<SUBMISSION>
<ACCESSION-NUMBER>0001157523-04-007765
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20040630
<FILING-DATE>20040813
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>PHASE III MEDICAL INC/DE
<CIK>0000320017
<ASSIGNED-SIC>6399
<IRS-NUMBER>222343568
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-10909
<FILM-NUMBER>04974937
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>330 SOUTH SERVICE ROAD
<STREET2>SUITE 120
<CITY>MELVILLE
<STATE>NY
<ZIP>11747
<PHONE>6315744955
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>330 SOUTH SERVICE ROAD
<STREET2>SUITE 120
<CITY>MELVILLE
<STATE>NY
<ZIP>11747
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>CORNICHE GROUP INC /DE
<DATE-CHANGED>19951117
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>FIDELITY MEDICAL INC
<DATE-CHANGED>19951025
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>FIDELITY MEDICAL SERVICES INC
<DATE-CHANGED>19830825
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a4701718.txt
<DESCRIPTION>PHASE III MEDICAL 10-Q
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                 _______________

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004

                                       OR

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

    For the Transition Period from                 to
                                    ---------------    ------------------

                         Commission file number 0-10909

                             PHASE III MEDICAL, INC.
             (Exact name of registrant as specified in its charter)

                  DELAWARE                                 22-2343568
         (State or other jurisdiction of                (I.R.S. Employer
         incorporation or organization)                Identification No.)


           330 SOUTH SERVICE ROAD, SUITE 120, MELVILLE, NEW YORK         11747
                    (Address of principal executive offices)          (zip code)

    Registrant's telephone number, including area code: 631-574-4955


              (Former name, former address and former fiscal year,
                          if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
                                                  ---

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act of 1934). Yes __ No X

             31,981,460 SHARES, $.001 PAR VALUE, AS OF JULY 30, 2004

(Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date)




                                       1
<PAGE>

                                    I N D E X


                                                                        Page No.
 Part I  - Financial Information:                                       -------

          Item 1.             Financial Statements (Unaudited):

                              Balance Sheets
                              At June 30, 2004 and December 31, 2003           3

                              Statements of Operations
                              For the three and six months
                              ended June 30, 2004 and 2003                     4

                              Statements of Cash Flows
                              for the six months ended
                              June 30, 2004 and 2003                           5


                              Notes to Unaudited Financial Statements        6-9


          Item 2.             Management's Discussion and Analysis of
                              Financial    Condition   and   Results   of
                              Operations                                   10-12

          Item 3.             Quantitative  and  Qualitative  Disclosures
                              About Market Risk                               13

          Item 4.             Controls and Procedures                         13

Part     II     -     Other Information:

          Item 1.             Legal Proceedings                               14

          Item 3.             Defaults Upon Senior Securities                 14



          Item 6.             Exhibits and Reports on Form 8-K.               14

                              Signatures                                      15






                                       2
<PAGE>

                             PHASE III MEDICAL, INC.


                                 BALANCE SHEETS
                                   (Unaudited)


ASSETS
                                      June 30,   December 31,
                                        2004        2003
                                    ------------------------

Current assets:
  Cash and equivalents                    $1,750   $210,947
  Prepaid expenses and other current
   assets                                  8,018     18,024
                                    ------------------------

        Total current assets               9,768    228,971

Property and equipment, net                4,425      1,935
Deferred acquisition costs                53,638     77,782
Other assets                               3,000      3,000
                                    ------------------------

                                         $70,831   $311,688
                                    ========================

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Interest and dividends payable -
   preferred stock                      $457,037    $433,196
  Accounts payable                       135,575      87,896
  Accrued liabilities                     87,594      92,115
  Notes payable                          540,000     400,000
  Current portion of long-term debt            -       9,513
                                    -------------------------

        Total current liabilities      1,220,206   1,022,720

Unearned revenues                         76,153     110,568

Series A mandatorily redeemable
 convertible
           preferred stock               681,174     681,174
                                    -------------------------

Total Liabilities                      1,977,533   1,814,462

Stockholders' Deficit:
  Preferred stock;  authorized,
   5,000,000 shares
    Series B convertible redeemable
     preferred stock,
    liquidation value, 10 shares of
     common stock per
    share; $0.01 par value;
     authorized, 825,000 shares;
     issued and outstanding, 10,000
      shares                                 100         100

  Common stock, $.001 par value;
   authorized,
    250,000,000 shares; issued and
     outstanding,
    31,656,460 shares at June 30,
     2004 and
    26,326,460 shares at December
     31, 2003                             31,657      26,327
  Additional paid-in capital           9,771,881   9,232,753
  Accumulated deficit                (11,710,340)(10,761,954)
                                    -------------------------

         Total stockholders' deficit  (1,906,702) (1,502,774)
                                    -------------------------

                                         $70,831    $311,688
                                    =========================



                 See accompanying notes to financial statements


                                       3
<PAGE>

                             PHASE III MEDICAL, INC.


                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                             Three Months Ended     Six  Months Ended
                                                                                   June 30,             June 30,
                                                                            --------------------------------------------
                                                                                  2004       2003       2004       2003
                                                                                  ----       ----       ----       ----

<S>                                                                            <C>       <C>        <C>        <C>
Earned revenues                                                                $ 7,073   $ 17,005   $ 34,415   $ 35,009

Direct costs                                                                    (4,871)   (12,177)   (24,144)   (25,100)
                                                                            --------------------------------------------

Gross profit                                                                     2,202      4,828     10,271      9,909


Selling, general and administrative                                           (175,532)  (209,490)  (324,611)  (338,068)
Purchase of medical royalty stream                                            (240,000)         -   (480,000)         -
                                                                            --------------------------------------------

Operating loss                                                                (413,330)  (204,662)  (794,340)  (328,159)

Other income (expense):

  Interest income                                                                    4          3        159          7
  Interest expense                                                             (66,933)   (42,927)  (130,363)   (62,414)
  Interest expense - Series A mandatorily redeemable convertible preferred
   stock                                                                       (11,921)         -    (23,842)         -
                                                                            --------------------------------------------

Net loss                                                                      (492,180)  (247,586)  (948,386)  (390,566)

Preferred dividend                                                                   -    (11,921)         -    (23,842)
                                                                            --------------------------------------------

Net loss attributable to common stockholders                                 $(492,180) $(259,507) $(948,386) $(414.408)
                                                                            ============================================


Net loss per common share                                                        $(.02)     $(.01)     $(.03)     $(.02)
                                                                            ============================================

Weighted average
  common shares outstanding                                                 29,501,515 22,597,777 28,076,075 22,584,172
                                                                            ============================================

                 See accompanying notes to financial statements.
</TABLE>


                                       4
<PAGE>


                             PHASE III MEDICAL, INC.


                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                        Six months ended June 30,
                                                                           2004          2003
                                                                           ----          ----

Cash flows from operating activities:
<S>                                                                      <C>          <C>
Net loss                                                                 $(948,386)   $ (390,566)
Adjustments to reconcile net loss to net
 cash used in operating activities:
Common shares issued and stock
  options granted for services rendered and
  interest expense                                                          115,708        49,065
Depreciation                                                                    798           216
Deferred acquisition costs                                                   24,144        25,100
Changes in operating asset and
  liabilities:
Prepaid expenses and other current assets                                    10,006      (19,164)
Unearned revenues                                                          (34,415)      (35,009)
Accounts payable, accrued expenses,
  and other current liabilities                                              66,999       194,438
                                                                        ------------ -------------

Net cash used in operating activities                                     (765,146)     (175,920)
                                                                        ------------ -------------

Cash flows from investing activities:
Acquisition of property and equipment                                       (3,288)       (2,581)
                                                                        ------------ -------------
Net cash used in investing activities                                       (3,288)       (2,581)
                                                                        ------------ -------------

Cash flows from financing activities:
Net proceeds from issuance of common stock                                  428,750         2,750
Net proceeds from advances on notes payable                                 140,000       195,000
Repayment of long-term debt                                                 (9,513)      (11,052)
                                                                        ------------ -------------
Net cash provided by financing activities                                   559,237       186,698
                                                                        ------------ -------------

Net (decrease) increase in cash and cash equivalents                      (209,197)         8,197

Cash and cash equivalents at beginning of period                            210,947        19,255
                                                                        ------------ -------------

Cash and cash equivalents at end of period                                  $ 1,750      $ 27,452
                                                                        ============ =============




                                                                           2004          2003
                                                                           ----          ----
Supplemental  Disclosure of Cash Flow Information:

Cash paid during the period for:

   Interest                                                               $  22,254    $  2,712
                                                                          =========    ========

Supplemental Schedule of Non-cash Financing Activities:


 Net accrual of dividends on Series A Preferred Stock                     $  23,842   $  23,842
                                                                          =========   =========

  Issuance of common stock for services rendered                          $       -   $   3,303
                                                                          =========   =========

  Compensatory element of stock options                                   $  96,508   $  45,762
                                                                          =========   =========



                 See accompanying notes to financial statements.

</TABLE>


                                       5
<PAGE>




                             PHASE III MEDICAL, INC.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS


NOTE 1 - THE COMPANY

     Phase III Medical, Inc. ("Phase III" or the "Company") (formerly known as
     Corniche Group Incorporated) provides capital and guidance to
     companies, within the medical sector, in exchange for revenues,
     royalties and other contractual rights known as "royalty interests",
     that entitle it to receive a portion of revenue from the sale of
     pharmaceuticals, medical devices and biotechnology products.
     Previously, the Company was a provider of extended warranties and
     service contracts via the Internet at warrantysuperstore.com through
     June 30, 2002. The business of the Company today comprises the "run
     off" of its sale of extended warranties and service contracts via the
     Internet and the new business opportunity it is pursuing in the
     medical/bio-tech sector.


NOTE 2 - BASIS OF PRESENTATION

     The accompanying unaudited financial statements have been prepared in
     accordance with accounting principles generally accepted in the United
     States of America for interim financial information and with the
     instructions for Form 10-Q and Article 10 of Regulation S-X.
     Accordingly, they do not include all of the information and footnotes
     required by accounting principles generally accepted in the United
     States of America for complete financial statements. In the opinion of
     management, the statements contain all adjustments (consisting only of
     normal recurring accruals) necessary to present fairly the financial
     position as of June 30, 2004 and December 31, 2003, the results of
     operations for the three and six months ended June 30, 2004 and 2003
     and the cash flows for the six months ended June 30, 2004 and 2003.
     The results of operations for the three and six months ended June 30,
     2004 are not necessarily indicative of the results to be expected for
     the full year.

     The Company's financial statements have been prepared assuming the Company
     will continue as a going concern. Accordingly, the Company currently
     has no operations and limited financial resources to pay its current
     expenses and liabilities. These factors raise substantial doubt about
     the Company's ability to continue as a going concern. The financial
     statements do not include any adjustments that might result from the
     outcome of this uncertainty.

     The December 31, 2003 balance sheet has been derived from the audited
     financial statements at that date included in the Company's Annual
     Report on Form 10-K. These unaudited financial statements should be
     read in conjunction with the financial statements and notes thereto
     included in the Company's Annual Report on Form 10-K.

NOTE 3 -STOCK OPTIONS

     In December 2002, the Financial Accounting Standards Board ("FASB")
     issued Statement of Financial Accounting Standards ("SFAS") No. 148,
     "Accounting for Stock-Based Compensation-Transition and Disclosure -
     an amendment of FASB Statement No. 123 ("SFAS 148"). SFAS No. 148
     amends SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS
     123"), to provide alternative methods of transition for a voluntary
     change to the fair value based method of accounting for stock-based
     employee compensation and does not permit the use of the original SFAS
     No. 123 prospective method of transition in fiscal years beginning
     after December 15, 2003. In addition, SFAS No. 148 amends the
     disclosure requirements of SFAS 123 to require prominent disclosures
     in both annual and interim financial statements about the method of
     accounting for stock-based employee compensation and the effect of the
     method used on reported results, regardless of whether, when, or how
     an entity adopts preferable fair value based method of accounting.
     SFAS No. 148 improves the prominence and clarity of the pro forma
     disclosures required by SFAS No. 123 by prescribing a specific tabular
     format and by requiring disclosure in the "Summary of Significant
     Accounting Policies" or its equivalent and improves the timeliness of
     those disclosures by requiring their inclusion in financial reports
     for interim periods. The Company has adopted the disclosure
     requirements of SFAS No. 148. The Company will continue to account for
     stock-based employee compensation under APB Opinion No. 25 and its
     related interpretations.


                                       6
<PAGE>

     The following table illustrates the effect on net loss and net loss per
     share if the Company had applied the fair value recognition provisions
     of SFAS No. 123, "Accounting for Stock-Based Compensation," to
     stock-based employee compensation for all periods:
<TABLE>
<CAPTION>

                                                  Three Months Ended June 30,                Six Months Ended June 30,
                                                    2004                2003                 2004                   2003
                                               ----------------    ----------------     ----------------     -------------------


<S>                                         <C>                 <C>                  <C>                  <C>
Net loss as reported                        $        (492,180)  $        (247,586)   $        (948,386)   $           (390,566)
Additional compensation                               (10,985)             (1,088)            (157,785)                 (3,708)
                                               ----------------    ----------------     ----------------     -------------------

Adjusted net loss                           $        (503,165)  $        (248,674)   $      (1,106,171)   $           (394,274)
                                               ================    ================     ================     ===================

Net loss per share as reported              $            (.02)  $            (.01)   $            (.03)   $               (.02)
                                               ================    ================     ================     ===================

Adjusted net loss per share                 $            (.02)  $            (.01)   $            (.04)   $               (.02)
                                               ================    ================     ================     ===================

</TABLE>

NOTE 4 - NOTES PAYABLE

     In September 2002, the Company sold to accredited investors five 60-day
     romissory notes in the principal sum of $25,000 each, resulting in
     et proceeds to the Company of $117,500, net of offering costs. The
     otes bear interest at 15% per annum payable at maturity. The notes
     nclude a default penalty pursuant to which if the notes are not paid
     n the due date the holder shall have the option to purchase twenty
     ive thousand shares of the Company's common stock for an aggregate
     urchase price of $125. If the non payment continues for 30 days, then
     n the 30th day, and at the end of each successive 30-day period until
     he note is paid in full, the holder shall have the option to purchase
     n additional twenty five thousand shares of the Company's common
     tock for an aggregate purchase price of $125. During the six months
     nded June 30, 2004, options for 750,000 shares of common stock were
     xercised by the note holders. At June 30, 2004, the Company had
     eserved 750,000 shares of the Company's common stock for issuance
     gainst exercise of the options granted pursuant to the default
     enalty. At June 30, 2004, $125,000 of these notes was unpaid along
     ith $33,545 of accrued interest.

     On March 17, 2003, the Company commenced a private placement offering
     which raised $250,000 in 6-month promissory notes in increments of
     $5,000 bearing interest at 15% per annum. Only selected investors
     which qualify as "accredited investors" as defined in Rule 501(a)
     under the Securities Act of 1933, as amended, are eligible to purchase
     these promissory notes. As of June 30, 2004, $250,000 remains
     outstanding. All of these notes are in default, and accordingly the
     interest rate has been increased to 20%. All interest payments on
     these notes have been made.

     On August 26, 2003, the Company borrowed $25,000 from a then consultant
     to the Company. The loan bears interest at 8% and as of June 30, 2004,
     $26,452, including accrued interest of $1,452, remains unpaid.

     In February 2004, the Company commenced a sale of 30 day 20% notes in the
     amount of $125,000 to three accredited investors to fund current
     operations. It is anticipated that these notes will be repaid from the
     proceeds of the amended equity private placement. Two of these notes
     have a default provision that if they are not paid within 30 days,
     there is an additional interest payment of $250 per $25,000 for each
     30 day period or part thereof. As of June 30, 2004, $100,000 of these
     notes remains unpaid. All interest payments have been paid timely. In
     May 2004, the Company sold an additional 30 day 20% note in the amount
     of $40,000 to an accredited investor to fund current operations. As of
     June 30, 2004, this note remains unpaid in its entirety. All interest
     payments have been paid timely.


NOTE 5 - SERIES "A" MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK

     The Certificate of Designation for the Company's Series A Preferred Stock
     provides that at any time after December 1, 1999 any holder of Series
     A Preferred Stock may require the Company to redeem his shares of
     Series A Preferred Stock (if there are funds with which the Company
     may legally do so) at a price of $1.00 per share. Notwithstanding the
     foregoing redemption provisions, if any dividends on the Series A
     Preferred Stock are past due, no shares of Series A Preferred Stock
     may be redeemed by the Company unless all outstanding shares of Series
     A Preferred Stock are simultaneously redeemed. The holders of Series A
     Preferred Stock may convert their Series A Preferred Stock into shares
     of Common Stock of the Company at a price of $5.20 per share. At June
     30, 2004 and December 31, 2003, 681,174 shares of Series A Preferred
     Stock were outstanding.


                                       7
<PAGE>

NOTE 6 - STOCKHOLDERS' EQUITY

    (a) Common Stock:

        During the six months ended June 30, 2004, the Company issued 30,000
        shares of its common stock whose fair value was $4,200 to two
        note holders as additional interest.

        The Company amended its equity private placement to raise up to $4
        million through the sale of up to 40 million shares of Common
        Stock in increments of $5,000 or 50,000 shares. Only selected
        investors which qualify as "accredited investors" as defined in
        Rule 501(a) under the Securities Act of 1933, as amended, are
        eligible to purchase these shares. The initial placement closed
        on December 31, 2003. During the six months ended June 30, 2004,
        the Company sold 4,550,000 common shares resulting in net
        proceeds to the Company of $425,000. Such shares have not been
        registered under the Securities Act and may not be offered or
        sold in the United States absent registration or an applicable
        exemption of registration requirements.

        As described in Note 4, the Company granted purchasers of the
        Company's September 2002 60-day promissory notes, options to
        purchase shares of common stock if the Company defaulted on the
        payment of principal or interest on such promissory notes. For
        each 30 day period, the purchaser is granted the option to
        purchase 25,000 shares of common stock for an aggregate price of
        $125 on the 30th day. In January 2004, two holders of such
        promissory notes exercised their options and purchased 200,000
        shares of common stock resulting in net proceeds to the Company
        of $1,000. During the three months ended June 30, 2004, three
        holders of such promissory notes exercised their options and
        purchased 550,000 shares of common stock resulting in net
        proceeds to the Company of $2,750.

    (b) Warrants:

        The Company has issued common stock purchase warrants from time to
        time to investors in private placements, certain vendors,
        underwriters, and directors and officers of the Company. A total
        of 326,500 shares of common stock are reserved for issuance upon
        exercise of outstanding warrants as of June 30, 2004 at prices
        ranging from $0.12 to $8.10 and expiring through December 2008.
        In connection with the September 2003 equity private placement,
        the Company issued a 5 year warrant to purchase 282,500 shares of
        its Common Stock at an exercise price of $0.12 per share to its
        retained placement agent, Robert M. Cohen & Company. The warrant
        contains piggyback registration rights.

    (c) Stock Option Plans:

        In February 2003, the Company adopted the 2003 Equity Participation
        Plan, which was approved by stockholders at the Company's Annual
        Meeting on July 24, 2003. Under this plan, the Company has
        reserved 15,000,000 shares of common stock for the grant of
        incentive stock options and non-statutory stock options to
        employees and non-employee directors, consultants and advisors.

        Information with respect to options under the 2003 Equity Participation
        Plan is summarized as follows:

                                                    For the Six Months Ended
                                                          June 30, 2004
                                                 -------------- --------------
                                                     Shares         Prices
                                                 -------------- --------------

              Outstanding at beginning of period   3,700,000    $0.03 to $0.18
              Granted                              1,910,000    $0.10 to $0.15
              Expired                                      -                 -
              Cancelled                                    -                 -
                                                 -------------- --------------
              Outstanding at end of period         5,610,000    $0.03 to $0.18
                                                 ============== ==============



          Options are granted at an exercise price equal to the fair value of
          the common stock at the grant date. However, included above are
          300,000 options to purchase the Company's common stock at $ .10
          per share granted at an exercise price of $.10 when the fair
          value on that date was $.15. Therefore the Company recorded an
          expense of $15,000 associated with that transaction. Options to
          purchase 1,000,000 of the Company's common stock were granted to
          five members of the Company's Board of Advisors pursuant to their
          agreements. Each advisor was issued options to purchase 200,000
          shares of the Company's common stock at a range of exercise
          prices of $.11 to $.15 per share. The balance of the options
          granted were issued for services to consultants and directors of
          the Company.


                                       8
<PAGE>

NOTE  7 - COMMITMENTS AND CONTINGENCIES

          On  April 22, 2004, the Company entered into an agreement with an
          advisor in connection with its amended private placement to
          provide assistance in finding qualified investors. The agreement
          calls for the payment of 10% of the funds raised by the Company
          as a direct result of introductions made by the advisor. In
          addition, the Company is obligated to pay a 2% non-accountable
          expense allowance on all funds raised that are subject to the 10%
          payment. As of June 30, 2004, the Company paid a total of $21,000
          under this agreement.

          On March 20, 2004, the Company entered into a consulting agreement
          which will provide the Company with advice as to business
          development possibilities for the services and technology of
          NeoStem Inc. (See MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS). The agreement
          provides for the issuance of options to purchase 300,000 shares
          of the Company's common stock at an exercise price of $.10 per
          share. This option is immediately vested and expires ten years
          from the date of issue. The agreement also provides for the
          payment of $2,500 per month for each month after the Company has
          received capital contributions of $1,000,000 from the date of the
          agreement. If certain performance levels are met, the Company is
          obligated to issue an additional option to purchase 500,000
          shares of the Company's common stock for an exercise price of
          $.10 per share.

          On December 12, 2003, the Company signed a royalty agreement with
          Parallel Solutions, Inc. "(PSI") to develop a new bioshielding
          platform technology for the delivery of therapeutic proteins and
          small molecule drugs in order to extend circulating half-life to
          improve bioavailability and dosing regimen, while maintaining or
          improving pharmacologic activity. The agreement provides for PSI
          to pay the Company a percentage of the revenue received from the
          sale of certain specified products or licensing activity. The
          Company is providing capital and guidance to PSI to conduct a
          proof of concept study to improve an existing therapeutic protein
          with the goal of validating the bioshielding technology for
          further development and licensing the technology. During the six
          months ended June 30, 2004, the Company paid $480,000 as
          specified in the agreement which brought the total paid since the
          inception of the agreement to $560,000.



NOTE  8 - INDUSTRY AND GEOGRAPHICAL SEGMENTAL INFORMATION

          The Company's operations are currently in one segment, namely the
          "run off" of its sale of extended warranties and service
          contracts via the Internet. Additionally, the Company is
          currently endeavoring to establish new business operations in the
          medical/bio-tech sector. The Company did not realize any revenue
          from its purchase of the royalty interest. The Company's
          operations are conducted entirely in the United States.


NOTE  9 - SUBSEQUENT EVENTS

          The Company has sold 300,000 shares of its common stock through the
          amended private placement since June 30, 2004 with net proceeds
          to the Company of $30,000.

          As described in Note 4, holders of promissory notes in default
          exercised options to purchase 25,000 shares of common stock since
          June 30, 2004, with net proceeds to the Company of $125.

          The Company sold $30,000 of 30 day 20% notes, $25,000 of 150 day 20%
          notes and $80,000 of 180 day 20% notes to accredited investors
          since June 30, 2004.


                                       9
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

This Quarterly Report on Form 10-Q and the documents incorporated herein
contain "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company, or industry
results, to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. When used
in this Quarterly Report, statements that are not statements of current or
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words "plan", "intend," "may," "will," "expect," "believe",
"could," "anticipate," "estimate," or "continue" or similar expressions or other
variations or comparable terminology are intended to identify such
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. Except
as required by law, the Company undertakes no obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise.

GENERAL

The Company provides capital and guidance to companies within the medical
sector, in exchange for revenues, royalties and other contractual rights known
as "royalty interests" that entitle it to receive a portion of revenue from the
sale of pharmaceuticals, medical devices and biotechnology products. On December
12, 2003, the Company signed a royalty agreement with Parallel Solutions, Inc.
"(PSI") to develop a new bioshielding platform technology for the delivery of
therapeutic proteins and small molecule drugs in order to extend circulating
half-life to improve bioavailability and dosing regimen, while maintaining or
improving pharmacologic activity. The agreement provides for PSI to pay the
Company a percentage of the revenue received from the sale of certain specified
products or licensing activity. The Company is providing capital and guidance to
PSI to conduct a proof of concept study to improve an existing therapeutic
protein with the goal of validating the bioshielding technology for further
development and licensing the technology. During the six months ended June 30,
2004, the Company provided $480,000 to PSI pursuant to the royalty agreement
which brings the total payments since the inception of the agreement to
$560,000. The Company remains obligated under this agreement to pay an
additional $440,000. Subsequent to June 30, 2004, the Company paid an additional
$80,000 to PSI, in accordance with the terms of the agreement

On January 19, 2004, the Company entered into a letter of intent with
NeoStem, Inc., a California company, whose primary business is to establish an
autologous adult stem cell bank. If a definitive agreement is reached, Phase III
would provide funding and guidance in connection with the adult stem cell
banking enterprise in exchange for a share of the revenues derived from such
enterprise. This letter of intent has expired, however, the Company and NeoStem
continue to discuss and work towards a definitive agreement. As of June 30,
2004, no payments have been made to NeoStem. No assurances can be given that a
definitive revenue sharing agreement will be finalized, that the Company will
raise the capital needed to fund its obligations to NeoStem, that NeoStem's
collection, processing and storage technology will be successfully implemented,
that NeoStem will be able to commercialize its adult stem cell banking
enterprise, or that there will be market acceptance of any such enterprise
sufficient to generate any material revenues for NeoStem or any material royalty
revenues for the Company, or that any stem cell therapeutic strategies will be
successfully developed or commercialized.

On March 31, 2004, the Company signed a Joint Venture Agreement with
NeoStem to introduce NeoStem to potential clients for its services and/or
technology. In exchange for such introductions, Phase III will receive 10% of
any revenues or fees and 2% of any research grants received from or as a result
of the introduced client. As of June 30, 2004, no payments have been received
under this agreement.

RESULTS OF OPERATIONS

The Company recognizes revenue from its warranty service contracts business
over the life of contracts executed. Additionally, the Company purchased
insurance to fully cover any losses under the service contracts from a domestic
carrier. The insurance premium expense and other costs related to the sale are
amortized ratably over the life of the contracts.

Three Months Ended June 30, 2004 Compared To Three Months Ended June 30, 2003.

The Company recognized revenues from the sale of extended warranties and
service contracts via the Internet of $7,073 for the three months ended June 30,
2004 as compared to $17,005 for the three months ended June 30, 2003. The
revenues generated in the quarter were derived entirely from revenues deferred
over the life of contracts sold in prior periods. Similarly, direct costs
incurred were $4,871 and $12,177 for the three months ended June 30, 2004 and
2003, respectively. In addition, the Company paid $240,000 for the purchase of
royalty interests as per its agreement with PSI. Due to the uncertainty of the
future revenues, the amounts paid have been charged to current operations.


                                       10
<PAGE>

General and administration expenses decreased 16.2% to $175,532 for the
three months ended June 30, 2004 as compared to $209,490 for the three months
ended June 30, 2003. The decrease in general and administrative expenses of
approximately $34,000 is primarily due to a reduction in professional fees.

Interest expense increased by approximately $24,000 for the three months
ended June 30, 2004 from the three months ended June 30, 2003 primarily as a
result of short-term loans obtained in the last nine months of fiscal year ended
December 31, 2003 and the six months ended June 30, 2004.

For the reasons cited above, primarily the purchase of the royalty
interests, the net loss for the three months ended June 30, 2004 increased to
$492,180 from $247,586 for the three months ended June 30, 2003.

Six Months Ended June 30, 2004 Compared To Six Months Ended June 30, 2003.

The Company recognized revenues from the sale of extended warranties and
service contracts via the Internet of $34,415 for the six months ended June 30,
2004 as compared to $35,009 for the six months ended June 30, 2003. The revenues
generated in the six months were derived entirely from revenues deferred over
the life of contracts sold in prior periods. Similarly, direct costs incurred
were $24,144 and $25,100 for the six months ended June 30, 2004 and 2003,
respectively. In addition, the Company paid $480,000 for the purchase of royalty
interests as per its agreement with PSI. Due to the uncertainty of the future
revenues, the amounts paid have been charged to current operations.

General and administration expenses decreased 4% to $324,611 for the six
months ended June 30, 2004 as compared to $338,068 for the six months ended June
30, 2003. The slight decrease in general and administrative expenses of
approximately $14,000 is primarily due to a reduction in professional fees.

Interest expense increased by approximately $68,000 for the six months
ended June 30, 2004 from the six months ended June 30, 2003 primarily as a
result of short-term loans obtained in the last nine months of fiscal year ended
December 31, 2003 and the six months ended June 30, 2004.

For the reasons cited above, primarily the purchase of the royalty
interests, the net loss for the six months ended June 30, 2004 increased to
$948,386 from $390,566 for the six months ended June 30, 2003.


LIQUIDITY AND CAPITAL RESOURCES

The following chart represents the net funds provided by or used in
operating, financing and investment activities for each period indicated:

                                                 Six Months Ended
                                                 ----------------
                                        June 30, 2004       June 30, 2003
          Cash used in
            Operating Activities          $(765,146)         $  (175,920)

          Cash used by
            Investing Activities         $   (3,288)   $          (2,581)

          Cash provided by
            Financing Activities         $  559,237              186,698

The Company incurred a net loss of $948,386 for the six months ended June
30, 2004. Such loss adjusted for non-cash items such as deferred revenues (net
of deferred acquisition costs) ($10,271) and other non cash credits totaling
$101,506 resulted in cash used in operations totaling $765,146 for the six
months ended June 30, 2004, including working capital movements of $77,005.

To meet its cash requirement for the six months ended June 30, 2004, the
Company relied on:

(i)  the proceeds from the issuance of Promissory Notes in the amount of
     $140,000; and

(ii) the proceeds from the sale of the Company's common stock in the amount of
     $428,750

(iii) proceeds from the settlement of the Strandtek litigation


                                       11
<PAGE>

The Company has a contractual commitment to pay PSI an additional $440,000
through the end of its agreement. As of June 30, 2004, the Company had cash
balances totaling $1,750. The Company will rely on its current cash and proceeds
from the sale of promissory notes and common stock to fund its new business
operations until they become cash generative. The Company amended its equity
private placement to raise up to $4 million through the sale of up to 40 million
shares of Common Stock in increments of $5,000 or 50,000 shares. Only selected
investors which qualify as "accredited investors" as defined in Rule 501(a)
under the Securities Act of 1933, as amended, are eligible to purchase these
shares. The initial placement closed on December 31, 2003. As of June 30, 2004,
the Company has sold 4,550,000 common shares resulting in net proceeds to the
Company of $425,000. Such shares have not been registered under the Securities
Act and may not be offered or sold in the United States absent registration or
an applicable exemption of registration requirements. Additionally, the Company
issued $160,000 of 20% 30 day promissory notes to fund the PSI payments and
current operating expenses. The Company repaid $25,000 of these notes as of June
30, 2004. The Company plans to meet its current and future obligations through
the sales of common stock and loans from accredited investors. There can be no
assurance that sufficient proceeds will be raised to meet current obligations
when due.

The Company's financial statements have been prepared assuming the Company
will continue as a going concern. The Company currently has no operations and
limited financial resources to pay its current expenses and liabilities. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.


INFLATION

The Company does not believe that its operations have been materially
influenced by inflation for the six months ended June 30, 2004, a situation
which is expected to continue for the foreseeable future.


                                       12
<PAGE>

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable

Item 4.  CONTROLS AND PROCEDURES

          (a)  Our principal executive officer has concluded, based on his
               evaluation of, the effectiveness of our "disclosure controls and
               procedures" as of the end of the period covered by this quarterly
               report on Form 10-Q (as defined under Rule 13a-15(e) and Rule
               15d-15(e) of the Securities Exchange Act of 1934) were effective
               as of such date to ensure that information we are required to
               disclose in the reports we file or submit under the Exchange Act
               is recorded, processed, summarized and reported within the time
               periods specified in the SEC's rules and forms, and include
               controls and procedures designed to ensure that information we
               are required to disclose in such reports is accumulated and
               communicated to management, including our principal executive, as
               appropriate, to allow timely decisions regarding required
               disclosure.

          (b)  During our last fiscal quarter and subsequent to our evaluation,
               there were no significant changes in internal controls or other
               factors that have materially affected, or reasonably likely to
               materially affect our internal controls over financial reporting.


                                       13
<PAGE>



                             PHASE III MEDICAL, INC.

                                     PART II

                                OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

The Company is not aware of any material pending legal proceedings or
claims against the Company

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

The Company is in default on the September 2002 60-day promissory notes
sold to accredited investors in the amount of $125,000. The notes include a
default penalty pursuant to which if the notes are not paid on the due date the
holder shall have the option to purchase twenty five thousand shares of the
Company's common stock for an aggregate purchase price of $125. If the
nonpayment continues for 30 days, then on the 30th day, and at the end of each
successive 30-day period until the note is paid in full, the holder shall have
the option to purchase an additional twenty five thousand shares of the
Company's common stock for an aggregate purchase price of $125. During the six
months ended June 30, 2004, options for 750,000 shares were exercised by the
note holders. At June 30, 2004, the Company had reserved 750,000 shares of the
Company's common stock for issuance against exercise of the options granted
pursuant to the default penalty.

Notes issued from March through August 2003, for $250,000, are in default
and bear interest at 20% per annum. Notes issued in February 2004, for $125,000,
are in default. Two of these notes, for $50,000, require an additional interest
payment of $250 per $25,000 invested for each 30 day period they remain unpaid.
At June 30, 2004, $100,000 of these notes remains unpaid. A note issued in May
2004, for $40,000, is in default.

Cumulative dividends payable on Series A Convertible Redeemable Preferred
Stock totaled $457,037 at June 30, 2004, of which $23,842 represents dividends
for the six months then ended.



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         31.1 Certification of Chief Executive Officer pursuant to Section 302
              of the Sarbanes-Oxley Act of 2002.

         32.1 Certification of Chief Executive Officer pursuant to Section 906
              of the Sarbanes-Oxley Act of 2002.

(b)      Reports on Form 8-K

         None


                                       14
<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                             PHASE III MEDICAL, INC.
                             (formerly known as CORNICHE GROUP INCORPORATED)
                             (Registrant)



                               By:  /s/    Mark Weinreb
                                   --------------------------------------------
                                   Mark Weinreb, President and Chief Executive
                                   Officer

                               Date: August 13, 2004


                                       15

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>a4701718ex311.txt
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
                                                                    Exhibit 31.1

                                  CERTIFICATION

I, Mark Weinreb, certify that:

1.   I have reviewed this Quarterly Report on Form 10-Q of Phase III Medical,
     Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly;

4.   The registrant's other certifying officer(s) (if any) and I are responsible
     for establishing and maintaining disclosure controls and procedures (as
     defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
     and have:

     a)   designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by others within those entities, particularly during the period in
          which this quarterly report is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this Report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this quarterly report based on such
          evaluation; and

     c)   presented in this quarterly report any change in the registrant's
          internal control over financial reporting that occurred during the
          registrant's most recent fiscal quarter (the registrant's fourth
          fiscal quarter in the case of an annual report) that has materially
          affected, or is reasonably likely to materially affect, the
          registrant's internal control over financial reporting;

5.   I have disclosed, based on our most recent evaluation of internal control
     over financial reporting to the registrant's auditors and the registrant's
     board of directors (or persons performing the equivalent functions):

     a)   all significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.


Date: August 13, 2004


/s/ Mark Weinreb
------------------
Name: Mark Weinreb
Title: Chief Executive Officer of Phase III Medical, Inc.

A signed original of this written statement required by Section 302 has
been provided to Phase III Medical, Inc. and will be retained by Phase III
Medical, Inc. and furnished to the Securities and Exchange Commission or its
staff upon request.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>3
<FILENAME>a4701718ex321.txt
<DESCRIPTION>EXHIBIT 32.1
<TEXT>
                                                                    Exhibit 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Quarterly Report of Phase III Medical, Inc. (the
"Company") on Form 10-Q for the period ended June 30, 2004 filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Mark
Weinreb, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:

     (1)  The Report fully complies with the requirements of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all
          material respects, the financial condition of the Company as of the
          dates presented and the result of operations of the Company for the
          periods presented.

Dated:  August 13, 2004



                                                 /s/Mark Weinreb
                                                 -----------------------
                                                 Mark Weinreb
                                                 Chief Executive Officer

The foregoing certification is being furnished solely pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350,
Chapter 63 of Title 18, United States Code) and is not being filed as part of
the Form 10-Q or as a separate disclosure document.

A signed original of this written statement required by Section 906 has
been provided to Phase III Medical, Inc. and will be retained by Phase III
Medical, Inc. and furnished to the Securities and Exchange Commission or its
staff upon request.








</TEXT>
</DOCUMENT>
</SUBMISSION>
