND 2010

NOTE H – CONVERTIBLE PROMISSORY NOTES AND NOTES PAYABLE (Continued)

Gemini (Continued)

The Note provides that the holder may only convert the debenture if the number of shares held by the lender or its affiliates after conversion would not exceed 4.99% of the outstanding shares of the Company's common stock following such conversion.

The issuance costs related to the Note of $3,485 in cash were capitalized to current assets on the balance sheet and are being amortized over the original term of the Note ~~which is calculated~~ based upon the effective interest method. For the ~~three~~year ~~and nine months~~ ended ~~September~~December 3031, 2010, the Company recognized $~~872 and $2~~3,~~601~~485 as other expense related to the amortization of the issuance costs ~~with a $884 balance remaining in current assets~~.

The Company determined that the Note was issued with a beneficial conversion feature (“BCF”) due to the conversion price ($0.04) being less than the closing stock price ($0.095) on the date of issuance, and the conversion feature being in-the-money. Thus, the BCF ~~has~~was been determined based on the gross debenture amount, and recorded as a discount to reduce the carry value of the Note and increase additional-paid-in-capital. The Company calculated the initial BCF on the closing date of the transaction to be $206,250 using the intrinsic value method. Since this amount is greater than the $150,000 value of the Note, the Company reduced the initial carry value of the Note to zero effectively recording a BCF of $150,000 as additional-paid-in-capital. The BCF discount was expensed when the note became convertible which was on the date of issuance. ~~Thus~~On October 14, ~~during~~2010, the ~~nine~~note ~~months~~was ~~ended~~further ~~September~~modified ~~30,~~to ~~2010,~~provide ~~the~~for ~~Company~~a ~~recognized~~conversion price of $~~150,000~~0.005 inper ~~non-cash~~share. The ~~amortization~~Company ~~expense~~calculated ~~attributable~~the toBCF on the ~~amortization~~closing date of the ~~beneficial~~modification ~~conversion~~to ~~feature~~be ~~discount~~$83,528 using the intrinsic value method.

~~During~~On ~~the~~January ~~three and nine months ended September 30~~12, ~~2010~~2011, ~~the~~ Gemini ~~converted~~purchased $2024,000 of ~~principle~~the ~~and~~Dutchess ~~$1,183.33~~debt of(See ~~accrued~~“Other ~~interest~~Convertible ~~into~~Promissory ~~2,824,444~~Notes” ~~shares~~below) ofsubject ~~common~~to ~~stock~~the same terms as the original Dutchess debt.

During the three ~~and nine~~ months ended ~~September~~March 3031, ~~2010,~~2011 ~~the Company recognized $3,833~~ and $92010,~~954~~ inrelated ~~interest~~to ~~expense~~the ~~related~~notes toabove, the ~~Note.~~Company:

NOTE H – NOTES PAYABLE

Notes payable consists of the following at September 30, 2010:

~~($7,630)~~Recognized Oninterest ~~September~~expense ~~30,~~during ~~2009~~ the ~~Company~~three ~~issued~~months anended ~~Addendum~~March ~~to the Seacoast Advisors~~31, ~~Inc.~~2011 ~~February~~and ~~13,~~2010 ~~2009~~of ~~note increasing the loan balance by~~ $543,~~000. The~~482 ~~addendum extended the maturity date of the original note~~ and ~~the~~ $542,~~000 to September 30~~277, 2010. The addendum also changed the conversion price of the $54,000 to $0.07 per share compared to $0.05 per share for the original note. All other terms and conditions are unchanged and include interest at eight percent (8%) per annum respectively;

122.

Converted $22,300, including $20,000 of principle and $2,300 of accrued interest into 4,460,000 shares of common stock;

Had a current principle balance and accrued interest balance of $214,000 and $13,365, respectively.

On January 12, 2011, The Company issued $80,000 of convertible notes to Gemini Master Fund, Ltd. and received $61,000 due to a $19,000 original issue discount. The note bears interest of ten percent (10%) per annum with an effective interest rate of 35.6%, matures on February 1, 2012 and is convertible at the option of the note holder at any time at a conversion price equal to the lesser of (i) $0.005 and (ii) 80% of the lowest closing bid price of the Company’s common stock during the 10 trading days immediately preceding the applicable conversion date. The Notes provide that the holder may only convert the debenture if the number of shares held by the lender or its affiliates after conversion would not exceed 4.99% of the outstanding shares of the Company's common stock following such conversion. In the event of default the interest rate on the notes shall increase to the lesser of 24% or the maximum rate permitted under applicable law. The Company determined that the Note was issued with a beneficial conversion feature (“BCF”) due to the conversion price ($0.005) being less than the closing stock price ($0.015) on the date of issuance, and the conversion feature being in-the-money. Thus, the BCF was been determined based on the gross Note amount, and recorded as a discount to reduce the carry value of the Note and increase additional-paid-in-capital. The Company calculated the initial BCF on the closing date of the transaction to be $160,000 using the intrinsic value method. Since this amount is greater than the $80,000 value of the Note, the Company reduced the initial carry value of the Note to zero effectively recording a BCF of $80,000 as additional-paid-in-capital. The BCF discount was expensed when the note became convertible which was on the date of issuance.

-13-

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2010~~2011 AND ~~2009~~2010

NOTE H – CONVERTIBLE PROMISSORY NOTES AND NOTES PAYABLE (Continued)

~~and~~Gemini only one principal and interest payment upon maturity. During the three and nine months ended September 30, 2010, the Company recognized $669 and $2,811, respectively of interest expense. During the three and nine months ended September 30, 2009, the Company recognized $125 of interest expense. During the three and nine months ended September 30, 2009, the Company converted $50,395 (~~$46,459 of principle and $3,936 of interest~~Continued) into 5,039,489 shares of common stock. As of September 30, 2010, the total due under this note was $7,630, including $89 of accrued interest and $7,541 of principal. Accrued interest under this note is recorded under other current liabilities.

During the three months ended March 31, 2011, related to the note above, the Company:

Recognized $80,000 in non-cash amortization expense attributable to the amortization of the beneficial conversion feature;

~~($81,637)~~Recognized Represents the promissory notes assumed from Dutchess Private Equities L.P. pursuant to the HBS merger. In November 2006, the HBS entered into a loan transaction with Dutchess Private Equities, LP (“Dutchess”), and issued to Dutchess a Promissory Note (“First Dutchess Note”) with a face value of $14,~~200,000,~~563 ~~with net proceeds to the Company from the transaction~~ of ~~$1,000,000 and an imputed annual rate of~~ interest ofexpense ~~43.278%. The~~during ~~First~~the ~~Dutchess~~three ~~Note~~months ~~matured~~ended onMarch ~~August~~ 31, ~~2007. Repayment~~2011 of ~~the~~which ~~face value was to be made monthly in the amount of~~ $~~120~~3,~~000,~~170 ~~plus~~was ~~50%~~accreted ~~of any proceeds raised over $120,000 per month from Puts, issued by the Company as collateral. If the First Dutchess Note’s face value is not paid off by maturity, the Company will be required~~ to ~~pay an additional 10% on~~ the ~~face~~note value of the First Dutchess Note, plus 2.5% per month, compounded daily, until the First Dutchess Note is paid off. The Company may be required to pay penalties if certain obligations under the First Dutchess Note are not met. If the Company raises financing of more than $2,000,000, Dutchess may require that the Company use the balance of any amount over $2,000,000 to pay any amounts due on the First Dutchess Note. During the nine months ended September 30, 2010, $200,363 ($182,500 from straight conversions and $17,863 converted through PUTS (See Note L, Investment Agreements below)) was converted into 6,401,754 shares of common stock (5,650,000 shares from straight conversions and 751,754 through PUTS (See Note L, Investment Agreements below).;

~~($119,000)~~Had ~~During~~a ~~the~~current ~~nine~~principle ~~months~~balance ~~ended September 30, 2010, the Company borrowed $119,000 from Seacoast Advisors, Inc. The notes have the same terms~~ and ~~conditions,~~accrued ~~including~~ interest atbalance ~~eight~~of ~~percent (8%) per annum and only one principal and interest payment due upon maturity on January 1~~$64,170 ~~2012. During the three~~ and ~~nine months ended September 30, 2010, the Company recognized~~ $1,~~875 and $2~~393,~~712,~~ respectively ~~of interest expense on these notes~~.

~~On August 10, 2008 the Company issued an unsecured promissory note to~~ Seacoast Advisors, Inc. in exchange for $80,000. On February 13, 2009 the original promissory note was canceled and replaced with a convertible promissory note. The terms of the new note and original note did not change except for the addition of a conversion feature in the new note. The new note accrues interest at eight percent (8%) per annum, is due in one year or August 12, 2009, requires only one principal and interest payment upon maturity and is convertible into common stock of the Company at the rate of $.01 of outstanding principal and interest and upon written notice from Seacoast Advisors, Inc. On September 30, 2009 the maturity date of the note was extended to September 30, 2010. During the year ended December 31, 2009, the Company made a $6,000 payment and recognized $8,528 of interest expense. As of December 31, 2009, the total balance due under this note was $82,528, including $74,000 of principle and $8,528 of accrued interest. During the nine months ended September 30, 2010, the Company recognized $1,068 of interest expense and received conversion notices to convert the entire outstanding balance of $83,695.49 ($74,000 of principle and $9,596 of accrued interest) into 8,359,649 shares of the Company’s common stock.

On February 13, 2009, the Company ~~issued~~cancelled anand ~~unsecured~~reissued ~~promissory~~the Seacoast Advisors, Inc. $80,000 note tooriginally ~~Kelly~~dated ~~Clark~~August ~~with~~10, a2008, ~~face~~maturing ~~amount~~on ofAugust 12, 2009 and carrying eight percent (8%) interest per annum. The new $~~100~~80,000 innote ~~exchange~~dated ~~for~~February ~~Ms.~~13, ~~Clark~~2009 ~~retiring~~matured 39on August 12,~~520~~ 2009,~~735~~ carried interest of eight percent (8%) per annum with no prepayments required and converted into shares of the Company’s ~~common~~upon ~~stock~~default ~~that~~at a conversion price of $.05. Per ASC 470-20-25-12, no portion of the proceeds from this note were attributable to the conversion feature as the conversion can be made at the option of the holder at a specified price and only upon default, the conversion price does not decrease, the debt was originally sold at the face amount and the conversion price was greater than the perceived market value of the stock. Additionally, this note was issued pior to Msthe merger with Human BioSystems and there was no active market for the Company’s stock at that time. In ~~Clark~~March inof ~~2005~~2009 $6,000 was paid against this note. ~~The~~In February and March of 2010, Seacoast converted $74,000 of this note ~~accrues~~into ~~interest~~7,400,000 shares of common stock at ~~eight~~an ~~percent~~exercise ~~(8%)~~price ~~per~~of ~~annum~~$.01 reflecting the decrease in the conversion price due to the 5:1 forward stock split affected on November 3, is2009. $9,596 remained due under this note and was converted in ~~one~~full ~~year~~into or959,649 ~~February~~shares 13of common stock at a conversion price of $.01 on August 30, 2010. On ~~and~~September ~~requires~~30, ~~only~~2009, ~~one~~an ~~principal~~addendum ~~and~~was ~~interest~~added ~~payment~~to ~~upon~~this ~~maturity~~note increasing the face amount to $54,000 for additional funds loaned to the Company. ~~During~~The addendum increased the ~~year~~maturity ~~ended~~date ~~December~~for ~~31,~~these ~~2009~~funds to September 30, 2010 and increased the ~~Company~~conversion ~~recognized~~price to $70.35 per share,~~036~~ ofor ~~interest~~$.07 ~~expense~~per share after giving effect to the 5:1 forward stock split. AsPer ASC 470-20-25-12, no portion of ~~December~~the 31proceeds from this adendum were attributable to the conversion feature as the conversion can be made at the option of the holder at a specified price and only upon default, ~~2009~~the conversion price does not decrease, the ~~total~~debt ~~due~~was originally sold at the face amount and the conversion price was greater than the market price of the stock. On August 16, 2010, this addendum was modified reducing the exercise price to $.01 per share exerciseable at the option of Seacoast at any time. The balance of principle and interest under this note at modification was $~~107~~57,~~036,~~723. The ~~including~~market price of common stock on the date of this modification was $~~7,036~~0.02 resulting in a beneficial conversion feature of ~~accrued~~$57,356. On ~~interest~~August 19, 2010 and August 30, 2010, Seacoast converted $~~100~~50,~~000~~395 into 5,039,489 shares of ~~principal. During~~common ~~the~~stock ~~nine~~leaving ~~months~~a ~~ended~~balance due of $7,581. Then, on September 301, 2010, the ~~Company received~~note ~~conversion~~was ~~notices~~further modified to ~~convert~~decrease the ~~entire~~conversion ~~outstanding~~price to $0.005. The balance of principle and interest under this note at modification was $~~107~~7,~~036~~581. The ~~into~~market 10price of common stock on the date of this modification was $0.01 resulting in a beneficial conversion feature of $7,~~703~~581. On October 22,~~600~~ 2010, Seacoast converted $4,750 into 950,000 shares of common stock leaving a balance due of $2,791.11 which was converted into 579,871 shares on December 22, 2010 leaving no balance due under the ~~Company’~~aforementioned note(s) ~~common~~as ~~stock~~of December 31, 2010. As of December 31, 2009, the balance under the above loan activity was $128,000.

In addition to the above, during the year ended December 31, 2010, the Company borrowed $133,000 from Seacoast Advisors, Inc. in various tranches for which separate promissory notes were issued. The notes have the same terms and conditions, including interest at eight percent (8%) per annum and only one principal and interest payment due upon maturity on January 1, 2012. On October 14, 2010, The Company and Seacoast canceled the previous notes and issued a single note in the amount of $121,631 ($119,000 principle and $2,631 accrued interest). Also, on October 14, 2010, Seacoast loaned and additional $9,000 and on November 2, 2010, Seacoast loaned an additional $5,000. The terms of the $121,631, $9,000 and $5,000 notes provide for interest at eight percent (8%) per annum, and only one principal and interest payment due upon maturity with maturity being six (6) months from the date each tranche was first received by the Company. In the event of default, the notes become convertible at the option of the holder into common stock of the Company at a conversion price of $0.005 per share. The Notes contain a provision limiting the conversion thereof by any party to not more that 4.99% ownership of the stock of the Company at any time after taking into account all of the holdings of the converting party. Per ASC 470-20-25-12,

-14-

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2010~~2011 AND ~~2009~~2010

NOTE H – CONVERTIBLE PROMISSORY NOTES AND NOTES PAYABLE (Continued)

Seacoast Advisors, Inc. (Continued)

no portion of the proceeds from this note are attributable to the conversion feature as the conversion can be made at the option of the holder at a specified price and only upon default, the conversion price does not decrease, the debt was originally sold at the face amount, the interest rate is lower than the Company would pay for non-convertible debt and the conversion price was greater than the perceived market value of the stock. In addition, the restrictions on the conversion prevent the holders from fully exercising the conversion, the Company has experienced significant operating losses and shareholder dilution, in the event of a conversion an attempt to sell converted shares would most likely result in a lower stock price due to the thin trading volume of the Company’s stock on the secondary markets, and the perceived market value of the stock was less than the conversion price due to the above and due to the significant decrease in the stated trading values of the Company’s stock which has decreased 97.4% from $0.308 one year prior to these notes leaving significant uncertainty about the future trading price of the stock and the ability of Seacoast to recover the face amount of the debt.

During the three months ended March 31, 2011, Seacoast purchased $50,637 of the Dutchess debt (See “Other Convertible Promissory Notes” below) subject to the same terms as the original Dutchess debt.

During the three months ended March 31, 2011 and 2010, related to the notes above, the Company:

Recognized $1,899 and $2,133 in interest expense during 2011 and 2010, respectively.

Converted $95,000, including $91,747 of principle and $3,253 of accrued interest into 19,000,000 shares of common stock;

Had a current principle balance and accrued interest balance of $14,550 and $472, respectively.

Other Convertible Promissory Notes

In November 2006, Human BioSystems entered into a loan transaction with Dutchess Private Equities, LP (“Dutchess”), and issued to Dutchess a Promissory Note with a face value of $1,200,000, net proceeds to the Company of $1,000,000 and an imputed annual rate of interest of 43.278%. The November 2006 Dutchess Note matured on August 31, 2007. Repayment of the face value was to be made monthly in the amount of $120,000, plus 50% of any proceeds raised over $120,000 per month from Puts, issued by the Company as collateral. In May 2007, the Company entered into a loan transaction with Dutchess and issued a Promissory Note with a face value of $462,000, net proceeds to the Company of $350,000 and an imputed annual rate of interest of 63.108%. The May 2007 Dutchess Note matured on April 15, 2008. Repayment of the face value was to be made monthly in an amount of the greater of 1) 100% of the proceeds raised from Puts given to Dutchess by the Company exceeding $120,000 per month or 2) $51,333 per month. If both Dutchess Note’s face value was not paid off by maturity, the Company would be required to pay an additional 10% on the face value of the First Dutchess Note, plus 2.5% per month until paid off. Any beneficial conversion feature that may have been recognized would not be relevant to the financial statements for the post-merger reporting which occurred on June 5, 2009 as these transactions occurred prior to the merger. Both notes were in default at the time of the merger on June 5, 2009. As a result of the default, Dutchess had the right to increase the face amount of the debentures by 10% of the face amount as an initial penalty and 2.5% of the face amount per month as liquidated damages. As of March 31, 2009, Dutchess had not elected this right. On June 5, 2009 Dutchess elected to exercise their right to impose penalties under the original notes and agreed to a $327,526 increase in the face amount of the debentures to $650,000. Both notes contain a conversion feature that became exerciseable only upon default. As a result of the default status of the notes, Ducthess currently has the right to convert the notes at a conversion price equal to 80% of the closing bid price of our common stock on the day prior to the conversion date. All conversions of Dutchess debentures are performed according to the methodology contained in the original notes.

During the year ended December 31, 2010, $202,363 was converted into 6,582,911 shares of common stock. Of the 6,582,911 shares issued, $182,500 was converted into 5,650,000 shares and $19,863 was repaid through the Company’s exercise of PUTS into 932,911 shares (See Note L, Investment Agreements below). As of December 31, 2010 and 2009, the balance of these notes was $74,637 and $282,000, respectfully.

During the three months ended March 31, 2011, the entire balance of $74,637 of the Dutchess debt was purchased by two outside parties. The terms of the debt did not change.

-15-

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE MONTHS ENDED MARCH 31, 2011 AND 2010

NOTE H – CONVERTIBLE PROMISSORY NOTES AND NOTES PAYABLE (Continued)

Other Convertible Promissory Notes (Continued)

On December 17, 2010 the Company issued $13,500 face value note that carries interest of eight percent (8%) per annum with no prepayments required and converts into shares of the Company upon default at a conversion price of $0.005. Per ASC 470-20-25-12, no portion of the proceeds from this note were attributable to the conversion feature as the conversion can be made at the option of the holder at a specified price and only upon default, the conversion price does not decrease, the debt was originally sold at the face amount, the interest rate is lower than the Company would pay for non-convertible debt and the conversion price was greater than the perceived market value of the stock. Additionally, the Company has experienced significant operating losses and shareholder dilution, in the event of a conversion an attempt to sell converted shares would most likely result in a lower stock price due to the thin trading volume of the Company’s stock on the secondary markets, and the perceived market value of the stock was less than the conversion price due to the above and due to the significant decrease in the stated trading values of the Company’s stock which has decreased 97% from $0.308 one year prior to this note leaving significant uncertainty about the future trading price of the stock and the ability to recover the face amount of the debt. During the three months ended March 31, 2011, the Company recognized $289 of interest expense on this note.

NOTE I – SUBSIDIARY PURCHASE LOAN

Secured Promissory Note to Cambio Enterprises in the amount of $263,202 dated August 12th 2008. The note bears interest of eight percent (8.0%) per annum, requires monthly principal and interest payments of $4,102, matures seven years from the date of the note or August 12, 2015 and is secured by certain assets of the Company.

In addition, the note is personally guaranteed by Frank J. Drechsler, CEO and General Manager, of San West, Inc. As of ~~September~~December 3031, 2010, the total principle due under this note was $~~226~~222,~~458~~456, and includes $2639,~~868~~176 and $~~199~~183,~~590~~280 recorded as current and non-current notes payable, respectively. During the ~~three~~year ~~months~~ ended ~~September~~December 3031, 2010 and 2009, the Company recorded interest expense of $417,~~522~~633 and $424,~~928~~334, respectively related to this note. During the ~~nine~~year ~~months~~ ended ~~September~~December 3031, 2010 ~~and 2009~~, the Company ~~recorded interest expense of $13,953 and $14,783, respectively related to this note. During the three and nine months ended September 30, 2010, the Company~~ made payments totaling $1259,~~307~~859 ($733,~~637~~656 of principle and $426,~~670~~203 of interest) ~~and $50,192 ($29,654 of principle and $20,537 of interest), respectively~~.

As of March 31, 2011, the total principle due under this note was $211,248, and includes $37,141 and $174,107 recorded as current and non-current notes payable, respectively. During the three months ended March 31, 2011 and 2010, the Company recorded interest expense of $3,182 and $4,996, respectively related to this note. During the three months ended March 31, 2011 and 2010, the Company made payments totaling $14,390 ($11,209 of principle and $3,182 of interest) and $12,717 ($12,717 of interest), respectively.

NOTE J – SHAREHOLDER LOANS

~~($216,950)~~ From time to time, the Company’s CEO, Frank J. Drechsler has deposited funds and made payments to vendors on behalf of the Company. On April 1, 2009, the Company and Mr. Drechsler entered into a promissory note for the principal balance then due or $216,950. The note accrues interest at four percent (4%) per annum, is due in three years or April 1, 2012 and requires only one principal and interest payment upon maturity. During the three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010, the Company recognized $2,~~187~~140 and $2,~~187~~140, respectively of interest expense related to this note. ~~During the nine months ended September 30, 2010 and 2009, the Company recognized $6,491 and $4,333 of interest expense related to this note.~~

NOTE K – ~~COMMON~~CAPITAL STOCK

OnPreferred ~~November 3, 2009, the Company effected a five-for-one (5:1) forward stock split.~~ Stock

During the three months ended March 31, 2011 and year ended December 31, ~~2009~~2010, the Company ~~received~~issued ~~gross~~10,000 ~~proceeds~~and 77,100 shares of ~~$798,500~~non incumulative ~~exchange~~Series ~~for~~A 33Preferred Stock,~~017,958~~ ~~shares~~respectively ofat ~~common~~a ~~stock~~price of ~~which~~ $~~67,500~~1.00 orper ~~964~~share (See SAN WEST,~~286~~ ~~shares~~INC. ~~were~~CERTIFICATE ~~issued~~OF inDESIGNATION FOR THE SERIES A PREFERRED STOCK filed with the Securities and Exchange Commission on Form 8-K on September 13, 2010).

During the year ended December 31, 2009, the Company received services valued at $434,965 in exchange for 9,480,000 shares of common stock of which 6,000,000 shares, or $372,325 had not been issued as of December 31, 2009 and are included in the equity section of our balance sheet as common stock payable. 1,300,000 shares or $80,670 have been issued through September 30, 2010. -16-

During the year ended December 31, 2009, 6,146,270 shares were issued from the existing outstanding shares of our CEO in exchange for $92,200 in gross proceeds.

During the year ended December 31, 2009, the Company converted $368,000 of our Dutchess Notes and issued 15,950,000 shares of common stock.

During the year ended December 31, 2009, the Company issued 833,333 shares of common stock as an inducement to invest from one of our shareholders.

During the nine months ended September 30, 2010, the Company issued 5,648,246 shares of common stock in exchange for $53,188.

During nine months ended September 30, 2010, the Company issued 5,000,000 shares to Jesse Gonzales for director services valued at $552,925.

During the nine months ended September 30, 2010, the Company issued 4,000,000 shares for services valued at $151,725. In addition, the Company recorded common stock payable for $51,213 for services received during the nine months ended September 30, 2010 for which an additional 1,250,000 shares are due.

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2010~~2011 AND ~~2009~~2010

NOTE K – ~~COMMON~~CAPITAL STOCK (Continued)

~~During~~Common the nine months ended September 30, 2010, the Company issued 2,093,145 to Dutchess as a finder’s fee related to the Investment Agreement (See Note L below) and recorded stock compensation expense of $400,000.Stock

During the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011, ~~Dutchess~~our ~~canceled~~Company ~~4,087,270~~recognized ~~shares originally received in connection with~~ the ~~merger~~following ~~between~~common ~~Human~~stock ~~BioSystems~~related ~~and San West in 2009. The shares were originally recorded as expense in the amount of $122,618.~~ activity:

~~During the nine months ended September 30, 2010, the Company issued 33,326,199 upon the conversion of $462,547 of debt~~1.

The Company received services valued at $73,100 in exchange for 5,000,000 shares of common stock valued at the market price of our common stock on the date of issuance or $0.0146 per share.

The Company issued 23,460 upon the conversion of $117,300 of debt and accrued interest.

During the year ended December 31, 2010, our Company recognized the following common stock related activity:

Towards the end of 2009, the Company received $67,500 in exchange for 964,286 shares of common stock that was issued in 2010.

The Company issued 5,275,000 shares of common stock at various times and prices ranging from $0.005 to $0.035 per share with a weighted average price of $0.0084 per share for proceeds of $44,500.

The Company issued 5,000,000 shares to Jesse Gonzales for director services valued on the date of issuance at $552,925.

As of December 31, 2009, the Company had recorded $372,325 of service related expense related to 6,000,000 shares that were owed but unissued. During 2010, all 6,000,000 shares were issued, including 1,300,000 shares on March 17, 2010, 4,500,000 on October 22, 2010, and 200,000 on December 23, 2010.

The Company issued 6,000,000 shares of common stock for services valued on the date of issuance at $202,951.

The Company PUT 2,167,000 shares of common stock to Dutchess in exchange for $37,852 of which the Company received $17,989 and $19,863 was applied to reduce our debt due to Dutchess (See Note L below).

The Company issued 2,093,145 to Dutchess as a finder’s fee related to the Investment Agreement and recorded stock compensation expense of $75,353 (See Note L and Note P below).

Dutchess canceled 4,087,270 shares originally received in connection with the merger between Human BioSystems and San West in 2009. The shares were originally recorded as expense in the amount of $122,618. Pursuant to ASC 505-30-30-7, the cost of treasury shares shall be reflected in capital. Since the stock has no par value and the cancellation did not require any cash outlays by the Company, no value has been assigned to these shares and the cancellation only affected the calculation of weighted average shares outstanding used in the calculation of earnings per share (See Note P below)..

The Company issued 44,369,871 upon the conversion of $503,660 of debt and accrued interest.

Common stock issued in a period subsequent to our reporting dates is included in the calculation of weighted average shares outstanding as of the date the expense was recognized or funds received.

2009 San West Long Term Equity Incentive Plan

On July 21, 2009, the Board of Directors of the Company adopted the 2009 San West Long Term Equity Incentive Plan (the “Stock Incentive Plan”). The Stock Incentive Plan provides for equity incentive benefits to awardees in the form of option rights or appreciation rights, restricted stock, restricted stock units, and/or performance shares or performance units. The total number of shares of Common Stock which may be awarded under the Plan is 50,000,000. If any awarded shares are forfeited, they become available for future issuance. An annual aggregate limit of 5,000,000 shares is set for any participant. The terms of each award are determined by the board and are to be evidenced in writing. No equity awards have been issued under the 2009 San West Long Term Equity Incentive Plan as of the date of this report.

-17-

SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE MONTHS ENDED MARCH 31, 2011 AND 2010

NOTE L – INVESTMENT AGREEMENTS

In December 2008, HBS entered into the Investment Agreement with Dutchess effective December 29, 2008 whereby the Company could sell up to $10 million of shares to Dutchess based on a certain formula. However, as a result of the reverse merger between San West, Inc and Human BioSystems in June 2009, this original Investment Agreement was considered void due to the significant change in control. As a result, on January 8, 2010, the Company filed a Post-Effective Amendment No.1 to Form S-1 seeking to register for resale up to 8.5 million shares common stock by Dutchess Opportunity Fund, II, LP, a selling stockholder pursuant to a “put right” under an investment agreement (the “Investment Agreement”), also referred to as an Equity Line of Credit, that we have entered into with Dutchess. The S-1 and subsequent amendments became effective on June 21, 2010. Pursuant to the terms of the Investment Agreement, we may offer, through a series of puts, and Dutchess must purchase from time to time shares of our common stock, provided that Dutchess shall not be required to purchase shares of our stock with an aggregate purchase price in excess of $10,000,000. We will not receive any proceeds from the sale of these shares of common stock offered by Dutchess. However, we will receive proceeds from the sale of securities pursuant to our exercise of this put right if and when the Company exercises its right. The purchase price of shares purchased under this Investment Agreement shall be equal to 92% of the lowest closing “best bid” price (the highest posted bid price) of the common stock during the five consecutive trading days immediately following the date of our notice to Dutchess of our election to put shares pursuant to this Investment Agreement (The Company does not recognize expense for the 8% discount. Dutchess in effect acts as a vehicle for the Company to be able to finance our operations through the Investment Agreement and they reasonably expect to make a small profit or commission which in this case is theoretically 8% assuming no negative volatility in our stock price. In accounting for the discount, we rely on Title 17, 230.141; SFAS No. 141, Business Combinations, Paragraph 24; and IAS 32 Financial Instruments, SIC 17. We treat the discount as an issuance cost. As such, the value of the stock issuance is reduced by the 8% discount and each issuance is reflected at 92% in our common stock equity balance with no expense booked to the statement of operations). The dollar value that we will be permitted to put pursuant to this Investment Agreement will be either: (A) 200% of the average daily volume in the US market of the common stock for the three trading days prior to the notice of our put, multiplied by the average of the three daily closing prices immediately preceding the date of the put, or (B) $100,000. During the ~~nine~~year ~~months~~ ended ~~September~~December 3031, 2010, the Company “put” to Dutchess 12,~~125~~167,000 shares of common stock and received net proceeds of $2637,~~551~~852 of which $1719,863 was applied to debt owed to Dutchess and $817,~~688~~989 was remitted to the Company. No PUTS were placed with Dutchess during the three months ended March 31, 2011.

NOTE M –- ~~SUBSEQUENT~~RELATED ~~EVENTS~~PARTY TRANSACTIONS

OnDuring ~~October~~the ~~22,~~year ~~2010,~~ended ~~the~~December ~~Company~~31, ~~issued 4~~2010,~~500,000~~ ~~shares~~our ~~for~~CEO ~~services~~Frank ~~valued~~Drechsler atmade a $~~279~~5,~~244~~000 ~~which~~payment ~~were~~to ~~recorded~~a tovendor ~~expense~~on inbehalf ~~2009,~~of ~~but~~the ~~which~~Company. There ~~shares~~were ~~have~~no ~~been~~related ~~included~~party intransactions during the ~~calculation~~three ofmonths ~~earnings~~ended ~~per~~March ~~share~~31, ~~since 2009~~2011.

~~On October 22, 2010, the Company issued 950,000 shares in exchange for the conversion of $4,750 of debt.~~-18-

14SAN WEST, INC.

NOTES TO FINANCIAL STATEMENTS (Unaudited)

THREE MONTHS ENDED MARCH 31, 2011 AND 2010

NOTE N – SUBSEQUENT EVENTS

Pursuant to FASB Accounting Standards Codification 855, Subsequent Events, Including ASC 855-10-S99-2, the Company evaluated subsequent events through May 15, 2011.

Subsequent to March 31, 2011, the Company:

Issued 1,500 shares of Series A Preferred Stock in exchange for $1,500;

Issued 3,000,000 shares of restricted common stock in exchange for services valued at $33,000;

Issued 4,466,667 shares to Gemini Master Fund upon their conversion of $22,333 of debt; and

Issued two promissory notes to Seacoast advisors in exchange for $75,000. The first note is dated April 1, 2011 for $50,000 and the second note was issued on April 18, 2011 for $25,000. The notes have the same terms and conditions, including interest at eight percent (8%) per annum and only one principal and interest payment due upon maturity on each note’s six month anniversary and in the event of default, the notes become convertible at the option of the holder into common stock of the Company at a conversion price of $0.005 per share. Per ASC 470-20-25-12, no portion of the proceeds from these notes are attributable to the conversion feature as the conversion can be made at the option of the holder at a specified price and only upon default, the conversion price does not decrease, the debt was originally sold at the face amount, and the interest rate is lower than the Company would pay for non-convertible debt. In addition, the restrictions on the conversion prevent the holders from fully exercising the conversion, the Company has experienced significant operating losses and shareholder dilution, in the event of a conversion an attempt to sell converted shares would most likely result in a lower stock price due to the thin trading volume of the Company’s stock on the secondary markets, and the perceived market value of the stock was less than the conversion price due to the above and due to the significant decrease in the stated trading values of the Company’s stock.

On April 19, 2011, the Company resolved to adopt the Non-Employee Consultants Retainer Stock Plan for the Year 2011. The purpose of this Plan is to enable the Company, to promote the interests of the Company and its stockholders by attracting and retaining non-employee consultants capable of furthering the future success of the Company and by aligning their economic interests more closely with those of the Company’s stockholders, by paying their retainer or fees in the form of shares of the Company’s common stock. 10,000,000 shares of common stock are registered to this plan at an offering price of $0.011. The Plan shall expire on April 19, 2021.

On April 27, 2011, Norman Reynolds received 3,000,000 shares common stock in lieu of payment by the Company for legal services he provided as the Company’s attorney.

-19-

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report contains forward-looking statements including statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expects,” “anticipates,” “intends,” “believes” or similar language. These forward-looking statements involve risks, uncertainties and other factors. All forward-looking statements included in this quarterly report are based on information available to us on the date hereof and speak only as of the date hereof. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. The factors discussed elsewhere in this quarterly report are among those factors that in some cases have affected our results and could cause the actual results to differ materially from those projected in the forward-looking statements.

The following discussion should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this quarterly report.

Overview

Our goal is to become one of the largest dealers of off-road buggies in the United States through acquisitions and internal growth. WeThe ~~design,~~recreational ~~manufacture,~~vehicle ~~sell~~industry ~~and~~is ~~repair~~highly ~~off-road~~fragmented ~~buggies,~~with ~~and~~an ~~additionally~~estimated ~~provide~~4,000 ~~after~~retail ~~market~~stores ~~performance~~throughout ~~products~~the ~~and~~United ~~accessories for buggies~~States. ~~Our~~We ~~products~~ are ~~sold~~attempting ~~both~~to atcapitalize ~~our~~upon ~~store~~the ~~and~~consolidation ~~online~~opportunities ~~while~~available ~~our buggy repair services are sold~~ and ~~fulfilled~~increase at our ~~store. Our~~revenues ~~goal~~and isincome toby ~~address~~acquiring ~~the~~additional ~~growing~~dealers ~~demand~~and ~~for~~improving ~~off-road vehicles while offering~~ our ~~customers~~performance ~~the highest quality products at the most affordable~~ and ~~competitive prices, following up with customer care and support services~~profitability.

~~Our~~We ~~plan~~sell ofand ~~growth~~service isoff-road tobuggies ~~capitalize~~and onrelated ~~the~~after ~~growth~~market ofperformance ~~the~~products Uand accessories.S. Our ~~market~~products ~~for~~are ~~Chinese~~sold ~~made~~both ~~off-road~~at ~~buggies~~our store and goonline ~~karts,~~while asour ~~well~~buggy asrepair toservices ~~establish~~are ~~master~~sold ~~dealer~~and ~~arrangements~~fulfilled ~~with~~at ~~leading~~our ~~brands,~~store. Our ~~continue~~goal is to ~~expand~~address ~~our~~the ~~online~~growing ~~sales~~demand ~~and~~for tooff-road ~~leverage~~vehicles while offering our ~~equity~~customers tothe ~~negotiate~~highest quality products at the most affordable and ~~acquire~~competitive ~~synergistic~~prices, ~~businesses~~following up with customer care and support services.

~~The~~Our ~~motorsports~~plan ~~industry~~of growth is ~~highly~~to ~~fragmented~~establish ~~with~~master andealer ~~estimated~~arrangements ~~4,000~~with ~~retail~~leading ~~stores~~brands, ~~throughout~~continue ~~the~~to ~~United~~expand ~~States. We~~our ~~are~~online ~~attempting~~sales and to ~~capitalize~~leverage ~~upon~~our ~~the~~equity ~~consolidation~~to ~~opportunities~~negotiate ~~available~~ and ~~increase~~acquire ~~our~~synergistic ~~revenues~~businesses ~~and~~to ~~income~~capitalize byon ~~acquiring~~the ~~additional~~growth ~~dealers~~of ~~and~~the ~~improving~~U.S. ~~our~~market ~~performance~~for Chinese made off-road buggies and ~~profitability~~go karts.

We plan to maximize the operating and financial performance of our dealerships by achieving certain efficiencies that will enhance internal growth and profitability. By consolidating our corporate and administrative functions, we believe we can reduce overall expenses, simplify dealership management and create economies of ~~scale~~scope.

We will specifically target dealers in markets with strong buyer demographics that, due to under-management or under-capitalization, are unable to realize their market share potential and can benefit substantially from our systems and operating strategy.

Buggy World, located in Santee, California, is our primary location to sell buggies, modification parts, and accessories for off-road buggies built in China for the U.S. market. We currently utilize a “just-in-time” inventory system which reduces our overall inventory expense and risk. We ship all requested kits and products within 72 hours of each order.

Seasonality.

Our products are subject to seasonality. Traditionally, the off-road buggy season begins in early September and runs until May.

Impact of Inflation.

General inflation in the economy has driven the operating expenses of many businesses higher, and, accordingly we have experienced increased salaries and higher prices for supplies, goods and services. We continuously seek methods of reducing costs and streamlining operations while maximizing efficiency through improved internal operating procedures and controls. While we are subject to inflation as described above, our management believes that inflation currently does not have a material effect on our operating results. However, inflation may become a factor in the future.

15-20-

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires us to make judgments, assumptions and estimates that affect the amounts reported. Note A of Notes to Financial Statements describes the significant accounting policies used in the preparation of the financial statements. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

A critical accounting policy is defined as one that is both material to the presentation of our financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on our financial condition and results of operations. Specifically, critical accounting estimates have the following attributes:

We are required to make assumptions about matters that are highly uncertain at the time of the estimate; and

Different estimates we could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on our financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. Based on a critical assessment of our accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that our financial statements are fairly stated in accordance with accounting principles generally accepted in the United States, and present a meaningful presentation of our financial condition and results of operations.

In preparing our financial statements to conform to accounting principles generally accepted in the United States, we make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. These estimates include useful lives for fixed assets for depreciation calculations and assumptions for valuing options and warrants. Actual results could differ from these estimates.

Revenue Recognition

Revenue from the sale of inventory is recognized when the earning process is complete and ~~the~~when ~~risk~~title ~~and~~has ~~rewards of ownership have~~ transferred to the customer, which is considered to have occurred after delivery.

Stock-Based Compensation

The Company accounts for all compensation related to stock, options or warrants using a fair value based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. Stock issued for compensation is valued using the market price of the stock on the date of the related agreement or the date of issuance whichever is most relevant. We use the Black-Scholes pricing model to calculate the fair value of options and warrants issued to both employees and non-employees. In calculating this fair value, there are certain assumptions that we use consisting of the expected life of the option, risk-free interest rate, dividend yield, volatility and forfeiture rate. The use of a different estimate for any one of these components could have a material impact on the amount of calculated compensation expense.

Inventories

~~Inventories~~Inventory ~~are~~is valued at the lower of cost or market. Cost is determined on a first-in-first-out basis. Management performs periodic assessments to determine the existence of obsolete, slow moving and non-salable inventories, and records necessary provisions to reduce such inventories to net realizable value. San West’s inventory consists primarily of vehicle parts and complete vehicles.

16-21-

Intangible Assets

Results of Operations

Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2010~~2011 Compared With the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2009~~2010.

Revenues

Net Revenue for the three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009 was $630,412 and $217,099, respectively. Net Revenue for the nine months ended September 30,~~ 2010 ~~and 2009~~ was $2596,~~320,239~~486 and $~~546~~493,~~620~~615, respectively. ~~Three~~The ~~month year-over-year revenue increased $413~~102,~~313~~871, or ~~190%~~20. ~~Nine month year-over-year revenue increased $1,773,619, or 324~~8%~~. The~~ increase in revenue is ~~primarily~~ due to ~~County~~increasing ~~Imports which~~sales ~~expanded~~through ~~our~~County ~~product lines to include ATV’s and Scooters and contributed $1,999,874 to revenue during the first three quarters of 2010~~Imports. ~~We have put an emphasis on advertising the site and the spring and summer season is the main purchasing time for scooters.~~ The Company acts as dealer and fulfillment house for www.countyimports.com resulting in additional revenue.

Gross Profit

Gross profit ~~and gross margin~~ for the three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010 was $29119,~~019~~391 and ~~5% and~~ $35135,~~695 and 16%~~492, respectively. The Gross ~~profit and gross~~ margin for the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011 and ~~2009~~2010 ~~was $470,884 and~~ 20.0% and ~~$146,336 and~~ 27.4%, respectively. Our ~~nine~~three month year-over-year gross margin decreased 7.4% ~~to 20% in 2010 from 27% in 2009~~ due to ~~slightly~~fluctuations ~~lower~~in ~~profit~~our ~~margins~~product ~~on products sold through www.countyimports.com compared to buggy~~ sales ~~which made up a larger proportion of our sales in 2009~~mix.

Selling General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) for the three months ended ~~September~~March 3031, ~~2010~~2011 were $~~304~~249,~~323~~077, ana ~~increase~~decrease of $19675,~~456~~365 from $~~284~~924,~~867~~442 for the three months ended ~~September~~March 3031, ~~2009~~2010. ~~SG&A~~ The ~~for~~decrease ~~the~~in ~~nine~~expense ~~months~~is ~~ended~~mainly ~~September~~due ~~30,~~to ~~2010~~the ~~were~~recognition ~~$2,070,695, an increase~~ of $1642,~~386,233~~175 ~~from~~in ~~$684,462~~non-cash ~~for the nine months ended September 30, 2009. Excluding $1,155,863 and $62,640 of~~ stock compensation ~~expense~~ in ~~SG&A during the first three quarters of~~ 2010 ~~and 2009, respectively, SG&A expense was $914,832~~ compared to $~~621~~73,~~822~~100 of ~~SG&A~~stock ~~expense~~compensation during ~~the~~2011, ~~first three quarters of 2009 representing an increase of~~ $~~293~~71,~~010~~426 ~~which~~decrease ~~is primarily due to increases~~ in ~~sales commissions,~~ professional fees and ~~advertising costs offset by lower payroll~~$34,864 ~~flooring~~net ~~interest~~decrease ~~and~~in ~~rent~~other ~~expense~~general expenses.

Other Income and Expense

Total other ~~income and~~ expense ~~was~~decreased ~~expense~~$67,173 ofto $1396,~~981~~281 ~~during~~for the three months ended ~~September~~March 3031, ~~2010~~2011 compared to ~~expense~~$163,454 of ~~$13,012~~expense during the ~~three~~same ~~months~~period ~~ended~~last ~~September 30, 2009~~year. ~~Total~~The ~~other~~decrease ~~income~~is ~~and~~primarily ~~expense~~due ~~was~~to ~~expense~~a of $6826,~~118~~000 ~~during~~reduction in the ~~nine~~amortization ~~months~~of ~~ended~~a ~~September~~convertible ~~30,~~promissory ~~2010~~note’s ~~compared~~beneficial toconversion ~~expense~~feature ofto $3680,~~451~~000 ~~during the nine months ended September 30, 2009. Included~~ in ~~other income and expense for~~ the ~~nine~~current ~~months~~year ~~ended~~compared ~~September~~to ~~30, 2010 was income of~~ $~~122,618 resulting from 4,087,270 shares being canceled offset by expense of $~~150,000 ~~related~~in to the ~~beneficial~~prior ~~conversion~~year ~~feature~~offset ofby a ~~convertible promissory note,~~ $23,~~601~~685 ofincrease ~~amortized~~in ~~issuance~~interest ~~costs~~expense related to ~~the~~our ~~convertible~~ promissory ~~note~~notes ~~and $38,139 of interest expense~~overall. ~~Included~~ ~~in other income and expense for the nine months ended September 30, 2009 was net other expense of $4,246 and interest expense of $32,205.~~

Net Loss

As a result of the foregoing factors, our net loss was $~~289~~225,~~285~~967, or $0.00 per share, for the three months ended ~~September~~March 3031, ~~2010~~2011 compared to a loss of $~~262~~952,~~184~~404, or $0.0001 per share for the three months ended ~~September~~March 3031, ~~2009~~2010. ~~For~~Excluding ~~the~~one-time, ~~nine~~non-cash ~~months~~charges ~~ended~~totaling ~~September 30~~$197,100 ~~2010,~~and ~~our net loss was~~ $1792,~~667,929,~~175 orfor ~~$0.01~~the ~~per~~three ~~share~~months ~~compared~~ended toMarch a31, ~~loss~~2011 ofand ~~$574~~2010,~~577~~ respectively, orrelated ~~$0.01~~to ~~per~~stock ~~share~~compensation ~~for~~and the ~~nine~~expense ~~months~~associated ~~ended~~with ~~September~~the ~~30,~~beneficial ~~2009. Excluding~~conversion ~~one-time,~~feature ~~non-cash~~of ~~charges~~our ~~related~~convertible tonotes, ~~stock~~the ~~compensation~~Company’s ~~expense~~loss ~~totaling~~decreased $187,~~155,863~~362 ~~and~~to $6272,~~640~~867 ~~during~~for the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011 ~~and~~compared ~~2009,~~to ~~respectively~~$160,229 for the ~~Company’s~~three ~~net~~months ~~loss~~ended ~~was~~March ~~$512~~31,~~066~~ in 2010 ~~and $511,937 in 2009~~.

17-22-

Financial Condition

From inception to ~~September~~March 3031, ~~2010~~2011, we have incurred an accumulated deficit of $53,~~456~~423,~~104~~320. This loss has been incurred through a combination of ~~goodwill impairment of $2,186,536, stock compensation of $1,649,161 and $1,620,407 related to~~ professional fees and expenses supporting our plans to acquire synergistic businesses as well as past operating losses.

Our primary source of liquidity has been cash generated by operations, issuance of promissory notes and capital raised through equity sales of our common stock ~~and various loans and notes payable~~. As of ~~September~~March 3031, ~~2010~~2011 we had cash on hand of $1857,~~589. During~~454 ~~the~~and ~~nine months ended September 30, 2010 we~~ experienced a net ~~decrease~~increase in cash of $3245,~~070~~888 during the three months ended March 31, 2011 compared to cash on hand of $5011,~~659~~566 at December 31, ~~2009~~2010.

As of ~~September~~March 3031, ~~2010~~2011, we had outstanding liabilities of $1,~~864~~856,~~475~~630 compared to $21,~~037~~875,~~970~~050 as of December 31, ~~2009~~2010. Of this amount, approximately $1,~~328~~465,~~935~~573 is payable within 12 months. In the event that we are unable to repay all or any portion of these outstanding amounts from cash from operations, we would be required to:

Seek one or more extensions for the payment of such amounts;

Refinance such debt to the extent available; Raise additional equity capital; or

Consummate any combination of the foregoing transactions.

Our available working capital and capital requirements will depend upon numerous factors, including product sales, the timing and cost of expanding into new markets, the status of our competitors, and our ability to attract and retain key employees.

Inventory Management

We believe that successful inventory management is the most important factor in determining our profitability. In the power sports business, and particularly as it relates to the sale of motorcycles, there is normally a limited timeframe for the sale of current year models. For example, if we are unable to sell a significant portion of our 2009 models before the 2010 models are released, it could be very difficult for us to sell our remaining inventory of 2009 models. Therefore, our goal is to limit sales of carryover products (i.e., products that remain in inventory after the release of new models) to no more than 10 percent of our total sales each year. This is accomplished by making all of our purchasing decisions based on sales information for the prior year and then utilizing aggressive sales and marketing techniques during the early part of a model year in order to assure the timely sale of our products.

The Company’s Liquidity Plan

Recent operating results give rise to concerns about the Company's ability to generate cash flow from operations sufficient to sustain ongoing viability. Net loss for the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011 was $1225,~~667~~967,~~929,~~ ~~or $512,066 excluding one-time stock compensation charges,~~ while cash used for operations was $~~324~~13,~~604~~904.

During the ~~year~~three months ended ~~December~~March 31, ~~2009~~2011, San West:

~~Received~~The ~~gross~~Company ~~proceeds~~issued ~~of $798~~10,~~500~~000 ~~in exchange for 33,017,959~~ shares of ~~common~~preferred stock ofin ~~which~~exchange for $6710,~~500 or 964,286 shares were issued in 2010~~000;

~~Received~~The ~~services~~Company ~~valued~~issued ~~at $434~~5,~~965~~000,000 shares to in exchange for ~~9,480,000~~services ~~shares~~valued on the date of ~~common~~issuance ~~stock~~at $73,100;

~~Received~~The ~~$60,944~~Company ~~upon~~issued ~~the transfer of 6~~23,~~146~~460,~~270~~000 ~~shares~~upon ~~from~~ the ~~existing~~conversion ~~outstanding shares~~ of ~~Harry Masuda~~$117,300 ~~our former chief executive officer, net~~ of ~~finder’s fees of $31,257~~debt;

~~Converted~~The company received $~~368~~61,000 ofin ~~our~~exchange ~~Dutchess~~for ~~Notes~~a ~~and~~convertible ~~issued~~promissory 15note with a face amount of $80,~~950~~000 with a $19,000 ~~shares~~original ofissue ~~common~~discount ~~stock;~~being ~~and~~accreted over the term of the note.

During the year ended December 31, 2010, San West:

~~Canceled~~The 39Company issued 5,~~520~~275,~~735~~000 ~~founders’~~ shares inof ~~exchange~~common ~~for~~stock aat prices ranging from $~~100,000~~0.005 ~~promissory~~to ~~note~~$0.035 per share with a weighted average price of $0.0084 per share for proceeds of $44,500;

~~Issued~~The ~~833~~Company issued 5,~~333~~000,000 shares ofto ~~common~~Jesse ~~stock~~Gonzales asfor andirector ~~inducement~~services tovalued ~~invest~~on ~~from~~the ~~one~~date of ~~our~~issuance ~~shareholders.~~ at $552,925;

During the nine months ended September 30, 2010, San West:

~~Issued~~The ~~promissory~~Company ~~notes~~issued ~~and~~6,000,000 ~~received~~shares ~~gross~~of ~~proceeds~~common stock for services valued on the date of issuance at $~~269~~202,~~000.~~951;

~~Issued~~The ~~964~~Company PUT 2,~~286~~167,000 shares of common stock ~~that~~to ~~was~~Dutchess ~~payable~~in asexchange offor ~~year-end~~$37,852 ~~and~~of which ~~had~~the aCompany ~~value~~received of$17,989 and $6719,~~500.~~863 was applied to reduce our debt due to Dutchess;

~~Issued~~The 33Company issued 2,~~326~~093,~~199~~145 ~~shares~~to ~~upon~~Dutchess as a finder’s fee related to the ~~conversion~~Investment ofAgreement ~~$462,547~~and ofrecorded ~~debt.~~stock compensation expense of $75,353;

~~Issued~~The 5Company issued 44,~~000~~369,~~000~~871 ~~shares~~upon tothe ~~Jesse~~conversion ~~Gonzales~~of ~~for director services valued at~~ $~~552~~503,~~925.~~ 660 of debt;

~~Issued~~The ~~1,300,000~~company ~~shares~~issued ~~of a total 6~~77,~~000,000~~100 shares ~~due~~of ~~for~~Series ~~services~~A ~~performed~~Preferred ~~in 2009, valued at $372,325 and recorded as common~~ stock ~~payable. The 1,300,000 shares were valued at $80,670 which expense was recognized~~ in ~~2009. The~~exchange ~~balance~~for ~~of shares remaining is 4,700,000 with a corresponding~~ $~~291~~77,~~655 recorded as common stock payable.~~100;

-23-

~~Issued~~The ~~4,000,000~~Company ~~shares~~received in$296,500 ~~exchange~~and ~~for~~repaid $~~151~~38,~~725~~656 of ~~services~~various promissory notes.

·In its report prepared in connection with our 2010 financial statements, our independent registered public accountants have included an explanatory paragraph that the Company has suffered recurring losses and current liabilities exceed current assets which raises substantial doubt about its ability to continue as a going concern.

Issued 5,648,246 shares in exchange for $53,188 of cash.

Issued 2,093,145 shares valued at $400,000 as a finder’s fee to Dutchess pursuant to the Investment Agreement.

Received 4,087,270 canceled shares from Dutchess valued at $122,618.

Our independent registered public accountants have indicated that the Company has suffered recurring losses from operations that raises substantial doubt about its ability to continue as a going concern.

Management is currently in the process of seeking additional equity financing with potential investors. There can be no assurance that such additional financing will be obtained. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company's need to raise additional equity or debt financing and the Company's ability to generate cash flow from operations will depend on its future performance and the Company's ability to successfully implement business and growth strategies. The Company's performance will also be affected by prevailing economic conditions. Many of these factors are beyond the Company's control. If future cash flows and capital resources are insufficient to meet the Company's commitments, the Company may be forced to reduce or delay activities and capital expenditures or obtain additional equity capital. In the event that the Company is unable to do so, the Company may be left without sufficient liquidity.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We conduct all of our transactions, including those with foreign suppliers and customers, in U.S. dollars. We are therefore not directly subject to the risks of foreign currency fluctuations and do not hedge or otherwise deal in currency instruments in an attempt to minimize such risks. Demand from foreign customers and the ability or willingness of foreign suppliers to perform their obligations to us may be affected by the relative change in value of such customer or supplier's domestic currency to the value of the U.S. dollar. Furthermore, changes in the relative value of the U.S. dollar may change the price of our products relative to the prices of our foreign competitors.

Item 4. Controls and Procedures.

See Item 4(T) below.

Item 4(T). Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

~~Based~~As onof ~~management’s~~March ~~evaluation~~31, ~~(with~~2011, under the ~~participation~~direction of ~~our~~the Chief Executive Officer ~~(CEO)~~ and Chief Financial Officer ~~(CFO))~~, asthe ofCompany evaluated the ~~end~~effectiveness of the ~~period~~design ~~covered by this report, our CEO~~ and ~~CFO~~operation ~~have~~of ~~concluded that~~ our disclosure controls and procedures, (as defined in ~~Rules~~ Rule 13a~~-15(e)~~ ~~and~~— ~~15d-~~15(e) under the Securities Exchange Act of 1934, as amended. Based (on the ~~Exchange~~evaluation ~~Act~~of these controls and procedures required by paragraph (b)), ~~are~~of ~~effective~~Sec. to240.13a-15 ~~provide~~or ~~reasonable~~240.15d-15 ~~assurance~~the ~~that~~disclosure ~~information~~controls ~~required~~and procedures have been found to be ~~disclosed~~ineffective byto usprovide inreasonable ~~reports~~assurance that information we ~~file~~are orrequired ~~submit~~to disclose in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in ~~Securities~~the ~~and~~SEC’s ~~Exchange Commission~~ rules and forms, and that such information is accumulated and communicated to our management, including our ~~principal~~manager's ~~executive~~CEO ~~officer~~ and ~~principal financial officer~~CFO, as appropriate, to allow timely decisions regarding required disclosure. due to the material weakness in our internal control over financial reporting as described below.

19The Company maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in our reports filed under the securities Exchange Act, is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

~~Changes~~Evaluation inof Internal Control ~~over~~Over Financial Reporting

~~There were no changes to our internal control over financial reporting (as defined in Rules 13a~~-~~15(f) and 15d~~24-15(f) under the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Inherent~~Management ~~Limitations~~conducted onan ~~Effectiveness~~evaluation of ~~Controls~~the effectiveness of the Company’s internal control over financial reporting as of March 31, 2011. In making this assessment, management used the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. The COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment, (ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring. In management’s assessment of the effectiveness of internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) as required by Exchange Act Rule 13a-15(c), our management concluded as of the end of the period covered by this Report, that we did not maintain effective internal control over financial reporting due to the weakness described below.

~~Our~~A ~~management,~~material ~~including~~weakness ~~the~~is ~~CEO~~a ~~and CFO~~deficiency, ~~does~~or ~~not~~combination ~~expect~~of ~~that~~deficiencies, ~~our~~in ~~disclosure controls or our~~ internal control over financial reporting ~~will prevent or detect all error and all fraud. A control system~~, nosuch ~~matter~~that ~~how~~there ~~well~~is ~~designed~~a ~~and operated, can provide only~~ reasonable, ~~not~~possibility ~~absolute, assurance~~ that ~~the control system’s objectives will be met. The design of~~ a ~~control~~material ~~system~~misstatement ~~must reflect the fact that there are resource constraints, and the benefits~~ of ~~controls must be considered relative to their costs. Further, because of~~ the ~~inherent~~company’s ~~limitations~~annual inor ~~all~~interim ~~control~~financial ~~systems,~~statements ~~no evaluation of controls can provide absolute assurance that misstatements due to error or fraud~~ will not ~~occur~~be prevented or ~~that~~detected ~~all~~on ~~control~~a ~~issues~~timely ~~and instances of fraud, if any, have been detected~~basis. ~~The~~We ~~design~~identified ~~of any system of controls is based in part on certain assumptions about~~ the ~~likelihood~~following ofmaterial ~~future~~weakness ~~events, and there can be no assurance that any design will succeed~~ in ~~achieving~~our ~~its~~assessment ~~stated goals under all potential future conditions. Projections~~ of ~~any evaluation of~~ the effectiveness of ~~controls~~internal tocontrol ~~future~~over ~~periods~~financial ~~are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.~~ reporting:

We did not have adequate segregation of duties, due to our resources and size which prevent us from being able to employ sufficient resources to enable us to have adequate segregation of duties within our internal control system.

We did not design and implement adequate controls related to the accounting of our merger with Human BioSystems. Specifically, applying guidance from ASC 805-40, Business Combinations, Reverse Acquisitions, we originally accounted for the merger under purchase accounting when recapitalization accounting was more appropriate. This material weakness has resulted in the required restatement of previously issued financial statements for the year ended December 31, 2009.

We did not design and implement adequate controls related to the accounting for the issuance of stock and the inclusion of beneficial conversion features associated with our convertible promissory notes as described in the footnotes to our 2010 Form 10-K financial statements; Note P - 2010 Accounting Error Adjustments.

Plan of Remediation

To remediate the aforementioned material accounting weaknesses, we are implementing additional controls to help ensure that all accounting pronouncements are sufficiently researched and that our conclusions relative to the effect of such pronouncements on us are communicated to management and our auditors.

Regarding the lack of segregation of duties, if the volume of business increases and sufficient capital is secured, it is the Company’s intention to further increase staffing to mitigate the current lack of segregation of duties within the general, administrative and financial functions.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this prospectus.

Changes in Internal Controls

Management of the Company has evaluated, with the participation of the Chief Executive Officer of the Company, any change in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report. There was no change in the Company’s internal control over financial reporting identified in that evaluation that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting, other than what has been reported above.

Limitations on the Effectiveness of Controls and Other Matters

-25-

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is designed 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliancewith the policies or procedures may deteriorate. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls may be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Risk Factor Related to Controls and Procedures

The Company has limited segregation of duties amongst its employees with respect to the Company’s preparation and review of the Company’s financial statements due to the limited number of employees, which is a material weakness in internal controls, and if the Company fails to maintain an effective system of internal controls, it may not be able to accurately report its financial results or prevent fraud. As a result, current and potential stockholders could lose confidence in the Company’s financial reporting which could harm the trading price of the Company’s stock.

Management has found it necessary to limit the Company’s administrative staffing in order to conserve cash until the Company’s level of business activity increases. As a result, there is limited segregation of duties amongst the employees. The Company and its independent public accounting firm have identified this as a material weakness in the Company’s internal controls. The Company intends to remedy this material weakness by hiring additional employees and reallocating duties, including responsibilities for financial reporting, among the employees as soon as there are sufficient resources available. However, until such time, this material weakness will continue to exist.

PART II -- OTHER INFORMATION

Item 1. Legal Proceedings.

Not applicable.

Item 1a. Risk Factors.

Not applicable.

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

During the ~~nine~~three months ended ~~September~~March 3031, ~~2010~~2011, San West issued 3228,~~782~~460,~~431~~000 shares of its common stock and 10,000 shares of preferred stock in private transactions not involving a public offering as follows:

Issued 523,~~648~~460,~~246~~000 shares inupon ~~exchange~~the ~~for~~conversion of $53117,~~188~~300 of ~~cash~~debt.

Issued ~~964~~5,~~286~~000,000 shares ofin ~~stock~~exchange ~~that~~for ~~was~~services ~~payable~~valued asat ~~of year-end and which had a value of~~ $6773,~~500~~100.

Issued 33,326,199 shares upon the conversion of $462,547 of debt.

Issued 5,000,000 shares to Jesse Gonzales for director services valued at $552,925.

Issued 1,300,000 shares of a total 6,000,000 shares due for services performed in 2009, valued at $372,325 and recorded as common stock payable. The 1,300,000 shares were valued at $80,670 which expense was recognized in 2009. The balance of shares remaining is 4,700,000 with a corresponding $291,655 recorded as common stock payable.

Issued 4,000,000 shares in exchange for $151,725 of services.

Issued 2,093,145 shares valued at $400,000 as a finder’s fee to Dutchess pursuant to the Investment Agreement.

All funds received from the sale of our shares were used for working capital purposes.

All shares bear a legend restricting their disposition.

20The shares were issued in reliance upon an exemption from registration pursuant to Section 4(2) of the Securities Act or Rule 506 of Regulation D promulgated under the Securities Act. Each investor took his securities for investment purposes without a

The shares were issued in reliance upon an exemption from registration pursuant to Section 4(2) of the Securities Act or Rule 506 of Regulation D promulgated under the Securities Act. Each investor took his securities for investment purposes without a view to distribution and had access to information concerning us and our business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the purchase of our shares. Our securities were sold only to an accredited investor, as defined in the Securities Act with whom we had a direct personal preexisting relationship, and after a thorough discussion. Finally, our stock transfer agent has been instructed not to transfer any of such shares, unless such shares are registered for resale or there is an exemption with respect to their transfer.-26-

view to distribution and had access to information concerning us and our business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the purchase of our shares. Our securities were sold only to an accredited investor, as defined in the Securities Act with whom we had a direct personal preexisting relationship, and after a thorough discussion. Finally, our stock transfer agent has been instructed not to transfer any of such shares, unless such shares are registered for resale or there is an exemption with respect to their transfer.

Each purchaser was provided with access to our filings with the SEC, including the following:

Our annual report to stockholders for the most recent fiscal year, the definitive proxy statement filed in connection with that annual report, and, if requested by the purchaser in writing, a copy of our most recent Form 10-K under the Exchange Act.

The information contained in an annual report on Form 10-K under the Exchange Act.

The information contained in any reports or documents required to be filed by San West under sections 13(a), 14(a), 14(c), and 15(d) of the Exchange Act since the distribution or filing of the reports specified above.

A brief description of the securities being offered, the use of the proceeds from the offering, and any material changes in San West’ affairs that are not disclosed in the documents furnished.

Item 3. Defaults Upon Senior Securities.

Not applicable.

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

Not applicable.

Item 5. Other Information.

~~Effective~~Not ~~May 10, 2010, Bryan Britton resigned as a director and chief financial officer of the registrant due to the pressures of other business matters~~applicable. ~~There were no disagreements between the registrant and Mr. Britton. Mr. Britton furnished the registrant with a letter which is filed as Exhibit 17 to this Current Report on Form 10-Q.~~

Mr. Britton did not hold any positions on any committee of the board of directors of the registrant at the time of the director’s resignation.

The registrant has furnished Mr. Britton with a copy of the disclosures it is making in this Current Report on Form 10-Q no later than the day the registrant file the disclosures with the Commission;

The registrant has provided Mr. Britton with the opportunity to furnish the registrant as promptly as possible with a letter addressed to the registrant stating whether he agrees with the statements made by the registrant in response to this Item 5 and, if not, stating the respects in which he does not agree; and file any letter received by the registrant from Mr. Britton with the Commission as an exhibit by an amendment to the previously filed Form 10-Q within two business days after receipt by the registrant.

On March 11, 2010, we received notification from Ken Skiba, the alleged owner of the trademark “Buggy World,” which we thought we had purchased when we acquired the assets of Buggy World from Jim Jordan on June 21, 2008. After receiving the notification from Mr. Skiba, we decided to cease use of the trademark and to explore the use of another suitable trademark. However, we are currently using the name “Buggy Nation” and continue to use “Buggy Nation” as our new Internet site to sell the off-road buggies.

On May 10, 2010, the registrant has appointed Frank J. Drechsler, its president and chief executive officer as the new chief financial officer.

Frank J. Drechsler has been our chief executive officer and one of our directors since our inception, and served as our corporate secretary until July 2005. Following the Merger between San West, Inc. and Human BioSystems in 2009, Mr. Drechsler became our chief executive officer and chairman of the board.

Since 2002, Mr. Drechsler has been an officer and director of Krinner USA, Inc., a privately-held Nevada corporation (“Krinner”) which markets and sells Christmas tree stands designed in Germany. Mr. Drechsler also works as a sales agent for Krinner but receives no compensation from Krinner when its products are sold on our online store. Since July 2001, Mr. Drechsler has also been the president, secretary and a director of Finger Tip Drive, Inc., a Nevada corporation, which provides online computer data storage services. From October 1998 to May 2001, Mr. Drechsler was the president and a director of Pacific Trading Post, Inc., a Nevada corporation, which marketed and sold products on the Internet within the outdoor sports industries, specifically in the areas of skate, surf and snow. In January 1998, Mr. Drechsler co-founded and developed the business model for skatesurfsnow.com, where he was responsible for the day-to-day operations. During 1997, Mr. Drechsler was self-employed as a consultant and helped start up companies develop sales and marketing programs. From 1995 to December 1996, Mr. Drechsler was the international sales manager for Select Distribution.

Mr. Drechsler graduated from California State University, Fullerton with a Bachelor of Science degree in International Business in 1992. Mr. Drechsler was previously an officer and director of Zowcom, Inc. a Nevada corporation, JPAL, Inc., a Nevada corporation, and Expressions Graphics, Inc., a Nevada corporation, all of which are reporting companies. Mr. Drechsler is not an officer or director of any other reporting company.

There is no material plan, contract or arrangement (whether or not written) to which Mr. Drechsler is a party or in which he participates that is entered into or material amendment in connection with the triggering event or any grant or award to any such covered person or modification thereto, under any such plan, contract or arrangement in connection with any such event.

Item 6. Exhibits.

Exhibit No.	Identification of Exhibit
31.1*	Certification of Frank J. Drechsler, Chief Executive Officer, Chief Financial Officer and Principle Accounting Officer of San West, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Frank J. Drechsler, Chief Financial Officer of San West, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Frank J. Drechsler, Chief Executive Officer, Chief Financial Officer and Principle Accounting Officer of San West, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Frank J. Drechsler, Chief Executive Officer of San West, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Frank J. Drechsler, Chief Financial Officer of San West, Inc., pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.

Filed ~~HerewithSIGNATURES~~Herewith

-27-

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SAN WEST, INC.

Date: ~~November~~May 1118, ~~2010~~2011.

By /s/ Frank J. Drechsler

Frank J. Drechsler, Chief Executive Officer, Chief Financial Officer

By /s/ Frank J. Drechsler

Frank J. Drechsler, Chief Financial Officer

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

Signature		Title		Date
/s/ Frank J. Drechsler		Chief Executive Officer, Chief Financial Officer and Director		~~November~~May 1118, ~~2010~~2011

22-28-

Filing Compare · San West, Inc