---

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 10-QSB

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

For the quarterly period ended September 30, 2004

 ̈  Transition
  Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period __________ 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)                  |                                  
|                                                |                                  
|3960 Howard Hughes Parkway, Suite 500           |                                  
|Las Vegas, Nevada                               | 89109                            
|(Address of principal executive offices)        | (Zip Code)                       
|                                                |                                  
|Issuer's telephone number, including area code: | (702) 296-8034                   

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 Securities Exchange Act of 1934 during
  the preceding 12 months (or for such shorter period that the issuer was required
  to file such reports), and (2) has been subject to such filing requirements
  for the past 90 days: Yes x  No
   ̈

State the number of shares outstanding of each of the issuer's
  classes of common stock, as of the latest practicable date: 161,426,594
  shares of common stock issued and outstanding as of November 19, 2004.

Transitional Small Business Disclosure Format (check one):
  Yes  ̈   No x

---

PART I - FINANCIAL INFORMATION

ITEM 1.            FINANCIAL
  STATEMENTS.

2

---

|EYI
      INDUSTRIES, INC.CONSOLIDATED BALANCE SHEETS
|-----------------------------------------------------

|                                                            |   | September 30, 2004 |   |   | December 31, 2003 |  
|----------------------------------------------------------- | - | ------------------ | - | - | ----------------- | -
|                                                            |   | (Unaudited)        |   |   | (Restated)        |  
|ASSETS                                                      |   |                    |   |   |                   |  
|                                                            |   |                    |   |   |                   |  
|CURRENT ASSETS                                              |   |                    |   |   |                   |  
|Cash                                                        | $ | 43,711             |   | $ | 52,075            |  
|Restricted cash                                             |   | 210,946            |   |   | 223,682           |  
|Accounts receivable, net of allowance                       |   | 48,497             |   |   | 52,323            |  
|Related party receivables                                   |   | 4,996              |   |   | 5,465             |  
|Prepaid expenses                                            |   | 974,290            |   |   | 28,600            |  
|Inventory                                                   |   | 205,274            |   |   | 254,367           |  
|TOTAL CURRENT ASSETS                                        |   | 1,487,714          |   |   | 616,512           |  
|                                                            |   |                    |   |   |                   |  
|OTHER ASSETS                                                |   |                    |   |   |                   |  
|Property, plant and equipment, net                          |   | 79,039             |   |   | 143,439           |  
|Deferred offering costs, net                                |   | 341,250            |   |   | -                 |  
|TOTAL OTHER ASSETS                                          |   | 420,289            |   |   | 143,439           |  
|                                                            |   |                    |   |   |                   |  
|INTANGIBLE ASSETS                                           |   | 17,101             |   |   | 19,801            |  
|                                                            |   |                    |   |   |                   |  
|TOTAL ASSETS                                                | $ | 1,925,104          |   | $ | 779,752           |  
|                                                            |   |                    |   |   |                   |  
|LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)              |   |                    |   |   |                   |  
|                                                            |   |                    |   |   |                   |  
|CURRENT LIABILITIES                                         |   |                    |   |   |                   |  
|Bank indebtedness                                           | $ | 13,361             |   | $ | 259,977           |  
|Accounts payable and accrued liabilities                    |   | 1,000,819          |   |   | 836,751           |  
|Accounts payable - related parties                          |   | 612,193            |   |   | 779,367           |  
|Convertible debt-related party, net of discount             |   | 415,000            |   |   | -                 |  
|Customer deposits                                           |   | 8,250              |   |   | 6,250             |  
|TOTAL CURRENT LIABILITIES                                   |   | 2,049,623          |   |   | 1,882,345         |  
|                                                            |   |                    |   |   |                   |  
|COMMITMENTS AND CONTINGENCIES                               |   | -                  |   |   | -                 |  
|                                                            |   |                    |   |   |                   |  
|MINORITY INTEREST IN SUBSIDIARY                             |   | 376,419            |   |   | 468,877           |  
|                                                            |   |                    |   |   |                   |  
|STOCKHOLDERS' EQUITY (DEFICIT)                              |   |                    |   |   |                   |  
|Preferred stock, $0.001 par value; 10,000,000 shares        |   |                    |   |   |                   |  
|authorized, no shares issued and
      outstanding          |   | -                  |   |   | -                 |  
|Common stock, $0.001 par value; 300,000,000 shares          |   |                    |   |   |                   |  
|authorized, 162,103,042 and 148,180,670
      shares issued |   |                    |   |   |                   |  
|and outstanding, respectively                               |   | 162,103            |   |   | 148,181           |  
|Discount
      on common stock                              |   | (53,598            | ) |   | (53,598           | )
|Additional paid-in capital                                  |   | 2,784,814          |   |   | 827,972           |  
|Stock options and warrants                                  |   | 2,141,768          |   |   | 128,385           |  
|Subscription receivable                                     |   | (15,000            | ) |   | -                 |  
|Accumulated deficit                                         |   | (5,521,026         | ) |   | (2,622,410        | )
|TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                        |   | (500,938           | ) |   | (1,571,470        | )
|                                                            |   |                    |   |   |                   |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)        | $ | 1,925,104          |   | $ | 779,752           |  

The accompanying condensed notes are an integral part of these
  financial statements. 
  F-1

---

|EYI
      INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF OPERATIONS
|---------------------------------------------------------------

|                                                |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |  
|----------------------------------------------- | - | -------------------------------- | - | - | ------------------------------- | -
|                                                |   | 2004                             |   |   | 2003                            |  
|                                                |   | (Unaudited)                      |   |   | (Unaudited)                     |  
|REVENUE                                         | $ | 1,379,056                        |   | $ | 2,257,932                       |  
|                                                |   |                                  |   |   |                                 |  
|COST OF GOODS SOLD                              |   | 799,991                          |   |   | 1,693,639                       |  
|                                                |   |                                  |   |   |                                 |  
|GROSS PROFIT                                    |   | 579,065                          |   |   | 564,293                         |  
|                                                |   |                                  |   |   |                                 |  
|OPERATING EXPENSES                              |   |                                  |   |   |                                 |  
|Consulting fees                                 |   | 318,095                          |   |   | 215,152                         |  
|Legal and professional                          |   | 106,237                          |   |   | 51,629                          |  
|Customer service                                |   | 84,636                           |   |   | 241,622                         |  
|Finance and administration                      |   | 1,166,046                        |   |   | 190,066                         |  
|Sales and marketing                             |   | 108,790                          |   |   | 75,489                          |  
|Telecommunications                              |   | 180,937                          |   |   | 106,665                         |  
|Wages and benefits                              |   | 325,396                          |   |   | 234,363                         |  
|Warehouse expense                               |   | 112,089                          |   |   | 13,364                          |  
|TOTAL OPERATING EXPENSES                        |   | 2,402,226                        |   |   | 1,128,351                       |  
|                                                |   |                                  |   |   |                                 |  
|OPERATING LOSS                                  |   | (1,823,161                       | ) |   | (564,057                        | )
|                                                |   |                                  |   |   |                                 |  
|OTHER INCOME (EXPENSES)                         |   |                                  |   |   |                                 |  
|Interest and other income                       |   | 3,741                            |   |   | 1,453                           |  
|Interest expense                                |   | (6,546                           | ) |   | (13,392                         | )
|Foreign currency gain/(discount)                |   | 127                              |   |   | 18,026                          |  
|TOTAL OTHER INCOME (EXPENSES)                   |   | (2,678                           | ) |   | 6,087                           |  
|                                                |   |                                  |   |   |                                 |  
|NET LOSS BEFORE TAXES                           |   | (1,825,839                       | ) |   | (557,970                        | )
|                                                |   |                                  |   |   |                                 |  
|PROVISION FOR INCOME TAXES                      |   | -                                |   |   | -                               |  
|                                                |   |                                  |   |   |                                 |  
|NET LOSS BEFORE ALLOCATION TO MINORITY INTEREST |   | (1,825,839                       | ) |   | (557,970                        | )
|                                                |   |                                  |   |   |                                 |  
|ALLOCATION OF LOSS TO MINORITY INTEREST         |   | 37,472                           |   |   | -                               |  
|                                                |   |                                  |   |   |                                 |  
|NET LOSS                                        | $ | (1,788,367                       | ) | $ | (557,970                        | )
|                                                |   |                                  |   |   |                                 |  
|BASIC AND DILUTED                               |   |                                  |   |   |                                 |  
|NET LOSS PER COMMON SHARE                       | $ | (0.01                            | ) | $ | nil                             |  
|                                                |   |                                  |   |   |                                 |  
|WEIGHTED AVERAGE NUMBER OF                      |   |                                  |   |   |                                 |  
|COMMON STOCK SHARES OUTSTANDING                 |   |                                  |   |   |                                 |  
|FOR BASIC AND DILUTED
      CALCULATION         |   | 162,066,682                      |   |   | 118,045,603                     |  

The accompanying condensed notes are an integral part of these
  financial statements. 
  F-2

---

|EYI
      INDUSTRIES, INC.CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
      (DEFICIT)
|----------------------------------------------------------------------------------------

|                                                         | Common Stock |  |   | Additional |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|-------------------------------------------------------- | ------------ |  | - | ---------- |  | - | --------- | - | - | ------------ | - | - | ------------ | - | - | --------- |  | - | ---------- | -
|                                                         | Number of    |  |   |            |  |   | Paid-in   |   |   | Discount on  |   |   | Subscription |   |   | Option/   |  |   | Retained   |  
|                                                         | Shares       |  |   | Amount     |  |   | Capital   |   |   | Common Stock |   |   | Receivable   |   |   | Warrants  |  |   | Earnings   |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Stock issued for cash on June 21, 2002                   | 23,026,200   |  | $ | 23,026     |  | $ | 6,974     |   | $ | -            |   | $ | -            |   | $ | -         |  | $ | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Contribution of assets, liabilities and                  |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|subsidiaries acquired at
      June 30, 2002             | 92,104,800   |  |   | 92,105     |  |   | -         |   |   | (53,598      | ) |   |              |   |   | -         |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Net loss for period ended June 30, 2002                  | -            |  |   | -          |  |   | -         |   |   | -            |   |   |              |   |   | -         |  |   | (7,967     | )
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Balance, June 30, 2002                                   | 115,131,000  |  |   | 115,131    |  |   | 6,974     |   |   | (53,598      | ) |   | -            |   |   | -         |  |   | (7,967     | )
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Shares issued for cash in private                        |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|placement for $1.50 per
      share,                     |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|net of prorata share of
      private placement          |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|fees of $61,206                                          | 2,914,603    |  |   | 2,915      |  |   | 477,307   |   |   | -            |   |   | -            |   |   | -         |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Net loss for fiscal year ended                           |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|June 30, 2003                                            | -            |  |   | -          |  |   | -         |   |   | -            |   |   | -            |   |   | -         |  |   | (1,644,456 | )
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Balance, June 30, 2003                                   | 118,045,603  |  |   | 118,046    |  |   | 484,281   |   |   | (53,598      | ) |   | -            |   |   | -         |  |   | (1,652,423 | )
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Shares issued in private placement in anticipation       |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|of recapitalization                                      | 3,931,067    |  |   | 3,931      |  |   | 463,866   |   |   | -            |   |   | -            |   |   | 82,552    |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Recapitalization and share exchange (restated)           | 26,204,000   |  |   | 26,204     |  |   | (120,175  | ) |   | -            |   |   | -            |   |   | 45,833    |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Net loss for fiscal year ended                           |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|December 31, 2003                                        | -            |  |   | -          |  |   | -         |   |   | -            |   |   | -            |   |   | -         |  |   | (969,987   | )
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Balance, December 31, 2003 (restated)                    | 148,180,670  |  |   | 148,181    |  |   | 827,972   |   |   | (53,598      | ) |   | -            |   |   | 128,385   |  |   | (2,622,410 | )
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Common stock issued at $0.20 including                   |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|warrants less expenses of
      $28,715                  | 1,466,455    |  |   | 1,466      |  |   | 146,930   |   |   | -            |   |   | -            |   |   | 70,844    |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Stock issued at $0.165 per share for cashless            |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|exercise of options in form
      of foregone debt       | 3,200,000    |  |   | 3,200      |  |   | 524,800   |   |   | -            |   |   | -            |   |   | -         |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Stock issued for exercise of options at $0.20 per share  |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|in lieu of payment of legal
      fees                   | 300,000      |  |   | 300        |  |   | 59,700    |   |   | -            |   |   | -            |   |   | -         |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Stock issued at $0.165 per share for cash and            |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|promissory note for
      exercise of options            | 1,000,000    |  |   | 1,000      |  |   | 164,000   |   |   | -            |   |   | (15,000      | ) |   | -         |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Common stock issued at $0.21 including                   |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|warrants for prepaid expenses                            | 5,476,190    |  |   | 5,476      |  |   | 487,381   |   |   | -            |   |   | -            |   |   | 657,143   |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Common stock issued at $0.21 including                   |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|warrants less expenses of
      $3,231                   | 566,833      |  |   | 567        |  |   | 36,369    |   |   | -            |   |   | -            |   |   | 78,869    |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Stock issued for exercise of options at $0.22 per share  |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|in lieu of consulting fees                               | 50,000       |  |   | 50         |  |   | 10,950    |   |   | -            |   |   | -            |   |   | -         |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Stock issued for deferred offering costs                 | 1,300,000    |  |   | 1,300      |  |   | 388,700   |   |   | -            |   |   | -            |   |   | -         |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Adjustment to subsidiaries stock held by minority        |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|interest                                                 | 176,534      |  |   | 177        |  |   | 33,126    |   |   | -            |   |   | -            |   |   | -         |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Stock issued at $0.28 per share for consulting agreement | 350,000      |  |   | 350        |  |   | 97,650    |   |   | -            |   |   | -            |   |   | -         |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Vested stock options issued for consulting at an         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|average price of $0.18 per
      share                   | -            |  |   | -          |  |   | -         |   |   | -            |   |   | -            |   |   | 128,250   |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Vested stock options issued for compensation at an       |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|average price of $0.18 per
      share                   | -            |  |   | -          |  |   | -         |   |   | -            |   |   | -            |   |   | 1,078,277 |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Stock issued at $0.165 per share for cash and            |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|promissory note for exercise
      of options            | 36,360       |  |   | 36         |  |   | 7,236     |   |   | -            |   |   | -            |   |   | -         |  |   | -          |  
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Net loss for period ended                                |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|September 30, 2004                                       | -            |  |   | -          |  |   | -         |   |   | -            |   |   | -            |   |   | -         |  |   | (2,898,616 | )
|                                                         |              |  |   |            |  |   |           |   |   |              |   |   |              |   |   |           |  |   |            |  
|Balance, September 30, 2004 (Unaudited)                  | 162,103,042  |  | $ | 162,103    |  | $ | 2,784,814 |   | $ | (53,598      | ) | $ | (15,000      | ) | $ | 2,141,768 |  | $ | (5,521,026 | )

The accompanying condensed notes are an integral part of these
  financial statements. 
  F-3

---

|EYI
      INDUSTRIES, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
|---------------------------------------------------------------

|                                                                              |   | Nine Months Ended  |  
|----------------------------------------------------------------------------- | - | ------------------ | -
|                                                                              |   | September 30, 2004 |  
|                                                                              |   | (Unaudited)        |  
|                                                                              |   |                    |  
|CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES                            |   |                    |  
|Net loss                                                                      | $ | (2,898,616         | )
|Loss allocated to minority
      interest                                     |   | 59,155             |  
|                                                                              |   | (2,957,771         | )
|                                                                              |   |                    |  
|Adjustments to reconcile
      net loss                                       |   |                    |  
|to net cash used by operating activities:                                     |   |                    |  
|Depreciation and amortization                                                 |   | 115,139            |  
|Stock and warrants issued for consulting and services                         |   | 1,404,527          |  
|Stock issued for options exercised in lieu of debt                            |   | 528,000            |  
|Stock issued for options exercised in lieu of consulting and legal
      fees |   | 71,000             |  
|Financing expense paid through escrow                                         |   | 85,000             |  
|Decrease (increase) in:                                                       |   |                    |  
|Related party receivables                                                     |   | 469                |  
|Accounts receivable                                                           |   | 3,826              |  
|Prepaid expenses                                                              |   | 104,310            |  
|Inventory                                                                     |   | 49,093             |  
|Increase (decrease) in:                                                       |   |                    |  
|Accounts payable and accrued liabilities                                      |   | 164,069            |  
|Accounts payable - related parties                                            |   | (252,174           | )
|Customer deposits                                                             |   | 2,000              |  
|Net cash used by operating
      activities                                   |   | (682,512           | )
|                                                                              |   |                    |  
|CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES                            |   |                    |  
|Decrease (increase) in restricted
      cash                                  |   | 12,736             |  
|Cancellation of additions
      to property, plant, and equipment             |   | 711                |  
|Purchase of trademarks and
      formulas                                     |   | -                  |  
|Net cash provided by investing
      activities                               |   | 13,447             |  
|                                                                              |   |                    |  
|CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES                            |   |                    |  
|Net change in bank indebtedness                                               |   | (246,616           | )
|Issuance of stock, net of
      private placement costs & warrants            |   | 492,317            |  
|Net proceeds from convertible
      debt                                      |   | 415,000            |  
|Net cash provided by financing
      activities                               |   | 660,701            |  
|                                                                              |   |                    |  
|Net increase in cash and cash equivalents                                     |   | (8,364             | )
|                                                                              |   |                    |  
|CASH - Beginning of Year                                                      |   | 52,075             |  
|                                                                              |   |                    |  
|CASH - End of Period                                                          | $ | 43,711             |  
|                                                                              |   |                    |  
|SUPPLEMENTAL CASH FLOW DISCLOSURES:                                           |   |                    |  
|Interest expense paid                                                         | $ | 40,537             |  
|Income taxes paid                                                             | $ | -                  |  
|                                                                              |   |                    |  
|NON-CASH INVESTING AND FINANCING TRANSACTIONS:                                |   |                    |  
|Stock issued for options
      exercised in lieu of debt                      | $ | 528,000            |  
|Stock issued for options
      exercised in lieu of consulting and legal fees | $ | 71,000             |  
|Stock subscription issued
      for promissory note                           | $ | 15,000             |  
|Stock and warrants issued
      for prepaid expenses                          | $ | 1,150,000          |  
|Stock issued for deferred
      offering costs                                | $ | 390,000            |  
|Stock and warrants issued
      for expenses                                  | $ | 198,000            |  
|Stock options vested for
      consulting and compensation                    | $ | 1,206,527          |  
|Financing expense paid through
      escrow                                   | $ | 85,000             |  

The accompanying condensed notes are an integral part of these
  financial statements. 
  F-4

---

|EYI
      INDUSTRIES, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
      September 30, 2004
|--------------------------------------------------------------------------------------------------------------

NOTE 1  DESCRIPTION OF BUSINESS

Essentially Yours Industries, Inc., 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 the reorganization notesof
  Essentially Yours Industries, Inc. On December 31, 2003, Essentially Yours Industries,
  Inc. entered into a share exchange agreement of its stock with Safe ID Corporation
  ("Safe ID"). This transaction is being 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 through network
  marketing distributors, which in turn, sell the products to the end customers.
  The Company maintains its principal business office in Surrey, British Columbia.
  Effective for the period ended December 31, 2003, the Company elected to change
  its year-end from June 30 to December 31.

The Company has four wholly owned subsidiaries. The first
  subsidiary is Halo Distributions LLC (hereinafter Halo), which was organized
  on January 15, 1999, in the State of Kentucky. Halo is the distribution center
  for the Company's product in addition to other products. 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 the province of British Columbia, 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
  and marketing services to the consolidated entity.

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., a Nevada corporation,
  which was organized by a joint venture agreement effective May 6, 2004. (See
  Note 3)

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, 2003. In the opinion of management,
  all required adjustments which consist of normal re-occurring accruals have
  been made to the financial

F-5

---

|EYI
      INDUSTRIES, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
      September 30, 2004
|--------------------------------------------------------------------------------------------------------------

statements. The operating results for the nine month period
  ended September 30, 2004 are not necessarily indicative of the results of operations
  that may be expected for the year ended December 31, 2004.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

Accounting for Stock Options and Warrants Granted to Employees
  and Non-Employees Statement of Financial Accounting Standards No. 123, "Accounting
  for Stock-Based Compensation" ("SFAS No. 123"), 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.

Bad Debts 
  During the period ending September 30, 2004, the Company estimated bad debts
  utilizing the allowance method, based upon past experience and current market
  conditions. At September 30, 2004, the allowance for doubtful accounts was $12,387.
  During the period ending December 31, 2003, the Company was unable to estimate
  its expected allowance for bad debts. The Company believed that any estimate
  would be immaterial and elected to use the direct write-off method and expensed
  approximately $27,000 in bad debt expense.

Restricted Cash 
  Restricted cash includes deposits held in a reserve account in the amount of
  $210,946 and $223,682 at September 30, 2004 and December 31, 2003, respectively.
  Such deposits are required by the bank as protection against unfunded charge
  backs and returns of credit card transactions.

Revenue Recognition 
  The Company is in the business of selling nutritional products in two categories;
  dietary supplements and personal care products. Sales of personal care products
  represent less than 5% of the overall revenue and therefore is not classified
  separately in the financial statements. The Company recognized revenue for product
  sales when the products are shipped and title passes to customer. Administrative
  fees charged to the Independent Business Associates are included in the gross
  sales and amounted to $156,920 and $280,840 at September 30, 2004 and September
  30, 2003, respectively.

Going Concern
  As shown in the accompanying financial statements, the Company had negative
  working capital of approximately $562,000 and an accumulated deficit of approximately
  $5,500,000 incurred through September 30, 2004. 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

F-6

---

|EYI
      INDUSTRIES, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
      September 30, 2004
|--------------------------------------------------------------------------------------------------------------

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 JOINT VENTURE AGREEMENT

On May 28, 2004, the Company entered into a joint venture
  agreement with World Wide Buyers' Club Inc. ("WWBC") and Supra Group, Inc. ("SG")
  Pursuant to the terms of the joint venture agreement, the Company and SG agree
  to form WWBC, a Nevada corporation, owned 51% by the Company and 49% by SG.
  The purpose of the agreement is for the joint marketing and distribution of
  products of SG using the Company's existing distribution system in the United
  States. The term of the agreement is 10 years commencing May 6, 2004. As of
  September 30, 2004, there has been no economic activity between the Company,
  SG, or WWBC.

NOTE 4 PROPERTY AND EQUIPMENT

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

NOTE 5  CONVERTIBLE LOANS PAYABLE

On June 2, 2004, the Company entered into a loan agreement
  with Cornell Capital Partners, LP ("the Investor") in which the Company received
  $415,000 net of expenses of $85,000 in funding in exchange for convertible securities
  guaranteed by the assets of the Company. The convertible debt instrument underlying
  this loan agreement will automatically convert into common stock at either 120%
  of the closing bid price by the second anniversary date of issuance or 100%
  of the average of the three lowest daily volume weighted average price of the
  common stock for the 30 trading days immediately preceding the conversion date.
  Failure to issue unrestricted, freely tradable common

F-7

---

|EYI
      INDUSTRIES, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
      September 30, 2004
|--------------------------------------------------------------------------------------------------------------

stock to the Investor upon conversion after the registration
  statement filed pursuant to this transaction has been declared effective would
  be considered an event of default, thereby entitling the Investor to accelerate
  full repayment of the convertible securities then outstanding. Under the agreement,
  the Company is required to keep available common stock duly authorized for issuance
  in satisfaction of the convertible. (See Note 8)

NOTE 6  CAPITAL STOCK

On January 1, 2004, the Company entered into a agreement with
  an independent contractor to provide services in exchange for 250,000 common
  shares. The Company computed the number of shares issued in this transaction
  based on the estimated fair market value of the Company's common stock on the
  dates of issuance and recognized an expense of $70,000 for consulting fees.

On March 5, 2004, the Company entered into a agreement with
  an independent contractor to provide services in exchange for 100,000 common
  shares. The Company computed the number of shares issued in this transaction
  based on the estimated fair market value of the Company's common stock on the
  dates of issuance and recognized an expense of $28,000 for consulting fees.

On April 1, 2004, the Company entered into a consulting agreement
  that granted the consultant, Daniel Matos, 2,000,000 stock options and requires
  the payment of a consulting fee of $16,667 each month. The consultant will use
  the monthly sum to acquire shares of the Company by exercising the options once
  they vested on October 1, 2004.

On April 6, 2004, an employee of the Company exercised 1,000,000
  options at $0.165 per share at the aggregate exercise price of $165,000. The
  options were paid by a combination of cash and a promissory note issued by the
  employee to the Company in the amount of $15,000. The note has been determined
  to be a stock subscription and has been properly allocated on the financial
  statements as a subscription receivable.

On April 20, 2004, an officer of the Company exercised 3,200,000
  options at $0.165 per share at the aggregate exercise price of $528,000. The
  options were paid in the form of foregone debt owed to the officer by the Company.
  (See Note 10)

On May 4, 2004 the Company issued 5,476,190 common shares
  to Eyewonder, Inc. ("Eyewonder") at a price of $0.21 per share, pursuant to
  the terms of the Letter Agreement dated May 4, 2004. The issuance of the 5,476,190
  of common shares has been determined to be a prepaid expense due to the conditions
  of the agreement stating that the shares are fully paid in exchange for Eyewonder's
  role and work in creating and managing an advertising and promotional on-line
  campaign for the Company. Eyewonder Inc. also received 5,476,190 warrants exercisable
  at a price of $0.30 per share for a period of five years from the date of issuance.
  In addition, on execution of the

F-8

---

|EYI
      INDUSTRIES, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
      September 30, 2004
|--------------------------------------------------------------------------------------------------------------

agreement, the Company agreed to issue options to purchase
  1,100,000 shares of the Company's common stock at a price of $0.22 per share
  to certain individuals designated by Eyewonder. The total amount of prepaid
  expense in the amount of $1,050,000 is being expensed over three years, the
  life of the contract. In the period ending September 30, 2004, the Company has
  expensed $145,834 on this contract.

On June 3, 2004, 300,000 options were exercised at $0.20 per
  share at the aggregate exercise price of $60,000. The options were paid in the
  form of forgone debt owed to the legal firm by the Company The Company computed
  the number of options issued in this transaction based on the estimated fair
  market value of the Company's common stock on the dates of issuance.

During the quarter ended June 30, 2004, the Company issued
  50,000 restricted shares at $0.22 per share in payment of consulting fees. The
  Company computed the number of shares issued in this transaction based on the
  fair value of services received and the market value of the Company's common
  stock on the dates of issuance and recognized an expense of $11,000 to consulting
  fees.

During the quarter ended June 30, 2004, the Company received
  $115,805 from the private placement sale of 566,833 shares of common stock at
  $0.21 per share. In addition, the purchasers of the shares received warrants
  to purchase one additional share of common stock for each share purchased, exercisable
  at $0.30 per share for a period of two years. (See Note 7)

During the period ended June 30, 2004, the Company issued
  1,300,000 shares of its common stock as an incentive. (See Note 8)

On July 1, 2004, the Company issued 100,000 stock options
  at $0.26 per share to consultants in exchange for services. The options will
  vest at 50% on October 1, 2004 and 50% on October 1, 2005.

On July 6, 2004, an employee of the Company exercised 36,360
  options at $0.20 per share. The options were paid by cash in the amount of $7,272.

On September 30, 2004, the Company issued 2,650,000 stock
  options at $0.11 per share to various consultants and an employee. These options
  vested immediately upon issuance. (See Note 7)

NOTE 7  COMMON STOCK OPTIONS AND WARRANTS

Financial Accounting Standards No. 123, "Accounting for Stock-Based
  Compensation" (hereinafter "SFAS No. 123"), defines a fair value-based method
  of accounting for stock options and other equity instruments. The Company has
  adopted this method, which

F-9

---

|EYI
      INDUSTRIES, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
      September 30, 2004
|--------------------------------------------------------------------------------------------------------------

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. 123, 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 stock options and warrants
  for the period ended September 30, 2004; estimated risk-free interest rate of
  3 - 4%, estimated volatility of between 75% and 110% and term of two years.

Warrants

Warrants and Prior Year Adjustment 
  During the period ended June 30, 2004, the Company determined that an additional
  916,667 warrants from the reverse acquisition and share exchange with Safe ID
  Corporation had not been properly determined and valued at the date of the change
  of control nor at December 31, 2003. A correction of an error was made and is
  reflected in the financial statements. The warrants were valued at $45,833.
  The additional paid-in-capital was reduced by $45,833 and warrants accounted
  for in the equity section was increased by the same. There was no effect on
  total stockholders equity or upon net income and accumulated deficits.

During the period ended September 30, 2004, the Company received
  $115,805 from the private placement sale of 566,833 shares of common stock.
  In addition, the purchasers of the shares received warrants to purchase one
  additional share of common stock for each share purchased, exercisable at $0.30
  per share for a period of two years. The fair value of the warrants issued as
  part of the private placement was determined to be $78,869.

Stock Options 
  During the period ending September 30, 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. Subsequent to the board of directors approval,
  this plan was approved by the shareholders. This plan enables the Company to
  grant stock options to directors, officers, employees and eligible consultants
  of the Company

During the period ended September 30, 2004, the Company granted
  stock options to purchase a total of 24,639,000 shares of common stock to its
  employees, directors, and consultants. The options were granted from $0.08 to
  $0.26 per share. The Company recognized an expense to services and consulting
  of $1,206,527 during the period ending September 30, 2004 for all vested options.

Following is a summary of the status of the stock options
  during the nine months ended September 30, 2004:

F-10

---

|EYI
      INDUSTRIES, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
      September 30, 2004
|--------------------------------------------------------------------------------------------------------------

|                                                       |                  |   | Weighted Average
|------------------------------------------------------ | ---------------- | - | ----------------
|                                                       | Number of Shares |   | Exercise Price  
|Outstanding at December 31, 2003                       | -                |   | -               
|Granted                                                | 24,639,000       |   | 0.18            
|Exercised                                              | (4,536,360       | ) | 0.17            
|Forfeited                                              | -                |   | -               
|Options outstanding at September 30, 2004              | 20,102,640       |   | 0.18            
|Options exercisable at September 30, 2004              | 12,698,140       |   | 0.17            
|                                                       |                  |   |                 
|Weighted average fair value of options granted in 2004 |                  |   | 0.15            

Summarized information about stock options outstanding and
  exercisable at September 30, 2004 is as follows:



| |               |  | Options
      Outstanding
| | ------------- |  | -------------------------
| | Exercise      |  |                          
| | Price         |  | Number                   
| | Range         |  | of Shares                
| | $0.08 - $0.26 |  | 20,102,640               
| |               |  |                          
| |               |  | Options
      Exercisable
| | Exercise      |  |                          
| | Price         |  | Number                   
| | Range         |  | of
      Shares          
| | $0.11 - $0.22 |  | 12,698,140               

NOTE 8  COMMITMENTS AND CONTINGENCIES

Purchase Agreement 
  On June 30, 2002, the Company entered into a distribution and license agreement
  with a company in which one of the Company's directors has an ownership interest.The agreement gives the Company the exclusive right to market, sell and
  distribute certain products for a five-year renewable term. Management estimates
  that 90% of the Company's sales volume results from products supplied under
  this licensing agreement.

During the quarter ended March 31, 2004, the Company negotiated
  the lowering of the purchasing threshold, and pursuant to the agreement, the
  Company is required to purchase the following amounts of product during the
  term of the agreement:

|June 1, 2003 to May 31, 2004 | $1,586,000
|---------------------------- | ----------
|June 1, 2004 to May 31, 2005 | $3,964,000

For each year thereafter, during the term of this agreement,
  the Company is obligated to purchase a minimum amount of $5,549,000 of product.

F-11

---

|EYI
      INDUSTRIES, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
      September 30, 2004
|--------------------------------------------------------------------------------------------------------------

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 and it has been determined by the Company to
  be a remote possibility that the licensor will enforce the minimum purchase
  requirements, therefore, there has not been an accrual made to the financial
  statements to reflect any estimated liability pertaining to this agreement.

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,
      
      Minimum2004
      $
      264,6342005
      
      177,3562006
      
      151,7392007
      
      52,432


Management Agreement


The remuneration to be paid by EYII to EYI Corp. for the aforementioned
  services shall be the cost of actual expenses plus a fee of five (5%) percent
  for services provided.

Standby Equity Distribution Agreement 
  On June 22, 2004, the Company entered into a two-year Standby Equity Distribution
  Agreement with Cornell Capital Partners LP ("Cornell"). Pursuant to this agreement,
  Cornell will purchase up to 10,000,000 shares of the Company's common stock
  through a placement agent. The Company issued 1,300,000 shares of its common
  stock to Cornell and the placement agent upon the inception of this agreement.
  The $390,000 value of these shares is included in the deferred offering costs
  in the financial statements and will be amortized on a straight line method
  over a two year period. (See Note 5).

Other Matters 
  The Company's predecessor organization, Essentially Yours Industries Corp. ("EYIC"),
  a British Columbia corporation, has outstanding claims from the Internal Revenue
  Service

F-12

---

|EYI
      INDUSTRIES, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
      September 30, 2004
|--------------------------------------------------------------------------------------------------------------

for penalties and interest of approximately $2,000,000. Furthermore,
  one or more states may have claims against EYIC for unpaid state income 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.

NOTE 9  CONCENTRATIONS

Economic Dependence 
  During 2004, 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 8).

NOTE 10  RELATED PARTY TRANSACTIONS

Accounts payable to related parties includes amounts due to
  the president and chief executive officer for services performed 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.

During the nine months, the Company purchased approximately
  90% of its products for resale from one company, Nutri-Diem Inc., which is owned
  in part by a director of the Company. (See Note 8)

On April 7, 2004, an employee of the Company issued a promissory
  note in exchange for the exercise of options in the amount of $15,000. The note
  is due on demand and is payable with interest at the rate of 5% per annum. The
  note has been determined to be a stock subscription and is recorded on the Company's
  financial statements as a subscription receivable. See Note 6.

During the period ending June 30, 2004, an agreement was reached
  between the president and an officer of the Company for the reallocation of
  related party payables. Subsequent to the agreement, the Company exchanged the
  debt owed the officer for the right of the officer to exercise 3,200,000 options
  at the exercise price of $0.16 per share for the aggregate exercise price of
  $528,000.

NOTE 11 - SUBSEQUENT EVENT

On October 13, 2004, the Company issued 250,000 options at
  $0.08 per option to a consultant in exchange for services performed.

On October 26, 2004, a consultant exercised 250,000 options
  at $0.08 per option.

F-13

---

|EYI
      INDUSTRIES, INC.CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
      September 30, 2004
|--------------------------------------------------------------------------------------------------------------

On November 12, 2004, the Company entered into a non-binding
  letter with Romford Investments, PLC ("Romford") which is subject to the consummation
  of a formal agreement expected in December 2004, and the completion of our due
  diligence review of the investment terms. Romford has proposed to commit to
  purchase a Convertible Debenture of EYI Industries, Inc. with a principal amount
  of $10,000,000 in exchange for Romford's shares. Romford proposes to enter into
  similar transactions with approximately 20-25 small capitalization issuers.

F-14

---

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

FORWARD LOOKING STATEMENTS


The information in this discussion contains forward-looking
  statements. These forward-looking statements involve risks and uncertainties,
  including statements regarding EYI Industries, Inc.'s (the "Company") 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
  the Company files with the Securities and Exchange Commission (the "SEC"). These
  factors may cause the Company's actual results to differ materially from any
  forward-looking statement.

As used in this quarterly report, the terms "we", "us", "our",
  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.

OVERVIEW


We are in the business of selling, marketing, and distributing
  a product line consisting of approximately 35 nutritional products in two categories,
  dietary supplements and personal care products. 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 400,000 IBAs, of which approximately 11,000 we consider "active". An "active"
  IBA is one who purchased our products within the preceding 12 months. Over 1,600
  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.

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 September 30, 2004,
  our product line consisted of: (i) 24 dietary supplement products; and (ii)
  11 personal care products consisting primarily of cosmetic and skin care 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 all 50 states, the District of Columbia and Canada.

We believe that our network marketing system is suited to
  marketing dietary supplement and personal care products, 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.

3

---

Recent Corporate Developments

We have experienced the following significant changes since
  the completion of our most recent fiscal year end:

In November, 2004 we completed the development of a trade-marked and
      patent-pending product called Prosoteine TM . Prosoteine TM is a proprietary
      plant-based amino-acid supplement. The new patent-pending formula is designed
      specifically to address longevity issues and energy issues. We commenced
      sales of Prosoteine TM in November, 2004.
    During the quarter ended September 30, 2004 we created a new department
      called Sales Communication. This department is responsible for contacting
      our inactive IBA data base and encouraging them to purchase our products.
    On November 12, 2004, we entered into a non-binding letter with Romford
      Investments, PLC ("Romford") which is subject to the consummation of a formal
      agreement expected in December 2004, and the completion of our due diligence
      review of the investment terms. Romford has proposed to commit to purchase
      a convertible debenture of our company with a principal amount of $10,000,000
      in exchange for shares of Romford. Romford proposes to enter into similar
      transactions with approximately 20-25 small capitalization issuers whose
      stock is traded on the over-the-counter bulletin board or Nasdaq Smallcap
      markets.
    On September 24, 2004, we issued a secured convertible debenture to Cornell
      in the principal amount of $250,000. The secured convertible debenture is
      convertible at the Cornell's option any time up to maturity at a conversion
      price equal to the lower of: (i) 120% of the closing bid price of the common
      stock as of the date of issuance, or (ii) 80% of the average of the lowest
      daily volume weighted average price of our common stock for the 5 trading
      days immediately preceding the conversion date. At maturity, the remaining
      unpaid principal and accrued interest under the debentures must be, at our
      option, either paid or converted into shares of common stock at a conversion
      price equal to the lower of (i) 120% of the closing bid price of the common
      stock as of the date of issuance, or (ii) 80% of the lowest closing bid
      price of the common stock for the lowest trading days of the 5 trading days
      immediately preceding the conversion date. The secured convertible debenture
      is secured by all of our assets. The secured convertible debenture accrues
      interest at a rate of 5% per year and has a term of 3 years. In the event
      the secured convertible debentures are redeemed, then we will issue to Cornell
      a warrant to purchase 50,000 shares for every $100,000 redeemed at an exercise
      price of 120% of the closing bid price as of September 24, 2004. Cornell
      purchased the secured convertible debentures from us in a private placement
      on September 24, 2004. Cornell assigned its interest in the secured convertible
      debenture in September, 2004 to Taib Bank, E.C. and Kent Chou.
    On September 17, 2004, we filed a registration statement on Form SB-2
      registering an offering of 83,646,847 shares of the common stock held by
      certain of our stockholders, including Cornell Capital Partners, L.P., which
      intends to sell up to an aggregate amount of 80,918,173 shares of common
      stock, which includes 71,382,289 pursuant to a Standby Equity Distribution
      Agreement, described below, 8,269,295 shares of common stock underlying
      convertible debentures, and 1,266,589 shares of common stock issued as a
      commitment fee pursuant to the Standby Equity Distribution Agreement. Other
      selling stockholders include Newbridge Securities Corporation, an unaffiliated
      registered broker-dealer retained by us in connection with the Standby Equity
      Distribution Agreement, which intends to sell under the registration statement
      33,411 shares of common stock issued as a placement agent fee. We are not
      selling any shares of common stock in the offering and therefore will not
      receive any proceeds from the offering. We will, however, receive proceeds
      from the sale of common stock under the Standby Equity Distribution Agreement.
      All costs associated with the registration of the offering will be borne
      by us.
    In August, 2004 we entered into a non-binding letter of intent with Venevision
      Continental LLC ("Venvision") for the purpose of implementing a marketing
      campaign for our Calorad® product within


4

---

- In July, 2004 we entered into subsidy agreements with
      Stancorp, Winslow Drive Corp., and Premier Wellness Products (each a "Participant"),
      each of which is controlled by a relative of Mr. Jay Sargeant, our President.
      Pursuant to the terms of the subsidy agreements, we agreed to pay each Participant
      a subsidy of $2,500 per week in consideration of sales and marketing services
      provided by the Participants to us. The term of each subsidy agreement commences
      July 23, 2004 to October 15, 2004. The agreement is intended to provide
      a fixed commission to the Participants during the transitional period between
      pay plans.
- During the quarter ended June 30, 2004, we constructed
      and completed our first video-streaming ads and developed a Calorad customer
      training series of video-streams. We intend to share this video-streaming
      training model with our core Network channel. Additionally, both EyeWonder,
      Inc. and our internet web-marketing division have begun to test the ads
      in real time. In the next phase we intend to commence a sales initiative
      to capture sales, create brand awareness and support sales campaigns.
- On June 22, 2004, we entered into a Standby Equity Distribution
      Agreement (the "Standby Equity Agreement") with Cornell Capital Partners,
      LP ("Cornell"), pursuant to which we entered into, among other things, the
      following agreements with Cornell: Registration Rights Agreement, Securities
      Purchase Agreement, Escrow Agreement, Placement Agent Agreement and Investor
      Registration Rights Agreement. Pursuant to the terms of the Standby Equity
      Agreement, we may, at our discretion, periodically issue and sell shares
      of our common stock for a total purchase price of $10 million. If we request
      advances under the Standby Equity Agreement, Cornell will purchase shares
      of our common stock for 98% of the lowest volume weighted average price
      on the Over-the-Counter Bulletin Board or other principal market on which
      our common stock is traded for the 5 days immediately following the advance
      notice date. Cornell will retain 5% of each advance under the Standby Equity
      Agreement. We may not request advances in excess of a total of $10 million.
      The maximum of each advance is equal to $250,000. Upon execution of the
      Standby Equity Agreement, we agreed to pay a fee consisting of 1,266,589
      shares of our common stock (the "Cornell Fee Shares") to Cornell, and a
      fee of 33,411 shares (the "Newbridge Fee Shares") to Newbridge Securities
      Corporation ("Newbridge") pursuant to a Placement Agent Agreement we entered
      into in connection with the Standby Equity Agreement. Pursuant to the terms
      of our Registration Rights Agreement and the Standby Equity Agreement with
      Cornell, we agreed to register and qualify the Fee Shares, the Newbridge
      Fee Shares and additional shares due to Cornell under the Standby Equity
      Agreement under a registration statement filed with the SEC.
- Also on June 22, 2004, we issued a 5% Secured Convertible
      Debenture (the "Secured Debenture") to Cornell in the principal amount of
      $250,000. The Secured Debenture is convertible at Cornell's option any time
      up to maturity at a conversion price equal to the lower of (i) 120% of the
      closing bid price of the common stock as of the date of issuance, or (ii)
      80% of the average of the lowest daily volume weighted average price of
      our common stock for the 5 trading days immediately preceding the conversion
      date. At maturity, the remaining unpaid principal and accrued interest under
      the debenture shall be, at our option, either paid or converted into shares
      of common stock at the conversion price set out in the agreement. The Secured
      Debenture is secured by all of our assets. In the event the Secured Debenture
      is redeemed, then we will issue to Cornell a warrant to purchase 50,000
      shares for every $100,000 redeemed at an exercise price of 120% of the closing
      bid price asof June 22, 2004. We agreed to register the resale of the amount
      of any principal owed which hasbeen converted under the Secured Debenture
      pursuant to the terms of our Investor RegistrationRights Agreement and Securities
      Purchase Agreement with Cornell.
- In July, 2004 we entered into a letter of intent with
      a private Canadian company for the purpose of acquiring all of its assets
      (the "Assets") including a worldwide marketing and distribution license
      of certain products manufactured by Kawahara Co. Ltd. Of Japan. The letter
      of intent is subject to the consummation of a definitive agreement between
      the parties by December 14, 2004, and the completion of our due diligence
      review of the company's Assets. The purchase price for the Assets will be
      mutually agreed upon, upon completion of our due diligence inspections.

5

---

- On May 4, 2004 we entered into a letter agreement with
      Eyewonder, Inc. ("Eyewonder"), pursuant to which Eyewonder agreed to manage
      an advertising and lead generation campaign to promote and sell our products
      utilizing Eyewonder's proprietary audio-video streaming technology. In consideration
      of the services provided by Eyewonder under the agreement, we agreed to
      pay the following fees: a fee of $100,000 for product promotions, a fee
      of $770,000 for the implementation of a communications component for the
      campaign, and a fee of $140,000 for each consumer application. Under the
      terms of the agreement we have the option to pay fees to Eyewonder through
      the issuance to Eyewonder of units of our stock, each consisting one share
      at a price of $0.21 per share and one share purchase warrant exercisable
      at a price of $0.30 per share for a period of five years from the date of
      issuance. Eyewonder is also entitled to a fee of 8% of the gross revenue
      and 45% of the net revenue generated through all sales of products that
      result from responses to advertising by Eyewonder. In addition, on execution
      of the agreement, we agreed to issue options to purchase 1,100,000 shares
      of our common stock at a price of $0.22 per share to certain individuals
      designated by Eyewonder.
- On April 30, 2004 we entered into an amendment to our
      License and Distribution Agreement (the "LDA Agreement") dated June 30,
      2002 with Nutri-Diem Inc. ("Nutri-Diem"), lowering the amount of expenditures
      we are required to make under the LDA Agreement. Pursuant to the terms of
      the amendment to the LDA Agreement we are required to expend the following
      amounts on purchasing the products of Nutri-Diem over the term of the LDA
      Agreement: (i) from June 1, 2003 to May 31, 2004, $1,530,000, (ii) from
      June 1, 2004 to May 31, 2005, $3,825,000, and (iii) for each year thereafter,
      $5,355,000. We did not meet the $1,530,000 minimum purchase requirement
      under the LDA Agreement for the period from June 1, 2003 to May 31, 2004.
      As a result of our failure to meet the minimum purchase requirement, Nutri-Diem
      had the option (the “Option”) to terminate the LDA Agreement,
      make the LDA Agreement non-exclusive, or require us to renegotiate the LDA
      Agreement. Nutri-Diem failed to exercise its Option within the period prescribed
      in the LDA Agreement.
- Our core business is in network marketing development
      and sales. In 2004 we implemented some critical changes to our network marketing
      development and sales strategy. We analyzed our compensation structure and
      realized that although the plan paid the sales force more than industry
      standard, it was still not encouraging sales, growth, duplication or retention.
      After months of study, outside consulting, field leader's focus groups and
      senior management discussion, we made key adjustments during our first fiscal
      quarter in 2004 that are intended to cap the sales commission expense while
      at the same time promote increased network sales. We anticipate retaining
      a higher percentage of both customers and distributors with this new plan.
- We see international sales as a key component for our
      growth in the next 5 years. During our second quarter of fiscal 2004, we
      entered into a joint venture agreement (the "JV Agreement") with World Wide
      Buyers' Club Inc. ("WWBC") and Supra Group, Inc. ("Supra Group"), dated
      as of May 28, 2004, for the purpose of jointly marketing and distributing
      our products through the existing Supra Group distribution system in the
      Latin American countries identified in the JV Agreement and the products
      of Supra Group using the existing EYI distribution system to residents in
      the U.S. We believe Supra Group has significant international experience,
      expertise and contacts and that this alliance will assist in our ability
      to expand into Spanish-speaking countries.
- We also distribute our products through brick and mortar
      retail stores. We encourage and support our IBA's in placing our nutritional
      supplements in retail environments that include doctor's offices, spas,
      gyms, health food stores and pharmacies. We have recently upgraded our merchandising
      tools and believe that there is potential in continuing and expanding these
      sales.

Our plan of operations over the next twelve months is to undertake
  the following:

| | 1. | We plan to expand the marketing of our Calorad product
        over the next twelve months. We feel that our main product Calorad, a
        21 year old market proven product, is positioned to expand into the weight
        loss industry.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. | We intend to upgrade our computer systems over the
        next twelve months. These upgrades are intended to result in improved
        operational efficiency with the objective of reducing overhead costs.                                

6

---

RESULTS OF OPERATIONS

Third Quarter and Nine Months Summary

|                    | Third Quarter Ended September
      30 |  | Nine Months Ended September
      30 | 
|------------------- | -------------------------------------- |  | ------------------------------------ | 
|                    | 2004                                   |  | 2003                                 | 
|                    |                                        |  |                                      | 
|                    |                                        |  |                                      | 
|Revenue             | $1,379,056                             |  | $2,257,932                           | 
|Cost of Goods Sold  | $799,991                               |  | $1,693,639                           | 
|Gross Profit        | $579,065                               |  | $564,293                             | 
|Gross Profit Margin | 42.0%                                  |  | 25.0%                                | 

Net Sales The decrease in our net sales is attributed to our inability to attract
    new IBA's into our sales force, and the changes made to our commission plan
    in January 2004. The decline in cost of goods sold during the period ended
    September 30, 2004 is attributed to the implementation of our new compensation
    plan for our IBAs. Operating Expenses


|                   |                                        |  |                                     
|------------------ | -------------------------------------- |  | ------------------------------------
|                   | Third Quarter Ended September
      30 |  | Nine Months Ended September
      30
|                   |                                        |  |                                     
|                   |                                        |  |                                     
|                   | 2004                                   |  | 2003                                
|                   |                                        |  |                                     
|Operating Expenses | $2,402,226                             |  | $1,128,351                          

The increase of our operating expenses during the three months
  ended September 30, 2004 was primarily due to the expense recognized to services
  and consulting of $1,206,527 as a result of the granting 24,639,000 shares of
  common stock to our employees, directors, and consultants.

Net Loss

|         |                                        |  |                                     
|-------- | -------------------------------------- |  | ------------------------------------
|         | Third Quarter Ended September
      30 |  | Nine Months Ended September
      30
|         |                                        |  |                                     
|         | 2004                                   |  | 2003                                
|         |                                        |  |                                     
|Net Loss | ($1,788,367)                           |  | ($557,970)                          

The increased net loss for the period ended September 30,
  2004 is the combined result of lower revenue and the $1,206,527 in expenses
  recognized as the value of stock options issued during the period.

FINANCIAL CONDITION

Cash and Working Capital

|                          |                       |  |                      |  | Percentage           
|------------------------- | --------------------- |  | -------------------- |  | ---------------------
|                          | At September 30, 2004 |  | At December 31, 2003 |  | Increase / (Decrease)
|Current Assets            | $1,487,714            |  | $616,512             |  | 141.3%               
|Current Liabilities       | $2,049,623            |  | $1,882,345           |  | 8.9%                 
|Working Capital (Deficit) | ($561,909)            |  | ($1,265,833)         |  | (55.6%)              

7

---

We had cash of $43,711 as at September 30, 2004, compared
  with cash of $52,075 as at December 31, 2003. The decrease in our working capital
  deficit was primarily attributed to our agreement with Eyewonder, pursuant to
  which we prepaid $770,000 towards the communications component of the agreement.
  The largest components of our working capital deficit are accounts payable,
  accrued liabilities, and convertible debt in the amount of $2,028,012 as at
  September 30, 2004 including amounts payable to related parties, compared to
  $1,616,118 as at December 31, 2003.

Liabilities

|                         |                       |  |                      |  | Percentage           
|------------------------ | --------------------- |  | -------------------- |  | ---------------------
|                         | At September 30, 2004 |  | At December 31, 2003 |  | Increase / (Decrease)
|Accounts Payable and     |                       |  |                      |  |                      
|Accrued Liabilities      | $1,000,819            |  | $836,751             |  | 19.6%                
|Convertible Debt-Related |                       |  |                      |  |                      
|Party, Net of Discount   | $415,000              |  | $0                   |  | 100%                 

We had an increase of 19.6% in Accounts Payable and Accrued
  Liabilities during the nine months which represents the increase in unpaid trade
  payables. The increase in convertible debt relates to our loan agreement with
  Cornell entered into on June 2, 2004, pursuant to which we received a net of
  $415,000 in exchange for convertible securities.

Cash Used in Operating Activities


Cash used in operating activities for the nine months ended
  September 30, 2004 was $682,512 compared to $1,008,260 for the comparative period
  in 2003, representing a decrease of $325,748 or 32%.

Cash Provided by Financing Activities

We have continued to finance our business primarily through
  private placement sales of our common stock, exercises of stock options, short
  term loans, conversion of accrued liabilities into stock and through increases
  in our accrued liabilities and accounts payable. Cash provided by financing
  activities for the nine months ended September 30, 2004 was $660,701, compared
  to $30,239 for the nine months ended September 30, 2003.

Financing activities included the issuance of common stock
  for aggregate proceeds of $492,317 during the nine months ended September 30,
  2004 in private placement and other financing transactions. The private placement
  transactions during the nine months ended September 30, 2004 included the issue
  of an aggregate of 566,833 shares of our common stock and associated share purchase
  warrants, representing an average price of $0.25 per share. During the nine
  months ended September 30, 2004 we issued 4,200,000 and 300,000 shares upon
  exercise of options with an exercise price of $0.165 per share and $0.21 per
  share, respectively. All shares issued pursuant to stock option exercises during
  our first quarter were registered on Form S-8 registration statements that we
  filed with the SEC. During the nine months ended September 30, 2004 we made
  the following issuances: 50,000 restricted shares of our common stock at a price
  of $0.22 per share in payment of consulting fees to a consultant; 1,266,589
  restricted shares of our common stock to Cornell in payment of certain fees
  owed to Cornell under the terms of the Standby Equity Agreement; and 33,411
  restricted shares of our common stock to Newbridge under the terms of the Placement
  Agent Agreement.

On September 24, 2004, we issued a secured convertible debenture
  to Cornell in the principal amount of $250,000. The secured convertible debentures
  are convertible at the holder's option any time up to maturity at a conversion
  price equal to the lower of : (i) 120% of the closing bid price of the common
  stock as of the date of issuance, or (ii) 80% of the average of the lowest daily
  volume weighted average price of our common stock for the 5 trading days immediately
  preceding the conversion date. At maturity, the remaining unpaid principal and
  accrued interest under the debentures must be, at our option, either paid or
  converted into shares of common stock at a conversion price equal to the lower
  of (i) 120% of the closing bid price of the common stock as of the

8

---

date of issuance, or (ii) 80% of the lowest closing bid price
  of the common stock for the lowest trading days of the 5 trading days immediately
  preceding the conversion date. The secured convertible debenture is secured
  by all of our assets. The secured convertible debenture accrues interest at
  a rate of 5% per year and has a term of 3 years. In the event the secured convertible
  debentures are redeemed, then we will issue to Cornell a warrant to purchase
  50,000 shares for every $100,000 redeemed at an exercise price of 120% of the
  closing bid price as of September 24, 2004. Cornell purchased the secured convertible
  debentures from us in a private placement on September 24, 2004.

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 $560,000 and an accumulated
  deficit of approximately $5,500,000 incurred through September 30, 2004.

Our current sources of working capital are sufficient to satisfy
  our anticipated working capital needs. In the event we do not receive further
  financing from our arrangements with Cornell, we will be required to seek additional
  financing to fully implement our business plan. We may not be able to obtain
  additional working capital on acceptable terms, or at all. Accordingly, there
  is substantial doubt about our ability to continue as a going concern. We anticipate
  that any additional financing would be through the sales of our common or preferred
  stock or placement of convertible debt.

We presently do not have any arrangements in place for the
  sale of any of our securities and there is no assurance that we will be able
  to raise any additional capital that we require to continue operations. In the
  event that we are unable to raise additional financing on acceptable terms,
  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.
  Our significant accounting policies are disclosed in Note 2 to our December
  31, 2003 consolidated financial statements.

Property and Equipment


Property and equipment are stated at cost. Depreciation of
  property and equipment is calculated using the straight-line method over the
  estimated useful lives of the assets, which range from three to seven years.

9

---

Revenue Recognition

We recognize revenue from product sales upon shipment to IBAs,
  our customers. Revenue from administration fees is recognized upon collection
  from IBAs.

Long-lived Assets


We review the carrying amount of long-lived assets for impairment
  where events or changes in circumstances indicate that the carrying amount may
  not be recoverable. The determination of any impairment would include a comparison
  of estimated future cash flows anticipated to be generated during the remaining
  life of the assets to the net carrying value of the assets.

NEW ACCOUNTING PRONOUNCEMENTS


In May 2003, the Financial Account Standards Board issued
  Statement of Financial Accounting Standards No. 150, "Accounting for Certain
  Financial Instruments with Characteristics of Both Liabilities and Equity" (hereinafter
  "SFAS No. 150"). SFAS No. 150 establishes standards for classifying and measuring
  certain financial instruments with characteristics of both liabilities and equity
  and requires that those instruments be classified as liabilities in statements
  of financial position. Previously, many of those instruments were classified
  as equity. SFAS No. 150 is effective for financial instruments entered into
  or modified after May 31, 2003 and otherwise is effective at the beginning of
  the first interim period beginning after June 15, 2003. We have determined that
  there was no impact on us from the adoption of the statement.

RISK FACTORS


We have a limited operating history, an accumulated deficit
  and may have continued losses for the foreseeable future with no assurance of
  profitability. As of September 30, 2004, we had an accumulated deficit of
  $5,521,026. 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,
  international sales, and warehouse sales, believe that we will eventually be
  able to reverse the present deficit. Management intends to seek additional capital
  from new equity securities offerings that should provide funds needed to increase
  liquidity, and implement our business plan. Management's plans include negotiations
  to convert 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.

We have a working capital deficit; we may need to raise
  additional capital to finance operations. We have relied on significant
  external financing to fund our operations. As of September 30, 2004, we had
  $43,711 of cash on hand and our total current assets were $1,487,714. Our current
  liabilities were $2,049,623. We will need to raise additional capital to fund
  our anticipated operating expenses and future expansion. Among other things,
  external financing may be required to cover our operating costs. Unless we obtain
  profitable operations, it is unlikely that we will be able to secure additional
  financing from external sources. If we are unable to secure additional financing
  or we cannot draw down on the Standby Equity Distribution Agreement, we believe
  that we will be required to seek additional financing to fund our continued
  operations. The sale of our common stock to raise capital may cause dilution
  to our existing shareholders. Our inability to obtain adequate financing will
  result in the need to curtail business operations. Any of these events would
  be materially harmful to our business and may result in a lower stock price.
  Our inability to obtain adequate financing will result in the need to curtail
  business operations and you could lose your entire investment. Our financial
  statements do not include any adjustments that might result from the outcome
  of this uncertainty.

10

---

Our independent auditors believe there is substantial doubt
  we can continue as a going concern.Our independent auditors believe there
  is substantial doubt that we can continue as a going concern which, if true,
  raises substantial doubt that a purchaser of our common stock will receive a
  return on his or her investment. As shown in the accompanying financial statements,
  we had negative working capital of approximately $560,000 and an accumulated
  deficit of approximately $5,500,000 incurred through September 30, 2004, these
  factors raise substantial doubt about our ability to continue as a going concern.

We are dependent on our IBAs for our product marketing
  efforts. 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.

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

11

---

restrictions may restrict our flexibility in marketing our
  product.

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

|Dietary Supplements   
|----------------------
|                      
|                     
|                      
|                     
|                      
|                     
|                      
|                     
|                      
|                     
|                      
|                     
|                      
|                     
|                      
|                     
|                      
|                     
|                      
|Personal Care Products
|                      
|                     

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; ora 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

12

---

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

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, andthe 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

13

---

- 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 million 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.
  A significant portion of our net sales is expected to be dependent upon our
  Calorad product. Calorad has traditionally represented more than 90% 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. 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,
    orcustomers 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

14

---

over us with respect to pricing, availability of product and
  in other areas through their control of the manufacturing process.

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 developing company, the further implementation
  of our business plan is dependent on the entrepreneurial skills and direction
  of management. Mr. Sargeant, 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 Morinda 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. With respect to product liability claims, we
  have coverage of $5,000,000 per occurrence and $5,000,000 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

15

---

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", with the result that
  trading of our common stock in any secondary market may be impeded. The
  SEC has adopted rules that regulate broker-dealer practices in connection with
  transactions in penny stocks. Penny stocks are generally equity securities with
  a price of less than $5.00, other than securities registered on certain national
  securities exchanges or quoted on the Nasdaq system, provided that current price
  and volume information with respect to transactions in such securities is provided
  by the exchange or system. The penny stock rules require a broker-dealer, prior
  to a transaction in a penny stock, to deliver a standardized risk disclosure
  document prepared by the Commission, that: (a) contains a description of the
  nature and level of risk in the market for penny stocks in both public offerings
  and secondary trading; (b) contains a description of the broker's or dealer's
  duties to the customer and of the rights and remedies available to the customer
  with respect to a violation to such duties or other requirements of Securities'
  laws; (c) contains a brief, clear, narrative description of a dealer market,
  including bid and ask prices for penny stocks and the significance of the spread
  between the bid and ask price; (d) contains a toll-free telephone number for
  inquiries on disciplinary actions; (e) defines significant terms in the disclosure
  document or in the conduct of trading in penny stocks; and (f) contains such
  other information and is in such form, including language, type, size and format,
  as the SEC may require by rule or regulation. The broker-dealer also must provide,
  prior to effecting any transaction in a penny stock, the customer with: (a)
  bid and offer quotations for the penny stock; (b) the compensation of the broker-dealer
  and its salesperson in the transaction; (c) the number of shares to which such
  bid and ask prices apply, or other comparable information relating to the depth
  and liquidity of the market for such stock; and (d) a monthly account statements
  showing the market value of each penny stock held in the customer's account.
  In addition, the penny stock rules require that prior to a transaction in a
  penny stock not otherwise exempt from those rules; the broker-dealer must make
  a special written determination that the penny stock is a suitable investment
  for the purchaser and receive the purchaser's written acknowledgment of the
  receipt of a risk disclosure statement, a written agreement to transactions
  involving penny stocks, and a signed and dated copy of a written suitability
  statement. These disclosure requirements may have the effect of reducing the
  trading activity in the secondary market for our stock as it is subject to these
  penny stock rules. Therefore, stockholders may have difficulty selling those
  securities.

ITEM 3.            CONTROLS
  AND PROCEDURES.

Evaluation Of Disclosure Controls And Procedures

As of the end of the period covered by this report, we carried
  out an evaluation, under the supervision and with the participation of our Principal
  Executive Officer and Principal Financial Officer, of the effectiveness of the
  design and operation of our disclosure controls and procedures. Our disclosure
  controls and procedures are designed to provide a reasonable level of assurance
  of achieving our disclosure control objectives. Our Principal Executive Officer
  and Principal Accounting Officer have concluded that our disclosure controls
  and procedures are, in fact, effective at this reasonable assurance level as
  of the period covered.

Changes In Internal Controls Over Financial Reporting

In connection with the evaluation of our internal controls
  during our last fiscal quarter, our Principal Executive Officer and Principal
  Financial Officer have determined that there are no changes to our internal
  controls over

16

---

financial reporting that has materially affected, or is reasonably
  likely to materially effect, our internal controls over financial reporting.

17

---

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.

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.

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 defence 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.

To the best of our knowledge, we are not subject to any other
  active or pending legal proceedings or claims against us or our subsidiaries
  or any of our properties that will have a material effect on our business or
  results of operations. However, from time to time, we may become subject to
  claims and litigation generally associated with any business venture.

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

During the three months ended September 30, 2004, we completed
  the sales of the following securities that were not registered pursuant to the
  Securities Act of 1933 (the "Securities Act") and have not been reported on
  our previous Quarterly Reports on Form 10-QSB during the year:

|1. | On September 24, 2004, we issued a 5% Secured Convertible
        Debenture to Cornell in the principal amount of $250,000. Cornell purchased
        the Secured Debenture from us in a private placement on September 24,
        2004. The sale of the Secured Debenture was completed pursuant to Rule
        506 of Regulation D of the Securities Act. All securities to be issued
        pursuant to the Secured Debenture will be endorsed with a restrictive
        legend confirming that the securities cannot be resold without registration
        under the Securities Act or an applicable exemption from the registration
        requirements of the Securities Act.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM 3.            DEFAULTS
  UPON SENIOR SECURITIES.

None.

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

No matters were submitted to our security holders for a vote during the fiscal quarter ended September 30, 2004.

18

---

ITEM 5.            OTHER
  INFORMATION.  
  None.  ITEM 6.            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.                                                                                                                                                                                                
|3.3            | Certificate
        of Amendment to Articles of Incorporation dated December 31, 2003.                                                                                                                                                                                                
|3.4            | Bylaws. (1)                                                                                                                                                                                                                                                                           
|10.1           | Transfer/Assignment, dated
        as of May 27, 2002, between Essentially Yours Industries, Inc., a Nevada
        corporation and Essentially Yours Industries, Corp., a Canadian Federal
        Company.(2)                                                                       
|10.2           | License of Intellectual
        Property, dated as of June 30, 2002, between Essentially Yours Industries,
        Inc., a Nevada corporation and Essentially Yours Industries, Corp., a
        Canadian Federal Company.(2)                                                         
|10.3           | Agency Appointment Agreement,
        dated as of June 30, 2002, between Essentially Yours Industries, Inc.,
        a Nevada corporation and Essentially Yours Industries, Corp., a Canadian
        Federal Company.(2)                                                             
|10.4           | Management Agreement, dated
        as of June 30, 2002, between Essentially Yours Industries, Inc., a Nevada
        corporation and Essentially Yours Industries, Corp., a Canadian Federal
        Company. (2)                                                                    
|10.5           | Distribution and License
        Agreement, dated as of June 30, 2002, between Essentially Yours Industries,
        Inc., a Nevada corporation and Nutri-Diem, Inc., a Canadian corporation
        incorporated pursuant to the laws of the Quebec Company Act.(2)                  
|10.6           | Declaration of Trust, dated
        as of May 27, 2002, between Jay Sargeant and twelve named trust beneficiaries.
        (2)                                                                                                                                                        
|10.7           | Notice to Transfer Intellectual
        Property Rights, dated as of August 28, 2002 from Essentially Yours Industries,
        Inc., a Nevada corporation, to Essentially Yours Industries, Corp., a
        Canadian Federal Company, and its directors.(2)                         
|10.8           | Assignment/Transfer of Intellectual
        Property Rights, dated as of August 28, 2002, from Essentially Yours Industries,
        Inc., a Nevada corporation, to Essentially Yours Industries, Corp., a
        Canadian Federal Company.(2)                                       
|10.9           | Consulting Agreement, dated
        as of November 5, 2002, between Essentially Yours Industries, Inc., a
        Nevada corporation, and Flaming Gorge, Inc.(2)                                                                                                                      
|10.10          | Consulting Agreement, dated
        as of November 5, 2002, between Essentially Yours Industries, Inc., a
        Nevada corporation, and O'Neill Enterprises, Inc.(2)                                                                                                                
|10.11          | Addendum to the Distribution
        and License Agreement dated as of November 7, 2002, between Essentially
        Yours Industries, Inc., a Nevada corporation and Nutri-Diem, Inc., a Canadian
        corporation incorporated pursuant to the laws of the Quebec Company Act.(2)
|10.12          | Form of Lock-up Agreement.(2)                                                                                                                                                                                                                                                         
|10.13          | Form of Subscription Documents.
        (2)                                                                                                                                                                                                                                           
|10.14          | Form of IBA Application.
        (2)                                                                                                                                                                                                                                                  
|10.15          | Transfer/Assignment, dated
        as of May 27, 2002, between Essentially Yours Industries, Inc., a Nevada
        corporation and Essentially Yours Industries, Corp., a Canadian Federal
        Company.(2)                                                                       
|10.16          | Merger Agreement and Plan
        of Reorganization, dated as of June 30, 2002, between and among Burrard
        Capital, Inc., a Nevada corporation, Essentially Yours Industries, Inc.,
        a Nevada corporation, and Jay Sargeant. (2)                                        
|10.17          | Share Exchange Agreement,
        dated November 4, 2002, by and among Safe ID Corporation, a Nevada corporation,
        Essentially Yours Industries, Inc., a Nevada corporation, the undersigned
        directors of Safe ID, and Jay Sargeant. (3)                               
|10.18          | First Amendment to Trust
        Agreement dated December 23, 2003, between Jay Sargeant and twelve named
        trust beneficiaries, revising the terms of the Declaration of Trust dated
        as of May 27, 2002, between Jay Sargeant and twelve named trust beneficiaries.(5) 
|10.19          | Registration Rights Agreement,
        dated December 31, 2003, by and among Safe ID Corporation, and certain
        shareholders of EYI Industries, Inc. (3)                                                                                                                        
|10.20          | Stock Compensation Program
        (4)                                                                                                                                                                                                                                                
|10.21          | Consulting Agreement dated
        December 27, 2003 between Rajesh Raniga Inc. and Safe ID Corporation.(6)                                                                                                                                                                           

19

---

|Exhibit Number | Description of Exhibit                                                                                                                                                        
|-------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.22          | Consulting Agreement dated
        January 1, 2004 between EYI Industries, Inc. and O'Neill Enterprises Inc.
        (6)                                                      
|10.23          | Consulting Agreement dated
        January 1, 2004 between EYI Industries, Inc. and Flaming Gorge, Inc.(6)                                                                    
|10.24          | Addendum to the Distribution
        and License Agreement between Essentially Yours Industries, Inc. and Nutri-Diem
        Inc. dated April 30, 2004.(6)                    
|10.25          | Letter Agreement dated May
        4, 2004 between Eye Wonder, Inc. and EYI Industries, Inc.(6)                                                                               
|10.26          | Standby Equity Distribution
        Agreement, dated June 22, 2004 by and between EYI Industries, Inc. and
        Cornell Capital Partners, LP(6)                            
|10.27          | Registration Rights Agreement,
        dated June 22, 2004 by and between EYI Industries, Inc. and Cornell Capital
        Partners, LP (6)                                   
|10.28          | Escrow Agreement, dated
        June 22, 2004 by and between EYI Industries, Inc. and Cornell Capital
        Partners, LP(6)                                                 
|10.29          | Placement Agent Agreement,
        dated June 22, 2004 by and between EYI Industries, Inc. and Cornell Capital
        Partners, LP(6)                                        
|10.30          | Securities Purchase Agreement,
        dated June 22, 2004 by and between EYI Industries, Inc. and Cornell Capital
        Partners, LP(6)                                    
|10.31          | Investor Registration Rights
        Agreement, dated June 22, 2004 by and between EYI Industries, Inc. and
        Cornell Capital Partners, LP(6)                           
|10.32          | Security Agreement, dated
        June 22, 2004 by and between EYI Industries, Inc. and Cornell Capital
        Partners, LP(6)                                               
|10.33          | Irrevocable Transfer Agent
        Instructions, dated June 22, 2004, by and among EYI Industries, Inc.,
        Cornell Capital Partners, LP and Corporate Stock Transfer(6) 
|10.34          | Escrow Agreement, dated
        June 22, 2004 by and among EYI Industries, Inc., Cornell Capital Partners,
        L.P. and Butler Gonzalez, LLP(6)                           
|10.35          | Form of Secured Convertible
        Debenture(6)                                                                                                                              
|10.36          | Letter Agreement dated May
        25, 2004 between EYI Industries, Inc. and Source Capital Group, Inc.(7)                                                                    
|10.37          | Lease
        Agreement dated May 1, 2003 among 468058 B.C. Ltd., 642706 B.C. Ltd.,
        Essentially Yours Industries Corp., and Essentially Yours Industries,
        Inc.
|10.38          | Amendment
        to Lease Agreement dated January 9, 2004 between Business Centers, LLC
        and Halo Distribution, LLC.                                                  
|10.39          | Subsidy
        Agreement dated July 23, 2004 between Essentially Yours Industries, Inc.
        and Winslow Drive Corp.                                                      
|10.40          | Subsidy
        Agreement dated July 23, 2004 between Essentially Yours Industries, Inc.
        and Premier Wellness Products.                                               
|10.41          | Subsidy
        Agreement dated July 23, 2004 between Essentially Yours Industries, Inc.
        and Stancorp.                                                                
|10.42          | 5%
        Secured Convertible Debenture dated September 24, 2004 between EYI Industries,
        Inc. and Cornell Capital Partners, LP                                       
|10.43          | 5%
        Secured Convertible Debenture dated September 27, 2004 between EYI Industries,
        Inc. and Kent Chou                                                          
|10.44          | 5%
        Secured Convertible Debenture dated September 27, 2004 between EYI Industries,
        Inc. Taib Bank, E.C.                                                        
|10.45          | Assignment
        Agreement dated September 27, 2004 between Cornell Capital Partners, LP
        and Taib Bank, E.C.                                                        
|10.46          | Assignment
        Agreement dated September 27, 2004 between Cornell Capital Partners, LP
        and Kent Chou                                                              
|14.1           | Code of Ethics(5)                                                                                                                                                             
|21.1           | List of Subsidiaries (5)                                                                                                                                                      
|31.1           | Certification
        of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                                           
|31.2           | Certification
        of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                                           

20

---

|Exhibit Number | Description of Exhibit                                                                                                                                           
|-------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|32.1           | 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 2002
|32.2           | 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

Notes:

| | (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.                                             

21

---

SIGNATURES

In accordance with Section 13 or 15(d) 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 Sargeant                   
|                     | Jay Sargeant                       
|                     | President, Chief Executive Officer,
|                     | and Director                       
|                     | (Principal Executive Officer)      
|                     | Date: November 22, 2004            

---