**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549




**FORM
      10-QSB/A**




x Quarterly
      Report under Section 13 or 15(d) of the Securities Exchange Act of 1934




For
      the
      quarterly period ended **June
      30, 2006**




 ̈ Transition
      Report under Section 13 or 15(d) of the Exchange Act




For
      the
      transition period from __________ to __________




Commission
      File Number: **000-29803**





**EYI
        INDUSTRIES, INC.**
 (Exact
        name of small business issuer as specified in its charter)
  **Nevada**
              
              **88-0407078**(State
                  or other jurisdiction of
              
              (IRS
                  Employer Identification No.)incorporation
                  or organization)**7865
                  Edmonds Street****Burnaby,
                  BC CANADA**
              
              **V3N
                  1B9**(Address
                  of principal executive offices)
              
              (Zip
                  Code)Issuer's
                  telephone number:
              
              **(604)
                  759-5031**
  **NOT
        APPLICABLE**


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






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


Yes x No  ̈






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


Yes  ̈ No x




State
      the
      number of shares outstanding of each of the issuer's classes of common stock,
      as
      of the latest practicable date: 286,975,475 shares of common stock issued and
      outstanding as of **** August
      21,
      2006.




Transitional
                  Small Business Disclosure Format (check one):
              Yes ̈Nox







**Explanatory
      Note**




This
      Amended Quarterly Report on Form 10-QSB/A dated August 23, 2006 is being filed
      to:




(i)
            correct
                typographical errors contained in the registrant's revenues and gross
                profit disclosed under the heading "Item 2. Management's Discussion
                and
                Analysis or Plan of Operation - Results of Operations" for the three
                months ended June 30, 2006;




Other
      than the foregoing items and conforming changes related thereto, no part of
      the
      Quarterly Report on Form 10-QSB filed on August 21, 2006 is being amended,
      and
      the filing of this Amended Quarterly Report on Form 10-QSB/A should not be
      understood to mean that any other statements contained therein are untrue or
      incomplete as of any date subsequent to August 21, 2006.










**PART
      I - FINANCIAL INFORMATION**




**ITEM
      1.            FINANCIAL
      STATEMENTS.**






The
      accompanying unaudited financial statements have been prepared in accordance
      with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B, and,
      therefore, do not include all information and footnotes necessary for a complete
      presentation of financial position, results of operations, cash flows, and
      stockholders' equity in conformity with accounting principles generally accepted
      in the United States of America. In the opinion of management, all adjustments
      considered necessary for a fair presentation of the results of operations and
      financial position have been included and all such adjustments are of a normal
      recurring nature. Operating results for the six month period ended June 30,
      2006
      are not necessarily indicative of the results that can be expected for the
      year
      ending December 31, 2006.




As
      used in
      this quarterly report, the terms "we", "us", "our", “EYI” and "our company" mean
      EYI Industries, Inc. and its subsidiaries unless otherwise indicated. All dollar
      amounts in this quarterly report are in U.S. dollars unless otherwise stated.









**EYI
                INDUSTRIES, INC.****CONSOLIDATED
                BALANCE SHEETS**June
                30, 2006
            
            December
                31, 2005(Unaudited)**ASSETS**CURRENT
                ASSETSCash
            
            $
            3,066,354
            
            $
            25,639Accounts
                receivable, net of allowance
            
            
            54,387
            
            
            48,783Related
                party receivables
            
            
            120
            
            
            -Prepaid
                expenses
            
            
            74,965
            
            
            12,387Inventory
            
            
            427,432
            
            
            295,248TOTAL
                CURRENT ASSETS
            
            
            3,623,258
            
            
            382,057OTHER
                ASSETSProperty,
                plant and equipment, net
            
            
            64,863
            
            
            49,671Deposits
            
            
            66,788
            
            
            67,603TOTAL
                OTHER ASSETS
            
            
            131,651
            
            
            117,274INTANGIBLE
                ASSETS
            
            
            13,944
            
            
            15,044**TOTAL
                ASSETS**
            
            $
            3,768,853
            
            $
            514,375**LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)**CURRENT
                LIABILITIESAccounts
                payable and accrued liabilities
            
            $
            1,493,170
            
            $
            1,929,049Accounts
                payable - related parties
            
            
            512,720
            
            
            328,038Convertible
                debt - related party, net of discount
            
            
            402
            
            
            -Derivative
                on convertible debt
            
            
            2,176,695
            
            
            -Interest
                payable, convertible debt
            
            
            41,096
            
            
            -Notes
                payable - related party
            
            
            40,000
            
            
            90,000TOTAL
                CURRENT LIABILITIES
            
            
            4,264,083
            
            
            2,347,087Net
                liabilities from discontinued operations
            
            
            375,344
            
            
            375,344MINORITY
                INTEREST IN SUBSIDIARY
            
            
            200,518
            
            
            262,057STOCKHOLDERS'
                EQUITY (DEFICIT)Preferred
                stock, $0.001 par value; 10,000,000 sharesauthorized,
                no shares issued and outstanding
            
            
            -
            
            
            -Common
                stock, $0.001 par value; 1,000,000,000 sharesauthorized,
                263,267,934 and 217,600,875 shares issuedand
                outstanding, respectively
            
            
            263,268
            
            
            217,600Additional
                paid-in capital
            
            
            8,717,640
            
            
            6,155,518Stock
                options and warrants
            
            
            4,584,530
            
            
            2,698,984Subscription
                receivable
            
            
            (195,000
            )
            
            (195,000
            )Accumulated
                deficit
            
            
            (14,441,530
            )
            
            (11,347,215
            )TOTAL
                STOCKHOLDERS' EQUITY (DEFICIT)
            
            
            (1,071,092
            )
            
            (2,470,113
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)**
            
            $
            3,768,853
            
            $
            514,375









**EYI
                INDUSTRIES, INC.****CONSOLIDATED
                STATEMENTS OF OPERATIONS**Three
                Months Ended
            
            Three
                Months Ended
            
            Six
                Months Ended
            
            Six
                Months EndedJune
                30, 2006
            
            June
                30, 2005
            
            June
                30, 2006
            
            June
                30, 2005(Unaudited)
            
            (Unaudited)
            
            (Unaudited)
            
            (Unaudited)**REVENUE,
                NET OF RETURNS AND ALLOWANCES**
            
            $
            1,009,978
            
            $
            1,225,216
            
            $
            2,118,737
            
            $
            2,514,283**COST
                OF GOODS SOLD**
            
            
            390,896
            
            
            254,402
            
            
            678,848
            
            
            489,936**GROSS
                PROFIT BEFORE COMMISSION EXPENSE**
            
            
            619,082
            
            
            970,814
            
            
            1,439,889
            
            
            2,024,347**COMMISSION
                EXPENSE**
            
            
            379,274
            
            
            450,857
            
            
            764,717
            
            
            922,462**GROSS
                PROFIT AFTER COST OF GOODS SOLD AND****COMMISSION
                EXPENSE**
            
            
            239,808
            
            
            519,957
            
            
            675,172
            
            
            1,101,885**OPERATING
                EXPENSES**Consulting
                fees
            
            
            224,363
            
            
            240,848
            
            
            484,099
            
            
            478,810Legal
                and professional fees
            
            
            86,760
            
            
            80,512
            
            
            161,242
            
            
            146,757Customer
                service
            
            
            66,587
            
            
            65,471
            
            
            107,003
            
            
            152,005Finance
                and administration
            
            
            146,567
            
            
            92,898
            
            
            428,694
            
            
            300,978Sales
                and marketing
            
            
            133,668
            
            
            1,273
            
            
            212,292
            
            
            4,991Telecommunications
            
            
            34,365
            
            
            124,890
            
            
            65,025
            
            
            242,258Wages
                and benefits
            
            
            321,822
            
            
            371,526
            
            
            599,393
            
            
            743,152Warehouse
                expense
            
            
            67,775
            
            
            16,819
            
            
            130,673
            
            
            61,846TOTAL
                OPERATING EXPENSES
            
            
            1,081,996
            
            
            994,237
            
            
            2,188,421
            
            
            2,130,797**LOSS
                FROM OPERATIONS**
            
            
            (842,188
            )
            
            (474,280
            )
            
            (1,513,249
            )
            
            (1,028,912
            )**OTHER
                INCOME (EXPENSES)**Interest
                and other income
            
            
            112
            
            
            319
            
            
            243
            
            
            3,468Interest
                expense
            
            
            (47,588
            )
            
            (34,442
            )
            
            (56,734
            )
            
            (54,578
            )Financing
                fees
            
            
            (89,002
            )
            
            (62,500
            )
            
            (306,937
            )
            
            (62,500
            )Loss
                on derivatives
            
            
            (1,295,508
            )
            
            -
            
            
            (1,295,508
            )
            
            -Foreign
                currency gain (discount)
            
            
            11,663
            
            
            (13,191
            )
            
            16,332
            
            
            (149,487
            )TOTAL
                OTHER INCOME (EXPENSES)
            
            
            1,420,323
            )
            
            (109,814
            )
            
            (1,642,604
            )
            
            (263,097
            )**NET
                LOSS BEFORE TAXES**
            
            
            (2,262,511
            )
            
            (584,094
            )
            
            (3,155,853
            )
            
            (1,292,009
            )**PROVISION
                FOR INCOME TAXES**
            
            
            -
            
            
            -
            
            
            -
            
            
            -**NET
                LOSS BEFORE ALLOCATION TO MINORITY INTEREST**
            
            
            (2,262,511
            )
            
            (584,094
            )
            
            (3,155,853
            )
            
            (1,292,009
            )**ALLOCATION
                OF LOSS TO MINORITY INTEREST**
            
            
            44,119
            
            
            17,161
            
            
            61,539
            
            
            32,749**ALLOCATION
                OF LOSS TO DISCONTINUED OPERATIONS**
            
            
            -
            
            
            (296,000
            )
            
            -
            
            
            (387,461
            )**NET
                LOSS**
            
            $
            (2,218,392
            )
            $
            (862,933
            )
            
            (3,094,314
            )
            $
            (1,646,721
            )**BASIC
                AND DILUTED****NET
                LOSS PER COMMON SHARE**
            
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (0.01
            )
            $
            (0.01
            )**WEIGHTED
                AVERAGE NUMBER OF****COMMON
                STOCK SHARES OUTSTANDING****FOR
                BASIC AND DILUTED CALCULATION**
            
            
            261,271,926
            
            
            157,060,345
            
            
            261,271,926
            
            
            157,060,345




The
      accompanying condensed notes are an integral part of these
      financials







**EYI
                INDUSTRIES, INC.**
              **CONSOLIDATED
                STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)****Common
                Stock**
            
            **Additional****Number
                of**
            
            
            
            **Paid-in**
            
            **Subscription**
            
            **Option/**
            
            **Accumulated****Shares**
            
            **Amount**
            
            **Capital**
            
            **Receivable**
            
            **Warrants**
            
            **Deficit**
            
            **Total**Balance
                December 31, 2004
            
            
            162,753,292
            
            $
            162,753
            
            $
            3,048,606
            
            $
            (15,000
            )
            $
            2,563,044
            
            $
            (7,085,205
            )
            
            
            
            $
            (1,325,802
            )Stock
                issued at $0.06 per
              Share
                for promissory note for exercise of options
            
            
            3,000,000
            
            
            3,000
            
            
            177,000
            
            
            (180,000
            )
            
            -
            
            
            -
            
            
            
            
            
            -Vested
                stock options issued for consulting at an average price of $0.07
                per
                share
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            35,250
            
            
            -
            
            
            
            
            
            35,250Vested
                stock options issued for employee compensation at an average price
                of
                $0.07 per share
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            133,750
            
            
            -
            
            
            
            
            
            133,750Stock
                issued to employee for financing guaranty & pledge valued at $0.05 per
                share
            
            
            800,000
            
            
            800
            
            
            39,200
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            40,000Consultant-options
                exercised
            
            
            250,000
            
            
            250
            
            
            14,750
            
            
            -
            
            
            (5,000
            )
            
            -
            
            
            
            
            
            10,000Gladys
                Sargeant 506 Subscription Agreement
            
            
            1,000,000
            
            
            1,000
            
            
            4,000
            
            
            -
            
            
            15,000
            
            
            -
            
            
            
            
            
            20,000Vested
                stock option issued for consulting at an average price of $0.03 per
                share
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            62,250
            
            
            -
            
            
            
            
            
            62,250Cancelled
                stock options issued for compensation and consulting at an average
                price
                of $0.08 per option
            
            
            -
            
            
            -
            
            
            425,300
            
            
            -
            
            
            (425,300
            )
            
            -
            
            
            
            
            
            -Cancelled
                stock options issued for compensation at $0.20
            
            
            -
            
            
            -
            
            
            2,400
            
            
            -
            
            
            (2,400
            )
            
            -
            
            
            
            
            
            -Stock
                issued to TAIB Bank to retire $75,000 of $300,000
                debenture
            
            
            2,027,027
            
            
            2,027
            
            
            72,973
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            75,000Stock
                issued to TAIB Bank to retire $170,000 of $300,000 debenture plus
                interest
                of $10,830
            
            
            4,487,096
            
            
            4,487
            
            
            176,343
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            180,830Stock
                issued to TAIB Bank to retire $5,000 debenture plus interest of
                $14,245
            
            
            375,146
            
            
            375
            
            
            18,870
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            19,245Stock
                issued to Agora as part of contract
            
            
            250,000
            
            
            250
            
            
            12,250
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            12,500Stock
                issued to Consultant as part of contract
            
            
            500,000
            
            
            500
            
            
            34,500
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            35,000Stock
                issued for exercise of options at $0.08 per share
            
            
            100,000
            
            
            100
            
            
            7,900
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            8,000Stock
                issued to Cornell to retire prom note
            
            
            22,789,581
            
            
            22,789
            
            
            1,008,099
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            1,030,888Vested
                stock options issued for consulting at an average price of $0.20
                per
                share
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            33,500
            
            
            -
            
            
            
            
            
            33,500Vested
                stock options issued for employee and management compensation at
                an
                average price of $0.20 per share
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            27,840
            
            
            -
            
            
            
            
            
            27,840Stock
                issued to Cornell in exchange for $700,000 pursuant to
                SEDA
            
            
            19,268,733
            
            
            19,269
            
            
            680,731
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            700,000Cancelled
                stock options issued for compensation
            
            
            -
            
            
            -
            
            
            10,500
            
            
            -
            
            
            (10,500
            )
            
            -
            
            
            
            
            
            -Vested
                stock options for consulting at an average price of $0.20 per
                share
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            271,550
            
            
            -
            
            
            
            
            
            271,550Beneficial
                conversion of convertible debt
            
            
            -
            
            
            -
            
            
            422,096
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            422,096Net
                loss for year ended December 31, 2005
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (4,262,010
            )
            
            
            
            
            (4,262,010
            )Balance,
                December 31, 2005
            
            
            217,600,875
            
            $
            217,600
            
            $
            6,155,518
            
            $
            (195,000
            )
            $
            2,698,984
            
            
            (11,347,215
            )
            
            
            
            $
            (2,470,113
            )Vested
                stock options issued for consulting at an average price of $0.20
                per
                share
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            3,750
            
            
            -
            
            
            
            
            
            3,750Stock
                issued to Cornell in exchange for $1,084,565 pursuant to the
                SEDA
            
            
            42,941,686
            
            
            42,942
            
            
            1,041,623
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            1,084,565Shares
                returned to treasury
            
            
            (268,639
            )
            
            (269
            )
            
            269
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            -Beneficial
                conversion of convertible debt
            
            
            -
            
            
            -
            
            
            200,207
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            200,207Stock
                issued to Cornell to retire portion of debenture
            
            
            1,497,006
            
            
            1,497
            
            
            23,503
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            25,000Stock
                issued to Certain Wealth to retire portion of debenture
            
            
            664,671
            
            
            665
            
            
            10,435
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            11,000Stock
                issued to TAIB Bank to retire portion of debenture
            
            
            832,335
            
            
            832
            
            
            13,068
            
            
            -
            
            
            -
            
            
            -
            
            
            
            
            
            13,900Warrants
                issued to Cornell Capital for financing services
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            3,148,413
            
            
            0
            
            
            
            
            
            3,148,413Vested
                stock options for consulting at $0.10 per share
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            5,000
            
            
            0
            
            
            
            
            
            5,000Vested
                stock options issued to employees at $0.02 per share
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            1,400
            
            
            0
            
            
            
            
            
            1,400Expired
                Consultant stock options
            
            
            -
            
            
            -
            
            
            961,300
            
            
            -
            
            
            (961,300
            )
            
            0
            
            
            
            
            
            -Expired
                employee stock options
            
            
            -
            
            
            -
            
            
            311,717
            
            
            -
            
            
            (311,717
            )
            
            0
            
            
            
            
            
            -Net
                loss for period ended
              June
                30, 2006
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (3,094,314
            )
            
            
            
            
            (3,094,314
            )Balance
                June 30, 2006 (Unaudited)
            
            
            263,267,934
            
            $
            263,268
            
            $
            8,717,640
            
            $
            (195,000
            )
            $
            4,584,530
            
            $
            (14,441,529
            )
            
            
            
            $
            (1,071,092
            )




The
      accompanying condensed notes are an integral part of these
      financials










**EYI
                INDUSTRIES, INC.****CONSOLIDATED
                STATEMENTS OF CASH FLOWS**Six
                Months Ended
            
            Six
                Months Ended(Unaudited)
              June
                30, 2006
            
            June
                30, 2005**CASH
                FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES**Net
                loss
            
            $
            (3,094,314
            )
            $
            (1,646,721
            )Loss
                allocated to minority interest
            
            
            61,539
            
            
            32,749(3,155,853
            )
            
            (1,679,470
            )Adjustments
                to reconcile net lossto
                net cash used by operating activities:Depreciation
                and amortization
            
            
            9,918
            
            
            44,064Stock
                and warrants issued for employee compensation and
                consulting
            
            
            10,150
            
            
            231,250Loss
                (gain) on valuation of derivative
            
            
            1,295,508
            
            
            -Stock
                issued for financing guaranty & pledge
            
            
            -
            
            
            40,000Discount
                recognized on convertible debt
            
            
            50,002
            
            
            38,159Beneficial
                conversion of convertible debt
            
            
            200,207
            
            
            -Liabilities
                in excess of assets on discontinued operations
            
            
            -
            
            
            382,067Decrease
                (increase) in:Related
                party receivables
            
            
            (120
            )
            
            427Accounts
                receivable
            
            
            (5,603
            )
            
            5,351Prepaid
                expenses
            
            
            (62,578
            )
            
            188,013Inventory
            
            
            (132,184
            )
            
            48,431Deposits
            
            
            816
            
            
            (3,385
            )Increase
                (decrease) in:Accounts
                payable and accrued liabilities
            
            
            (435,879
            )
            
            249,301Accounts
                payable - related parties
            
            
            184,682
            
            
            175,096Notes
                payable, related party
            
            
            (50,000
            )
            
            -Interest
                payable, convertible debt
            
            
            41,096
            
            
            -Net
                cash used by operating activities
            
            
            (2,049,838
            )
            
            (280,696
            )**CASH
                FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES**Decrease
                (increase) in restricted cash
            
            
            -
            
            
            100,248Decrease
                (increase) in property, plant, and equipment
            
            
            (24,012
            )
            
            (12,726
            )Net
                cash provided by investing activities
            
            
            (24,012
            )
            
            87,522**CASH
                FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES**Net
                change in bank indebtedness
            
            
            -
            
            
            (48,344
            )Issuance
                of stock, net of private placement costs & warrants
            
            
            -
            
            
            8,500Proceeds
                from Cornell SEDA
            
            
            1,084,565
            
            
            -Net
                proceeds from loan payable - Cornell
            
            
            -
            
            
            200,000Net
                proceeds from convertible debt
            
            
            4,030,000
            
            
            -Net
                cash provided by financing activities
            
            
            5,114,565
            
            
            160,156Net
                increase in cash and cash equivalents
            
            
            3,040,715
            
            
            (33,018
            )**CASH
                - Beginning of Year**
            
            
            25,639
            
            
            33,018**CASH
                - End of Period**
            
            $
            3,066,354
            
            $
            -**SUPPLEMENTAL
                CASH FLOW DISCLOSURES:****Interest
                expense paid**
            
            $
            56,756
            
            $
            34,442**Income
                taxes paid**
            
            $
            -
            
            $
            -**NON-CASH
                INVESTING AND FINANCING TRANSACTIONS:**Beneficial
                conversion of convertible debt
            
            $
            200,207
            
            $
            -Stock
                subscription for promissory note
            
            $
            -
            
            $
            180,000Stock
                options and warrants vested for consulting and
                compensation
            
            $
            10,150
            
            $
            231,250Stock
                issued for options exercised in lieu of legal fees
            
            $
            -
            
            $
            10,000Stock
                and warrants issued through private placement
            
            $
            -
            
            $
            20,000




The
      accompanying condensed notes are an integral part of these
      financials









**EYI
                INDUSTRIES, INC.**
              **CONDENSED
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**
              **June
                30, 2006**




**NOTE
      1 - DESCRIPTION OF BUSINESS** **AND BASIS OF PRESENTATION**







Essentially
      Yours Industries, Inc. (hereinafter “EYI”) was incorporated on June 21, 2002 in
      the State of Nevada. The main business activities of Essentially Yours
      Industries, Inc. were acquired through a merger with the former entity, Burrard
      Capital, Inc., and other entities concerning EYI’s reorganization. On December
      31, 2003, EYI entered into a share exchange agreement of its stock with Safe
      ID
      Corporation (“Safe ID”). This transaction was accounted for as a share exchange
      and recapitalization. As a result of this transaction, Safe ID has changed
      its
      name to EYI Industries, Inc. (“the Company”) and is acting as the parent holding
      company for the operating subsidiaries.





The
      principal business of the Company is the marketing of health and wellness care
      products. The Company sells its products primarily through network marketing
      distributors, which in turn sell the products to the end customers. The Company
      also sells product directly and through affiliates. The Company maintains its
      principal business office in Burnaby, British Columbia.


The
      Company has six wholly owned subsidiaries. The first subsidiary is Halo
      Distribution LLC (hereinafter “Halo”), which was organized on January 15, 1999
      in the State of Kentucky. Halo was the distribution center for the Company’s
      product, in addition to other products, until April 30, 2005 at which time
      the
      Company made the decision to discontinue its operations. The second subsidiary
      is RGM International Inc., which was incorporated on July 3, 1997, in the State
      of Nevada. RGM International Inc. is a dormant investment company which owns
      one
      percent of Halo. The third subsidiary is Essentially Yours Industries (Canada)
      Inc. (hereinafter “EYI Canada”), which was organized on September 13, 2002 in
      Canada. EYI Canada markets health and wellness care products for use in Canada.
      The fourth subsidiary is 642706 B.C. Ltd., doing business as EYI Management,
      which was organized on February 22, 2002 in the province of British Columbia,
      Canada. EYI Management provides accounting, customer service and marketing
      services to the consolidated entity. The fifth subsidiary is Essentially Yours
      Industries (Hong Kong) Limited (“EYI HK”). EYI HK was organized on August 23,
      2005 in Hong Kong. EYI HK markets health and wellness care products for use
      in
      Hong Kong and China. The sixth subsidiary is Essentially Yours Industries
      (International) Limited (“EYI INTL”). EYI INTL was organized on December 6, 2005
      to facilitate our expansion throughout other Southeast Asian
      countries.




In
      addition, the Company owns approximately 98% of Essentially Yours Industries,
      Inc. (“EYII”), incorporated on June 21, 2002 in the State of Nevada. EYII
      markets health and wellness care products for use in USA. The Company also
      owns
      51% of World Wide Buyers’ Club Inc. (“WWBC”), a Nevada corporation, which was
      organized by a joint venture agreement effective May 6, 2004.




Basis
      of Presentation




The
      accompanying interim condensed financial statements are prepared in accordance
      with rules set forth in Regulation SB of the Securities and Exchange Commission.
      As said, these statements do not include all disclosures required under
      generally accepted principles and should be read in conjunction with the audited
      financial statements for the year ended December 31, 2005. In the opinion of
      management, all required adjustments which consist of normal re-occurring
      accruals have been made to the financial statements.




The
      preparation of financial statements in accordance with generally accepted
      accounting principles requires the use of estimates and assumptions that affect
      the reported amounts of assets and liabilities, disclosure of contingent assets
      and liabilities known to exist as of the date the financial statements are
      published, and the reported amounts of revenues and expenses during the
      reporting period. Uncertainties with respect to such estimates and assumptions
      are inherent in the preparation of the Company's financial statements.
      Accordingly, it is possible that the actual results could differ from these
      estimates and assumptions that could have a material effect on the reported
      amounts of the Company's financial position and results of operations.




**NOTE
      2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES**




This
      summary of significant accounting policies of EYI Industries, Inc., is presented
      to assist in understanding the Company’s financial statements. The financial
      statements and notes are representations of the Company’s management, which is
      responsible for their integrity and objectivity. These accounting policies
      conform to accounting principles generally accepted in the United States of
      America, and have been consistently applied in the preparation of the financial
      statements.










Concentration
      of Credit Risk


The
      Company maintains its cash in one commercial bank. Although the financial
      institution is considered creditworthy, at June 30, 2006 the Company's cash
      balance exceeded Federal Deposit Insurance Corporation (FDIC) limits by
      $2,961,786. (See Note 13)





Derivative
      Instruments


The
      Financial Accounting Standards Board issued Statement of Financial Accounting
      Standards No. 133, "Accounting for Derivative Instruments and Hedging
      Activities" (hereinafter "SFAS No. 133"), as amended by SFAS No. 137,
      "Accounting for Derivative Instruments and Hedging Activities - Deferral of
      the
      Effective Date of FASB No. 133", and SFAS No. 138, "Accounting for Certain
      Derivative Instruments and Certain Hedging Activities", and SFAS No. 149,
      "Amendment of Statement 133 on Derivative Instruments and Hedging Activities".
      These statements establish accounting and reporting standards for derivative
      instruments, including certain derivative instruments embedded in other
      contracts, and for hedging activities. They require that an entity recognize
      all
      derivatives as either assets or liabilities in the balance sheet and measure
      those instruments at fair value.





If
      certain conditions are met, a derivative may be specifically designated as
      a
      hedge, the objective of which is to match the timing of gain or loss recognition
      on the hedging derivative with the recognition of (i) the changes in the fair
      value of the hedged asset or liability that are attributable to the hedged
      risk
      or (ii) the earnings effect of the hedged forecasted transaction. For a
      derivative not designated as a hedging instrument, the gain or loss is
      recognized in income in the period of change.





The
      Company has determined that derivatives existed because of features of the
      convertible debt as of the balance sheet date of June 30, 2006 (See Note
      4.)





Fair
      Value of Financial Instruments


The
      Company's financial instruments as defined by Statement of Financial Accounting
      Standards No. 107, "Disclosures about Fair Value of Financial Instruments,"
      include cash, trade accounts receivable, and accounts payable and accrued
      expenses. All instruments are accounted for on a historical cost basis, which,
      due to the short maturity of these financial instruments, approximates fair
      value at December 31, 2005 and June 30, 2006.




Inventory


The
      Company records inventories at the lower of cost or market on a first-in,
      first-out basis. Product inventory is reviewed for obsolescence each month.
      Product that has a shelf-life of less than 60 days is written off or discounted.
      The Company expensed $8,599 and $6,494 for the six months ended June 30, 2006
      and twelve months ended December 31, 2005 respectively.




Revenue
      Recognition


The
      Company is in the business of selling nutritional products in three categories:
      dietary supplements; personal care products; and water filtration systems.
      Sales
      of personal care products and water filtration systems represent less than
      5% of
      the overall revenue and therefore are not classified separately in the financial
      statements. The Company recognized revenue from product sales when the products
      are shipped and title passes to the customer. Administrative fees charged to
      the
      Independent Business Associates are included in the gross sales and amounted
      to
      $38,970 and $33,550 for the three months ended June 30, 2006 and June 30, 2005
      respectively.




Stock
      Options and Warrants Granted to Employees and Non-Employees




Statement
      of Financial Accounting Standards No. 123R, “Accounting for Stock-Based
      Compensation” (“SFAS No. 123R”), defines a fair value-based method of accounting
      for stock options and other equity instruments. The Company has adopted this
      method, which measures compensation costs based on the estimated fair value
      of
      the award and recognizes that cost over the service period.





Going
      Concern


As
      shown
      in the accompanying financial statements, the Company had negative working
      capital and an accumulated deficit at June 30, 2006. The Company also has a
      history of recurring losses. These factors raise substantial doubt about the
      Company’s ability to continue as a going concern. The financial statements do
      not include any adjustments relating to the recoverability and classification
      of
      recorded assets, or the amounts and classification of liabilities that might
      be
      necessary in the event the Company cannot continue in existence.





Management
      has established plans designed to increase the sales of the Company’s products
      and decrease debt. The Company plans on continuing to reduce expenses, and
      with
      small gains in any combination of network sales, direct sales, international
      sales, and warehouse sales, believe that they will eventually be able to reverse
      the present deficit. Management intends to seek additional capital from new
      equity securities offerings that will provide funds needed to increase
      liquidity, fund internal growth and fully implement its business plan.
      Management plans include negotiations to convert significant portions of
      existing debt into equity.










The
      timing and amount of capital requirements will depend on a number of factors,
      including demand for products and services and the availability of opportunities
      for international expansion through affiliations and other business
      relationships.





**NOTE
      3 - CONVERTIBLE DEBT**





On
      April
      24, 2006 the Company entered into a securities purchase agreement to borrow
      $4,500,000 under debentures convertible into shares of the Company's common
      stock. Of this aggregate amount, $1,500,000 was funded on April 28, 2006,
      $1,500,000 was funded two business days prior to the date the registration
      statement was filed with the U.S. Securities and Exchange Commission
      (“ SEC ”)
      and
      $1,500,000 was funded two business days prior to the date that such registration
      statement is declared effective by the SEC.





The
      debentures mature on April 24, 2009, accrue interest at an annual rate of ten
      percent and are convertible into shares of the Company’s common stock at the
      option of the holder. During the quarter ended June 30, 2006, the Company
      recognized embedded derivatives in the convertible debentures. (See Note 4
      .)




On
      April
      24, 2006 the Company issued to a lender seventeen warrants to purchase up to
      an
      aggregate 124,062,678 shares of the Company’s common stock at $0.02 and $0.40
      per share. Each warrant has “piggy back” registration rights and expires five
      years from the date of issuance, on or about April 24, 2011. Following EITF
      00-19, "Accounting for Derivative Financial Instruments Indexed to, and
      Potentially Settle in, a Company's Own Stock," and SFAS No. 133, the Company
      has
      recognized an embedded equity derivative in the warrant. For accounting and
      fair
      value purposes, the equity derivative will be accounted for as a stock option,
      following SFAS No. 123(R) for valuation purposes.





**NOTE
      4 - DERIVATIVES**





Derivatives
      have been accounted for in accordance with SFAS 133, as amended, and EITF No.
      00-19, "Accounting for Derivative Financial Instruments Indexed to, and
      Potentially Settled in, a Company's Own Stock." The Company has identified
      that
      the debentures described in Note 3 have embedded derivatives. These embedded
      derivatives have been bifurcated from their respective host debt contracts
      and
      accounted for as derivative liabilities in accordance with EITF 00-19. When
      multiple derivatives exist within the loan agreements, they have been bundled
      together as a single hybrid compound instrument in accordance with SFAS No.
      133,
      Derivatives Implementation Group Implementation Issue No. B-15, "Embedded
      Derivatives: Separate Accounting for Multiple Derivative Features Embedded
      in a
      Single Hybrid Instrument".





The
      embedded derivatives within the loan agreements have been recorded at fair
      value
      at the date of issuance and are marked-to-market each reporting period with
      changes in fair value recorded on the Company's income statement as gain (loss)
      on derivatives.





The
      fair
      value of the derivative liabilities are subject to the changes in the trading
      value of the Company's common stock, as well as other factors. As a result,
      the
      Company's financial statements may fluctuate from quarter-to-quarter based
      on
      factors such as the price of the Company's stock at the balance sheet date
      and
      the amount of shares converted by note holders. Consequently, the Company's
      financial position and results of operations may vary from quarter-to-quarter
      based on conditions other than its operating revenues and expenses.





The
      initial fair value of the derivative embedded in the April 2006 $1,500,000
      convertible debenture was $1,093,089 and at June 30, 2006 the embedded
      derivative was revalued to its fair value of $725,565. The initial fair value
      of
      the derivative embedded in the June 8, 2006 $1,500,000 convertible debenture
      was
      $842,338 and at June 30, 2006 the embedded derivative was revalued to its fair
      value of $725,565. The initial fair value of the derivative embedded in the
      June
      20, 2006 $1,500,000 convertible debenture was $865,425 and at June 30, 2006
      the
      embedded derivative was revalued to its fair value of $725,565. Any change
      to
      the fair value of the derivatives is recognized on the income statement and
      recorded as gain/(loss) on derivatives. At June 30, 2006 the Company recognized
      an increase in the fair value of the derivatives of $624,157 and a corresponding
      gain on derivatives on the consolidated statements of operations.





**NOTE
      5 - ACCOUNTS RECEIVABLE AND CREDIT RISK**





Accounts
      receivable at June 30, 2006 and December 31, 2005 consist primarily of amounts
      due from direct retail clients of EYI.





**NOTE
      6 - PROPERTY AND EQUIPMENT**





Capital
      assets are recorded at cost. Depreciation is calculated using the straight
      line
      method over three to seven years.





**NOTE
      7 - INTANGIBLE ASSETS**





Intangible
      assets consist of rights, title, and interest in and to the contracts with
      the
      Company’s independent business associates, as well as the rights and licenses to
      trademarks and formula for the Company’s primary products. These rights and
      licenses were obtained from the Company’s former parent, pursuant to a transfer
      agreement, as well as from the Company’s primary shareholder.









Trademarks
      and Formulas


Costs
      relating to the purchase of trademarks and formulas were capitalized and
      amortized using the straight-line method over ten years, representing the
      estimated life of the assets.





**NOTE
      8 - CAPITAL STOCK**





Preferred
      Stock


The
      Company is authorized to issue 10,000,000 shares of preferred stock with a
      par
      value of $0.001. As of June 30, 2006 and December 31, 2005, the Company has
      not
      issued any preferred stock.





Common
      Stock


The
      Company is authorized to issue 1,000,000,000 shares of common stock. All shares
      have equal voting rights, are non-assessable and have one vote per share. Voting
      rights are not cumulative and, therefore, the holders of more than 50% of the
      common stock could, if they choose to do so, elect all of the directors of
      the
      Company.





Between
      January 1, 2006 and March 31, 2006, the Company issued 42,941,686 shares to
      Cornell Capital in exchange for $1,084,565.





On
      February 6, 2006, the Jay Sargeant Trust was dissolved and the related shares
      were disbursed to the beneficiaries. In connection with this transaction,
      268,639 common shares were returned to treasury at par value.





On
      June
      27, 2006, the Company issued 2,994,012 common shares to its lenders to retire
      $50,000 of convertible debt.




**NOTE
      9 - COMMON STOCK OPTIONS AND WARRANTS**





Financial
      Accounting Standards No. 123R, "Accounting for Stock-Based Compensation"
      (hereinafter "SFAS No. 123R"), defines a fair value-based method of accounting
      for stock options and other equity instruments. The Company has adopted this
      method, which measures compensation costs based on the estimated fair value
      of
      the award and recognizes that cost over the service period.





In
      accordance with SFAS No. 123R, the fair value of stock options and warrants
      granted are estimated using the Black-Scholes Option Price Calculation. The
      following assumptions were made to value the warrants for the period ended
      June
      30, 2006: estimated risk-free interest rate of 5.125%; no dividends to be paid;
      estimated volatility of 140% and term of five years.





Stock
      Options


During
      the period ending December 31, 2004, the Company’s board of directors approved
      the Stock Compensation Program to allow up to 25,000,000 shares of stock to
      be
      issued under the program. This plan enables the Company to grant stock options
      to directors, officers, employees and eligible consultants of the Company.
      There
      was no Company stock option plan in effect prior to 2004.




During
      the period ended June 30, 2006, the Company recognized an expense to consulting
      of $5,000 and an expense to wages of $1,400 for all vested options.




Following
      is a summary of the status of the stock options during the three
      months:




Weighted
                AverageNumber
                of Shares
            
            Exercise
                PriceOutstanding
                at December 31, 2005
            
            
            16,252,390
            
            $
            0.14Granted
            
            
            -
            
            
            -Exercised
            
            
            -
            
            
            -Forfeited
                or cancelled
            
            
            7,212,640
            
            
            -Options
                outstanding at June 30, 2006
            
            
            9,039,750
            
            $
            0.10Options
                exercisable at June 30, 2006
            
            
            8,969,750
            
            $
            0.10Weighted
                average fair value of options granted
            $
            0.06










Summarized
      information about stock options outstanding and exercisable at June 30, 2006
      is
      as follows:




Options
                  OutstandingExercise
              
              
              
              Weighted
                  Ave.
              
              Weighted
                  Ave.Price
              
              Number
              
              Remaining
              
              ExerciseRange
              
              of
                  Shares
              
              Life
              
              Price$0.02
                  - $0.26
              
              
              9,039,750
              
              
              0.81
              
              $
              0.10
  Options
                  ExercisableExercise
              
              
              
              Weighted
                  Ave.
              
              Weighted
                  Ave.Price
              
              Number
              
              Remaining
              
              ExerciseRange
              
              of
                  Shares
              
              Life
              
              Price$0.02
                  - $0.26
              
              
              8,969,750
              
              
              0.80
              
              $
              0.10


Summarized
      information about non- vested but granted stock options outstanding at June
      30,
      2006 is as follows:





Non-vested
                Granted Options OutstandingExercise
            
            
            
            Weighted
                Ave.
            
            Weighted
                Ave.Price
            
            Number
            
            Remaining
            
            ExerciseRange
            
            of
                Shares
            
            Life
            
            Price$0.02
                - $0.10
            
            
            70,000
            
            
            1.42
            
            $
            0.02





Total
      compensation costs related to non-vested stock options as of June 20, 2006
      is
      $1,400.





**Warrants**





In
      consideration of the convertible debenture described in Note 3, the Company
      has
      also issued an aggregate of 124,062,678 common stock purchase warrants dated
      April 24, 2006 to a lender, each exercisable for a period of five years
      commencing April 24, 2006 for the purchase of one share of common stock. The
      warrants provide that the holder cannot exercise the warrants to the extent
      such
      exercise would cause the holder and its affiliates to own more than 4.99% of
      our
      outstanding common shares. The warrants have exercise prices, subject to
      adjustment, ranging from $0.02 to $0.40 per share. Each warrant has “piggy back’
registration rights and shall expire five (5) years for the date of issuance,
      on
      or about April 24, 2011.




Number
                of
              Warrants
            
            Weighted
                Average
              Remaining
                Life
            
            Average
                Exercise
              PriceOutstanding
                and
              exercisable
            
            
            129,538,868
            
            
            5.00
            
            $
            0.09




**NOTE
      10 - COMMITMENTS AND CONTINGENCIES**





Purchase
      Agreement


On
      June
      30, 2002, the Company entered into a distribution and license agreement which
      gives the Company the exclusive right to market, sell and distribute certain
      products for a five-year renewable term. Management estimates that 87% of the
      Company’s sales volume results from products supplied under this licensing
      agreement.





Pursuant
      to the agreement, the Company is required to purchase a minimum amount of
      $6,035,000 of product in each of the remaining years.





In
      the
      event that the Company is unable to meet the minimum purchase requirements
      of
      the licensing agreement or the terms requiring it to pay 15% of the difference
      between the minimum purchase amount referred to above and actual purchases
      for
      that year in which there is a shortfall, then the licensor has various remedies
      available to it including renegotiating the agreement, removing exclusivity
      rights, or terminating the agreement.










As
      of the
      date of these financial statements, the purchase requirements have not been
      made. The period for which the licensor could request payment per the penalty
      clause has expired for the year and therefore the Company has not made any
      accrual to the financial statements. The Company continues to purchase products
      from the licensor.





Lease
      Payments


The
      Company has operating lease commitments for its premises, office equipment
      and
      an automobile. The minimum annual lease commitments are as follows:





Year
              ended December 31,
            
            Minimum
              Amount2006
            
            $
            218,4692007
            
            
            163,2852008
            
            
            141,8412009
            
            
            147,0132010
                and thereafter
            
            
            309,544





Regulatory
      Risks and Claims


The
      Company’s products are subject to regulation by a number of federal and state
      entities, as well as those of foreign countries in which the Company’s products
      are sold. These regulatory entities may prohibit or restrict the sale,
      distribution, or advertising of the Company’s products for legal, health or
      safety related reasons. In addition to the potential risk of adverse regulatory
      actions, the Company is subject to the risk of potential product liability
      claims.





Standby
      Equity Distribution Agreement




On
      May
      13, 2005 the Company entered into a standby equity distribution agreement with
      Cornell Capital Partners, LP (“Cornell”) pursuant to which the Company may, at
      its discretion, periodically issue and sell shares of its common stock for
      a
      total purchase price of $10 million. If the Company requests advances under
      the
      agreement, Cornell will purchase shares of the Company's common stock for 98%
      of
      the lowest volume weighted average price on the Over-the-Counter Bulletin Board
      or other principal market on which the Company's common stock is traded for
      the
      5 days immediately following the advance notice date. Cornell will retain 5%
      of
      each advance under the new Standby Equity Distribution Agreement. The Company
      may not request advances in excess of a total of $10 million. Pursuant to the
      terms of its agreements with Cornell, the Company agreed to register and
      qualify, among other things, the additional shares due to Cornell under a
      registration statement filed with the SEC.




On
      April
      3, 2006 the Company signed a termination agreement with Cornell Capital
      Partners, L.P for the purpose of terminating the standby equity distribution
      agreement, registration rights agreement and escrow agreement all of
      which are dated as of May 13, 2005.





Other
      Matters


The
      Company’s predecessor organization, Essentially Yours Industries Corp. (“EYIC”),
      a British Columbia corporation, has outstanding claims from the Internal Revenue
      Service for penalties and interest of approximately $2,000,000. Furthermore,
      one
      or more states may have claims against EYIC for unpaid state taxes. Management
      believes that these claims are limited solely to EYIC and that any prospective
      unpaid tax claims against the Company are remote and unable to be
      estimated.





*Oppression
      Action by Lavorato/Heyman*


In
      2002,
      an oppression action was commenced in the Supreme Court of British Columbia
      by
      the plaintiffs Brian Lavorato, Geraldine Heyman and their respective holding
      companies, alleging that Essentially Yours Industries Corp., our affiliate,
      had
      improperly vended assets into Essentially Yours Industries, Inc., our wholly
      owned subsidiary, as part of a corporate restructuring alleged to be oppressive
      to the plaintiffs. As of April 4, 2003, the lawsuit has been settled and was
      subsequently dismissed by the plaintiffs by consent, with the exception of
      claims asserted by the plaintiffs against Thomas K. Viccars, a former in-house
      counsel of Essentially Yours Industries, Corp., who may potentially assert
      a
      third party claim against Essentially Yours Industries, Inc. On May 1, 2006
      we
      entered into a settlement agreement with Thomas Viccars, pursuant to which
      we
      will pay $60,000 to Mr. Viccars in full and final settlement of all claims
      against EYI.





*Action
      By Suhl, Harris and Babich*


In
      2003 a
      consolidated action was brought by the plaintiffs Wolf Suhl, Christine Harris
      and Edward Babich in the Supreme Court of British Columbia pursuant to an order
      pronounced in the New Westminster Registry under Action No. S061589 on May
      7,
      2003, which allowed the plaintiffs to proceed with an action against Essentially
      Yours Industries, Inc. The plaintiffs allege that Essentially Yours Industries,
      Inc. holds certain of its products or revenues derived therefrom as trust
      property for the benefit of the plaintiffs.










The
      claim
      is for an aggregate of 4.9% of the wholesale volume of sales generated by
      Essentially Yours Industries, Inc. from the alleged trust property, and for
      damages and costs. A consolidated statement of defense has been filed by
      Essentially Yours Industries, Inc., and interrogatories have been responded
      to.
      Management believes this claim to be without merit and intends to vigorously
      defend against this claim. In February 2006, the Supreme Court of British
      Columbia made an order that EYI and Mr. Jay Sargeant be added to the lawsuit,
      and the Writ of Summons and Statement of Claim be amended to add the following
      claims: (a) against EYI, damages for unjust enrichment and breach of trust
      for
      any amount found to be owing by Essentially Yours Industries, Inc. plus interest
      and costs; and (b) against Jay Sargeant, damages for unjust enrichment and
      breach of trust for any amount found to be owing by Essentially Yours
      Industries, Inc. or Barry La Rose, plus interest and costs. The Plaintiffs’
total claim is approximately $478,000. On
      April
      13, 2006, the plaintiffs amended their pleadings to assert claims against EYI
      and Jay Sargeant. EYI has entered an Appearance to the action and plans to
      file
      a Defence. An order was pronounced on August 15, 2006 for the substitutional
      service of Mr. Jay Sargeant. This
      matter is set for trial commencing September 11, 2006. The parties are presently
      negotiating to settle these claims.




**NOTE
      11 - DISCONTINUED OPERATIONS**





During
      the period ended December 31, 2005, the Company elected to discontinue the
      operations of Halo Distribution LLC (hereinafter “Halo”), a subsidiary of the
      Company. The Company’s balance sheet reports net liabilities from discontinued
      operations of $375,344 as at March 31, 2006 and December 31, 2005.





In
      June
      2002, the Financial Accounting Standards Board issued Statement of Financial
      Accounting Standards, No. 146, “Accounting for Costs Associated with Exit or
      Disposal Activities” (hereinafter “SFAS No. 146”). SFAS No. 146 addresses
      significant issues regarding the recognition, measurement, and reporting of
      costs associated with exit and disposal activities, including restructuring
      activities. SFAS No. 146 also addresses recognition of certain costs related
      to
      terminating a contract that is not a capital lease, costs to consolidate
      facilities or relocate employees, and termination benefits provided to employees
      that are involuntarily terminated under the terms of a one-time benefit
      arrangement that is not an ongoing benefit arrangement or an individual
      deferred-compensation contract. The Company’s financial position and results of
      operations have not been affected by adopting SFAS No. 146.




**NOTE
      12 - RELATED PARTY NOTES PAYABLE**





The
      Company issued a promissory note for a total of $50,000 in December 2003. The
      note is unsecured, non-interest bearing and is payable upon demand.





**NOTE
      13 - CONCENTRATIONS**





Bank
      Accounts


The
      Company maintains its cash accounts in one commercial bank. During the year,
      the
      Company may maintain balances in excess of the federally insured amounts in
      the
      accounts that are maintained in the United States. The Company also maintains
      funds in commercial banks in Vancouver, British Columbia, in which funds in
      U.S.
      dollars are not insured. Additionally, the Company maintains funds in Hong
      Kong
      where none of the funds are insured. At June 30, 2006 and December 31, 2005,
      a
      total of $2,961,786 and $56,088 respectively, was not insured.





Economic
      Dependence


During
      the year, the Company purchased approximately 90% of its products for resale
      from one company, Nutri-Diem Inc., which is the sole supplier of the Company’s
      flagship product Calorad. Pursuant to a purchase agreement, the Company is
      subject to minimum purchases per annum. (See Note 10.)





**NOTE
      14 - RELATED PARTY TRANSACTIONS**





On
      May
      27, 2002, Mr. Jay Sargeant, a shareholder of Essentially Yours Industries,
      Corp.
      (“EYI Corp.”) agreed to acquire all of the shares of the Essentially Yours
      Industries, Inc. (“EYII”), along with the transfer agreement, license agreement,
      and agency appointment agreement, in settlement of amounts owed to him. As
      part
      of this transaction, EYI Corp. agreed to provide to EYII the services outlined
      in a management agreement.





The
      Company acquired, through agreements with Essentially Yours Industries, Corp.
      (“EYI Corp”), the rights, title, and interest in and to the contracts with the
      Company’s Independent Business Associates as well as the rights and licenses to
      trademarks and formula for the Company’s primary products.










Accounts
      payable to related parties represents amounts due to the president and chief
      executive officer and to the chief operations officer for services preformed
      during the last year, as well as to other related parties and the company with
      which they have a signed management agreement. These payables are non-interest
      bearing and non-collateralized.





The
      Company purchases approximately 90% of its products for resale from one company,
      Nutri-Diem Inc., which is owned in part by a director of the Company.




**NOTE
      15 - SUBSEQUENT EVENTS**




Between
      July 1, 2006 and August 16, 2006, The Company issued 23,661,654 common shares
      to
      lenders to retire $182,705 of convertible debt.




**ITEM
      2.
           MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.**




**FORWARD
      LOOKING STATEMENTS**




The
      information in this discussion contains forward-looking statements. These
      forward-looking statements involve risks and uncertainties, including statements
      regarding EYI’s capital needs, business strategy and expectations. Any
      statements contained herein that are not statements of historical facts may
      be
      deemed to be forward-looking statements. In some cases, you can identify
      forward-looking statements by terminology such as "may", "should", "expect",
      "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential"
      or
      "continue", the negative of such terms or other comparable terminology. Actual
      events or results may differ materially. In evaluating these statements, you
      should consider various factors, including the risks outlined in the Risk
      Factors section below, and, from time to time, in other reports we file with
      the
      Securities and Exchange Commission (the "SEC"). These factors may cause our
      actual results to differ materially from any forward-looking
      statement.




**OVERVIEW**




We
      are in
      the business of selling, marketing, and distributing a product line consisting
      of approximately 27 nutritional products in three categories, dietary
      supplements, personal care products and water filtration systems. Our most
      successful product is Calorad, a liquid collagen-based dietary supplement
      presently available on the market. These products are marketed through a network
      marketing program in which IBAs (Independent Business Associates) purchase
      products for resale to retail customers as well as for their own personal use.
      We have a list of over 380,000 IBAs, of which approximately 7,800 we consider
      "active". An "active" IBA is one who purchased our products within the preceding
      12 months. Over 1,400 of these IBAs are considered "very active". A "very
      active" IBA is one who is on our automatic Auto-ship Program and is current
      with
      their annual administration fee. Our Auto-ship Program, recently re-named
      Convenience Program, allows our IBAs to set up a reoccurring order that is
      automatically shipped to them each month.




The
      IBAs
      in our network are encouraged to recruit interested people to become new
      distributors of our products. New IBAs are placed beneath the recruiting IBA
      in
      the "network" and are referred to as being in that IBA's "down-line"
      organization. Our marketing plan is designed to provide incentives for IBAs
      to
      build, maintain and motivate an organization of recruited distributors in their
      down-line organization to maximize their earning potential. IBAs generate income
      by purchasing our products at wholesale prices and reselling them at retail
      prices. IBAs also earn commissions on product purchases generated by their
      down-line organization.




On
      an
      ongoing basis we review our product line for duplication and sales trends and
      make adjustments accordingly. As of June 30, 2006, our product line consisted
      of: (i) 18 dietary supplement products; (ii) 7 personal care products consisting
      primarily of cosmetic and skin care products and (iii) 2 water filtration system
      products. Our products are primarily manufactured by Nutri-Diem, Inc., a related
      party, and sold by us under a license and distribution agreement with
      Nutri-Diem. Certain of our own products are manufactured for us by third party
      manufacturers pursuant to formulations developed for us. Our products are sold
      to our IBAs located in the United States, Canada and Asia.




We
      believe that our network marketing system is suited to marketing dietary
      supplements, personal care products and water filtration systems, because sales
      of such products are strengthened by ongoing personal contact between IBAs
      and
      their customers. We also believe that our network marketing system appeals
      to a
      broad cross-section of people, particularly those looking to supplement family
      income or who are seeking part-time work. IBAs are given the opportunity,
      through our sponsored events and training sessions, to network with other
      distributors, develop selling skills and establish personal goals. We supplement
      monetary incentives with other forms of recognition, in order to motivate IBAs.









**Recent
      Corporate Developments**




We
      experienced the following significant developments through the date of this
      filing and during fiscal 2006:




·
            On
                August 12, 2006 we entered into a joint venture agreement (the "
                Joint
                Venture") with Internet Marketing Consortium ("IMC") to provide multi
                media strategies, promotional, direct and targeted marketing services
                for
                an undetermined period of time. In consideration for the services
                provided
                by IMC, we will pay a fee of $25,000.




·
            On
                July 27, 2006 we entered into an addendum (the "Addendum") to the
                China
                Agency Agreement dated September 15, 2005 between Essentially Yours
                Industries (Hong Kong) Limited and Guangzhou Zhongdian Enterprises
                (Group)
                Co. Ltd. and China Electronics Import and Export South China Corporation.
                Pursuant to the Addendum, we agreed to extend the purchasing and
                exclusivity terms of the China Agency Agreement for an additional
                one year
                period.




·
            On
                July 19, 2006, our majority owned subsidiary Essentially Yours Industries,
                Inc. ("EYII") signed a letter of intent ("LOI") with Mach 3 Technologies
                Group, LLC ("Mach 3"). Subject to the receipt of sufficient efficiency
                testing and Environmental Protection Agency ("EPA") registration,
                EYI may
                acquire the exclusive individual residential consumer rights for
                the USA,
                Canada and Mexico for the Ultimate ME2 product. The Ultimate ME2
                product
                is designed to reduce emissions and save fuel. On August 2, 2006
                confirmation of EPA registration was received by Mach 3.




·
            On
                July 12, 2006 and July 14, 2006 we received letters from Metals &
                Arsenic Removal Technology, Inc. ("MARTI") advising that the worldwide
                license for the ARTI-64 technology used for the production of the
                Code
                BlueTM product had been transferred from Hydroflo, Inc. to MARTI. MARTI
                has
                also transferred some of its inventory to Markus Group Ltd. ("Markus
                Group") and in the event MARTI is unable to meet production requirements
                they have granted the rights to produce Code BlueTM to Markus Group. On
                July 20, 2006 Markus Group provided EYI with an Indemnity in connection
                with the letters provided by MARTI.




·
            On
                July 1, 2006 EYII entered into a consulting agreement with James
                Toll. Mr.
                Toll is to provide training and marketing services for a period of
                three
                (3) months. Mr. Toll will receive $3,750 per month as compensation
                for his
                services.




·
            On
                May 17, 2006 our wholly owned subsidiary Essentially Yours Industries
                (Hong Kong) Limited entered into a distribution agreement (the
                "Distribution Agreement") with Nozin, LLC. The Distribution Agreement
                is
                for a term of five years for the distribution of the nozin nasal
                sanitizer
                product in Hong Kong, Philippines and China. At present, the Company
                has
                not placed any purchase orders with Nozin, LLC.




·
            On
                May 1, 2006 we entered into a settlement agreement with Thomas K.
                Viccars,
                SAV Management Co. Ltd. and VFT Management Co. Ltd. (collectively,
                "Viccars group") in the amount of $60,000 pursuant to which we entered
                into a full and final settlement of all claims by Viccars Group against
                our company and subsidiaries whereby Mr. Viccars claimed that he
                was
                entitled to certain unpaid compensation and benefits from our company
                and
                subsidiaries.




·
            On
                May 1, 2006 EYI HK amended the Logistics Management Agreement originally
                dated September 1, 2005 with All In One Global Logistics Ltd. which
                provides international freight, warehousing and distribution services
                in
                Hong Kong.




·
            On
                April 24, 2006 we entered into a Securities Purchase Agreement with
                Cornell Capital Partners, LP ("Cornell") pursuant to which we entered
                into
                the following agreements: an Investor Registration Rights Agreement,
                Irrevocable Transfer Agent Instructions and a Security Agreement.
                Pursuant
                to the terms of the Securities Purchase Agreement, we may sell convertible
                debentures to Cornell in the amount of $4,500,000 plus accrued interest
                which are convertible into shares of our common stock. The convertible
                debentures accrue interest at 10% per annum, convertible at $0.06
                or 80%
                of the lowest volume weighted average price of EYI's common stock
                during
                five (5) trading days immediately preceding the date of conversion
                as
                quoted by Bloomberg. Of this amount $1,500,000 must be paid five
                days
                after April 24, 2006, $1,500,000 must be paid two (2) business days
                prior
                to the date a registration statement is filed with the SEC and $1,500,000
                shall be paid two (2) business days prior to the date that such
                registration statement is declared effective by the SEC. We received
                proceeds of $1,305,000 (net of fees associated with the issuance
                of the
                convertible debentures) on April 27, 2006 in connection with the
                issuance
                of $1,500,000 of convertible debentures in the following amounts:
                $750,000
                to Cornell, $416,667 to TAIB Bank, B.S.C., and $333,333 to Certain
                Wealth,
                Ltd. pursuant to the terms of the Securities Purchase Agreement.








·
            Pursuant
                to the terms of the Securities Purchase Agreement and the issuance
                of our
                convertible debentures, on April 24, 2006 we issued to Cornell seventeen
                warrants to purchase up to an aggregate 124,062,678 shares of our
                common
                stock at the discretion of Cornell (collectively, the “Warrants”) each for
                good and valuable consideration. Cornell is entitled to purchase
                from us:
                (1) 10,416,650 shares of our common stock at $0.02 per share, (2)
                13,888,866 shares of our common stock at $0.03 per share, (3) 10,416,650
                shares of our common stock at $0.04 per share, (4) 8,333,320 shares
                of our
                common stock at $0.05 per share, (5) 6,944,433 shares of our common
                stock
                at $0.06 per share, (6) 5,952,371 shares of our common stock at $0.07
                per
                share, (7) 11,250,000 shares of our common stock at $0.08 per share,
                (8)
                10,000,000 shares of our common stock at $0.09 per share, (9) 19,000,000
                shares of our common stock at $0.10 per share, (10) 8,181,818 shares
                of
                our common stock at $0.11 per share, (11) 7,500,000 shares of our
                common
                stock at $0.12 per share, (12) 3,333,333 shares of our common stock
                at
                $0.15 per share, (13) 2,500,000 shares of our common stock at $0.20
                per
                share, (14) 2,000,000 shares of our common stock at $0.25 per share,
                (15)
                1,666,666 shares of our common stock at $0.30 per share, (16) 1,428,571
                shares of our common stock at $0.35 per share and (17) 1,250,000
                shares of
                our common stock at $0.40 per share upon surrender of the Warrants
                (or as
                subsequently adjusted pursuant to the terms of each Warrant) . Each
                Warrant has “piggy back” registration rights and shall expire five (5)
                years from the date of issuance, on or about April 24,
                2011.





·
            On
                April 6, 2006 Essentially Yours Industries (International) Limited
                ("EYIINT"), our wholly owned subsidiary, signed a Letter of Intent
                and
                Good Faith Commitment ("LOI") with Raul Bautista and Rommel Panganiban
                to
                act as managing partners and distributors for the Philippines. The
                LOI is
                subject to the entry into a definitive agreement between the parties
                on or
                before July 1, 2006. At present, the Company has not signed a definitive
                agreement.





·
            On
                April 3, 2006 we signed a termination agreement ("Termination Agreement")
                with Cornell terminating our Standby Equity Distribution Agreement,
                Registration Rights Agreement and Escrow Agreement previously entered
                into
                with Cornell on May 13, 2005.




**2006
      Growth Strategy**




*New
      Product Introduction* . During
      2005, we introduced our new product, Code BlueTM. The initial shipment of Code
      Blue Filters did not meet EYI product specifications. However, in January of
      2006, we received a revised version of the Code Blue filter called the G-4,
      which we believe meets our product specifications.




We
      intend
      to aggressively promote Code Blue systems through a year long promotional tour
      campaign ("North American Tour" or “Tour”). Our intent is to host approximately
      120 regional training meetings with audiences of up to 100 people and 30 larger
      conferences in targeted cities where we can train and market to larger audiences
      of 150 to 300. We have selected cities to host these events where we believe
      there is a greater interest in the product and a concentration of our active
      IBAs. We intend to use a group of 5 to 6 veteran IBA’s to act as our Regional
      Trainers and to work in concert with our management team to promote, coordinate,
      and host these events. We anticipate that the total cost of the North American
      Tour campaign will be approximately $240,000. We anticipate an offset to this
      cost by way of sales that occur at these events and through ongoing residual
      sales generated by the new IBAs enrolled in our system as a result of this
      Tour.




*International
      Expansion* *.* We
      opened
      our Hong Kong office in September 2005. The office is intended to be used to
      service distributors and provide a product pick up depot for Code BlueTM,
      Calorad ***®*** ,
      Prosoteine® ***,*** Agrisept-L®
      and Definition® drops and cream, and the newest EYI product, Calorad ***®*** Cream.
      The new office will also play a role in supporting the sales, distribution
      and
      logistics of the CEIEC agency agreement.




In
      January 2006, we relocated our Executive Vice President and COO, Dori O’Neill to
      Hong Kong for six months and Mr. O’Neill will now continue his work in Asia from
      his office in Burnaby, British Columbia, Canada and through periodic trips
      to
      Asia. Mr. O’Neill is expected to play a key role in our Asian market initiative.
      His initial focus will be to introduce and train our unified global binary
      program to new Asian IBAs. In addition, Mr. O’Neill will also focus on
      researching and reviewing other locations and markets for
      expansion.









In
      April
      2006, our subsidiary, Essentially Yours Industries (International) Limited,
      signed a Letter of Intent and Good Faith Commitment with Raul Bautista and
      Rommel Panganiban to act as managing partners and distributors for the
      Philippines. Once a definitive agreement is reached, EYI will work with this
      group to get them operational within one to two months.




*Distributor
      Commission Pay Plan Enhancement* .
      On July
      28, 2006 the Company launched a new component of it’s commission pay plan for
      its independent distributors called the Management Matching Bonus (“MMB”). We
      believe that this enhancement will give our distributors additional incentive
      to
      sell more of our products, recruit new sales people and assist their existing
      and new customers.




**RESULTS
      OF OPERATIONS**




***Second
      Quarter and Six Months Summary***




**Three
                months ended**
            
            **Six
                months ended****30-Jun-06**
            
            **30-Jun-05**
            
            **Variance**
            
            **30-Jun-06**
            
            **30-Jun-05**
            
            **Variance**Revenue
            
            $
            1,009,978
            
            $
            1,225,216
            
            
            ($215,238
            )
            
            -18
            %
            $
            2,118,737
            
            $
            2,514,283
            
            
            ($395,546
            )
            
            -16
            %Cost
                of goods sold
            
            $
            390,896
            
            $
            254,402
            
            $
            136,494
            
            
            54
            %
            $
            678,848
            
            $
            489,936
            
            $
            188,912
            
            
            39
            %Gross
                profit before commissions expense
            
            $
            619,082
            
            $
            970,814
            
            
            ($351,732
            )
            
            -36
            %
            $
            1,439,889
            
            $
            2,024,347
            
            
            ($584,458
            )
            
            -29
            %Commission
                expense
            
            $
            379,274
            
            $
            450,857
            
            
            ($71,583
            )
            
            -16
            %
            $
            764,717
            
            $
            922,462
            
            
            ($157,745
            )
            
            -17
            %Gross
                profit after cost of goods sold and commissions
            
            $
            239,808
            
            $
            519,957
            
            
            ($280,149
            )
            
            -54
            %
            $
            675,172
            
            $
            1,101,885
            
            
            ($426,713
            )
            
            -39
            %Operating
                expenses
            
            $
            1,081,996
            
            $
            994,237
            
            $
            87,759
            
            
            9
            %
            $
            2,188,421
            
            $
            2,130,797
            
            $
            57,624
            
            
            3
            %Operating
                loss
            
            
            ($842,188
            )
            
            ($474,280
            )
            
            ($367,908
            )
            
            78
            %
            
            ($1,513,249
            )
            
            ($1,028,912
            )
            
            ($484,337
            )
            
            47
            %





**Revenues**




During
      the three months ended June 30, 2006 we had total revenues of $1,009,978 as
      compared to revenues of $1,225,216 for the same period in 2005 which represents
      a decline of $215,238 or 18%. The
      year-to-date results for 2006 compared with 2005 indicate a revenue decline
      of
      $395,546 or 16%. The
      decrease in our revenues can be primarily attributed to the following
      factors:




·
            Our
                inability to attract new IBA's




·
            Lack
                of IBA participation in our auto-ship program




**Gross
      Profit before Commission Expense**




During
      the three months ended June 30, 2006 as compared to the same period in 2005,
      we
      had gross profits of $ 619,082
      and $970,814 respectively. This represents a decline of $351,732 or 36%. The
      year-to-date results for 2006 compared with 2005 indicate that the gross profit
      has declined $584,458 or 29%. The
      decline in our gross profit is primarily attributed to our decreased binary
      sales in relation to other revenue segments that have a higher percentage of
      cost-of-goods.




**Revenue
      by Segments**





The
      following table summarizes our four revenue segments as a percentage of total
      revenue, respectively, for the periods indicated:








**Revenue
                by Segments****Three
                months ended**
            
            **Six
                months ended****30-Jun-06**
            
            **30-Jun-05**
            
            **Variance**
            
            **30-Jun-06**
            
            **30-Jun-05**
            
            **Variance**Administration
                fees
            
            $
            38,970
            
            $
            33,550
            
            $
            5,420
            
            
            16
            %
            $
            78,961
            
            $
            74,645
            
            $
            4,316
            
            
            6
            %Binary
                Sales
            
            $
            714,586
            
            $
            902,497
            
            
            ($187,911
            )
            
            -21
            %
            $
            1,476,781
            
            $
            1,850,919
            
            
            ($374,138
            )
            
            -20
            %Direct
                sales
            
            $
            155,706
            
            $
            213,531
            
            
            ($57,826
            )
            
            -27
            %
            $
            357,382
            
            $
            426,272
            
            
            ($68,890
            )
            
            -16
            %Affiliate
                sales
            
            $
            99,274
            
            $
            74,056
            
            $
            25,219
            
            
            34
            %
            $
            199,887
            
            $
            156,800
            
            $
            43,086
            
            
            27
            %Sales
                Aids
            
            $
            1,442
            
            $
            1,582
            
            
            ($140
            )
            
            -9
            %
            $
            5,727
            
            $
            5,647
            
            $
            80
            
            
            1
            %Warehouse
            
            $
            0.00
            
            $
            0.00
            
            $
            0
            
            
            0
            %
            $
            0.00
            
            $
            0.00
            
            $
            0
            
            
            0
            %$
            1,009,978
            
            $
            1,225,216
            
            
            ($215,238
            )
            
            -18
            %
            $
            2,118,737
            
            $
            2,514,283
            
            
            ($395,545
            )
            
            -16
            %





Details
      of the most significant changes for the periods presented are detailed
      below:





*Binary
      sales* - The
      binary sales segment represents $714,586 or 70% of the total revenue earned
      during the quarter ended June 30, 2006, as compared to $902,497 or 73% of the
      total revenues earned during the quarter ended June 30, 2005. A comparison
      of
      the quarterly and six month results for 2006 and 2005 indicate a decline of
      21%
      and 20% respectively.





*Direct
      sales* - The
      direct sales segment represents $155,706 or 15% of the total revenue earned
      during the quarter ended June 30, 2006, as compared to $213,531 or 17% of the
      total revenues earned during the quarter ended June 30, 2005. A comparison
      of
      the quarterly and six month results for 2006 and 2005 indicate a decline of
      27%
      and 16% respectively.





*Affiliate
      sales* - The
      affiliate sales segment represents $99,274 or 9% of the total revenue earned
      during the quarter ended June 30, 2006, as compared to $74,056 or 6% of the
      total revenues earned during the quarter ended June 30, 2005. A comparison
      of
      the quarterly and six month results for 2006 and 2005 indicate a increase of
      34%
      and 27% respectively.




**Expenses**




Operating
      expenses :





The
      following table summarizes operating expenditures for the periods
      indicated:





**Operating
                Expenses**
            
            **Three
                months ended**
            
            **Six
                months ended****30-Jun-06**
            
            **30-Jun-05**
            
            **Variance**
            
            **30-Jun-06**
            
            **30-Jun-05**
            
            **Variance**Consulting
                fees
            
            $
            224,362
            
            $
            240,848
            
            
            ($16,486
            )
            
            -7
            %
            $
            484,099
            
            $
            478,810
            
            $
            5,289
            
            
            1
            %Legal
                and professional fees
            
            $
            86,760
            
            $
            80,512
            
            $
            6,248
            
            
            8
            %
            $
            161,242
            
            $
            146,757
            
            $
            14,485
            
            
            10
            %Customer
                service
            
            $
            66,587
            
            $
            65,471
            
            $
            1,116
            
            
            2
            %
            $
            107,003
            
            $
            152,005
            
            
            ($45,002
            )
            
            -30
            %Finance
                and administration
            
            $
            146,657
            
            $
            92,898
            
            $
            53,759
            
            
            58
            %
            $
            428,694
            
            $
            300,978
            
            $
            127,716
            
            
            42
            %Sales
                and marketing
            
            $
            133,668
            
            $
            1,273
            
            $
            132,395
            
            
            10400
            %
            $
            212,292
            
            $
            4,991
            
            $
            207,301
            
            
            4153
            %Telecommunications
            
            $
            34,365
            
            $
            124,890
            
            
            ($90,525
            )
            
            -72
            %
            $
            65,025
            
            $
            242,258
            
            
            ($177,233
            )
            
            -73
            %Wages
                and benefits
            
            $
            321,822
            
            $
            371,526
            
            
            ($49,704
            )
            
            -13
            %
            $
            599,393
            
            $
            743,152
            
            
            ($143,759
            )
            
            -19
            %Warehouse
                expense
            
            $
            67,775
            
            $
            16,819
            
            $
            50,956
            
            
            303
            %
            $
            130,673
            
            $
            61,846
            
            $
            68,827
            
            
            111
            %$
            1,081,996
            
            $
            994,237
            
            $
            87,759
            
            
            9
            %
            $
            2,188,421
            
            $
            2,130,797
            
            $
            57,624
            
            
            3
            %





**Operating
      Expenses**




We
      incurred total operating expenses in the amount of $2,188,421 during the six
      months ended June 30, 2006, compared to $2,130,797 for the six months ended
      June
      30, 2005. The results for the three and six months ended June 30, 2006 compared
      with the same periods in 2005 indicate that the total Operating expenses
      increased 9% and 3% respectively. The following explains the most significant
      changes for the periods presented:




Legal
      and Professional fees - The
      results for the three and six months ended June 30, 2006 compared with the
      same
      periods in 2005 indicate that Legal and Professional fees increased 8% and
      10%
      respectively. This increase is largely associated with the additional fees
      incurred in connection with the review of SEC filings.




*Customer
      Service* - The
      results for the three and six months ended June 30, 2006 compared with the
      same
      periods in 2005 indicate that Customer Service expenses increased 2% and
      decreased 30% respectively. These expenditures represent the services provided
      by EYI Corp. pursuant to the terms of their management agreement with our
      subsidiary Essentially Yours Industries, Inc. (“EYII”). The overall reduction of
      expenditures is related to EYII utilizing other service providers to provide
      the
      services that were previously provided by EYI Corp. **









*Finance
      and administration* - The
      results for the three and six months ended June 30, 2006 compared with the
      same
      periods in 2005 indicate that Finance and Administration expenses increased
      58%
      and 42% respectively. This increase is largely associated with the
      following:




§
            Expenditures
                relating to Hong Kong operations


§
            Investor
                relations fees




*Sales
      & Marketing* - The
      results for the three and six months ended June 30, 2006 compared with the
      same
      periods in 2005 indicate that Sales & Marketing expenses increased 10400%
      and 4153% respectively. This increase is largely associated with the
      following:




§
            Hong
                Kong marketing initiatives for the Grand Opening


§
            Registration
                costs for Code Blue in China


§
            North
                American Training event expenditures




*Telecommunications* - The
      results for the three and six months ended June 30, 2006 compared with the
      same
      periods in 2005 indicate that Telecommunications expenses declined 72% and
      73%
      respectively. This decrease is attributed to the elimination of a third party
      service provider of our website and shopping cart. We have replaced these
      systems with systems built and managed in-house.




*Wages
      and benefits* - The
      results for the three and six months ended June 30, 2006 compared with the
      same
      periods in 2005 indicate that Wages and Benefits declined 13% and 19%
      respectively. This decline is the result of less stock options issued and
      vesting during 2006 over the same periods in 2005.




*Warehouse
      expenses* - The
      results for the three and six months ended June 30, 2006 compared with the
      same
      periods in 2005 indicate that Warehouse expenses increased 303% and 111%
      respectively. The increase is primarily attributed to the rental fees associated
      with the Hong Kong operation.




**Other
      Income (Expense)** **:**




Loss
      on
      derivative - During the three months ended June 30, 2006 the Company made an
      adjustment to the initial derivative valuation in the amount of $1,9191,665.
      The
      Company also recorded a June 30, 2006 gain pursuant to the mark-to-market
      adjustment of the derivative in the amount of $624,157.




**FINANCIAL
      CONDITION**




**Cash
      and Working Capital**




**As
                at**
            
            **As
                at****30-Jun-06**
            
            **31-Dec-05**
            
            **Variance**Current
                assets
            
            $
            3,623,258
            
            $
            382,057
            
            $
            3,241,201
            
            
            848
            %Current
                Liabilities
            
            $
            4,264,083
            
            $
            2,347,087
            
            $
            1,916,996
            
            
            82
            %Working
                Capital (deficit)
            
            
            ($640,825
            )
            
            ($1,965,030
            )
            $
            1,324,205
            
            
            -67
            %




We
      had
      cash of $3,066,354 as at June 30, 2006, compared with cash of $25,639 as at
      December 31, 2005. We had a working capital deficit at June 30, 2006 and
      December 31, 2005 of $640,825 and $1,965,030 respectively.




**Liabilities**




**As
                at**
            
            **As
                at****30-Jun-06**
            
            **31-Dec-05**
            
            **Variance**Accounts
                payable and accrued liabilities
            
            $
            1,493,170
            
            $
            1,929,049
            
            
            ($435,879
            )
            
            -23
            %Accounts
                payable - related parties
            
            $
            512,720
            
            $
            328,038
            
            $
            184,682
            
            
            56
            %Convertible
                debt - related party, net of discount
            
            $
            402
            
            $
            0
            
            $
            402
            
            
            100
            %Derivative
                on convertible debt
            
            $
            2,176,695
            
            $
            0
            
            $
            2,176,695
            
            
            100
            %Interest
                payable, convertible debt
            
            $
            41,096
            
            $
            0
            
            $
            41,096
            
            
            100
            %Notes
                payable - related party
            
            $
            40,000
            
            $
            90,000
            
            
            ($50,000
            )
            
            -56
            %$
            4,264,083
            
            $
            2,347,087
            
            $
            1,916,996
            
            
            82
            %




We
      had a
      decrease of 23% in Accounts Payable and Accrued Liabilities during the six
      months ended June 30, 2006. We also experienced an increase of 56% in Accounts
      Payable-Related Parties during this same period. In both cases, the majority
      of
      the variance is due to a reclassification of debt owed to two of our officers
      in
      the amount of $263,383. This amount was reclassified from Accounts Payable
      and
      Accrued Liabilities to Accounts Payable - Related Parties.




**Cash
      Used in Operating Activities**




Cash
      used
      in operating activities for the six months ended June 30, 2006 was $2,049,838
      compared to $280,696 for the comparative period in 2005.




**Cash
      Provided by Financing Activities**




Cash
      provided by financing activities for the six months ended June 30, 2006 was
      $5,114,565, compared to $160,156 for the six months ended June 30, 2005. Our
      financing activities are primarily through our financing agreements with Cornell
      Capital Partners, L.P.




**Financing
      Requirements**




Our
      consolidated interim financial statements included with this Quarterly Report
      on
      Form 10-QSB have been prepared assuming that we will continue as a going
      concern. As shown in the accompanying financial statements, we had negative
      working capital of approximately $640,825 and an accumulated deficit of
      approximately $14,441,530 incurred through June30, 2006.




Our
      current sources of working capital are sufficient to satisfy our anticipated
      current working capital needs. On April 24, 2006 we entered into a Securities
      Purchase Agreement with the Cornell, TAIB Bank, and Certain Wealth (the
“ Buyers ”).
      Pursuant to this agreement, we agreed to sell to the Buyers convertible
      debentures in the aggregate principal amount of $4,500,000. We believe that
      this
      financing arrangement will provide the necessary cash flow to meet our
      operational needs.




In
      the
      event that this financing does not support our operational cash flow
      requirements, then we may have to scale back our plan of operations and
      operating expenditures. We anticipate that we will continue to incur losses
      until such time as the revenues we are able to generate from sales and licensing
      of our products exceed our increased operating expenses. We base this
      expectation in part on the expectation that we will incur increased operating
      expenses in completing our stated plan of operations and there is no assurance
      that we will generate revenues that exceed these expenses.




**OFF-BALANCE
      SHEET ARRANGEMENTS**









We
      have
      no off-balance sheet arrangements that have or are reasonably likely to have
      a
      current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results of operations, liquidity, capital
      expenditures or capital resources.




**Critical
      Accounting Policies**





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





Our
      management routinely makes judgments and estimates about the effects of matters
      that are inherently uncertain. As the number of variables and assumptions
      affecting the probable future resolution of the uncertainties increase, these
      judgments become even more subjective and complex. We have identified certain
      accounting policies, described below, that are the most important to the
      portrayal of our current financial condition and results of
      operations.




Stock
      Options and Warrants Granted to Employees and Non-Employees




Statement
      of Financial Accounting Standards No. 123R, “Accounting for Stock-Based
      Compensation” (“SFAS No. 123R”), defines a fair value-based method of accounting
      for stock options and other equity instruments. We have adopted this method,
      which measures compensation costs based on the estimated fair value of the
      award
      and recognizes that cost over the service period.





Derivative
      Instruments


The
      Financial Accounting Standards Board issued Statement of Financial Accounting
      Standards No. 133, "Accounting for Derivative Instruments and Hedging
      Activities" (hereinafter "SFAS No. 133"), as amended by SFAS No. 137,
      "Accounting for Derivative Instruments and Hedging Activities - Deferral of
      the
      Effective Date of FASB No. 133", and SFAS No. 138, "Accounting for Certain
      Derivative Instruments and Certain Hedging Activities", and SFAS No. 149,
      "Amendment of Statement 133 on Derivative Instruments and Hedging Activities".
      These statements establish accounting and reporting standards for derivative
      instruments, including certain derivative instruments embedded in other
      contracts, and for hedging activities. They require that an entity recognize
      all
      derivatives as either assets or liabilities in the balance sheet and measure
      those instruments at fair value.





If
      certain conditions are met, a derivative may be specifically designated as
      a
      hedge, the objective of which is to match the timing of gain or loss recognition
      on the hedging derivative with the recognition of (i) the changes in the fair
      value of the hedged asset or liability that are attributable to the hedged
      risk
      or (ii) the earnings effect of the hedged forecasted transaction. For a
      derivative not designated as a hedging instrument, the gain or loss is
      recognized in income in the period of change.




**Recent
      Accounting Pronouncements**





New
      accounting pronouncements that have a current or future potential impact on
      our
      financial statements are as follows:





In
      December 2004, the Financial Accounting Standards Board issued a revision to
      Statement of Financial Accounting Standards No. 123R, "Accounting for Stock
      Based Compensation." This statement supercedes APB Opinion No. 25, "Accounting
      for Stock Issued to Employees," and its related implementation guidance. This
      statement establishes standards for the accounting for transactions in which
      an
      entity exchanges its equity instruments for goods or services. It also addresses
      transactions in which an entity incurs liabilities in exchange for goods or
      services that are based on the fair value of the entity's equity instruments
      or
      that may be settled by the issuance of those equity instruments. This statement
      focuses primarily on accounting for transactions in which an entity obtains
      employee services in share-based payment transactions. This statement does
      not
      change the accounting guidance for share based payment transactions with parties
      other than employees provided in Statement of Financial Accounting Standards
      No.
      123. This statement does not address the accounting for employee share ownership
      plans, which are subject to AICPA Statement of Position 93-6, "Employers'
      Accounting for Employee Stock Ownership Plans." We have previously adopted
      SFAS
      123 and the fair value of accounting for stock options and other equity
      instruments. We have determined that there was no impact to its financial
      statements from the adoption of this new statement.









**RISKS
      AND UNCERTAINTIES**




**We
      have an accumulated deficit and may have continued losses for the foreseeable
      future with no assurance of profitability** .




As
      of
      June 30, 2006, we had an accumulated deficit of $14,441,530. We will need to
      generate significant revenues to achieve profitability, which may not occur.
      We
      expect operating expenses to increase as a result of the further implementation
      of our business plan. Even if we achieve profitability, we may be unable to
      sustain or increase profitability on a quarterly or annual basis in the future.
      It is possible that we will never achieve profitability.




Management
      has established plans designed to attempt to increase the sales of our products
      and decrease debt. We plan on continuing to reduce expenses, and with small
      gains in any combination of network sales, direct sales, and international
      sales, but there are no assurances that we will eventually be able to reverse
      the present deficit. Management intends to utilize the cash proceeds from the
      Securities Purchase Agreement with Cornell, TAIB Bank, and Certain Wealth to
      assist in its operating cash flow shortages.




**We
      have been subject to a going concern opinion from our independent
      auditors**




Our
      independent auditors have added an explanatory paragraph to their audit issued
      in connection with the financial statements for the period ended December 31,
      2005, relative to our ability to continue as a going concern. We have negative
      working capital of approximately $640,825 and an accumulated deficit incurred
      through June 30, 2006, which raises substantial doubt about our ability to
      continue as a going concern. Accordingly, there is substantial doubt about
      our
      ability to continue as a going concern. Our financial statements do not include
      any adjustments that might result from the outcome of this uncertainty.




**We
      are dependent on our IBAs for our product marketing efforts, the loss of a
      significant number of IBAs or the loss of a key IBA could adversely affect
      our
      sales.**




Our
      success and growth depend upon our ability to attract, retain and motivate
      our
      network of IBAs who market our products. IBAs are independent contractors who
      purchase products directly from us for resale and their own use. IBAs typically
      offer and sell our products on a part-time basis and may engage in other
      business activities, possibly including the sale of products offered by our
      competitors. Typically, we have non-exclusive arrangements with our IBAs, which
      may be canceled on short notice and contain no minimum purchase requirements.
      While we encourage IBAs to focus on the purchase and sale of our products,
      they
      may give higher priority to other products, reducing their efforts devoted
      to
      marketing our products. Also, our ability to attract and retain IBAs could
      be
      negatively affected by adverse publicity relating to us, our products or our
      operations. In addition, as a result of our network marketing program, the
      down-line organizations headed by a relatively small number of key IBAs are
      responsible for a significant percentage of total sales.




The
      loss
      of a significant number of IBAs, including any key IBA, for any reason, could
      adversely affect our sales and operating results, and could impair our ability
      to attract new IBAs. There is no assurance that our network marketing program
      will continue to be successful or that we will be able to retain or expand
      our
      current network of IBAs. Also, if our IBAs do not accept recent changes to
      our
      commission plan, our business may be adversely affected.




**Government
      regulation by the Food and Drug Administration and other federal and state
      entities of our products can impact our ability to market
      products.**




The
      manufacturing, processing, formulation, packaging, labeling and advertising
      of
      nutritional products are subject to regulation by one or more federal agencies,
      including the Food and Drug Administration, the Federal Trade Commission, the
      Consumer Product Safety Commission, the United States Department of Agriculture,
      the United States Postal Service, the United States Environmental Protection
      Agency and the Occupational Safety and Health Administration. These activities
      are also regulated by various agencies of the states and localities, as well
      as
      of foreign countries, in which our products may be sold. We may incur
      significant costs in complying with these regulations. In the event we cannot
      comply with government regulations affecting our business and products, we
      may
      be forced to curtail or cease our business operations.





On
      March
      7, 2003, the FDA proposed a new regulation to require current good manufacturing
      practices, or cGMPs, affecting the manufacturing, packing and holding of dietary
      supplements. The proposed regulation would establish standards to ensure that
      dietary supplements and dietary ingredients are not adulterated with
      contaminants or impurities and are labeled to accurately reflect the active
      ingredients and other ingredients in the products. It also includes proposed
      requirements for designing and constructing physical plants, establishing
      quality control procedures, and testing manufactured dietary ingredients and
      dietary supplements, as well as proposed requirements for maintaining records
      for handling consumer complaints related to current good manufacturing
      practices. The final rule resulting from this rulemaking process is currently
      undergoing review by the Office of Management and Budget. Publication of the
      final rule is expected in the next several months. Because of the long delay
      in
      issuing the final rule, there is considerable uncertainty as to the provisions
      of the final rule, and as to how large an impact the rule will have on the
      dietary supplement industry. The adoption of the final rule may adversely affect
      our operations and increase the cost of compliance with government regulations.









We
      market
      products that fall under two types of Food and Drug Administration regulations:
      dietary supplements and personal care products. In general, a dietary
      supplement:




·
            is
                a product (other than tobacco) that is intended to supplement the
                diet
                that bears or contains one or more of the following dietary ingredients:
                a
                vitamin, a mineral, a herb or other botanical, an amino acid, a dietary
                substance for use by man to supplement the diet by increasing the
                total
                daily intake, or a concentrate, metabolite, constituent, extract,
                or
                combinations of these ingredients.




·
            is
                intended for ingestion in pill, capsule, tablet, or liquid
                form.




·
            is
                not represented for use as a conventional food or as the sole item
                of a
                meal or diet.




·
            is
                labeled as a "dietary supplement" .




Personal
      care products are intended to be applied to the human body for cleansing,
      beautifying, promoting attractiveness, or altering the appearance without
      affecting the body's structure or functions. Included in this definition are
      products such as skin creams, lotions, perfumes, lipsticks, fingernail polishes,
      eye and facial make-up preparations, shampoos, permanent waves, hair colors,
      toothpastes, deodorants, and any material intended for use as a component of
      a
      cosmetic product. The Food & Drug Administration has a limited ability to
      regulate personal care products.




Dietary
      supplements must follow labeling guidelines outlined by the FDA. Neither dietary
      supplements nor personal care products require FDA or other government approval
      or notification to market in the United States.




Under
      the
      Dietary Supplement Health and Education Act of 1994, companies that manufacture
      and distribute dietary supplements are limited in the statements that they
      are
      permitted to make about nutritional support on the product label without FDA
      approval. In addition, a manufacturer of a dietary supplement must have
      substantiation for any such statement made and must not claim to diagnose,
      mitigate, treat, cure or prevent a specific disease or class of disease. The
      product label must also contain a prominent disclaimer. These restrictions may restrict our flexibility in marketing our
      product.




We
      believe that all of our existing and proposed products that are dietary
      supplements or personal care products do not require governmental approvals
      to
      market in the United States. Our key products are classified as
      follows:




**Dietary
                Supplements**•
            Calorad®•
            Agrisept-L®•
            Triomin•
            Noni
                Plus®•
            Iso-Greens®•
            Definition
                ® (drops)•
            Prosoteine®**Personal
                Care Products**•
            Definition®
                (cream)Calorad
                ® (cream)**Water
                Filtration Products**•
            Code
                BlueTM•
            Code
                BlueTMFilter









The
      processing, formulation, packaging, labeling and advertising of such products,
      however, are subject to regulation by one or more federal agencies, including
      the FDA, the Federal Trade Commission, the Consumer Products Safety Commission,
      the Department of Agriculture and the Environmental Protection Agency. Our
      activities also are subject to regulation by various agencies of the states
      and
      localities in which our products are sold. Among other things, such regulation
      puts a burden on our ability to bring products to market. Any changes in the
      current regulatory environment could impose requirements that would make
      bringing new products to market more expensive or restrict the ways we can
      market our products.




No
      governmental agency or other third party makes a determination as to whether
      our
      products qualify as dietary supplements, personal care products or neither.
      We
      make this determination based on the ingredients contained in the products
      and
      the claims we make for the products.




**If
      the Federal Trade Commission or certain states object to our product claims
      and
      advertising we may be forced to give refunds, pay damages, stop marketing
      certain products or change our business methods.**




The
      Federal Trade Commission and certain states regulate advertising, product
      claims, and other consumer matters, including advertising of our products.
      In
      the past several years the Federal Trade Commission has instituted enforcement
      actions against several dietary supplement companies for false or deceptive
      advertising of certain products. We provide no assurance that:




·
            the
                Federal Trade Commission will not question our past or future advertising
                or other operations; or




·
            a
                state will not interpret product claims presumptively valid under
                federal
                law as illegal under that state's regulations.




Also,
      our
      IBAs and their customers may file actions on their own behalf, as a class or
      otherwise, and may file complaints with the Federal Trade Commission or state
      or
      local consumer affairs offices. These agencies may take
      action on their own initiative or on a referral from IBAs, consumers or others.
      If taken, such actions may result in:




·
            entries
                of consent decrees;




·
            refunds
                of amounts paid by the complaining IBA or
                consumer;




·
            refunds
                to an entire class of IBAs or
                customers;




·
            other
                damages; and




·
            changes
                in our method of doing business.




**A
      complaint based on the activities of one IBA, whether or not such activities
      were authorized by us, could result in an order affecting some or all IBAs
      in a
      particular state, and an order in one state could influence courts or government
      agencies in other States.**




Our
      IBAs
      act as independent sales people and are not closely supervised by EYI or
      supervised by us at all. We have little or no control or knowledge of our IBAs'
      actual sales activities and therefore we have little or no ability to ensure
      that our IBAs comply with regulations and rules regarding how they market and
      sell our products. It is possible that we may be held liable for the actions
      of
      our IBAs. Proceedings resulting from any complaints in connection with our
      IBAs'
      marketing and sales activities may result in significant defense costs,
      settlement payments or judgments and could force to curtail or cease our
      business operations.




If
      our
      network marketing program is shown to violate federal or state regulations,
      we
      may be unable to market our products. Our network marketing program is subject
      to a number of federal and state laws and regulations administered by the
      Federal Trade Commission and various state agencies. These laws and regulations
      include securities, franchise investment, business opportunity and criminal
      laws
      prohibiting the use of "pyramid" or "endless chain" types of selling
      organizations. These regulations are generally directed at ensuring that product
      sales are ultimately made to consumers (as opposed to other IBAs) and that
      advancement within the network marketing program is based on sales of products,
      rather than investment in the company or other non-retail sales related
      criteria.




The
      compensation structure of a network marketing organization is very complex.
      Compliance with all of the applicable regulations and laws is uncertain because
      of:







·
            the
                evolving interpretations of existing laws and regulations,
                and




·
            the
                enactment of new laws and regulations pertaining in general to network
                marketing organizations and product distribution.




We
      have
      not obtained any no-action letters or advance rulings from any federal or state
      securities regulator or other governmental agency concerning the legality of
      our
      operations. Also, we are not relying on a formal opinion of counsel to such
      effect. Accordingly there is the risk that our network marketing system could
      be
      found to be in noncompliance with applicable laws and regulations, which could
      have a material adverse effect on us. Such a decision could require modification
      of our network marketing program, result in negative publicity, or have a
      negative effect on IBA morale and loyalty. In addition, our network marketing
      system will be subject to regulations in foreign markets administered by foreign
      agencies should we expand our network marketing organization into such
      markets.




**The
      legality of our network marketing program is subject to challenge by our
      IBAs.**




We
      are
      subject to the risk of challenges to the legality of our network marketing
      organization by our IBAs, both individually and as a class. Generally, such
      challenges would be based on claims that our network marketing program was
      operated as an illegal "pyramid scheme" in violation of federal securities
      laws,
      state unfair practice and fraud laws and the Racketeer Influenced and Corrupt
      Organizations Act. An illegal pyramid scheme is generally a marketing scheme
      that promotes "inventory loading" and does not encourage retail sales of the
      products and services to ultimate consumers. Inventory loading occurs when
      distributors purchase large quantities of non-returnable inventory to obtain
      the
      full amount of compensation available under the network marketing program.
      In
      the event of challenges to the legality of our network marketing organization
      by
      our IBAs, there is no assurance that we will be able to demonstrate
      that:




·
            our
                network marketing policies were enforced, and




·
            the
                network marketing program and IBAs' compensation thereunder serve
                as
                safeguards to deter inventory loading and encourage retail sales
                to the
                ultimate consumers.




**Proceedings
      resulting from these claims could result in significant defense costs,
      settlement payments or judgments, and could have a material adverse effect
      on
      us.**




One
      of
      our competitors, Nutrition for Life International, Inc., a multi-level seller
      of
      personal care and nutritional supplements, announced in 1999 that it had settled
      class action litigation brought by distributors alleging fraud in connection
      with the operation of a pyramid scheme. Nutrition for Life International agreed
      to pay in excess of $3,000,000 to settle claims brought on behalf of its
      distributors and certain purchasers of its stock.




We
      believe that our marketing program is significantly different from the program
      allegedly promoted by Nutrition for Life International and that our marketing
      program is not in violation of anti-pyramid laws or regulations. However, there
      can be no assurance that claims similar to the claims brought against Nutrition
      for Life International and other multi-level marketing organizations will not
      be
      made against us, or that we would prevail in the event any such claims were
      made. Furthermore, even if we were successful in defending against any such
      claims, the costs of conducting such a defense, both in dollars spent and in
      management time, could be material and adversely affect our operating results
      and financial condition. In addition, the negative publicity of such a suit
      could adversely affect our sales and ability to attract and retain
      IBAs.




**A
      large portion of our sales is attributable to Calorad, if Calorad loses market
      share or loses favor in the marketplace, our financial results will
      suffer**




A
      significant portion of our net sales is expected to be dependent upon our
      Calorad product. Calorad has traditionally represented more than 65% of our
      net
      sales and, although we hope to expand and diversify our product offerings,
      Calorad is expected to provide a large portion of our net sales in the
      foreseeable future. If Calorad loses market share or loses favor in the
      marketplace, our financial results will suffer.




**Our
      products are subject to obsolescence, which could reduce our sales significantly**




The
      introduction by us or our competitors of new dietary supplement or personal
      care
      products offering increased functionality or enhanced results may render our
      existing products obsolete and unmarketable. Therefore, our ability to
      successfully introduce new products into the market on a timely basis and
      achieve acceptable levels of sales has and will continue to be a significant
      factor in our ability to grow and remain competitive and profitable. In
      addition, the nature and mix of our products are important factors in attracting
      and maintaining our network of IBAs, which consequently affects demand for
      our
      products. Although we seek to introduce additional products, the success of
      new
      products is subject to a number of conditions, including customer acceptance.
      There can be no assurance that our efforts to develop innovative new products
      will be successful, or customers will accept new products.









In
      addition, no assurance can be given that new products currently experiencing
      strong popularity will maintain their sales over time. In the event we are
      unable to successfully increase the product mix and maintain competitive product
      replacements or enhancements in a timely manner in response to the introduction
      of new products, competitive or otherwise, our sales and earnings will be
      materially and adversely affected.




**We
      have no manufacturing capabilities and we are dependent upon Nutri-Diem, Inc.
      and other companies to manufacture our products.**




We
      have
      no manufacturing facilities and have no present intention to manufacture any
      of
      our dietary supplement and personal care products. We are dependent upon
      relationships with independent manufacturers to fulfill our product needs.
      Nutri-Diem, Inc., a related party, manufactures and supplies more than 70%
      of
      our products. We have contracts with Nutri-Diem that require us to purchase
      set
      amounts of its manufactured products for at least the next five years and
      possibly the next ten years. It is possible that these contracts with
      Nutri-Diem, Inc. could become unfavorable, and we may not be able to use other
      manufacturers to provide us with these services if our terms with Nutri-Diem,
      Inc. become unfavorable. In addition, we must be able to obtain our dietary
      supplement and personal care products at a cost that permits us to charge a
      price acceptable to the customer, while also accommodating distribution costs
      and third party sales compensation. Competitors who do own their own
      manufacturing may have an advantage over us
      with respect to pricing, availability of product and in other areas through
      their control of the manufacturing process. In addition, if we are forced to
      hold longer quantities of inventory, we face the risk that our inventory becomes
      obsolete with the passage of large amounts of time.




We
      may
      not be able to deliver various products to our customers if third party
      providers fail to provide necessary ingredients to us. We are dependent on
      various third parties for various ingredients for our products. Some of the
      third parties that provide ingredients to us have a limited operating history
      and are themselves dependent on reliable delivery of products from others.
      As a
      result, our ability to deliver various products to our users may be adversely
      affected by the failure of these third parties to provide reliable various
      ingredients for our products.




**We
      are materially dependent upon our key personnel and the loss of such key
      consultants could result in delays in the implementation of our business plan
      or
      business failure.**




We
      depend
      upon the continued involvement of Jay Sargeant, our President, Chief Executive
      Officer and Director, and Dori O'Neill, our Executive Vice President, Chief
      Operations Officer, Secretary, Treasurer and Director. As we are a development
      stage company, the further implementation of our business plan is dependent
      on
      the entrepreneurial skills and direction of management. Mr. Sargeant and Mr.
      O'Neill guide and direct our activity and vision. This direction requires an
      awareness of the market, the competition, current and future markets and
      technologies that would allow us to continue our operations. The loss or lack
      of
      availability of these individuals could materially adversely affect our business
      and operations. We do not carry "key person" life insurance for these officers
      and directors, and we would be adversely affected by the loss of these two
      key
      consultants.




**We
      face substantial competition in the dietary supplement and personal care
      industry, including products that compete directly with
      Calorad.**




The
      dietary supplement and personal care industry is highly competitive. It is
      relatively easy for new companies to enter the industry due to the availability
      of numerous contract manufacturers, a ready availability of natural ingredients
      and a relatively relaxed regulatory environment. Numerous companies compete
      with
      us in the development, manufacture and marketing of supplements as their sole
      or
      principal business. Generally, these companies are well funded and sophisticated
      in their marketing approaches.




**Depending
      on the product category, our competition varies.**




Calorad
      competes directly with Colvera, a product with different ingredients but a
      similar concept. Additionally, Calorad competes indirectly with food plans
      such
      as Weight Watchers and meal replacement products such as Slim Fast. Our Noni
      Plus product competes with Tahitian International and others. Our other products
      have similar well-funded and sophisticated competitors. Increased competitive
      activity from such companies could make it more difficult for us to increase
      or
      keep market share, since such companies have greater financial and other
      resources available to them and possess far more extensive manufacturing,
      distribution and marketing capabilities.









**We
      may be subject to products liability claims and may not have adequate insurance
      to cover such claims. As with other retailers, distributors and manufacturers
      of
      products that are designed to be ingested, we face an inherent risk of exposure
      to product liability claims in the event that the use of our products results
      in
      injury.**




We,
      like
      any other retailers and distributors of products that are designed to be
      ingested, face an inherent risk of exposure to product liability claims in
      the
      event that the use of products contain contaminants or include inadequate
      instructions with other substances. With respect to product liability claims,
      we
      have coverage of $2,000,000 per occurrence and $2,000,000 in the aggregate.
      Because our policies are purchased on a year to year basis, industry conditions
      or our own claims experience could make it difficult for us to secure the
      necessary insurance at a reasonable cost. In addition, we may not be able to
      secure insurance that will be adequate to cover liabilities. We generally do
      not
      obtain contractual indemnification from parties supplying raw materials or
      marketing our products. In any event, any such indemnification is limited by
      its
      terms and, as a practical matter, to the creditworthiness of the other party.
      In
      the event that we do not have adequate insurance or contractual indemnification,
      liabilities relating to defective products could require us to pay the injured
      parties' damages which are significant compared to our net worth or
      revenues.




**We
      may be adversely affected by unfavorable publicity relating to our products
      or
      similar products manufactured by our competitors.**




We
      believe that the dietary supplement products market is affected by national
      media attention regarding the consumption of these products. Future scientific
      research or publicity may be unfavorable to the dietary supplement products
      market generally or to any particular product and may be inconsistent with
      earlier favorable research or publicity. Adverse publicity associated with
      illness or other adverse effects resulting from the consumption of products
      distributed by other companies, which are similar to our products, could reduce
      consumer demand for our products and consequently our revenues. This
      may occur
      even if the publicity did not relate to our products. Adverse publicity directly
      concerning our products could be expected to have an immediate negative effect
      on the market for that product.




**Because
      we have few proprietary rights, others can provide products and services
      substantially equivalent to ours.**




We
      hold
      no patents. We believe that most of the technology used by us in the design
      and
      implementation of our products may be known and available to others.
      Consequently, others may be able to formulate products equivalent to ours.
      We
      rely on confidentiality agreements and trade secret laws to protect our
      confidential information. In addition, we restrict access to confidential
      information on a "need to know" basis. However, there can be no assurance that
      we will be able to maintain the confidentiality of our proprietary information.
      If our pending trademark or other proprietary rights are violated, or if a
      third
      party claims that we violate its trademark or other proprietary rights, we
      may
      be required to engage in litigation. Proprietary rights litigation tends to
      be
      costly and time consuming. Bringing or defending claims related to our
      proprietary rights may require us to redirect our human and monetary resources
      to address those claims.




**Our
      common stock is "penny stock", which may make it more difficult for investors
      to
      sell their shares due to suitability requirements**




Our
      common stock is deemed to be a "penny stock" as that term is defined in Rule
      3a51-1 promulgated under the Securities Exchange Act of 1934. Penny stocks
      are
      stock:




·
            With
                a price of less than $5.00 per
                share;


·
            That
                are not traded on a "recognized" national
                exchange;


·
            Whose
                prices are not quoted on the Nasdaq automated quotation system (Nasdaq
                listed stock must still have a price of not less than $5.00 per share;
                or


·
            In
                issuers with net tangible assets less than $2.0 million (if the issuer
                has
                been in continuous operation for at least three years) or $5.0 million
                (if
                in continuous operation for the last three
                years.




Broker/dealers
      dealing in penny stocks are required to provide potential investors with a
      document disclosing the risks of penny stocks. Moreover, broker/dealers are
      required to determine whether an investment in a penny stock is a suitable
      investment for a prospective investor. These requirements may reduce the
      potential market for our common stock to sell shares to third parties or to
      otherwise dispose of them. This could cause our stock price to
      decline.




**ITEM
      3.            CONTROLS
      AND PROCEDURES.**




Under
      the
      supervision and with the participation of our management, including the Chief
      Executive Officer and Chief Financial Officer, we have evaluated the
      effectiveness of our disclosure controls and procedures as required by Exchange
      Act Rule 13a-15(b) as of the end of the period covered by this report. Based
      on
      that evaluation, the Chief Executive Officer and Chief Financial Officer have
      concluded that these disclosure controls and procedures are effective.









There
      were no changes in our internal control over financial reporting during the
      quarter ended June 30, 2006 that have materially affected, or are reasonably
      likely to materially affect, our internal control over financial
      reporting.




**PART
      II - OTHER INFORMATION**




**ITEM
      1.            LEGAL
      PROCEEDINGS.**




Other
      than as described below, we are not a party to any material legal proceedings
      and to our knowledge, no such proceedings are threatened or contemplated that
      have not been reported in our previous Quarterly Reports:




*1.
      Oppression Action by Lavorato/Heyman*





In
      2002,
      an oppression action was commenced in the Supreme Court of British Columbia
      by
      the plaintiffs Brian Lavorato, Geraldine Heyman and their respective holding
      companies, alleging that Essentially Yours Industries Corp., our affiliate,
      had
      improperly vended assets into Essentially Yours Industries, Inc., our wholly
      owned subsidiary, as part of a corporate restructuring alleged to be oppressive
      to the plaintiffs. As of April 4, 2003, the lawsuit has been settled and was
      subsequently dismissed by the plaintiffs by consent, with the exception of
      claims asserted by the plaintiffs against Thomas K. Viccars, a former in-house
      counsel of Essentially Yours Industries, Corp., who may potentially assert
      a
      third party claim against Essentially Yours Industries, Inc. On May 1, 2006
      we
      entered into a settlement agreement with Thomas Viccars, pursuant to which
      we
      will pay $60,000 to Mr. Viccars in full and final settlement of all claims
      against EYI.





*2.*  *Action
      By Suhl, Harris and Babich*





In
      2003 a
      consolidated action was brought by the plaintiffs Wolf Suhl, Christine Harris
      and Edward Babich in the Supreme Court of British Columbia pursuant to an order
      pronounced in the New Westminster Registry under Action No. S061589 on May
      7,
      2003, which allowed the plaintiffs to proceed with an action against Essentially
      Yours Industries, Inc. The plaintiffs allege that Essentially Yours Industries,
      Inc. holds certain of its products or revenues derived therefrom as trust
      property for the benefit of the plaintiffs.





The
      claim
      is for an aggregate of 4.9% of the wholesale volume of sales generated by
      Essentially Yours Industries, Inc. from the alleged trust property, and for
      damages and costs. A consolidated statement of defense has been filed by
      Essentially Yours Industries, Inc., and interrogatories have been responded
      to.
      Management believes this claim to be without merit and intends to vigorously
      defend against this claim. In February 2006, the Supreme Court of British
      Columbia made an order that EYI and Mr. Jay Sargeant be added to the lawsuit,
      and the Writ of Summons and Statement of Claim be amended to add the following
      claims: (a) against EYI, damages for unjust enrichment and breach of trust
      for
      any amount found to be owing by Essentially Yours Industries, Inc. plus interest
      and costs; and (b) against Jay Sargeant, damages for unjust enrichment and
      breach of trust for any amount found to be owing by Essentially Yours
      Industries, Inc. or Barry La Rose, plus interest and costs. The Plaintiffs’
total claim is approximately $478,000. On
      April
      13, 2006, the plaintiffs amended their pleadings to assert claims against EYI
      and Jay Sargeant. EYI has entered an Appearance to the action and plans to
      file
      a Defence. An order was pronounced on August 15, 2006 for the substitutional
      service of Mr. Jay Sargeant. This
      matter is set for trial commencing September 11, 2006. The parties are presently
      negotiating to settle these claims.




**ITEM
      2.
           UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.**




During
      the six months ended June 30, 2006 we did not complete any sales of securities
      that were not registered pursuant to the Securities Act of 1933 and have not
      been reported on our previous Quarterly Reports on Form 10-QSB during the year.




**ITEM
      3.            DEFAULTS
      UPON SENIOR SECURITIES.**




None.




**ITEM
      4.            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS.**




On
      July
      7, 2006 we filed a Preliminary Schedule 14A Information Statement with the
      SEC
      which encloses our Proxy Statement materials for our Special Meeting. Our
      Special Meeting will be held on August 22, 2006 in Los Angeles, California
      to
      seek shareholder approval to increase the number of authorized common shares
      from 1,000,000,000 to 3,000,000,000. On July 20, 2006 we filed our Definitive
      Schedule 14A Information Statement with the SEC.




**ITEM
      5.            OTHER
      INFORMATION.**









None.




**ITEM
      6.            EXHIBITS
      AND REPORTS ON FORM 8-K.**




(a)
      Exhibits





**Exhibit
                Number**
            
            **Description
                of Exhibit**3.1
            
            Articles
                of Incorporation.(1)3.2
            
            Certificate
                of Amendment to Articles of Incorporation dated December 29,
                2003.(11)3.3
            
            Certificate
                of Amendment to Articles of Incorporation dated December 31,
                2003.(11)3.4
            
            Bylaws.(1)3.5
            
            Amended
                Bylaws.(12)3.6
            
            Certificate
                of Amendment to Articles of Incorporation dated March 30, 2006(23)10.1
            
            Consulting
                Agreement, dated as of November 5, 2002, between Essentially Yours
                Industries, Inc., a Nevada corporation, and Flaming Gorge,
                Inc.(1)10.2
            
            Consulting
                Agreement, dated as of November 5, 2002, between Essentially Yours
                Industries, Inc., a Nevada corporation, and O’Neill Enterprises,
                Inc.(1)10.3
            
            Registration
                Rights Agreement, dated December 31, 2003, by and among Safe ID
                Corporation, A Nevada corporation, and certain shareholders of EYI
                Industries, Inc., A Nevada corporation.(5)10.4
            
            Stock
                Compensation Program(4)10.5
            
            Consulting
                Agreement dated December 27, 2003 between Rajesh Raniga Inc. and
                Safe ID
                Corporation.(6)10.6
            
            Consulting
                Agreement dated January 1, 2004 between EYI Industries, Inc. and
                O’Neill
                Enterprises Inc.(6)10.7
            
            Consulting
                Agreement dated January 1, 2004 between EYI Industries, Inc. and
                Flaming
                Gorge, Inc.(6)10.8
            
            Addendum
                to the Distribution and License Agreement between Essentially Yours
                Industries, Inc. and Nutri-Diem Inc. dated April 30, 2004.(6)10.9
            
            Letter
                Agreement dated May 4, 2004 between Eye Wonder, Inc. and EYI Industries,
                Inc.(6)10.10
            
            Standby
                Equity Distribution Agreement, dated June 22, 2004 by and between
                EYI
                Industries, Inc. and Cornell Capital Partners, LP(6)10.11
            
            Registration
                Rights Agreement, dated June 22, 2004 by and between EYI Industries,
                Inc.
                and Cornell Capital Partners, LP(6)10.12
            
            Escrow
                Agreement, dated June 22, 2004 by and between EYI Industries, Inc.
                and
                Cornell Capital Partners, LP(6)10.13
            
            Placement
                Agent Agreement, dated June 22, 2004 by and between EYI Industries,
                Inc.
                and Cornell Capital Partners, LP(6)10.14
            
            Compensation
                Debenture, dated June 22, 2004(7)10.15
            
            Securities
                Purchase Agreement, dated June 22, 2004 by and between EYI Industries,
                Inc. and Cornell Capital Partners, LP(6)10.16
            
            Investor
                Registration Rights Agreement, dated June 22, 2004 by and between
                EYI
                Industries, Inc. and Cornell Capital Partners, LP(6)10.17
            
            Security
                Agreement, dated June 22, 2004 by and between EYI Industries, Inc.
                and
                Cornell Capital Partners, LP(6)10.18
            
            Irrevocable
                Transfer Agent Instructions, dated June 22, 2004, by and among EYI
                Industries, Inc., Cornell Capital Partners, LP and Corporate Stock
                Transfer(6)10.19
            
            Escrow
                Agreement, dated June 22, 2004 by and among EYI Industries, Inc.,
                Cornell
                Capital Partners, L.P. and Butler Gonzalez, LLP(6)10.20
            
            Form
                of Secured Convertible Debenture(6)10.21
            
            Form
                of Warrant(7)10.22
            
            Letter
                Agreement dated May 25, 2004 between EYI Industries, Inc. and Source
                Capital Group, Inc.(8)







**Exhibit
                  Number**
              
              **Description
                  of Exhibit**


10.23
            
            Lease
                Agreement dated May 1, 2003 among 468058 B.C. Ltd., 642706 B.C. Ltd.,
                Essentially Yours Industries Corp., and Essentially Yours Industries,
                Inc.(8)10.24
            
            5%
                Secured Convertible Debenture dated September 24, 2004 between EYI
                Industries, Inc. and Cornell Capital Partners, LP(8)10.25
            
            5%
                Secured Convertible Debenture dated September 27, 2004 between EYI
                Industries, Inc. and Kent Chou(8)10.26
            
            5%
                Secured Convertible Debenture dated September 27, 2004 between EYI
                Industries, Inc. TAIB Bank, E.C.(8)10.27
            
            Assignment
                Agreement dated September 27, 2004 between Cornell Capital Partners,
                LP
                and TAIB Bank, E.C.(8)10.28
            
            Assignment
                Agreement dated September 27, 2004 between Cornell Capital Partners,
                LP
                and Kent Chou(8)10.29
            
            Joint
                Venture Agreement dated May 28, 2004 between EYI Industries, Inc.,
                World
                Wide Buyer’s Club Inc. and Supra Group, Inc.(9)10.30
            
            Indenture
                of Lease Agreement dated January 3, 2005 between Golden Plaza Company
                Ltd., 681563 B.C. Ltd., and 642706 B.C. Ltd.(10)10.31
            
            Consulting
                Services Agreement dated March 5, 2004 between EYI Industries, Inc.
                and
                EQUIS Capital Corp.(13)10.32
            
            Letter
                dated May 25, 2004 between Source Capital Group, Inc. and EYI Industries,
                Inc.(14)10.33
            
            Loan
                Agreement between Janet Carpenter and EYI Industries, Inc., dated
                February
                10, 2005(15)10.34
            
            Promissory
                Note dated February 10, 2005 between Janet Carpenter and EYI
                Industries(15)10.35
            
            Bonus
                Share Agreement between Janet Carpenter and EYI Industries, Inc.
                dated
                February 14, 2005(15)10.36
            
            Pledge
                and Escrow Agreement dated February 24, 2005 between Janet Carpenter,
                Cornell Capital Partners, LP and David Gonzalez.(15)10.37
            
            Guaranty
                Agreement dated February 24, 2005 between Janet Carpenter, Cornell
                Capital
                Partners, LP(15)10.38
            
            Secured
                Promissory Note dated February 24, 2005 between EYI Industries, Inc.
                and
                Cornell Capital Partners, LP(15)10.39
            
            Agreement
                dated April 22, 2005 between Essentially Yours Industries Inc. and
                Source
                1 Fulfillment(17)10.40
            
            Reseller
                Agreement dated May 11, 2005 between Essentially Yours Industries
                Inc. and
                Metals & Arsenic Removal Technology, Inc.(16)10.41
            
            Termination
                Agreement dated May 13, 2005 between EYI Industries Inc. and Cornell
                Capital Partners, LP(17)10.42
            
            Standby
                Equity Distribution Agreement dated May 13, 2005 between EYI Industries
                Inc. and Cornell Capital Partners, LP(17)10.43
            
            Registration
                Rights Agreement dated May 13, 2005 between EYI Industries Inc. and
                Cornell Capital Partners, LP(17)10.44
            
            Escrow
                Agreement dated May 13, 2005 between EYI Industries Inc. and Cornell
                Capital Partners, LP(17)10.45
            
            Placement
                Agent Agreement dated May 13, 2005 between EYI Industries Inc. and
                Cornell
                Capital Partners, LP(17)10.46
            
            Consulting
                Agreement dated June 1, 2005 between EYI Industries, Inc. and Eliza
                Fung(18)10.47
            
            Addendum
                to the Reseller Agreement dated June 1, 2005 between Essentially
                Yours
                Industries Inc. and Metals & Arsenic Removal Technology, Inc.(18)10.48
            
            Non-Circumvention
                and Non-Disclosure Agreement dated July 14, 2005 between Essentially
                Yours
                Industries Inc. and Metals & Arsenic Removal Technology,
                Inc.(18)10.49
            
            Promissory
                Note dated August 1, 2005 between EYI Industries Inc. and Cornell
                capital
                Partners, LP(18)10.50
            
            Investor
                Relations Agreement dated July 28, 2005 between EYI Industries, Inc.
                and
                Agora Investor Relations Corp.(18)10.51
            
            China
                Agency Agreement entered into with Guanghzhou Zhongdian Enterprises
                (Group) Co. Ltd. and China Electronics Import and Export South China
                Corporation. Dated September 15, 2005(19)10.52
            
            Logistics
                Management Agreement dated September 1, 2005 between Essentially
                Yours
                Industries (Hong Kong) Limited and All In One Global Logistics
                Ltd.(20)10.53
            
            Contract
                for Legal Services dated September 1, 2005 between EYI Industries
                Inc. and
                M. Ali Lakhani Law Corporation(21)10.54
            
            Amended
                Investor Relations Agreement dated October 5, 2005 between EYI Industries,
                Inc. and Agora Investor Relations Corp.(22)









**Exhibit
                  Number**
              
              **Description
                  of Exhibit**


10.55
            
            Settlement
                Agreement dated December 21, 2005 between EYI Industries, Inc., Halo
                Distribution, LLC and Business Centers, LLC.(23)10.56
            
            Global
                Consulting Group Agreement dated January 19, 2006 entered into with
                Global
                Consulting Group Inc. and EYI Industries Inc.(23)10.57
            
            Consulting
                Agreement dated January 27, 2006 entered into with Lou Prescott and
                Essentially Yours Industries, Inc.(23)10.58
            
            Termination
                Agreement dated April 3, 2006 between EYI Industries Inc. and Cornell
                Capital Partners, LP(25)10.59
            
            Letter
                of Intent dated April 6, 2006 between Essentially Yours Industries
                (International) Limited and Rommel Panganiban and Raul Batista(25)10.60
            
            Securities
                Purchase Agreement, dated as of April 24, 2006, by and between EYI
                Industries, Inc. and the Buyers listed therein(24)10.61
            
            Registration
                Rights Agreement, dated as of April 24, 2006, by and between EYI
                Industries, Inc. and the Buyers listed therein(24)10.62
            
            $750,000
                Secured Convertible Debenture No. CCP-1, dated as of April 24, 2006,
                issued to Cornell Capital Partners, LP(24)10.63
            
            $333,333
                Secured Convertible Debenture CW-1, dated as of April 24, 2006, issued
                to
                Cornell Capital Partners, LP(24)10.64
            
            $416,667
                Secured Convertible Debenture TAIB-1, dated as of April 24, 2006,
                issued
                to Cornell Capital Partners, LP(24)10.65
            
            Security
                Agreement, dated as of April 24, 2006, issued to Cornell Capital
                Partners,
                LP(24)10.66
            
            Warrant
                No. CCP-001, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.67
            
            Warrant
                No. CCP-002, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.68
            
            Warrant
                No. CCP-003, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.69
            
            Warrant
                No. CCP-004, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.70
            
            Warrant
                No. CCP-005, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.71
            
            Warrant
                No. CCP-006, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.72
            
            Warrant
                No. CCP-007, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.73
            
            Warrant,
                No. CCP-008, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.74
            
            Warrant
                No. CCP-009, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.75
            
            Warrant
                No. CCP-010, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.76
            
            Warrant
                No. CCP-011, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.77
            
            Warrant
                No. CCP-012, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.78
            
            Warrant
                No. CCP-013, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.79
            
            Warrant
                No. CCP-014, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.80
            
            Warrant
                No. CCP-015, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.81
            
            Warrant
                No. CCP-016, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)









**Exhibit
                  Number**
              
              **Description
                  of Exhibit**


10.82
            
            Warrant
                No. CCP-017, dated April 24, 2006, issued by the Company to Cornell
                Capital Partners, LP(24)10.83
            
            Irrevocable
                Transfer Agent Instructions, dated April 24, 2006, by and among the
                Company, the Buyers listed therein and Corporate Stock Transfer,
                Inc.(24)10.84
            
            Consulting
                Agreement dated May 1, 2006 between Essentially Yours Industries
                (Hong
                Kong) Limited and Siu Chung (Freeda) Chan(25)10.85
            
            Amended
                Logistics Management Agreement dated May 1, 2006 between Essentially
                Yours
                Industries (Hong Kong) Limited and All In One Global Logistics
                Ltd.10.86
            
            Distribution
                Agreement dated May 17, 2006 between Essentially Yours Industries
                (Hong
                Kong) Limited and Nozin, LLC(27)10.87
            
            Consulting
                Agreement dated July 1, 2006 between Essentially Yours Industries,
                Inc.
                and James Toll10.88
            
            Letters
                dated July 12, 2006 and July 14, 2006 from Metals & Arsenic Removal
                Technology10.89
            
            Addendum
                to the China Agency Agreement dated September 15, 2005 between EYI
                HK and
                Guangzhou Zhondian Enterprises (Group) Co. Ltd. and China Electronics
                Import and Export South China Corporation(28)14.1
            
            Code
                of Ethics(5)21.1
            
            List
                of Subsidiaries(23)23.1
            
            Consent
                of Williams & Webster, P.S.(26)31.1
            
            Certification
                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 200231.2
            
            Certification
                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
                Act of 200232.1
            
            Certification
                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
            
            Certification
                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
                adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





______________




(1)
            Filed
                as an exhibit to the registration statement on Form 10-SB/A of Safe
                ID
                Corporation, filed with the SEC on September 21,
                2000.


(2)
            Filed
                as an exhibit to the registration statement on Form SB-2 of Essentially
                Yours Industries, Inc., filed with the SEC on November 12,
                2002.


(3)
            Filed
                as an exhibit to our Current Report on Form 8-K, filed with the SEC
                on
                January 8, 2004.


(4)
            Filed
                as an exhibit to our Registration Statement on Form S-8, filed with
                the
                SEC on March 30, 2004.


(5)
            Filed
                as an exhibit to our annual report on Form 10-KSB for the year ended
                December 31, 2003, filed with the SEC on April 14,
                2004.


(6)
            Filed
                as an exhibit to our quarterly report on Form 10-QSB for the period
                ended
                March 31, 2004, filed with the SEC on May 24,
                2004.


(7)
            Filed
                as an exhibit to our registration statement on Form SB-2, filed with
                the
                SEC on September 17, 2004.


(8)
            Filed
                as an exhibit to our quarterly report on Form 10-QSB for the period
                ended
                September 30, 2004, filed with the SEC on November 22,
                2004.


(9)
            Filed
                as an exhibit to our Amendment No. 1 to our registration statement
                on Form
                SB-2 on December 23, 2004.


(10)
            Filed
                as an exhibit to our Current Report on Form 8-K, filed with the SEC
                on
                January 12, 2005.


(11)
            Filed
                as an exhibit to our quarterly report on Form 10-QSB for the period
                ended
                September 30, 2004, filed with the SEC on November 22,
                2004.


(12)
            Filed
                as an exhibit to our Current Report on Form 8-K, filed with the SEC
                on
                March 10, 2005.


(13)
            Filed
                as an exhibit to our quarterly report on Form 10-QSB/A for the period
                ended March 31, 2004, filed with the SEC on December 15,
                2004.


(14)
            Filed
                as an exhibit to our quarterly report on Form 10-QSB/A for the period
                ended June 30, 2004, filed with the SEC on December 15,
                2004.


(15)
            Filed
                as an exhibit to our annual report on Form 10-KSB for the period
                ended
                December 31, 2004, filed with the SEC on April 18,
                2005.


(16)
            Filed
                as an exhibit to our Current Report on Form 8-K, filed with the SEC
                on May
                17, 2005.


(17)
            Filed
                as an exhibit to our Quarterly Report on Form 10-QSB for the period
                ended
                March 31, 2005, filed with the SEC on May 23,
                2005.


(18)
              Filed
                  as an exhibit to our Quarterly Report on Form 10-QSB for the period
                  ended
                  June 30, 2005, filed with the SEC on August 19,
                  2005.
 (19)
              Filed
                  as an exhibit to our Current Report on Form 8-K, filed with the
                  SEC on
                  September 27, 2005.
 (20)
              Filed
                  as an exhibit to our quarterly report on Form 10-QSB for the period
                  ended
                  September 30, 2005, filed with the SEC on November 21,
                  2005.
 (21)
              Filed
                  as an exhibit to our quarterly report on Form 10-QSB for the period
                  ended
                  September 30, 2005, filed with the SEC on November 21,
                  2005.
 (22)
              Filed
                  as an exhibit to our quarterly report on Form 10-QSB for the period
                  ended
                  September 30, 2005, filed with the SEC on November 21,
                  2005.
 (23)
              Filed
                  as an exhibit to our annual report on Form 10-KSB for the period
                  ended
                  December 31, 2005, filed with the SEC on March 31,
                  2006.
 (24)
              Filed
                  as an exhibit to our Current Report on Form 8-K, filed with the
                  SEC on
                  April 28, 2006.
 (25)
              Filed
                  as an exhibit to our Quarterly Report on From 10-QSB for the period
                  ended
                  March 31, 2006, filed with the SEC on May 16,
                  2006.
 (26)
              Filed
                  as an exhibit to our registration statement on Form SB-2/A on June
                  21,
                  2006.
 (27)
              Filed
                  as an exhibit to our Current Report on Form 8-K, filed with the
                  SEC on
                  April 28, 2006
 (28)
              Filed
                  as an exhibit to our Current Report on Form 8-K, filed with the
                  SEC on
                  August 3, 2006


(b)
      Reports on Form 8-K:





**Date
                of Event**
            **Date
                of filing**
            **Description
                of the Form 8-K**July
                27, 2006
            August
                3, 2006
            Disclosure
                of an Addendum to the China Agency Agreement dated September 15,
                2005
                between EYI HK and Guangzhou Zhongdian Enterprises (Group) Co. Ltd.
                and
                China Electronics Import and Export South China
                CorporationJuly
                21, 2006
            July
                24, 2006
            Disclosure
                of news release dated July 21, 2006 regarding a non-binding letter
                of
                intent with Mach 3 Technologies Group, LLCMay
                17, 2006
            May
                24, 2006
            Disclosure
                of Distribution Agreement dated May 17, 2006 with Nozin,
                LLCMay
                11, 2006
            May
                11, 2006
            Amendment
                No. 1 to Form 8-K filed on May 1, 2006April
                24, 2006
            May
                1, 2006
            Disclosure
                of securities purchase agreement pursuant to which EYI will sell
                convertible debentures and issuance of warrants to Cornell Capital
                Partners, LPApril
                3, 2006
            April
                4, 2006
            Disclosure
                of Termination Agreement with Cornell Capital
                Partners







**SIGNATURES**






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




**EYI
                INDUSTRIES, INC.**By:
            /s/
                Jay SargeantJay
                SargeantPresident,
                Chief Executive Officer,and
                Director(Principal
                Executive Officer)Date:
                August 23, 2006By:
            /s/
                Rajesh RanigaRajesh
                RanigaChief
                Financial Officer
              (Principal
                Accounting Officer)
              Date:
                August 23, 2006