Eft (EFTB) 10-Q/A 2010 Q1 Quarterly report (amended)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Amendment No. 2)

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) 20-1211204 (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	¨	Accelerated filer	¨
Non-accelerated filer	¨	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 January 15, 2010, there were 75,983,205 shares of common stock, par value $0.00001 per share, of the Registrant issued and outstanding.

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TABLE OF CONTENTS

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	4-19
SIGNATURES		19

2

PART I - FINANCIAL INFORMATION

EXPLANATORY NOTE

The Registrant is filing this Amendment No. 2 to its Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 to amend the disclosure in Note 13 to the Registrant’s financial statements pursuant to comment letters, dated November 25, 2009 and December 23, 2010, from the SEC. The remaining items of the initial Form 10-Q have not been changed and are incorporated by reference herein.  The Registrant is also refiling Exhibits 31 and 32 with this Amendment No. 2.

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

3

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.

4

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. 

5

EFT BIOTECH HOLDINGS, INC.

Consolidated Statements of Cash Flows (unaudited)

	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 (used in) operating activities		2,633,625			(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. 

6

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.

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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

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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.

9

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.

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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

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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.

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	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.

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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.  

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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		58,567,750	48.81	%
2	Lu, TsoChun		10,000,000	8.33	%
3	Chiao, Jen-Ho		8,200,000	6.83	%
5	Lin, Ming-i		5,170,000	4.31	%
4	Ms. Ku		5,000,000	4.17	%
6	Yeuh-Chi Liu		4,766,000	3.97	%
7	Steve Hsiao		4,639,250	3.87	%
8	Wen Investment		4,000,000	3.33	%
	Others		19,657,000	16.38%
	Total		120,000,000	100	%

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

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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 (10 th) 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:

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	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 FIN 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 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 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

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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

The Company rents office space for its service center in Korea.  The lease provides for monthly lease payments approximating $9,330 USD starting on June 25, 2009 and expires on June 24, 2011.  Future minimum lease payments under the operating leases as of June 30, 2009 approximate the following:

Month Ending June 30,
2010	$	83,970
2011		111,960
2012		27,990
Total	$	223,920

The Company rents storage space for its service center in Korea.  The lease provides for monthly lease payments approximating $1,134 USD starting on June 25, 2009 and expires on June 24, 2011.  Future minimum lease payments under the operating leases as of June 30, 2009 approximate the following:

Month Ending June 30,
2010	$	10,206
2011		13,608
2012		3,402
Total	$	27,216

The Company rents office space for its service center in Vietnam.  The lease provides for monthly lease payments approximating $2,420 USD starting on May 9, 2009 and expires on May 9, 2011.  Future minimum lease payments under the operating leases as of June 30, 2009 approximate the following:

Month Ending June 30,
2010	$	21,780
2011		29,040
2012		2,420
Total	$	53,240

The Company rents office space for its service center in Vietnam SaiKong.  The lease provides for monthly lease payments approximating $1,400 USD starting on August 8, 2009 and expires on August 8, 2011.  Future minimum lease payments under the operating leases as of June 30, 2009 approximate the following:

Month Ending June 30,
2010	$	12,600
2011		16,800
2012		5,600
Total	$	35,000

The Company rents office space for its service center in Thailand.  The lease provides for monthly lease payments approximating $1,860 USD starting on April 20, 2009 and expires on February 28, 2010.  Future minimum lease payments under the operating leases as of June 30, 2009 approximate the following:

Month Ending June 30,
2010	$	16,740

The Company rents office space for its service center as Thailand Center.  The lease provides for monthly lease payments approximating $564 USD starting on April 1, 2009 and expires on February 28, 2010.  Future minimum lease payments under the operating leases as of June 30, 2009 approximate the following:

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Month Ending June 30,
2010	$	5,076

The Company rents office space for its auction product purchase center in China.  The lease provides for monthly lease payments approximating $732 USD starting on June 1, 2009 and expires on May 30, 2010.  Future minimum lease payments under the operating leases as of June 30, 2009 approximate the following:

Month Ending June 30,
2010	$	6,588
2011		1,464
Total	$	8,052

The Company rents another office space for its auction product purchase center in China.  The lease provides for monthly lease payments approximating $264 USD starting on July 15, 2009 and expires on July 14, 2010.  Future minimum lease payments under the operating leases as of June 30, 2009 approximate the following:

Month Ending June 30,
2010	$	2,376
2011		1,056
Total	$	3,432

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.

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: January 15, 2010	/s/ JACK JIE QIN
	Jack Jie Qin
	Chief Executive Officer, President and Chairman
	(Principal Executive Officer)
Dated: January 15, 2010	/s/ SHARON TANG
	Sharon Tang
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

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