Eft 10Q 2010 Q1 Quarterly report

U.S. 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, 2009

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

For the transition period from

Commission File No. 001-34222

EFT BIOTECH HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Nevada (State or other Jurisdiction of Incorporation or Organization)	22-1211204 (I.R.S. Employer Identification No.)

929 Radecki Court City of Industry, CA	91748
(Address of Principal Executive Offices)	(Zip Code)

Issuer's Telephone Number: (626) 581 - 0388

With Copies to:

Virginia K Sourlis, Esq.

The Sourlis Law Firm

2 Bridge Avenue

The Galleria

Red Bank, New Jersey 07701

Telephone: (732) 530-9007

N/A

(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 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 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,” "non-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	x

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

¨ Yes x No

State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date: As of August 14, 2009, there were 75,983,205 shares of common stock, par value $0.00001 per share, of the Registrant issued and outstanding.

TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3-20
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21-27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4T.	Controls and Procedures	28

PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Submission of Matters to a Vote of Security Holders	30
Item 5.	Other Information	30
Item 6.	Exhibits	30
Item 7.	Subsequent Events	31

SIGNATURES		32

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page(s)

Consolidated Financial Statements

Consolidated Balance Sheets – unaudited		4

Consolidated Statements of Operations and Other Comprehensive Income(loss) - unaudited		5

Consolidated Statements of Cash Flows - unaudited		6

Notes to Unaudited Consolidated Financial Statements		7

EFT BIOTECH HOLDINGS, INC.

Consolidated Balance Sheets

	June 30, 2009			March 31, 2009
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	40,175,985		$	38,181,837
Inventories		3,657,057			3,908,629
Available for sale securities		618,894			508,746
Prepaid expenses		927,515			2,551,298
Short-term note receivables – related party		4,664,717			4,064,717

Total current assets		50,044,168			49,215,227

Property and equipment, net		387,044			360,156
Other receivables		33,504			33,504
Investments		15,051,611			17,129,314
Loan to related party		1,897,000			1,897,000
Security deposit		144,127			31,121

Total assets	$	67,557,454		$	68,666,322

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued expenses	$	1,524,374		$	3,610,195
Other liabilities		7,747,921			6,675,552
Unearned revenues		2,193,575			1,991,215
Deposits from investors		-			-
Income tax payable		-			-

Total current liabilities		11,465,870			12,276,962

Stockholders' equity
Preferred stock, $.001 par value, 25,000,000 shares authorized,
none issued and outstanding		-			-
Common stock, $0.00001 par value, 4,975,000,000 authorized,
75,983,205 and 75,983,205 shares issued and outstanding
at June 30, 2009 and March 31, 2009		760			760
Additional paid in capital		52,854,891			52,854,891
Retained earnings		3,616,068			4,023,992
Accumulated other comprehensive loss		(380,135	)		(490,283	)

Total stockholders' equity		56,091,584			56,389,360

Total liabilities and stockholders' equity	$	67,557,454		$	68,666,322

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

EFT BIOTECH HOLDINGS, INC.

Consolidated Statements of Operations and Other Comprehensive Income

	Three Months Ended
	June 30, 2009			June 30, 2008
	(unaudited)			(unaudited)

Sales revenues, net	$	3,989,316		$	4,751,518
Shipping charge		1,054,080			1,499,870
		5,043,396			6,251,388

Cost of goods sold		960,448			1,632,841
Shipping cost		301,900			736,904
		1,262,348			2,369,745

Gross profit		3,781,048			3,881,643

Selling, general and administrative expenses		2,306,319			1,246,573

Net operating income		1,474,729			2,635,070

Other income (expense)
Interest income		164,932			416,376
Investment loss		(2,077,703	)		-
Foreign exchange gain(loss)		886			(499	)
Other income, net		29,232			3,634

Total other income(expense)		(1,882,653	)		419,511

Net income(loss) before income taxes		(407,924	)		3,054,581

Income taxes		-			90,000

Net income(loss)	$	(407,924	)	$	2,964,581

Unrealized gain(loss) on available for sale securities		110,148			(109,486	)

Comprehensive income(loss)	$	(297,776	)	$	2,855,095

Net income(loss) per common share
Basic and diluted	$	(0.01	)	$	0.05

Weighted average common shares outstanding
Basic and diluted		75,983,205			61,083,953

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

EFT BIOTECH HOLDINGS, INC.

Consolidated Statements of Cash Flows

	Three Months Ended
	June 30, 2009			June 30, 2008
Cash flows from operating activities:
Net income(loss)	$	(407,924	)	$	2,964,581
Adjustments to reconcile net income(loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization		12,589			11,795
Loss on investment-equity method		2,077,703			-
Warranty liability		(4,275	)		(32, 445	)
Changes in operating assets and liabilities:
Inventories		251,572			(2,964,173	)
Prepaid expenses and other current assets		1,510,777			203,580
Accounts payable and accrued liabilities		(2,085,821	)		(227,069	)
Other liabilities		1,076,644			(9,394,170	)
Unearned revenues		202,360			(1,056,435	)
Income tax payable		-			90,000

Net cash provided by operating activities		2,633,626			(10,404,336	)

Cash flows from investing activities:
Additions to fixed assets		(39,477	)		(49,101	)
Note receivables – related party		(600,000	)		-

Net cash (used in) investing activities		(639,477	)		(49,101	)

Cash flows from financing activities:
Restricted cash		-			(17,233,298	)
Proceeds from investor deposits		-			17,233,298

Net cash provided by (used in) financing activities		-			-

Net increase (decrease) in cash		1,994,148			(10,453,437	)

Cash, beginning of period		38,181,837			15,165,620

Cash, end of period	$	40,175,985		$	4,712,183

Supplemental disclosures of cash flow information:
Income taxes paid in cash	$	-		$	800

Non-cash investing and financing activities:
Unrealized (gain)loss on available for sale securities	$	(110,148	)	$	109,486

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

EFT BIOTECH HOLDINGS, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - ORGANIZATION

EFT Biotech Holdings, Inc. (“EFT Holdings” or “the Company”), formerly HumWare Media Corporation, GRG, Inc., Ghiglieri Corporation, Karat Productions, Inc., was incorporated in the State of Nevada on March 19, 1992.

On November 18, 2007, the Company issued an aggregate of 53,300,000 shares of its common stock in connection with a share exchange with the stockholders of EFT BioTech, Inc. (“EFT BioTech”), a Nevada Corporation formed on September 18, 2007 (the “Transaction”), pursuant to which EFT BioTech became a wholly-owned subsidiary of the Company. The 53,300,000 common shares issued included 52,099,000 to pre-capitalization shareholders and 1,201,000 to four directors and officers of EFT BioTech, and represented approximately 87.34% of the Company’s common stock outstanding after the Transaction. Consequently, the stockholders of EFT BioTech, Inc. own a majority of the Company's common stock immediately following the Transaction, therefore, the Transaction is being accounted for as a "reverse acquisition", and EFT BioTech is deemed to be the accounting acquirer in the reverse acquisition. As EFT Holdings was a non-operating public shell corporation that acquired an operating company, this Transaction is treated as a capital transaction where the acquiring corporation issued stock for the net monetary assets of the shell corporation, accompanied by a recapitalization. The accounting is similar in form to a reverse acquisition, except that goodwill or other intangibles are not recorded. All references to EFT BioTech common stock have been restated to reflect the equivalent numbers of EFT Holdings common shares.

At its formation on September 18, 2007, EFT BioTech acquired EFT Limited, a British Virgin Islands company (“BVI”) formed on August 22, 2007, pursuant to which EFT Limited (BVI) became a wholly-owned subsidiary of EFT BioTech. Since both EFT BioTech and EFT Limited (BVI) were under common control, this acquisition represents a reorganization of entities under common control.

EFT Limited (BVI) has four wholly-owned subsidiaries: EFT, Inc., a California company formed on January 1, 2003, Top Capital International, Ltd. (BVI), a BVI company formed on May 22, 2002, EFT (HK), Ltd., a Hong Kong (“HK”) company formed on November 1, 2006 and EFT International Ltd. (BVI), a BVI company formed on April 20, 2005, which it acquired all on November 14, 2007. As EFT Limited (BVI) and the four companies being acquired were under common control, this acquisition also represents a reorganization of entities under common control.

These reorganizations of entities under common control resulted in changes in the legal organization of these predecessors to EFT BioTech but did not result in changes in the reporting entity.

On October 20, 2008, EFT Investment Co., Ltd., a Taiwan company, was formed as a wholly-owned subsidiary of EFT Biotech Holding, Inc.

The Company, through its subsidiaries, is engaged in the E-Business designed around the concept of business-to-customer using the World Wide Web as its “storefront” and business platform to market, sell and distribute 49 American brand products consisting of 26 nutritional products, 20 personal care products, 1 automotive fuel additive, 1 home product and a portable drinking container.

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Presentation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation.

Foreign Currency

The Company’s reporting currency is the U.S. dollar. The Company’s operation in Hong Kong uses Hong Kong dollar (HKD) as its functional currency. The financial statements of the subsidiary are translated into U.S. Dollars (USD) in accordance with Statement of Financial Accounting Standards (SFAS) No. 52, Foreign Currency Translation. According to the Statement, all assets and liabilities were translated at the year end current exchange rate, stockholders equity items are translated at the historical rates and income statement items are translated at the average exchange rate for the period. The resulting translation adjustments are reported under other comprehensive income in accordance with SFAS No. 130, Reporting Comprehensive Income as a Component of Stockholders Equity. Foreign exchange transaction gains and losses are reflected in the income statement. During the years 2009 and 2008 there have been immaterial currency fluctuations between HKD and USD.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all highly liquid debt instruments with original maturities of three months or less. The Company maintains its accounts in banks, several of which exceed the federally insured limit. In aggregate, approximately $36.9 million were above the federally insured limit. Management believes the Company is not exposed to any significant credit risk on those accounts.

Available for sale securities

The Company’s investments in publicly traded equity securities are classified as available-for-sale and are reported at fair value (based on quoted prices and market prices) using the specific identification method. Unrealized gains and losses, net of taxes, are reported as a component of stockholders’ equity. Realized gains and losses on investments are included in investment and other income, net when realized. Any impairment loss to reduce an investment’s carrying amount to its fair market value is recognized in income when a decline in the fair market value of an individual security below its cost or carrying value is determined to be other than temporary.

Inventories

Inventories are valued at the lower of cost (determined on a first-in, first-out basis) or market. The Management compares the cost of inventories with the market value and allowance is made for writing down the inventories to market value, if lower. Inventory consists of high tech nutritional, cosmetic, automotive maintenance and environmentally safe products.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is provided using the straight-line method for substantially all assets with estimated lives of:

Machinery & equipment	3 years
Computers & office equipment	3 years
Automobile	5 years

For the three months ended June 30, 2009 and 2008, depreciation expenses were $12,589 and $11,795, respectively.

Long-Lived Assets

Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144), which addresses financial accounting and reporting for the impairment or disposal of long-lived assets and supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations for a Disposal of a Segment of a Business. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with SFAS 144. SFAS 144 requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the asset’s carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal. Based on its review, the Company believes that, as of June 30, 2009 there were no significant impairments of its long-lived assets.

Fair Value of Financial Instruments

Statement of Financial Accounting Standards No. 107, “Disclosures about Fair Value of Financial Instruments”, requires that the Company discloses estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for current assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value due to the short-term maturity of these instruments.

Fair Value Measurements

Effective April 1, 2008, the Company adopted Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements”, which defines fair value, establishes guidelines for measuring fair value and expands disclosures regarding fair value measurements. SFAS No. 157 does not require any new fair value measurements, but rather eliminates inconsistencies in guidance found in various other accounting pronouncements. The adoption of SFAS No. 157 did not have a material effect on the Company’s financial condition or operating results.

Refer to Note 4, “Fair Value Measurements” for additional information on the adoption of SFAS No. 157.

Stock-Based Compensation

In December 2004, the FASB issued FASB Statement No. 123R ("SFAS 123R"), "Share-Based Payment, an Amendment of FASB Statement No. 123". SFAS 123R requires companies to recognize in the statement of operations the grant date fair value of stock options and other equity-based compensation issued to employees. The Company adopted SFAS 123R on April 1, 2006.

Stocks issued to officers or employees

On November 18, 2007 in conjunction with the reverse acquisition, the Company granted its officers an aggregate 1,201,000 shares of fully vested stock with no future requisite service requirement. The share compensation cost is measured at grant date, based on estimated fair value of the award which is $0.0018 per share.

The amount of compensation was included as a period compensation expense. For the three months ended June 30, 2009 and 2008, the stock-based compensation for shares awarded to employees was $0 and $0, respectively.

During the years 2009 and 2008, the Company has not issued any stock options or warrants to employees, therefore pro forma disclosures are not required.

Stock issued for service

The company accounts for equity instruments issued in exchange for the receipts of goods or service from other than employees in accordance with SFAS No.123 (R) and the conclusions reached by the Emerging Issues Task Force (“EITF”) in Issue No. 96-18. Costs are measured at the estimated fair market value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of equity instruments issued for consideration other than employee services is determined on the earliest of performance commitment or completion of performance by the provider of goods or service as defined by EITF 96-18.

During November 2008, we issued 4,084 shares of common stock in exchange of service we received.

For the three months ended June 30, 2009 and 2008, the stock-based compensation for shares issued to non-employees was $0 and $0, respectively.

Revenue Recognition

The Company’s revenue recognition policy is in accordance with the requirements of Staff Accounting Bulletin (“SAB”) No. 104, Revenue Recognition, (“SAB 104”), EITF 01-09, Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor’s Products) (“EITF 01-09”) and other applicable revenue recognition guidance and interpretations. Sales revenue is recognized at the date of shipment to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectibility is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue. Cash consideration given by the Company to its sales affiliates is considered to be a reduction of the selling prices of the Company's products, thus, is recorded as a reduction of revenue.

Warranty

The Company generally does not provide customers with right of return except for defective products which is within six month warranty period from date of sales. Historically, the company warranty provisions have not been material. The specific warranty terms and conditions vary depending upon the product sold, but generally include replacement over a period of six months. Factors that affect the Company’s warranty liability include the number of products currently under warranty, historical and anticipated rates of warranty claims on those products, and cost per claim to satisfy the warranty obligation. The anticipated rate of warranty claims is the primary factor impacting the estimated warranty obligation. Warranty claims are relatively predictable based on our historical experience. Warranty reserves are included in other liabilities and the provision for warranty accruals is included in cost of goods sold in the consolidated statement of Operations and Other Comprehensive Income. Management reviews the adequacy of warranty reserves each reporting period based on historical experience and management's estimate of the costs to remediate the claims and adjusts the provisions accordingly.

Currently, the Company estimates its warranty expense as follows:

Products sold for
0-2 months	2% of cost
3-4 months	1.5% of cost
5-6 months	1% of cost

The Company records warranty liabilities at the time of sale for the estimated costs that may be incurred under its limited warranty. The specific warranty terms and conditions vary depending upon the product sold, but generally include replacement over a period of six months. Factors that affect the Company’s warranty liability include the number of products currently under warranty, historical and anticipated rates of warranty claims on those products, and cost per claim to satisfy the warranty obligation. The anticipated rate of warranty claims is the primary factor impacting the estimated warranty obligation. The other factors are less significant due to the fact that the warranty period is only six months and replacement is generally already in stock or available at a pre-determined price. Warranty claims are relatively predictable based on historical experience of failure rates. If actual results differ from the estimates, the Company revises its estimated warranty liability.

Shipping Costs

The Company’s shipping costs are included in cost of sales in the accompanying Consolidated Statements of Operations and Other Comprehensive Income for all periods presented.

Unearned Revenues

Unearned Revenues consist of cash amounts received in advance for goods and services to be delivered at a future date. The Registrant records the cash from customers as a liability until the products are delivered.

2. Advertising

Advertising expenses consist primarily of costs of promotion for corporate image and product marketing and costs of direct advertising. The Company expenses all advertising costs as incurred. For the three months ended June 30, 2009 and 2008, advertising expenses were $15,146 and $36,139, respectively.

Consultant Fee

On January 1, 2009, EFT International Ltd., a wholly-owned subsidiary of EFT BioTech Holdings, Inc., entered into a contract with ZR Public Relation Consultant Ltd. (the Consultant), which provides public relation consulting services in Asia. In consideration of the services rendered by the Consultant, EFT International Ltd. agrees to pay 5% of total commission payout for each fiscal year. For the three months ended June 30, 2009, consultant expense for EFT International Ltd was $354,747.

Income Taxes

The Company utilizes SFAS No. 109, Accounting for Income Taxes, 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 or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), on April 1, 2007 The Interpretation addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under FIN 48, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. FIN 48 also provides guidance on derecognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

Net Earnings (Loss) Per Share

Basic net earnings (loss) per common share of stock is calculated by dividing net income (loss) available to common stockholders by the weighted-average of common shares outstanding during each period.

Diluted net income (loss) per common share is calculated by dividing adjusted net income (loss) by the weighted-average of common shares outstanding, including the effect of other dilutive securities. The Company’s potentially dilutive securities consist of in-the-money outstanding warrants to purchase the Company’s common stock. Diluted net (loss) per common share does not give effect to dilutive securities as their effect would be anti-dilutive.

The treasury stock method is used to measure the dilutive impact of stock options and warrants. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. For the three months ended June 30, 2009 and 2008, stock warrants of 14,890,000 and zero shares have no effect on the diluted calculation because they are not in-the-money

	For the Three Months Ended June 30,
	2009			2008

Net Income(loss)	$	(407,924	)	$	2,964,581

Denominator:
Weighted-average shares used for basic net income per share		75,983,205			61,083,953
Effect of common stock equivalents	-			-
Weighted-average shares used for diluted net (loss) per share		75,983,205			61,083,953

Basic and diluted net income(loss) per share	$	(0.01	)	$	0.05

Comprehensive income

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. For the Company, comprehensive income for the periods presented is comprised of net income and unrealized loss on marketable securities classified as available-for-sale.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk are cash, accounts receivable and other receivables arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions, but several of its bank accounts exceed the federally insured limit. The Company’s accounts receivable is constantly at a marginal to zero dollar ($0) level and its revenues are derived from orders placed by consumers located anywhere in the world over the Company’s designated internet portal. The Company maintains a zero dollar ($0) allowance for doubtful accounts and authorizes credits based upon its historical “sound and quality” after sales customer services provided to affiliates and customers. Historically, such customer services have been maintained in accordance with the management expectations. The Company routinely assesses the credits authorized to its customers and, based upon factors surrounding the credit risk, establishes an allowance, if required, for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowance is limited.

Segment Reporting

Statement of Financial Accounting Standards No. 131 (SFAS 131), “Disclosure about Segments of an Enterprise and Related Information” requires use of the management approach model for segment reporting. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Since management does not disaggregate Company data, the Company has determined that only one segment exists. Accordingly, no segment reporting is provided. The Company’s maintains 5 product categories; nutritional products, personal care products, automotive fuel additives, home products and portable drinking containers. The Company’s current “in-house” information systems do not have the ability to compile revenues from external customers for each product category.

Recent accounting pronouncements

The FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, on June 29, 2009 and, in doing so, authorized the Codification as the sole source for authoritative U.S. GAAP. SFAS No. 168 will be effective for financial statements issued for reporting periods that end after September 15, 2009. Once it's effective, it will supersede all accounting standards in U.S. GAAP, aside from those issued by the SEC. SFAS No. 168 replaces SFAS No. 162 to establish a new hierarchy of GAAP sources for non-governmental entities under the FASB Accounting Standards Codification. The Company will evaluate the impact of SFAS No. 168 upon its effectiveness.

SFAS No. 167 amends FASB Interpretation (FIN) No. 46(R), Consolidation of Variable Interest Entities, by altering how a company determines when an entity that is insufficiently capitalized or not controlled through voting should be consolidated, the FASB said. A company has to determine whether it should provide consolidated reporting of an entity based upon the entity's purpose and design and the parent company's ability to direct the entity's actions.

The standards will be effective at the start of the first fiscal year beginning after November 15, 2009, which will mean January 2010 for companies that are on calendar years. The guidance will have to be applied for first-quarter filings. The Company will comply with the disclosure requirements of this statement when and if it acquires a variable interest entity, upon its effectiveness.

FAS No. 166 revises SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and will require entities to provide more information about sales of securitized financial assets and similar transactions, particularly if the seller retains some risk to the assets, the FASB said. The statement eliminates the concept of a qualifying special-purpose entity, changes the requirements for the derecognition of financial assets, and calls upon sellers of the assets to make additional disclosures about them. The Company does not believe implementation of FAS No. 166 will have a material impact on its financial statements.

On May 28, 2009 the FASB announced the issuance of SFAS 165, Subsequent Events. SFAS 165 should not result in significant changes in the subsequent events that an entity reports. Rather, SFAS 165 introduces the concept of financial statements being available to be issued. Financial statements are considered available to be issued when they are complete in a form and format that complies with generally accepted accounting principles (GAAP) and all approvals necessary for issuance have been obtained. The Company believes that SFAS No. 165 will have an effect on its financial statements and will comply upon effectiveness.

Note 3 - FINANCIAL INSTRUMENTS

The following table summarizes unrealized gains and losses related to the Company’s investments in marketable securities designated as available-for-sale. The fair value of available for sale securities has been estimated based on quoted market prices, which the Company currently believes are indicative of fair value. The Company’s available for sale securities are mainly on equity securities mutual funds.

	June 30, 2009							June 30, 2008
	Fair Value		Cost		Unrealized (Loss)			Fair Value		Cost		Unrealized (Loss)

Available for sale securities	$	618,894	$	999,029	$	(380,135	)	$	726,479	$	999,029	$	(272,550	)
Total	$	618,894	$	999,029	$	(380,135	)	$	726,479	$	999,029	$	(272,550	)

Note 4 - FAIR VALUE MEASUREMENTS

On April 1, 2008, the Company adopted the effective portions of SFAS 157. In February 2008 the FASB issued FSP FAS 157-2, “Effective Date of FASB Statement No. 157”, which provides a one year deferral of the effective date of SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). Therefore, the Company adopted the provisions of SFAS 157 with respect to only financial assets and liabilities.

SFAS 157 defines fair value, establishes a framework for measuring fair value and enhances disclosure requirements for fair value measurements. This statement does not require any new fair value measurements. SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. As a basis for considering such assumptions, SFAS 157 establishes a three-tier value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—Include other inputs that are directly or indirectly observable in the marketplace.

Level 3—Unobservable inputs which are supported by little or no market activity.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

In accordance with SFAS 157, the Company measures its available for sale securities at fair value. The available for sale securities are classified within Level 1. This is because the available for sale securities are valued using quoted market prices.

Assets and liabilities measured at fair value are summarized below.

	June 30, 2009
	Level 1
	Quoted Prices		Level 2
	in Active		Significant		Level 3
	Markets for		Other		Significant
	Identical		Observable		Unobservable
	Assets		Inputs		Inputs		Total

Available for sale securities	$	618,894	$	-	$	-	$	618,894
Total assets measured at fair value	$	618,894	$	-	$	-	$	618,894

Note 5 - NOTE RECEIVABLES, RELATED PARTY

Short-Term

On June 30, 2008, the Company signed a loan agreement denominated in U.S. dollars with Excalibur International Marine Corporation (“Excalibur”) to lend $19,193,000 at no interest with a term of five months. On November 14, 2008, the Company has received $17,628,283 from Excalibur. At the end of the five month term, the term of the loan was extended for another nine months. This loan still has an outstanding balance of $1,564,717 at June 30, 2009.

On September 23, 2008, the Company signed a loan agreement denominated in U.S. dollars with Excalibur International Marine Corporation (“Excalibur”) to lend $2,000,000 at interest rate of 3.75% per month with a term of no more than 60 days. At the end of the 60-day term, the term of the loan was extended for six months. On May 25, 2009, the Company extended this loan to Excalibur for another six months and lowered the interest rate to 12.5% per annum.

On November 24, 2008, the Company signed another loan agreement denominated in U.S. dollars with Excalibur to lend $500,000 at interest rate of 3.75% per month with a term of no more than 30 days. At the end of the 30-day term, the term of the loan was extended for six months. On May 25, 2009, the Company extended this loan to Excalibur for another six months and lowered the interest rate to 12.5% per annum.

On May 13, 2009, the Company signed another loan agreement denominated in U.S. dollars with Excalibur to lend $600,000 at interest rate of 12.5% per annum with a term of six months.

Long-Term

The Board of Directors approved two non-interest bearing unsecured demand loans in the amount of U.S. $330,000 and $1,567,000 respectively on July 11 and July 25 to Yeuh-Chi Liu, a vendor and a member of the board of directors of Excalibur. The loan amount of $1,567,000 is collateralized with 3.97% ownership of Excalibur International Marine Corp. As of the date hereof the full principal amount remains outstanding.

Note 6 – OTHER RECEIVABLE

EFT USA, Inc. (EFT), a wholly-owned subsidiary of EFT BioTech Holdings, Inc., sold certain business properties, including computers and an auto to Industrial Fulfillment Co. (IFC) in the amount of $33,504, its net book value as other receivable, pursuant to an asset purchase agreement. The sale of the assets under this agreement constitutes a complete transfer of all of its rights, title and interest with respect to the assets.

Note 7 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	June 30, 2009			March 31, 2009

Automobile	$	154,724		$	154,724
Furniture and fixture		12,278			12,278
Computer equipment		49,892			26,373
Machinery and equipment		22,364			6,405
Leasehold improvement		262,679			262,679

		501,937			462,459
Less: Accumulated depreciation		(114,893	)		(102,303	)
	$	387,044		$	360,156

Note 8 – INVESTMENT

On October 25, 2008, the Company through its wholly-owned subsidiary, EFT Investment Co. Ltd, a Taiwan company formed on October 20 2008, completed the acquisition of 48.81% of equity interest of Excalibur for approximately $19,193,000. The equity method has been used for this investment. The Company’s investment in Excalibur was $15,051,611 due to Excalibur has $2,127,428 net loss for the three months and write off for the premium the Company paid when it purchased the investment.

Investment consists of:

	June 30,		March 31,
	2009		2009
48.81% equity interest (a)	$	15,051,611	$	17,129,314
	$	15,051,611	$	17,129,314

(a) On October 20, 2008, EFT Investment Co., Ltd. was formed as a wholly-owned subsidiary of EFT BioTech Holdings, Inc. EFT Investment Co., Ltd was formed in Taiwan. On October 25, 2008, EFT Investment Co., Ltd. completed the acquisition of 585,677,500 shares of common stock of Excalibur; representing approximately 49% shares of issued and outstanding shares of Excalibur, for an aggregate purchase price of USD $19,193,000. Prior to the acquisition of Excalibur, Excalibur was not a related person under Item 404 of regulation S-K. The equity method has been used for this investment for the three months ended June 30, 2009.

The following table shows the summary of income statement for Excalibur International Corp. for the three months ended March 31, 2009:

Excalibur International Marine Corp
	Three Months Ended June 30,
	2009			2008
Exchange rate		33			-
Revenue	$	3,404		$	-
Gross profit	$	(2,130,832	)	$	-
Income from continuing operations	$	(2,127,428	)	$	-
Net income	$	(2,127,428	)	$	-
EFT 48.81% investment loss	$	(1,038,398	)	$	-

The following table provides the summary of balance sheet information for Excalibur International Marine Corp. as of June 30, 2009 and March 31, 2009:

Excalibur International Marine Corp
	June 30, 2009				March 31, 2009
	NT$		USD		NT$		USD
Total assets		1,276,028.936		38,667,544		1,289,432,107		39,073,700
Total liabilities		261,219,920		7,915,755		204,417,971		6,194,484
Net assets		1,014,809,016		30,751,789		1,085,014,136		32,879,216
EFT 48.81% ownership		495,328,281		15,009,948		529,595,400		16,048,345
Ending balance of investment account				15,051,611				17,129,314
Difference/Premium				41,663				(1,080,969	)

The difference of $41,663 was mainly due to the exchange rate fluctuations between the periods.

The premium of $1,080,969 was mainly the excess we paid to purchase of the 48.81% of ownership in Excalibur as of March 31, 2009. During the first quarter ended June 30, 2009 and with continued loss and general worsen market condition, management has determined to write-off the premium paid and recorded as part of the investment loss during the three month ended June 30, 2009.

The following is the shareholder’s list of Excalibur International Marine Corp as of June 30, 2009:

Excalibur International Marine Corp. Shareholders’ List
	Shareholders’ Name	# of shares		%
1	EFT Investment Co. Ltd		585,677,500		48.81	%
2	Lu, TsoChun		100,000,000		8.33	%
3	Chiao, Jen-Ho		82,000,000		6.83	%
5	Lin, Ming-i		51,700,000		4.31	%
4	Ms. Ku		50,000,000		4.17	%
6	Yeuh-Chi Liu		47,660,000		3.97	%
7	Steve Hsiao		46,392,500		3.87	%
8	Wen Investment		40,000,000		3.33	%
	Others		196,570,000		16.38%

	Total		1,200,000,000		100	%

56 individuals, none exceeds 2.5% interest in Excalibur International Marine Corp.

Note 9 – OTHER LIABILITIES

Other liabilities consist of the following:

	Three Months Ended June 30,
	2009		2008

Commission payable	$	6,834,451	$	5,977,969
Payroll liabilities		866,061		645,900
Warranty liability		47,409		51,683
Other		-		-
	$	7,747,921	$	6,675,552

Note 10 – STOCKHOLDERS’ EQUITY

Common stock

As of June 30, 2009 the Company has 4,975,000,000 shares of common stock authorized and 75,983,205 shares issued and outstanding at par value $0.00001 per share.

The Company did not issue any shares of Common Stock for the three months ended June 30, 2009.

Warrants

Each warrant underlying the unit offered in the private placement is immediately exercisable in whole or in part and from time to time, to purchase one share of common stock at $3.80 per share until the second anniversary date of the date of issuance.

The Company shall have the right, not the obligation to redeem the outstanding warrants, on a pro rata basis, at a purchase price of $0.00001 per warrant within thirty (30) days from the tenth (10th) consecutive trading day that the closing sales price, or the average of the closing bid and asked price in the event that the Company’s common stock trades on the OTC or any public securities market within the U.S., is at least Eleven Dollars ($11.00) per share.

As the only settlement option for the warrants is physical settlement, in which the party designated in the contract as the buyer delivers the full stated amount of cash to the seller, and the seller delivers the full stated number of shares to the buyer, the Company accounted for the warrants as permanent equity and recorded it in additional paid in capital.

Note 11 - INCOME TAXES

The Company was incorporated in the United States of America (“US”) and has operations in three tax jurisdictions - the United States of America, the Hong Kong Special Administrative Region (“HK SAR”) and the BVI. The Company generated substantially all of its net income from its BVI operations for the three months ended June 30, 2009 and 2008 which are not subject to any tax provision according to BVI tax law. The Company’s HK SAR subsidiaries had no taxable income in the respective periods. The deferred tax assets for the Company’s US operations and HK SAR subsidiaries were immaterial at June 30, 2009 and 2008.

The income tax expenses consist of the following:

	Three Months Ended June 30,
	2009		2008

Current:
Domestic	$	-	$	90,000
Foreign		-		-
Deferred		-		-
Income tax expenses	$	-	$	90,000

A reconciliation of income taxes, with the amount computed by applying the statutory federal income tax rate (37% for the three months ended June 30, 2009 and 2008) to income before income taxes for the three months ended June 30, 2009 and 2008, is as follows:

	Three Months Ended June 30,
	2009			2008

Income tax at U.S. statutory rate	$	-		$	1,135,498
State tax		-			-
Indefinitely invested earnings of foreign subsidiaries		(3,886	)		(1,140,801	)
Nondeductible expenses		3,886			5,503
	$	0		$	0
Effective tax rate		0	%		0	%

The Company’s effective tax rate has no change for the three months ended June 30, 2009, compared to the same period of 2008, due to, after the re-capitalization, a higher proportion of its operating profits is subject to income tax.

Uncertain Tax Positions

As a result of the implementation of Interpretation 48 on April 1, 2007, the Company recognized no material adjustments to liabilities or stockholders’ equity. Interest associated with unrecognized tax benefits are classified as income tax and penalties are classified in selling, general and administrative expenses in the statements of operations. The adoption of FIN 48 did not have a material impact on the Company’s financial statements.

For the three months ended June 30, 2009 and 2008, the Company had no unrecognized tax benefits and related interest and penalties expenses. Currently, the Company is not subject to examination by major tax jurisdictions.

Note 12 - WARRANTY LIABILITY

The Company records warranty liabilities at the time of sale for the estimated costs that may be incurred under its limited warranty. Changes in warranty liability for standard warranties which are included in current liabilities on the Company’s Consolidated Balance Sheets are presented in the following tables:

	Three Months Ended
	June 30,
	2009			2008

Warranty liability at March 31	$	51,684		$	85,608
Costs accrued		(4,275	)		(32,445	)
Service obligations honored		-			-
Warranty liability at June 30	$	47,409		$	53,163
Current portion	$	47,409		$	53,163
Non-current portion		-			-
Warranty liability at end of period	$	47,409		$	53,163

Note 13 - COMMITMENT

Operating Lease

The Company leases office space in the US under an operating lease agreement. The lease provides for monthly lease payments approximating $10,063 and expires on July 31, 2009. Future minimum lease payments under the operating leases as of June 30, 2009 approximate the following:

Month Ending June 30,
2010, one months		$	10,063

The Company rents office space for its sales division in Hong Kong. The lease provides for free lease in the first two years and a monthly lease payments approximating $50,000 USD starting the beginning of the third year and expires on June 30, 2012. Expensing the 5-year total rent evenly over the life of the lease, the future minimum lease payments under the operating lease are as follows:

Month Ending June 30,
2010	$	270,000
2011		360,000
2012		360,000
Total	$	990,000

The Company rents storage space for its sales division in Hong Kong. The lease provides for monthly lease payments approximating $1,135 USD starting on May 8, 2008 and expiring on May 7, 2010. Future minimum lease payments under the operating leases as of June 30, 2009 approximate the following:

Month Ending June 30,
2010	$	10,215
2011		1,135
Total	$	11,350

Rent expenses for the three months ended June 30, 2009 and June 30, 2008 were approximately $183,914 and $120,535, respectively.

14. Subsequent Events

The Company has evaluated subsequent events from the balance sheet date through August 14, 2009 with the date being the date that the financial statements are issued or are available to be issued.

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

Forward-Looking Statements

This Report contains statements that we believe are, or may be considered to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report regarding the prospects of our industry or our prospects, plans, financial position or business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “may,” “will,” “expect,” “intend,” “estimate,” “foresee,” “project,” “anticipate,” “believe,” “plans,” “forecasts,” “continue” or “could” or the negatives of these terms or variations of them or similar terms. Furthermore, such forward-looking statements may be included in various filings that we make with the SEC or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Report.

Industry Trends

We believe that the Business to Customer business is robust and that consumers have become more confident in ordering products, like ours, over the internet. However, the nutritional supplement and cosmetic e-business markets have and continue to become increasingly competitive and are rapidly evolving. Barriers to entry are minimal and current and new competitors can launch new websites at a relatively low cost. Many competitors in this area have greater financial, technical and marketing resources than our Company. Continued advancement in technology and increasing access to that technology is paving the way for growth in direct marketing. We also face competition for consumers from retailers, duty-free retailers, specialty stores, department stores and specialty and general merchandise catalogs, many of which have greater financial and marketing resources than we have. Notwithstanding the foregoing, we believe that we are well-positioned within the Asian consumer market with our current plan of supplying American merchandise brands to consumers and that our exposure to both the Asian and American cultures gives us a competitive advantage. There can be no assurance that we will maintain our competitive edge or that we will continue to provide only American made merchandise.

However, the global economy is currently undergoing a period of unprecedented volatility, and the future economic environment may continue to be less favorable than that of recent years. This has led, and could further lead, to reduced consumer spending in the foreseeable future, and this may include spending on nutritional and beauty products and other discretionary items, like our products. In addition, reduced consumer spending may drive us and our competitors to decrease prices. These conditions may adversely affect our revenues and profits.

Our long-term plan is to use funds from the private placement and revenues earned for investments and acquisitions to allow us to grow our existing business operations and to enter into additional territories. To date, we have not located any acquisition targets nor do we have any commitments for capital expenditures, other than Excalibur. We believe that due to the current global economic recession, there might be material opportunities for us to acquire smaller companies at discount prices. There can be no assurances however that we will be successful in doing so. Our expansion will rely to a great degree on global economic conditions and perceived future changes. Until such time, we intend to retain our cash reserves to fund our operations.

The Three Months Ended June 30, 2009 Compared to the Three Months Ended June 30, 2008

Assets.�� At June 30, 2009, we had $67,557,453 in total assets, compared to $68,666,322 at March 31 2009. This was primarily due to the investment loss of $2,077,703 from Excalibur International Corporation at June 30, 2009. Our inventories also decreased to $3,657,057 at June 30, 2009 from $3,908,629 at March 31, 2009 due to sales decreases during the quarter ended June 30, 2009.

Liabilities. At June 30, 2009, our Total Liabilities consisted of $11,465,870 compared to $12,276,962 at March 31, 2009. Liabilities consist of Accounts Payable; Other Liabilities; Unearned Revenue; Deposits from Investors; and Income Tax Payable. Accounts payable decreased to $1,524,374 at June 30, 2009 from $3,610,195 at March 31, 2009 primarily due to due to payment of trademark royalty expenses for last fiscal year. Other liabilities consist of commissions (Affiliate rewards) payable, payroll liabilities and other liabilities, and increased to $7,747,921 at June 30, 2009 from $6,675,552 at March 31, 2009 because of increased commissions payable and payroll payable. Unearned revenue consists of customer deposits for unshipped products, and increased to $2,193,575 at June 30, 2009 from $1,991,215 at March 31, 2009 due to increased deliveries in-transit.

Stockholders’ Equity (Deficit). Our Stockholders’ Equity (Deficit) decreased to $56,091,583 at June 30, 2009 from $56,389,360 at March 31, 2009. This decrease was primarily due to a decrease in Retained Earnings to $3,616,067 at June 30, 2009 from $4,023,992 at March 31, 2009.

RESULTS OF OPERATIONS

Revenues. Our Revenues decreased to $3,989,316 for the three months ended June 30, 2009 from $4,751,518 for the three months ended June 30, 2008 because of decreased sales. The decrease in revenue from 2008 to 2009 was due to slow recovering from the world recession and natural disasters in China during 2008.

Costs of Goods Sold. Costs of Goods Sold decreased to $960,448 for the three months ended June 30, 2009 from $1,632,841 for the three months ended June 30, 2008. Costs of Goods Sold consist of merchandise purchases from vendors and decreased because of decreased sales.

Shipping Charges. Shipping Charges decreased to $1,054,080 for the three months ended June 30, 2009 from $1,499,870 for the three months ended June 30, 2008 due to decreased sales.

Shipping Costs. Shipping Costs decreased to $301,900 for the three months ended June 30, 2009 from $736,904 for the three months ended June 30, 2008. Shipping Costs consist of freight charges to our Hong Kong facility and decreased because of decreased sales.

Gross Profits. Gross Profits decreased to $3,781,048 for the three months ended June 30, 2009 from $3,881,643 for the three months ended June 30, 2008. Our gross profit margin for the three months ended June 30, 2009 was 75% compared to 66% for the three months ended June 30, 2008. Gross Profits decreased due to sales volume decreasing by 10% and gross profit margins increasing due to the Company raising its unit sales prices in July 2008.

Selling, General and Administrative Expenses. Selling, General and Administrative Expenses increased to $2,306,319 for the three months ended June 30, 2009 from $1,246,573 for the three months ended June 30, 2008. Selling, General and Administrative Expenses consist of advertising of $15,141 and corporate administrative expenses of $1,336,431, and increasing consultant fees to ZR Public Relation Company, Ltd. of $354,747 and royalty fees accrued for trademark of $600,000 at June 30, 2009.

Interest Income. Interest Income decreased to $164,932 for the three months ended June 30, 2009 from $416,376 for the three months ended June 30, 2008. Interest Income decreased due to cash increasing $1,994,148 and interest rate declining at June 30, 2009.

Foreign Exchange Loss. Foreign Exchange Gain increased to $886 for the three months ended June 30, 2009 from $(499) for the three months ended June 30, 2008. Foreign Exchange Gain increased because of fluctuation on foreign exchange rates.

Other Income (Net). Other Income (Net) increased to $29,232 for the three months ended June 30, 2009 from $3,634 for the three months ended June 30, 2008. Other Income (Net) consists of fees received for educational training classes and increased due to additional classes held.

LIQUIDITY AND CAPITAL RESOURCES

As reflected in the accompanying consolidated financial statements, at June 30, 2009, the Company had $40,175,985 cash on hand and a stockholders’ equity of $56,091,584. To date, we have funded our operations primarily from sales to our Affiliates and through private equity financings. While we believe in the viability of our strategy to improve sales volume and in our ability to raise additional funds, there can be no assurances to that effect.

At June 30, 2009, we had $67,557,454 in total assets, compared to $68,666,322 at March 31, 2009. This was primarily due to investment loss from Excalibur International Corporation. Our inventories also decreased to $3,657,057 at June 30, 2009 from $3,908,629 at March 31, 2009 due to sales decrease. Our decrease in investments was due to an equity investment in Excalibur to $15,051,611 at June 30, 2009 from $17,129,314 at March 31, 2009, and related party Notes Receivable of $6,561,717 at June 30, 2009 compared to $5,961,717 at March 31, 2009 was due to loans made to Excalibur and Yeuh-Chi Liu. At June 30, 2009, we had $618,894 in invested mutual funds and our prepaid expenses were $927,515.

Our products are sensitive to business and personal discretionary spending levels and tend to decline or grow more slowly during economic downturns, including downturns in any of our major markets. The current worldwide recession is expected to adversely affect our sales and liquidity for the foreseeable future. Although we have mitigated decreases in sales by lowering our levels of inventory to preserve cash on hand, we do not know when the recession will subside and when consumer spending will increase from its current depressed levels. Even if consumer spending increases, we are not sure when consumer spending will increase for our products which will affect our liquidity. We believe we have enough capital to fund our operations during the next 12 months.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

	Payments due by period
	Total	Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-Term Debt Obligations			-		-		-		-
Capital Lease Obligations			-		-		-		-
Operating Lease Obligations (1)		$	290,278	$	721,135		-		-
Purchase Obligations			-		-		-		-
Other Long-Term Liabilities Reflected on the Registrant's Balance Sheet under GAAP			-		-		-		-
Total		$	290,278	$	721,135		-		-

(1)	Operating Lease

Month Ended June 30,
2010, one month		$	10,063

The Company rents office space for its sales division in Hong Kong. The lease provides for free lease in the first two years and a monthly lease payments approximating $50,000 USD starting the beginning of the third year and expiring on March 31, 2012. Expensing the 5-year total rent evenly over the life of the lease, the future minimum lease payments under the operating lease are as follows:

Month Ending June 30,
2010	$	270,000
2011		360,000
2012		360,000
Total:	$	990,000

Month Ending June 30,
2010	$	10,215
2011		1,135
Total:	$	11,350

Rent expenses for the quarter ended June 30, 2009 and June 30, 2008 were approximately $183,914 and $120,535, respectively.

Excalibur International Marine Corporation

Due to the recent changes in policy between Mainland China and Taiwan, an opportunity was recognized to take advantage of direct sailings for cargo and passengers through the Taiwan Strait. EFT identified Excalibur International Marina Corporation (“Excalibur”), a shipping company located in Taiwan, as a viable entity to participate with in this business opportunity. In order to expedite the purchase of a new vessel, EFT’s Board of Directors approved a non-interest bearing, unsecured loan to facilitate this purchase. On July 28, 2008, the Registrant loaned $19,193,000 to Excalibur. This loan was still outstanding with balance of $1,564,717 as of June 30, 2009. At the time of the transaction, Excalibur was not a related party nor did any of the Company or any of its officers or directors have any relationship with Excalibur or any of its officers and directors.

On September 23, 2008, the Registrant signed a loan agreement with Excalibur to lend $2,000,000 at an interest rate of 3.75% per month with a term of no more than 60 days. At the end of the 60 days term, the term of the loan was extended for six months. On November 23, 2008, the Company extended this loan to May 25, 2009. On May 25, 2009, the Company extended this loan to Excalibur for another six months and decreased the interest rate to 12.5% per annum.

On October 20, 2008, EFT Investment Co., Ltd. was formed as a wholly-owned subsidiary of EFT BioTech Holdings, Inc. EFT Investment Co., Ltd was formed in Taiwan. On October 25, 2008, EFT Investment Co., Ltd. completed the acquisition of 585,677,500 shares of common stock of Excalibur; representing approximately 49% shares of issued and outstanding shares of Excalibur, for an aggregate purchase price of USD $19,193,000. Prior to the acquisition of Excalibur, Excalibur was not a related person under Item 404 of Regulation S-K.

On November 25, 2008, the Registrant signed an additional loan agreement with Excalibur, a then related party, pursuant to which the Registrant loaned Excalibur $500,000 at the interest rate of 3.75% per month with a term of 30 days with an extension of six months. On December 25, 2008, the Company extended the loan to May 25, 2009. On May 25, 2009, the Company extended this loan for another six months and decreased the interest rate to 12.5% per annum.

On May 13, 2009, the Company signed another loan agreement denominated in U.S. dollars with Excalibur to lend $600,000 at interest rate of 12.5% per annum with a term of six months.

Note Receivable – Related party

The Board of Directors approved two non-interest bearing unsecured demand loans in the amount of U.S. $330,000 and $1,567,000 respectively on July 11 and July 25 to Yeuh-Chi Liu, a vendor and a member of the board of directors of Excalibur. As of the date hereof the full principal amount remains outstanding.

Off-Balance Sheet Arrangements

The Registrant does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Registrant’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Quantitative and Qualitative Disclosures about Market Risk

For our fiscal year ended March 31, 2009, 100% of our total sales consisted of sales outside of the United States, with 0% of total sales denominated in currencies other than the United States dollar. In addition, from time to time we execute intercompany loans with our foreign subsidiaries that are denominated in foreign currencies.

We are exposed to foreign currency risks that arise from normal business operations. These risks include the translation of local currency balances of our Company and foreign subsidiaries, intercompany loans with foreign subsidiaries and transactions denominated in foreign currencies. It is our policy not to enter into derivative financial instruments for speculative purposes. We do not hedge our exposure to the translation of reported results of our foreign subsidiaries from local currency to United States dollars. A 10% adverse change in the underlying foreign currency exchange rates would not be significant to our financial condition or results of operations.

Critical Accounting Policies

The Registrant’s financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. The Registrant believes that the following are some of the more critical judgment areas in the application of the Registrant’s accounting policies that currently affect the Registrant’s financial condition and results of operations.

Cash & Cash Equivalents

Cash and cash equivalents include cash on hand and cash in time deposits, and certificates. The Company maintains its accounts in various banks and several which exceed the federally insured limit.

Inventories

Inventories are valued at the lower of cost or market. Product cost includes completed merchandise and is accounted for using the first-in, first-out basis. The Company has two warehouses, one in City of Industry, CA and the other one in Kowloon, HK. On a quarterly basis, the Company reviews inventory levels in each country for estimated obsolescence or unmarketable items, as compared to future demand requirements and the shelf life of the various products. Based on this review, the Company records inventory write-downs when costs exceed expected net realizable value. Historically, the Company estimates of the obsolete or unmarketable items have been insignificant.

SFAS No. 151, “Inventory Costs,” (“SFAS 151”) clarifies that abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage) should be recognized as period charges, rather than as an inventory value. This standard also requires the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. The Registrant’s existing accounting policy for inventory valuation is generally consistent with this guidance, and therefore, the adoption of SFAS 151 did not have a significant impact on the Registrant’s 2008 and 2009 financial results.

Notes Receivables from Related Parties

Notes receivable consists of receivables from the Registrant’s loans to Excalibur, Taiwan, and Yeuh-Chi Liu, each a related party. As of June 30, 2009, outstanding loans to Excalibur totaled $ 4.06 million and to Yeuh-Chi Liu $1.89 million. The Registrant periodically reviews notes receivables for reliability and collectability, and recent account activities. If the Registrant’s estimates regarding collectability are inaccurate or an unforeseen matter is to occur, the Registrant may be exposed to a write-offs or bad debts. As of June 30, 2009, the Registrant does not have an allowance for bad debts.

Investment

The Registrant accounts for equity investments in entities in which it exercises significant influence but does not own a majority equity interest in or have control using the equity method. The Registrant evaluates its equity investments for impairment whenever events and changes in business circumstances indicate the carrying amount of the equity investment may not be fully recoverable. On October 25, 2008, the Registrant, through its wholly-owned subsidiary, EFT Investment Co. Ltd., invested $19,193,000 in Excalibur International Marine Corporation for 48.81% of its ownership. The Registrant recorded this investment using the equity method because of its significant influence over the entity.

Unearned Revenues

Revenue

The Registrant receives payment by cash only for orders from customers or Affiliates. Cash consideration given by the Registrant to its sales Affiliates is considered to be a reduction of the selling prices of the Company’s products, thus, is recorded as a reduction of revenue. Sales revenues are recorded when the merchandise delivery is completed.

Foreign Currency Translation

The Company’s functional currency is the U.S. dollar and its operation in Hong Kong uses Hong Kong dollar (HKD) as its functional currency. An entity’s functional currency is the currency of the primary economic environment in which the entity operates. Management must use judgment in determining an entity’s functional currency, assessing economic factors including cash flow, sales price, sales market, expense, financing and inter-company transactions and arrangements. Impact from exchange rate changes related to transactions denominated in currencies other than the functional currency is recorded as a gain and loss in the statements of operations, while impact from exchange rate changes related to translating a foreign entity’s financial statements from the functional currency to its reporting currency, the U.S. dollar, is disclosed and accumulated in a separate component under the equity section of the balance sheets. Different judgments or assumptions resulting in a change of functional currency may materially impact the Registrant’s financial position and results of operations.

Income Taxes

The Registrant uses the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating losses and tax credit carry-forwards. Management must make assumptions, judgments and estimates to determine the current provision for income taxes and the deferred tax assets and liabilities and any valuation allowance to be recorded against a deferred tax asset. Management’s judgments, assumptions and estimates relative to the current provision for income tax take into account current tax laws, management’s interpretation of current tax laws and possible outcomes of current and future audits conducted by foreign and domestic tax authorities. Changes in tax law or management’s interpretation of tax laws and the resolution of current and future tax audits could significantly impact the amounts provided for income taxes in the financial statements. Management’s assumptions, judgments and estimates relative to the value of a deferred tax asset take into account predictions of the amount and category of future taxable income, such as income from operations. Actual operating results and the underlying amount and category of income in future years could render management’s current assumptions, judgments and estimates of recoverable net deferred taxes inaccurate. Any of the assumptions, judgments and estimates mentioned above could cause our actual income tax obligations to differ from the estimates, thus materially impacting the financial position and results of operations.

RECENT ACCOUNTING PRONOUNCEMENTS

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

For the quarter and three month period ended June 30, 2009, 100% of our total sales consisted of sales outside of the United States, with 0% of total sales denominated in currencies other than the United States dollar. In addition, from time to time we execute intercompany loans with our foreign subsidiaries that are denominated in foreign currencies.

Item 4T. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Principal Executive Officer and Principal Financial Officer are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Our Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2009. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure.

Changes in Internal Control over Financial Reporting

During the quarter ended June 30, 2009, there were no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are not a party to nor are we threatened with or have any knowledge of any claims or legal actions that would have a material adverse impact on our financial position, operations or potential performance.

Item 1A. Risk Factors.

There have not been any material changes from the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2009 filed with the SEC on July 17, 2009.

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

In November 2007, the Company issued shares of common stock and options to its executive officers in consideration of services rendered by such individuals to the Company. The Company has issued these securities pursuant to the exemptions from the registration requirements of the Securities Act of 1933, as amended, afforded the Company under Section 4(2) promulgated thereunder due to the fact that such issuances did not involve a public offering of securities.

In November 2007, the Company issued the shares each to the following persons upon the conversion of debt. The Company has issued an aggregate of 7,550,000 shares to a total of seven accredited investors for $0.0018 per share. These securities issued these securities pursuant to the exemptions from the registration requirements of the Securities Act of 1933, as amended, afforded the Company under Section 4(2) promulgated thereunder due to the fact that such issuances did not involve a public offering of securities.

On November 18, 2007, EFT BioTech Holdings, Inc. (formerly HumWare Media Corporation) (the “Company”) issued an aggregate of 53,300,000 shares of its Common Stock in connection with a share exchange with EFT BioTech, Inc. (“EFT BioTech”), a Nevada corporation formed on September 18, 2007, pursuant to which the Company acquired 100% of the issued and outstanding shares of EFT BioTech in consideration for 53,300,000 shares of the Company’s Common Stock, representing 87.01% of the Company’s capital stock on a fully-diluted basis.

Below is a list of the investors who received shares of EFT BioTech Holdings, Inc. in the share exchange:

Stockholder:	No. of EFT BioTech Holdings, Inc. Shares Received in Share Exchange:
Dragon Win Management Limited (1)		52,099,000
George Currry (2)		300,000
Jin Qin Liu (3)		300,000
Jack Jie Qin (4)		1,000
Tony Kwok-Man So (5)		300,000
Joseph B. Williams (6)		300,000

(1)

The board of directors of Dragon Win Management Limited has voting and dispositive control over the Company. Nin-Sheng Cai and Xiao-Bao Hu are currently the two directors of Dragon Win Management Limited, and thereby control 68.57% of our issued and outstanding common stock.

(2)

Chief Marketing Officer of the Company.

(3)

Former Operations Manager of the Company.

(4)

President, Chief Executive Officer and Chairman of the Company.

(5)

Former Treasurer of the Company.

(6)

Former Chief Financial Officer, Chief Administrative Officer, Secretary and Director of the Company.

Regulation S Private Offering

In March 2008, we commenced a private placement of Units exclusively to non-U.S. residents at a purchase price of $3.80 per Unit under the exemption from the registration requirements of the Securities Act of 1933, as amended, afforded the Company under Regulation S thereunder due to the fact that offers and sales were only made to non-U.S. residents. The offering was conducted on a best-efforts basis and the placement agent was Buckman, Buckman & Reid, Inc., a registered broker/dealer (“Buckman”). The original offering was up to 10,000,000 but was increased by Buckman due to the terms of the Private Placement Memorandum.

Each Unit consisted of one share of Common Stock and one Redeemable Common Stock Purchase Warrant (the “Warrant”). Each Warrant is exercisable to purchase one share of Common Stock at $3.80 per share until the second anniversary date of the date of issuance. The Warrants are redeemable, on a pro rata basis, by the Company at a purchase price of $0.00001 per share within 30 days from the tenth (10th) consecutive trading day that the closing sales price, or the average of the closing bid and asked price in the event that the Company’s Common Stock trades on the OTCBB or any public securities market within the U.S., is at least $11.

The private placement terminated on October 25, 2008 and the Company sold an aggregate of 14,890,040 Units for net proceeds of $56,582,152 consisting of a total of 14,890,040 shares of Common Stock and 14,890,040 Warrants. As of the date hereof, none of the warrant have been exercised and none of the warrants have been redeemed.

The table below sets forth management’s used and currently planned allocation of the net proceeds of the offering.

Proceeds from Sale of Units
Category:	Amount (USD$):		Percentage of Net Proceeds:

Loan to Excalibur International Marine Corporation (1)	$	6,231,717		11	%
Investment to Excalibur International Marine Corporation (1)		19,193,000		34	%
Marketing Development (2)		20,000,000		35	%
Business Development (2)(3)		11,157,435		20	%
TOTAL	$	56,582,152		100	%

(1)

See Liquidity Section.

(2)

Currently planned. The allocation of these net proceeds of the Offering represents our best estimate based upon our present plans and certain assumptions regarding general economic and industry conditions and our future revenues and expenditures. We reserve the right to reallocate these proceeds within the above-mentioned categories or to other purposes if management believes it is in our best interests. We will not however use any of the net proceeds to pay any debt or other obligations owed to any party or management without the consent of the Placement Agent.

(3)

We anticipate using funds from the Private Placement for investments and acquisitions to allow us to grow our existing business operations and to enter into additional territories. To date, we have not located any acquisition targets nor do we have any commitments for capital expenditures other than Excalibur. We believe that due to the current global economic recession, there might be material opportunities for us to acquire smaller companies at discount prices. There can be no assurances that we will be successful in doing so. Our expansion will rely to a great degree on global economic conditions and perceived future changes. Until such time, we intend to retain our cash reserves to fund our operations.

Item 3. Defaults upon Senior Securities.

None

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

None

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit No.:		Description:
31.1		Certification by Jack Jie Qin, Principal Executive Officer of EFT BioTech Holdings, Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.

31.2		Certification by Sharon Tang, Principal Financial and Accounting Officer of EFT BioTech Holdings, Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1		Certification by Sharon Tang, Principal Financial and Accounting Officer of EFT BioTech Holdings, Inc., pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended.

Exhibit No.:		Description:
32.2		Certification by Sharon Tang, Principal Financial and Accounting Officer of EFT BioTech Holdings, Inc., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Item 7. Subsequent Events.

In June of 2009, EFT has developed its own reverse auction program, a proprietary software program, for the purposes of increasing revenues by attracting new members to join EFT’s affiliated program. In a reverse auction the objective is to bid the price of a product down within a predetermined time frame unlike an ordinary auction (also know as a forward auction) where bidders bid the price up and the highest bidder wins the product or service at the conclusion of bidding. The reverse auction program was beta-tested and introduced to all affiliates in June 2009. The Company decided to officially launch this program in July 2009.

On July 22, 2009, the Board of directors of EFT Biotech Holdings, Inc. (Company) appointed Norman Ko, Jerry B. Lewin and Visman Chow as new members of the Board of Directors of the Company. Mr. Norman Ko is elected as the Chairman for both audit and compensation committees. George Curry is elected as Corporate Secretary of the Company.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

	EFT BIOTECH HOLDINGS, INC.

Dated: August 14, 2009	/s/ Jack Jie Qin
	Jack Jie Qin
	Chief Executive Officer, President and Chairman
	(Principal Executive Officer)

Dated: August 14, 2009	/s/ Sharon Tang
	Sharon Tang
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

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Eft (EFTB) Inactive 10-Q2010 Q1 Quarterly report

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