UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-QSB





x  QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
ACT OF 1934





Comprehensive
filing for the quarterly periods within the fiscal years ended June 30, 2005 and
2006





o   TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
ACT OF 1934




For the
transition period from _________ to ___________


Commission
file number ________________________________








Commission
File No. 000-32673





TRANSWORLD
BENEFITS INTERNATIONAL, INC.


(Exact
name of small business issuer as specified in its charter)




California
            98-0218912(State or
      other jurisdiction of incorporation
              or
      organization)
            (IRS Employer
      Identification No.)




4675
MacArthur Court, Suite 550, Newport Breach, California 92660


(Address
of Principal Executive Offices)





(949)
851-7775


(Issuer's
telephone number)




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





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





Yes o No x





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





Yes o No x



















APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE
YEARS





Check
whether the registrant filed all documents and reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities
under a plan confirmed by a court. Not
Applicable      Yes o   No o




APPLICABLE
ONLY TO CORPORATE ISSUERS





State the
number of shares outstanding of each of the issuer's classes common equity,
as of the latest practical date: June 1, 2008: 99,960,362 shares of common stock
outstanding, $0.001 par value.





Transitional
small business disclosure format (check
one):        Yes x  No o














Part I--
FINANCIAL INFORMATION





Item
1. Financial
Statements                                                                                                                                                                                                           4





Unaudited Condensed
Consolidated Balance Sheets at September 30,  2005 and
2004.


Unaudited Condensed
Consolidated Statements of Operations for the  Three Months Ended
September 30, 2005 and 2004.


Unaudited Condensed
Consolidated Statements of Cash Flow for the  Three Months Ended
September 30, 2005 and 2004.





Unaudited Condensed
Consolidated Balance Sheets at December 31,  2005 and
2004.


Unaudited Condensed
Consolidated Statements of Operations for the  Six Months Ended
December 31, 2005 and 2004.


Unaudited Condensed
Consolidated Statements of Operations for the  Three Months Ended
December 31, 2005 and 2004.


Unaudited Condensed
Consolidated Statement of Cash Flow for the Six  Months Ended December
31, 2005 and 2004.





Unaudited Condensed
Consolidated Balance Sheets at March 31, 2006  and 2005.


Unaudited Condensed
Consolidated Statement of Operations for the  Nine Months Ended March
31, 2006 and 2005.


Unaudited Condensed
Consolidated Statement of Operations for the  Three Months Ended March
31, 2006 and 2005.


Unaudited Condensed
Consolidated Statement of Cash Flow for the  Nine Months Ended March
31, 2006 and 2005.





Item
2. Management's Discussion and Analysis of Financial
Condition                                                                                                                               
31





Item
3. Controls and
Procedures                                                                                                                                                                                                   
34





Part II--
OTHER INFORMATION





Item
1. Legal
Proceedings                                                                                                                                                                                                              
35





Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds                                                                                                                                    
36





Item
4. Submission of Matters to a Vote of Security
Holders                                                                                                                                                  
38





Item
5. Other
Information                                                                                                                                                                                                                38





Item
6.
Exhibits                                                                                                                                                                                                                                 
38













Item 1.
Financial Statements


TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Balance Sheets
 As of
September 30, 2005 and 2004
 (Unaudited)
  September
      30,2005
              
              
              
              2004Total
      assets
              
              $
              0
              
              
              $
              0Liabilities
      and stockholders’ deficiencyCurrent
      liabilities:Accounts
      payable and accrued expenses
              
              $
              260,894
              
              
              $
              226,528Accrued
      consulting and related
              
              
              279,058
              
              
              
              229,708Accounts
      payable to related parties
              
              
              1,317,717
              
              
              
              966,666Advances
      from related parties
              
              
              109,500
              
              
              
              159,500Notes
      payable to related party
              
              
              154,067
              
              
              
              154,067Accrued
      interest on notes payable to related party
              
              
              96,711
              
              
              
              79,764Advances
      payable
              
              
              27,000
              
              
              
              72,000Accrued
      interest on convertible debenture
              
              
              36,828
              
              
              
              21,328Accrued
      liability related to warrants and stock purchase rights
              
              -_
              
              
              
              1,0002,281,775
              
              
              
              1,910,561Convertible
      debenture, net of unamortized debt discount
              
              
              184,418
              
              
              
              138,183Total
      liabilities
              
              
              2,466,193
              
              
              
              2,048,744Stockholders’
      deficiency:Preferred
      stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and
      outstanding
              
              
              -
              
              
              
              -Common
      stock, $0.001 par value; 100,000,000 shares authorized; 35,069,898 shares
      issued and outstanding
                at
      September 30, 2005 and 2004
              
              
              35,070
              
              
              
              35,070Additional
      paid-in capital
              
              
              1,720,908
              
              
              
              1,720,908Accumulated
      deficit
              
              
              (4,222,171
              )
              
              
              (3,804,722
              )Total
      stockholders’ deficiency
              
              
              (2,466,193
              )
              
              
              (2,048,744
              )Total
      liabilities and stockholders’ deficiency
              
              $0_
              
              
              $
              0
 
 The
accompanying notes are an integral part of these unaudited consolidated
financial statements
 
 4
   TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Operations
 For the
Three Months Ended September 30, 2005 and 2004 and Cumulative
 Amounts
from Inception September 16, 1996 through September 30, 2005
 (Unaudited)
 
 
 CumulativeThree
      Months Ended Sept 30,
              
              
              Amounts
      From2005
              
              
              2004
              
              
              InceptionRevenues
              
              $
              0
              
              
              $
              0
              
              
              $
              0General
      and administrative expenses
              
              
              69,638
              
              
              
              56,229
              
              
              
              4,535,375Loss
      before other income (expense)
              
              
              (69,638
              )
              
              
              (56,229
              )
              
              
              (4,535,375
              )Other
      income (expense):Other
      income
              
              
              -
              
              
              
              -
              
              
              
              8,902Gain
      on settlement of debt
              
              
              -
              
              
              
              -
              
              
              
              189,024Gain
      on decrease in fair value of warrants and stock purchase rights
      liabilities
              
              
              
              
              
              
              7,000
              
              
              
              475,510Interest
      expense, net
              
              
              (15,471
              )
              
              
              (28,599
              )
              
              
              (360,232
              )Net
      income (loss)
              
              
              (85,109
              )
              
              
              (77,828
              )
              
              
              (4,222,171
              )Beginning
      of period accumulated deficit
              
              
              (4,137,062
              )
              
              
              (3,726,894
              )
              
              
              -End
      of period accumulated deficit
              
              $
              (4,222,171
              )
              
              $
              (3,804,722
              )
              
              $
              (4,222,171
              )Loss
      per share:Basic
      and diluted
              
              $
              (0.002
              )
              
              $
              (0.002
              )Weighted
      average numberof
      shares outstanding:Basic
      and diluted
              
              
              35,069,898
              
              
              
              35,069,898
 
 The
accompanying notes are an integral part of these unaudited consolidated
financial statements
  5
 
  TransWorld
Benefits International, Inc. and Subsidiary
 (Development
Stage Company)
 Condensed
Consolidated Statements of Cash Flows
 For the
Three Months Ended September 30, 2005 and 2004 and Cumulative
 Amounts
from Inception September 16, 1996 through September 30, 2005
 (Unaudited)
  Three
      Months Ended September 30,
              
              
              Cumulative
                Amounts
      from2005
              
              
              2004
              
              
              InceptionCash
      flows from Operating Activities:Net
      (loss)
              
              $
              (85,109
              )
              
              $
              (77,828
              )
              
              $
              (4,222,171
              )Adjustments
      to reconcile net (loss) to net cash (used in) operating
      activities:Amortization
      of deferred financing costs
              
              
              7,153
              
              
              
              20,841
              
              
              
              184,417Stocks
      and warrants issued for services and debt
              
              
              -
              
              
              
              -
              
              
              
              1,763,309(Gain)
      on settlement of debt
              
              
              -
              
              
              
              -
              
              
              
              (202,024
              )Subscription
      receivable exchanged for services
              
              
              -
              
              
              
              -
              
              
              
              20,000(Gain)
      on decrease in value of warrants and stock purchase rights
      liabilities
              
              
              -
              
              
              
              (7,000
              )
              
              
              (475,510
              )Changes
      in operating assets and liabilities, net of effects of
    merger:Accounts
      payable and accrued expenses
              
              
              -
              
              
              
              -
              
              
              
              541,302Accrued
      consulting and related
              
              
              8,292
              
              
              
              18,750
              
              
              
              (150,298
              )Accounts
      payable to related parties
              
              
              61,906
              
              
              
              37,479
              
              
              
              1,317,717Accrued
      interest on notes payable related party
              
              
              3,883
              
              
              
              3,883
              
              
              
              96,712Accrued
      interest on convertible debenture
              
              
              3,875
              
              
              
              3,875
              
              
              
              36,829Net
      cash (used in) Operating Activities
              
              
              0
              
              
              
              0
              
              
              
              (1,089,717
              )Cash
      flows from Investing Activities:Payments
      received on notes receivable related party
              
              
              0
              
              
              
              0
              
              
              
              205,400Cash
      flows from Financing Activities:Proceeds
      from advances payable
              
              
              -
              
              
              
              -
              
              
              
              89,500Repayments
      to advances payable
              
              
              -
              
              
              
              -
              
              
              
              (62,500
              )Proceeds
      from convertible debenture
              
              
              -
              
              
              
              -
              
              
              
              193,750Proceeds
      from common stock issuance
              
              
              -
              
              
              
              -
              
              
              
              400,000Advances
      from related parties
              
              
              -
              
              
              
              -
              
              
              
              159,500Repayments
      to related parties
              
              
              
              
              
              
              
              
              
              
              (50,000
              )Proceeds
      from notes payable related party
              
              
              -
              
              
              
              -
              
              
              
              154,067Net
      cash provided by Financing Activities
              
              
              0
              
              
              
              0
              
              
              
              884,317Net
      change in cash
              
              
              0
              
              
              
              0
              
              
              
              0Cash,
      beginning of period
              
              
              0
              
              
              
              0
              
              
              
              0Cash,
      end of period
              
              $
              0
              
              
              $
              0
              
              
              $
              0
 
 The
accompanying notes are an integral part of these unaudited consolidated
financial statements.
 
 6
   TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Cash Flow, Continued
 Supplemental
disclosure of cash flow information:
  For the
      Quarters Ended September 30,2005
              
              
              2004Cash
      paid for:Interest
              
              $
              -
              
              
              $
              -Income
      taxes
              
              $
              -
              
              
              $
              -
 
 
 
 Supplemental schedule of
non-cash, investing and financing activities:
 
 None
  The
accompanying notes are an integral part of these unaudited consolidated
financial statements.
   7
  TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Balance Sheets
 As of
December 31, 2005 and 2004
 (Unaudited)
  December
      31,2005
              
              
              
              2004Total
      assets
              
              $
              0
              
              
              $
              0Liabilities
      and stockholders’ deficiencyCurrent
      liabilities:Accounts
      payable and accrued expenses
              
              $
              240,154
              
              
              $
              231,292Accrued
      consulting and related
              
              
              301,340
              
              
              
              248,458Accounts
      payable to related parties
              
              
              1,385,712
              
              
              
              1,004,663Advances
      from related parties
              
              
              109,500
              
              
              
              159,500Notes
      payable to related party
              
              
              154,067
              
              
              
              154,067Accrued
      interest on notes payable related party
              
              
              100,595
              
              
              
              83,647Advances
      payable
              
              
              27,000
              
              
              
              72,000Accrued
      interest on convertible debenture
              
              
              40,703
              
              
              
              25,203Accrued
      liability related to warrants and stock purchase rights
              
              
              -
              
              
              
              -2,359,071
              
              
              
              1,978,830Convertible
      debenture, net of unamortized debt discount
              
              
              191,573
              
              
              
              159,024Total
      liabilities
              
              
              2,550,644
              
              
              
              2,137,854Stockholders’
      deficiency:Preferred
      stock, $0.001 pare value; 5,000,000 shares authorized; no shares issued
      and outstanding
              
              
              -
              
              
              
              -Common
      stock, $0.001 par value; 100,000,000 shares authorized; 35,069,898 shares
      issued and outstanding at December 31, 2005 and 2004
              
              
              35,070
              
              
              
              35,070Additional
      paid-in capital
              
              
              1,720,908
              
              
              
              1,720,908Accumulated
      deficit
              
              
              (4,306,622
              )
              
              
              (3,893,832
              )Total
      stockholders’ deficiency
              
              
              (2,550,644
              )
              
              
              (2,137,854
              )Total
      liabilities and stockholders’ deficiency
              
              $
              0
              
              
              $
              0
  The
      accompanying notes are an integral part of these unaudited consolidated
      financial statements
   8
   TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Operations
 For the
Six Months Ended December 31, 2005 and 2004 and Cumulative
 Amounts
from Inception September 16, 1996 through December 31, 2005
 (Unaudited)
 Six Months Ended December
      31,
              
              
              
              Cumulative
      Amounts From2005
              
              
              
              2004
              
              
              
              InceptionRevenues
              
              $
              0
              
              
              $
              0
              
              
              $
              0General
      and administrative expenses
              
              
              138,616
              
              
              
              117,739
              
              
              
              4,604,353Loss
      before other income (expense)
              
              
              (138,616
              )
              
              
              (117,739
              )
              
              
              (4,604,353
              )Other
      income (expense):Other
      income
              
              
              -
              
              
              
              -
              
              
              
              8,902Gain
      on settlement of debt
              
              
              -
              
              
              
              -
              
              
              
              189,024Gain on decrease in fair value of warrants and stock purchase rights
      liabilities
              
              
              -
              
              
              
              8,000
              
              
              
              475,510Interest
      expense, net
              
              
              (30,944
              )
              
              
              (57,199
              )
              
              
              (375,705
              )Net
      (loss)
              
              
              (169,560
              )
              
              
              (166,938
              )
              
              
              (4,306,622
              )Beginning
      of period accumulated deficit
              
              
              (4,137,062
              )
              
              
              (3,726,894
              )
              
              
              -End
      of period accumulated deficit
              
              $
              (4,306,622
              )
              
              $
              (3,893,832
              )
              
              $
              (4,306,622
              )Loss
      per share:
                Basic and diluted
              
              $
              (0.005
              )
              
              $
              (0.005
              )Weighted
      average number of shares outstanding:
                Basic and diluted
              
              
              35,069,898
              
              
              
              35,069,898
  The
      accompanying notes are an integral part of these unaudited consolidated
      financial statements.
 
  9
   TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Operations
 For the
Three Months Ended December 31, 2005 and 2004 and Cumulative
 Amounts
from Inception September 16, 1996 through December 31, 2005
 (Unaudited)
 Three
      Months Ended December 31,
              
              
              
              Cumulative
      Amounts From2005
              
              
              
              2004
              
              
              
              InceptionRevenues
              
              $
              0
              
              
              $
              0
              
              
              $
              0General
      and administrative expenses
              
              
              68,978
              
              
              
              61,510
              
              
              
              4,604,353Loss
      before other income (expense)
              
              
              (68,978
              )
              
              
              (61,510
              )
              
              
              (4,604,353
              )Other
      income (expense):Other
      income
              
              
              -
              
              
              
              -
              
              
              
              8,902Gain
      on settlement of debt
              
              
              -
              
              
              
              -
              
              
              
              189,024Gain on decrease in fair value of  warrants and stock purchase
      rights liabilities
              
              
              -
              
              
              
              1,000
              
              
              
              475,510Interest
      expense, net
              
              
              (15,473
              )
              
              
              (28,600
              )
              
              
              (375,705
              )Net
      (loss)
              
              
              (84,451
              )
              
              
              (89,110
              )
              
              
              (4,306,622
              )Beginning
      of period accumulated deficit
              
              
              (4,222,171
              )
              
              
              (3,804,722
              )
              
              
              -End
      of period accumulated deficit
              
              $
              (4,306,622
              )
              
              $
              (3,893,832
              )
              
              $
              (4,306,622
              )Loss
      per share:
                Basic and diluted
              
              $
              (0.002
              )
              
              $
              (0.003
              )Weighted
      average number of shares outstanding:
                Basic and diluted
              
              
              35,069,898
              
              
              
              35,069,898
  The
accompanying notes are an integral part of these unaudited consolidated
financial statements
   10
   TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Cash Flows
 For the
Six Months Ended December 31, 2005 and 2004 and Cumulative
 Amounts
from Inception September 16, 1996 through December 31, 2005
 (Unaudited)
   Six
      months Ended December 31,
              
              
              Cumulative
      Amounts From2005
              
              
              2004
              
              
              InceptionCash
      flows from Operating Activities:Net
      (loss)
              
              $
              (169,560
              )
              
              $
              (166,938
              )
              
              $
              (4,306,622
              )Adjustments
      to reconcile net (loss) to net cash (used in) operating
      activities:Amortization
      of deferred financing costs
              
              
              14,309
              
              
              
              41,681
              
              
              
              191,572Stocks
      and warrants issued for services and debt
              
              
              -
              
              
              
              -
              
              
              
              1,763,309(Gain)
      on settlement of debt
              
              
              -
              
              
              
              -
              
              
              
              (202,024
              )Subscription
      receivable exchanged for  services
              
              
              -
              
              
              
              -
              
              
              
              20,000(Gain)
      on decrease in value of warrants and stock purchase rights
      liabilities
              
              
              
              
              
              
              (8,000
              )
              
              
              (475,510
              )Changes
      in operating assets and liabilities, net of effects of
    merger:Accounts
      payable and accrued expenses
              
              
              (20,740
              )
              
              
              4,764
              
              
              
              520,563Accrued
      consulting and related
              
              
              30,573
              
              
              
              37,500
              
              
              
              (128,016
              )Accounts
      payable to related parties
              
              
              129,901
              
              
              
              75,476
              
              
              
              1,385,712Accrued
      interest  notes payable to a related party
              
              
              7,767
              
              
              
              7,767
              
              
              
              100,596Accrued
      interest convertible debenture
              
              
              7,750
              
              
              
              7,750
              
              
              
              40,703Net
      cash (used in) Operating Activities
              
              
              0
              
              
              
              0
              
              
              
              (1,089,717
              )Cash
      flows from Investing Activities:Payments
      received on related party notes receivable
              
              
              -
              
              
              
              -
              
              
              
              205,400Cash
      flows from Financing Activities:Proceeds
      from advances payable
              
              
              -
              
              
              
              -
              
              
              
              89,500Repayments
      on advances payable
              
              
              -
              
              
              
              -
              
              
              
              (62,500
              )Proceeds
      from convertible debenture
              
              
              -
              
              
              
              -
              
              
              
              193,750Proceeds
      from common stock issuances
              
              
              -
              
              
              
              -
              
              
              
              400,000Advances
      from related parties
              
              
              -
              
              
              
              -
              
              
              
              159,500Repayments
      to related parties
              
              
              -
              
              
              
              -
              
              
              
              (50,000
              )Proceeds
      from a related party notes payable
              
              
              -
              
              
              
              -
              
              
              
              154,067Net
      cash provided by Financing Activities
              
              
              0
              
              
              
              0
              
              
              
              884,317Net
      change in cash
              
              
              0
              
              
              
              0
              
              
              
              0Cash,
      beginning of period
              
              
              0
              
              
              
              0
              
              
              
              0Cash,
      end of period
              
              $
              0
              
              
              $
              0
              
              
              $
              0
  The
accompanying notes are an integral part of these unaudited consolidated
financial statements
   11
   TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Cash Flow, Continued
  Supplemental
disclosure of cash flow information:
 
 Six
      Months Ended December
      31,2005
              
              
              2004Cash
      paid for:Interest
              
              $
              -
              
              
              $
              -Income
      taxes
              
              $
              -
              
              
              $
              -
  Supplemental schedule of
non-cash, investing and financing activities:
 
 none
  The
accompanying notes are an integral part of these unaudited
consolidated financial statements
   12
   TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Balance Sheets
 As of
March 31, 2006 and 2005
 (Unaudited)
  March
      31,2006
              
              
              
              2005Total
      assets
              
              $
              0
              
              
              $
              0Liabilities
      and Stockholders’ deficiencyCurrent
      liabilities:Accounts
      payable and accrued expenses
              
              $
              240,155
              
              
              $
              231,292Accrued
      consulting and related
              
              
              335,840
              
              
              
              269,498Accounts
      payable to related parties
              
              
              1,404,183
              
              
              
              1,049,093Advances
      from related parties
              
              
              109,500
              
              
              
              159,500Notes
      payable to related party
              
              
              154,067
              
              
              
              154,067Accrued
      interest on notes payable to related party
              
              
              104,394
              
              
              
              88,628Advances
      payable
              
              
              27,000
              
              
              
              72,000Accrued
      interest convertible debenture
              
              
              44,577
              
              
              
              29,078Accrued
      liability related to warrants and stock purchase rights
      liabilities
              
              
              -
              
              
              
              -2,419,716
              
              
              
              2,053,156Convertible
      debenture, net of unamortized  debt discount
              
              
              183,750
              
              
              
              170,188Total
      liabilities
              
              
              2,603,466
              
              
              
              2,223,344Stockholders’
      deficiency:Preferred
      stock, $0.001 pare value; 5,000,000 shares authorized; no shares issued
      and outstanding
              
              
              -
              
              
              
              -Common
      stock, $0.001 par value; 100,000,000 shares authorized; 35,069,898 shares
      issued and outstanding at March 31, 2006 and 2005
              
              
              35,070
              
              
              
              35,070Additional
      paid-in capital
              
              
              1,730,908
              
              
              
              1,720,908Accumulated
      deficit
              
              
              (4,369,444
              )
              
              
              (3,979,322
              )Total
      stockholders’ deficiency
              
              
              (2,603,466
              )
              
              
              (2,223,344
              )Total
      liabilities and stockholders’ deficiency
              
              $
              0
              
              
              $
              0
  The
accompanying notes are an integral part of these unaudited consolidated
financial statements
   13
   TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Operation
 For the
Nine Months Ended March 31, 2006 and 2005 and Cumulative
 Amounts
from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
  Nine
      Months Ended March 31,
              
              
              
              Cumulative
      Amounts From2006
              
              
              
              2005
              
              
              
              InceptionRevenues
              
              $
              0
              
              
              $
              0
              
              
              $
              0General
      and administrative expenses
              
              
              191,588
              
              
              
              183,209
              
              
              
              4,657,326Loss
      before other income (expense)
              
              
              (191,588
              )
              
              
              (183,209
              )
              
              
              (4,657,326
              )Other
      income (expense):Other
      income
              
              
              -
              
              
              
              -
              
              
              
              8,902Gain
      on settlement of debt
              
              
              -
              
              
              
              -
              
              
              
              189,024Gain on decrease in value of warrants and stock purchase rights
      liabilities
              
              
              -
              
              
              
              8,000
              
              
              
              475,510Interest
      expense, net
              
              
              (40,794
              )
              
              
              (77,219
              )
              
              
              (385,554
              )Net
      (loss)
              
              
              (232,382
              )
              
              
              (252,428
              )
              
              
              (4,369,444
              )Beginning
      of period accumulated deficit
              
              
              (4,137,062
              )
              
              
              (3,726,894
              )
              
              
              -End
      of period accumulated deficit
              
              $
              (4,369,444
              )
              
              $
              (3,979,322
              )
              
              $
              (4,369,444
              )Loss
      per share:
                Basic and dilute
              
              $
              (0.007
              )
              
              $
              (0.007
              )Weighted
      average number of shares outstanding:
                Basic and diluted
              
              
              35,069,898
              
              
              
              35,069,898
  The
accompanying notes are an integral part of these unaudited consolidated
financial statements.
   14
 TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Operations
 For the
Three Months Ended March 31, 2006 and 2005 and Cumulative
 Amounts
from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
  Three
      Months Ended March 31,
              
              
              
              Cumulative
      Amounts From2006
              
              
              
              2005
              
              
              
              InceptionRevenues
              
              $
              0
              
              
              $
              0
              
              
              $
              0General
      and administrative expenses
              
              
              52,972
              
              
              
              65,470
              
              
              
              4,657,326Loss
      before other income (expense)
              
              
              (52,972
              )
              
              
              (65,470
              )
              
              
              (4,657,326
              )Other
      income (expense):Other
      income
              
              
              -
              
              
              
              -
              
              
              
              8,902Gain
      on settlement of debt
              
              
              -
              
              
              
              -
              
              
              
              189,024Gain
      on decrease in value of  warrants and stock purchase rights
      liabilities
              
              
              -
              
              
              
              -
              
              
              
              475,510Interest
      expense, net
              
              
              (9,850
              )
              
              
              (20,020
              )
              
              
              (385,554
              )Net
      (loss)
              
              
              (62,822
              )
              
              
              (85,490
              )
              
              
              (4,369,444
              )Beginning
      of period accumulated deficit
              
              
              (4,306,622
              )
              
              
              (3,893,832
              )
              
              
              -End
      of period accumulated deficit
              
              $
              (4,369,444
              )
              
              $
              (3,979,322
              )
              
              $
              (4,369,444
              )Loss
      per share:
                Basic and diluted
              
              $
              (0.002
              )
              
              $
              (0.002
              )Weighted
      average number of shares outstanding:
                Basic and diluted
              
              
              35,069,898
              
              
              
              35,069,898
  The
accompanying notes are an integral part of these unaudited consolidated
financial statements
   15
 TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Cash Flows
 For the
Nine Months Ended March 31, 2006 and 2005 and Cumulative
 Amounts
from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
  Nine
      Months Ended March 31,
              
              
              Cumulative
      Amounts From2006
              
              
              2005
              
              
              InceptionCash
      flows (used in) Operating Activities:Net
      (loss)
              
              $
              (232,382
              )
              
              $
              (252,428
              )
              
              $
              (4,369,444
              )Adjustments
      to reconcile net (loss) to net cash (used in) operating
      activities:Amortization
      of deferred financing costs
              
              
              16,486
              
              
              
              52,845
              
              
              
              193,750Stocks
      and warrants issued for services and debt
              
              
              -
              
              
              
              -
              
              
              
              1,763,309(Gain)
      of settlement of debt
              
              
              
              
              
              
              
              
              
              
              (202,024
              )Subscription
      receivable exchanged for services
              
              
              -
              
              
              
              -
              
              
              
              20,000(Gain)
      on decrease in value of warrants and stock purchase rights
      liabilities
              
              
              -
              
              
              
              (8,000
              )
              
              
              (475,510
              )Changes
      in operating assets and liabilities, net of effects of
    merger:Accounts
      payable and accrued expenses
              
              
              (20,739
              )
              
              
              4,764
              
              
              
              520,562Accrued
      consulting and related
              
              
              65,073
              
              
              
              58,540
              
              
              
              (93,516
              )Accounts
      payable to related parties
              
              
              148,372
              
              
              
              119,906
              
              
              
              1,404,183Accrued
      interest on notes payable to related party
              
              
              11,566
              
              
              
              12,748
              
              
              
              104,395Accrued
      interest on convertible debenture
              
              
              11,624
              
              
              
              11,625
              
              
              
              44,578Net
      cash (used in) Operating Activities
              
              0_
              
              
              0_
              
              
              
              (1,089,717
              )Cash
      flows from Investing Activities:Payments
      received on related party notes receivable
              
              0_
              
              
              0_
              
              
              
              205,400Cash
      flows from Financing Activities:Proceeds
      from advances payable
              
              
              -
              
              
              
              -
              
              
              
              89,500Repayments
      to advances payable
              
              
              -
              
              
              
              -
              
              
              
              (62,500
              )Proceeds
      from convertible debenture
              
              
              -
              
              
              
              -
              
              
              
              193,750Repayments
      to convertible debenture
              
              
              (10,000
              )
              
              
              -
              
              
              
              (10,000
              )Payment
      of debt by related party
              
              
              10,000
              
              
              
              
              
              
              
              10,000Proceeds
      from common stock issuance
              
              
              -
              
              
              
              -
              
              
              
              400,000Advances
      from related parties
              
              
              -
              
              
              
              -
              
              
              
              159,500Repayments
      to related parties
              
              
              -
              
              
              
              -
              
              
              
              (50,000
              )Proceeds
      from a related party notes payable
              
              -_
              
              
              -_
              
              
              
              154,067Net
      cash provided by Financing Activities
              
              0_
              
              
              
              0
              
              
              
              884,317Net
      change in cash
              
              
              0
              
              
              
              0
              
              
              
              0Cash,
      beginning of period
              
              0_
              
              
              0_
              
              
              0_Cash,
      end of period
              
              $0_
              
              
              $0_
              
              
              $
              0
  The
accompanying notes are an integral part of these unaudited consolidatedfinancial
statements
   16
 TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Condensed
Consolidated Statements of Cash Flow, Continued
  Supplemental
disclosure of cash flow information:
 
 For
      the Nine Months Ended March31,2006
              
              
              2005Cash
      paid for:Interest
              
              $
              -
              
              
              $
              -Income
      taxes
              
              $
              -
              
              
              $
              -
  Supplemental schedule of
non-cash, investing and financing activities:
 
 None
  The
accompanying notes are an integral part of these unaudited consolidated
financial statements





17




TransWorld
Benefits International, Inc. and Subsidiary


(A
Development Stage Company)


Notes
to Condensed Consolidated Financial Statements


For the
Periods Ended September 30, 2004 through March 31, 2006 and


Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006


(Unaudited)


NOTE 1. CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
 
 The
accompanying condensed consolidated financial statements of TransWorld Benefits
International, Inc. and subsidiary have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial information and with the rules and regulations for reporting on Form
10-QSB. Accordingly, they do not include certain information and disclosures
required for complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation have been included and
are of a normal recurring nature.
 
 These
statements should be read in conjunction with the consolidated financial
statements and footnotes included in the Company's comprehensive filing of Form
10-KSB for the years ended June 30, 2006, 2005, and 2004. The accounting
policies used in preparing these condensed consolidated financial statements are
the same as those described in Note 1 to the consolidated financial statements
in the Company's Form 10-KSB.
  NOTE 2. ORGANIZATION AND
BACKROUND
 
 The
Company was incorporated in 1996 in Nevada. The Company is a development stage
company formed to provide emergency travel services to the funeral, insurance,
travel, Internet, and credit card industries. The Company will generate revenue
through direct sales or licensing of the Company's proprietary products such as
the return of remains of the deceased by private executive aircraft. The Company
also intends to market and sell insured plans for the repatriation of remains
benefit, medical evacuation and necessary repatriation as well as accidental
death and dismemberment benefits. The Company expects to sell its products to
customers both domestically and internationally.
 
 Pursuant
to a Share Purchase Agreement dated October 4, 2002 by and among Thinka
Weight-Loss Corporation (the “Company”), TransWorld Benefits, Inc.
(“TransWorld”), and certain shareholders of TransWorld, the Company acquired
5,600,000 shares of the common stock of TransWorld, which represented 100% of
the issued and outstanding capital stock of TransWorld, in exchange for
4,500,000 newly issued shares of its common stock and 5,721,435 of outstanding
common stock shares (the “Reverse Acquisition”).  The parties to the
Reverse Acquisition originally contemplated that the shareholders of TransWorld
would receive an aggregate of 10,221,435 shares of the Company’s common stock at
the closing of the Reverse Acquisition, which together would have represented
53.7% of the Company’s total outstanding capital stock.  However, due
to a disputed claim made by a shareholder of the Company, the 5,721,435 shares
of the Company’s common stock were not transferred to the TransWorld
shareholders until June 2004.
 
 As a
result of the Reverse Acquisition, TransWorld became a wholly owned subsidiary
of the Company effective on January 30, 2003, and two shareholders of TransWorld
were elected to two of the three seats on the Company’s Board of
Directors.  Through their acquisition of the shares of the Company’s
outstanding common stock as described herein, certain shareholders of TransWorld
now exercise control of the Company, which in turn controls TransWorld as a
wholly owned
 
 18
  TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
  subsidiary.  As
a result, the related transactions together have been accounted For as a
“reverse acquisition.” Under reverse acquisition accounting, TransWorld is
considered the accounting acquirer and the Company is considered the accounting
acquiree.  The historical financial statements of TransWorld have now
become those of the Company.
 
 Development  Stage  Enterprise
 
 The
Company is a development stage company as defined in Statement of Financial
Accounting Standards ("SFAS") No. 7, "Accounting and Reporting by Development
Stage Enterprises." The Company is devoting substantially all of its present
efforts to establish a new business, and its planned principal operations have
not yet commenced. The Company has not generated any revenues from operations
and has no assurance of any future revenues. All losses accumulated since
inception have been considered as part of the Company's development stage
activities. The Company will require substantial additional funding for
continuing research and development, obtaining regulatory approval and for the
commercialization of its products. There is no assurance that the Company will
be able to obtain sufficient additional funds when needed, or that such funds
will be obtainable on terms satisfactory to the Company.
  NOTE 3 - RELATED PARTY
TRANSACTIONS
 
 Accounts payable to related
parties
 
 In 1999
the Company entered into a due on demand convertible promissory note at 8% per
annum with the Company's majority stockholder. The initial amount was for $1,500
with additional amounts advanced thereafter in accordance with the terms of the
note. The principal and accrued interest were convertible at any time into
shares of the Company's common stock at a conversion price equal to the lesser
of $1.00 per share or such lower price as determined by the Board of Directors
of the Company. In October 2001, the stockholder agreed to relinquish its
conversion right and any accrued and unpaid interest (which was approximately
$42,000 as of  October 2001), and reclassify the outstanding principal
balance to accounts payable to related parties in the accompanying consolidated
balance sheet. The balance is $560,318 from June 30, 2004 through June 30,
2006.
 
 Payments
for additional Company expenses and loans to the Company were made by our
majority stockholder from 2003 forward. Payments for Company expenses amounted
to general and administrative expenses of approximately $297,000 and $210,000
for the years ended June 30, 2005 and 2006, respectively.
 
 The
following table presents the quarterly balances in Accounts payable to related
parties:
 
 March 31, 2005
              
              
              December 31, 2004
              
              
              September 30, 2004$1,049,093
              
              
              
              $1,004,663
              
              
              
              $966,666March 31, 2006
              
              
              December 31, 2005
              
              
              September 30, 2005$1,404,183
              
              
              
              $1,385,712
              
              
              
              $1,317,717
   19
  TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31,
2006
 
 Advances from Related
Parties
 
 From 2001
through 2003, the Company received non-interest bearing, due on demand advances
of $15,000, $124,000 and $33,000, respectively, from related parties to fund its
operating expenses. The Company made payments on these advances of $50,000
during 2005.
 
 The
following table presents the quarterly balances in Advances from related
parties:
 
 March 31, 2005
              
              
              December 31, 2004
              
              
              September 30, 2004$159,500
              
              
              
              $159,500
              
              
              
              $159,500March 31, 2006
              
              
              December 31, 2005
              
              
              September 30, 2005$109,500
              
              
              
              $109,500
              
              
              
              $109,500
  Notes Payable and Accrued
Interest on Notes Payable to a Related Party
 
 In 1996
and 1997, the Company entered into due on demand unsecured promissory notes at
10% per annum simple interest with its majority shareholder. The Company amended
the interest calculation to annual compounding commencing July 1, 2003. The
Company has paid no interest since June 30, 2003. There has been no change in
the principal note balance of $154,067 since 1997.
 
 The
following table presents the quarterly balances in Accrued interest on notes
payable to a related party:
 
 March 31, 2005
              
              
              December 31, 2004
              
              
              September 30, 2004$88,628
              
              
              
              $83,647
              
              
              
              $79,764March 31, 2006
              
              
              December 31, 2005
              
              
              September 30, 2005$104,394
              
              
              
              $100,595
              
              
              
              $96,711
  NOTE 4 - CONVERTIBLE
DEBENTURE
 
 On
January 29, 2003 (as amended on August 14, 2003) the Company entered into a
Securities Purchase Agreement (the "Agreement") with La Jolla Cove investors,
Inc. ("La Jolla"), pursuant to which the Company issued an 8% convertible
debenture in the amount of $300,000 (the "Convertible Debenture"). The
Convertible Debenture was due on January 29, 2005. The Company received $163,750
and $30,000 of the principal amount of the Convertible Debenture in January 2003
and January 2004, respectively.  In connection with the Agreement, the
Company issued La Jolla a warrant for the purchase of 1,500,000 shares of common
stock at $1.00 per share, which expired unexercised on January 29,
2006.  Provided the Company obtained additional financing from a third
party of at least $1,000,000 by July 29, 2003, the Company had the right to
reject La Jolla's request to exercise all or any portion of the warrant. This
did not occur and the warrant terms were in full force and
effect.  Pursuant to the terms of the Agreement, La Jolla shall
simultaneously  with  the  conversion of the
Convertible Debenture at
  20
  TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
  any time,
exercise the warrant at the rate of at least 5 times the dollar amount of the
debenture being converted.
 
 The terms
of the Agreement permit La Jolla to convert the Convertible Debenture into
common shares of the Company at any time during the term of the Agreement. The
number of shares issued upon conversion of the debenture is equal to the
following: the dollar amount of the debenture being converted (a maximum of
$300,000), multiplied by 6, minus the product of the Conversion Price (which is
the lesser of $0.20 or 80% of the lowest market rate over the previous 20
trading days, less 3% for every month or partial month following June 8, 2003,
until the registration statement is declared effective) multiplied by 5 times
the amount of the debenture being converted, and the entire result shall be
divided by the Conversion Price.  In connection with the Agreement,
the Company is required to register the sale of the underlying common stock to
be issued upon conversion of the Convertible Debenture.  Upon the
effective date of the registration statement, the Company will receive any
balance due on the Convertible Debenture.  Thirty days following the
effective date of the registration statement, the Company has the right
to  cause La Jolla to convert up to 10% of the
Convertible
 Debenture
and exercise up to $150,000 of the warrant per month.  As of September
11, 2003, the registration statement was cancelled.
 
 As  the  Convertible  Debenture  allows  La  Jolla  to  convert  the
outstanding principal amount into shares of the Company's common stock at a
price below fair value at the time of conversion, the Company has recorded a
beneficial conversion feature in the amount of $108,600.  This amount
computed pursuant to the Black Scholes pricing model under Statement of
Financial Accounting  Standards  ("SFAS") No. 123, has been
recorded as a debt discount and is being amortized as interest expense over the
life of the Convertible Debenture. The debt discount related to the warrants
issued to La Jolla of $85,150 was recorded based on the relative fair value of
the debt and warrants computed pursuant to the Black Scholes pricing model under
Statement of Financial Accounting  Standards  ("SFAS") No.
123 as a debt discount and will be amortized as interest expense over the
remaining life of the Convertible Debenture.
 
 The
following table presents the quarterly amortized debt discount recorded as
interest expense:
 
 March 31, 2005
              
              
              December 31, 2004
              
              
              September 30, 2004$11,164
              
              
              
              $20,841
              
              
              
              $20,841March 31, 2006
              
              
              December 31, 2005
              
              
              September 30, 2005$2,177
              
              
              
              $7,154
              
              
              
              $7,154
 
 A Put and
Call agreement related to the Convertible Debenture was entered into between
three related parties of the Company and La Jolla. The agreement obligated La
Jolla to sell shares of stock during a ‘call period’ and obligated the related
parties to purchase shares of stock during a ‘put period’.  The shares
of Stock could be either the shares that would be obtained by La Jolla through
the conversion or could be the shares obtained through the actual exercise of
the warrant if the conversion occurred. Pursuant to La Jolla’s rights in the Put
& Call agreement, La Jolla elected to exercise its Put right and obligated
the related parties to purchase the number of shares of stock that
   21
 TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
   would
have been obtained through conversion. The related parties did not fulfill their
obligations and La Jolla filed suit in March 2005.  La Jolla received
a judgment for approximately $268,000 in October, 2005.  One related
party paid $68,000 in  2006 and 2007.  This related party
has relinquished any rights he may have for recourse to the Company. Another
related party paid approximately $200,000 in September 2006.  This
related party has filed a law suit to recover this payment but the ultimate
outcome is not determinable at this time.
 (See Note
10 - Litigation)
  NOTE 5 - ACCRUED LIABILITY
RELATED TO WARRANTS AND STOCK PURCHASE RIGHTS
 
 The
Company issued warrants as part of the January 2003 Convertible Debenture
Agreement and issued warrants and discounted stock purchase rights as part of a
June 2003 consulting agreement with a third party. The warrants and stock
purchase rights are valued using the Black-Scholes option pricing model. The
initial recording of the warrants related to the Convertible Debenture credited
accrued liability related to warrants and stock purchase rights in the amount of
$165,000. Quarterly adjustments to the accrued liability are charged to other
income (loss). The initial recording of the warrants and stock purchase rights
related to the consulting agreement credited accrued liability related to
warrants and stock purchase rights in the amount of $310,510. Quarterly
adjustments to the accrued liability are charged to other income
(loss).
 
 The
following table presents the quarterly balances in Accrued liability related to
warrants and stock purchase rights:
  March 31, 2005
              
              
              December 31, 2004
              
              
              September 30, 2004$0
              
              
              
              $0
              
              
              
              $1,000March 31, 2006
              
              
              December 31, 2005
              
              
              September 30, 2005$0
              
              
              
              0
              
              
              
              $0
  NOTE 6 - STOCKHOLDERS'
EQUITY
 
 Preferred  Stock
 
 On
September 30, 2003, the Company's stockholders authorized the amending of the
Articles of Incorporation to allow for the issuance of up to 5,000,000 shares of
$0.001 par value preferred stock.  Shares of preferred stock may be
issued in one or more classes or series at such time the Board of Directors
determine.  As of June 30, 2006, there were no shares of preferred
stock issued and outstanding and no classes or series have been designated by
the Board of Directors.
 
 Common  Stock
 
 The
Company has one class of common stock, par value $0.001 per share. Each share is
entitled to one vote on all matters submitted to stockholders. As of March 31,
2006, 100,000,000 common shares are authorized and 35,069,898 shares are issued
and outstanding.
  22
  TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
  The
following is a description of the issuances of common stock since inception and
other common stock information.
 
 During
the year ended December 31, 2001, the Company issued 64,286 shares of restricted
common stock to a related party at $3.11 per share (which represents
management's estimated fair market value of its common stock on the date of
issuance, as approved by the Board of Directors), for which the Company received
a promissory note in the principal amount of $200,000.
 
 During
the year ended December 31, 2001, the Company sold 96,428 shares of common stock
at $3.11 per share to related parties for $300,000 in cash.
 
 On
January 30, 2003, pursuant to the terms of the Purchase Agreement, all of the
outstanding common stock of Transworld of 5,600,000 shares was sold to TWLO in
exchange for 10,221,435 shares of TWLO common stock. As Transworld is considered
the surviving entity in this transaction (see  Note 1),  the
reduction in outstanding shares from 5,600,000 to 4,500,000 has been considered
a reverse stock split and all historic references to shares and price per share
prior to January 30, 2003 have been retroactively adjusted for this split
ratio.
 
 On
January 30, 2003, pursuant to the terms of the Purchase Agreement, the
14,534,600 shares of previously outstanding common stock of TWLC were accounted
for as an issuance of shares in a recapitalization of the Company as part of the
transaction (see Note 1).  In connection with the transaction, the
Company also assumed $148,947 of TWLC liabilities.
 
 On
January 30, 2003, the Company's stockholders approved an increase in the number
of authorized common shares to 100,000,000.
 
 On April
29, 2003, the Company entered into a Subscription Agreement with a third party
investor, pursuant to which the investor agreed to purchase 1,000,000 shares of
the Company's common stock at $0.10 per share for $100,000.  If during
the 90 days following the closing date, the price of the Company's common stock
falls below the purchase price of $0.10, the purchase price should be adjusted
to equal the lowest trading price, but not less than $0.01 per share, and the
Company should issue to the investor the additional shares.  During
the six months ended June 30, 2003, the Company received $66,000 for 1,320,000
shares ($0.05 per share) committed to be issued by the Company to this
investor.  The Company received the $34,000 balance and the Company
issued a total of 2,000,000 shares (as adjusted) of its common stock under this
Subscription Agreement.
 
 On June
28, 2003, the Company entered into an Engagement Agreement with a third party
for consulting services to be provided over a period of six months with the
following compensation terms to the third party for the services
provided:
 
 i)   an  initial
non-refundable retainer fee in an amount equal to $10,000 payable
in cash or in registered common stock upon acceptance of the Engagement
Agreement;
 ii)  a
monthly retainer thereafter in an amount equal to $10,000 payable in cash
or  in  registered  common  stock for
the term of the Engagement Agreement;
   23
  TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
  
 iii)  
250,000 unrestricted shares of the Company's common stock upon acceptance
of the Engagement Agreement;
 iv)  a
warrant to purchase 250,000 shares of the Company's common stock upon
acceptance of the Engagement  Agreement, exercisable for five years at
an exercise price equal to 110% of the Company's closing price on
the date of the Engagement Agreement; and
 v)   a
right to purchase up to $300,000 of the Company's unrestricted common
stock at a price equal to a 30% discount to the closing bid price
of the Company's common stock as of the date of exercise.
 
 Pursuant
to the terms of the Engagement Agreement, the Company issued a total of 340,909
shares of its common stock, valued at $45,000 ($0.13 per share, which was the
fair market value of the common stock on the date the shares were earned),
related to the initial non-refundable retainer fee and the 250,000 shares
upon  finalization  of  the Engagement Agreement.
The Company issued 197,000 registered common shares in June 2003 at $.10 per
share for a $20,000 subscription receivable pursuant to the right to purchase up
to $300,000 of the Company's common stock at a 30% discount. During the three
months ended September 30, 2003, the Company issued an additional 194,094
registered common shares for $8,000 at an average price of $0.07 per share
pursuant to the same 30% discount provision.  The monthly retainers in
August and September 2003 totaling $20,000 were paid with 288,115 registered
common shares at an average price of $0.08 per share.
 
 On July
17, 2003, the Company adopted a stock incentive plan that authorized the
issuance of 6,000,000 shares of the Company's registered common stock. Options
will vest at the discretion of the Board of Directors as determined at the grant
date and the 2003 Plan terminates on July 1, 2013.
 
 During
the year ended June 30, 2004, the Company issued 4,629,076 common shares at
prices between $0.045 and $0.175 for services valued at $356,838.
 
 During
the year ended June 30, 2004 the Company exchanged 8,868,313 common shares at
prices between $0.05 and $0.25 per share for debt valued at $848,937. Of this,
the Company’s majority shareholder accounted for 4,835,177 shares at $0.055 per
share valued at $265,935.
 
 See Note
9 - Subsequent Events for additional issuances of common shares.
 
 NOTE 7 - BASIC AND DILUTED
LOSS PER COMMON SHARE
 
 The
following table presents the components and the calculation of basic and diluted
loss per common share at each quarter end:
 
 Quarter
      ended
                Mar 31, 2005
              
              
              Quarter
      ended
                Dec 31, 2004
              
              
              Quarter
      ended
                Sept 30, 2004Numerator
      - net income (loss)
              
              $
              (85,490
              )
              
              $
              (89,110
              )
              
              $
              (77,828
              )Denominator
      - weighted average shares basic and diluted
              
              
              35,069,898
              
              
              
              35,069,898
              
              
              
              35,069,898Income
      (loss) per common share
              
              $
              (0.002
              )
              
              $
              (0.003
              )
              
              $
              (0.002
              )
   24
 TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
  Quarter
      ended
                Mar 31, 2006
              
              
              Quarter
      ended
                Dec 31, 2005
              
              
              Quarter
      endedSept 30, 2005Numerator
      - net (loss)
              
              $
              (62,822
              )
              
              $
              (84,451
              )
              
              $ 85,109Denominator
      - weighted average shares basic and diluted
              
              
              35,069,898
              
              
              
              35,069,898
              
              
              
              35,069,898(Loss)
      per common share
              
              $
              (0.002
              )
              
              $
              (0.002
              )
              
              $
              (0.002
              )Six
      months endDec 31,
    2005
              
              
              Six
      months endDec 31,
    2004Numerator
      - net (loss)
              
              $
              (169,560
              )
              
              $
              (166,938
              )Denominator
      - weighted average shares basic and diluted
              
              
              35,069,898
              
              
              
              35,069,898(Loss)
      per common share
              
              $
              (0.005
              )
              
              $
              (0.005
              )Nine
      months end March 31,
    2006
              
              
              Nine
      months endMarch 31,
    2005Numerator
      - net (loss)
              
              $
              (232,382
              )
              
              $
              (252,428
              )Denominator
      - weighted average shares basic and diluted
              
              
              35,069,898
              
              
              
              35,069,898(Loss)
      per common share
              
              $
              (0.007
              )
              
              $
              (0.007
              )
  NOTE 8 - LEGAL
PROCEEDINGS
 
 The
Company may become involved in various legal proceedings and claims which arise
in the ordinary course of its business.  Management does not believe
that these matters will have a material adverse effect on the Company’s
financial position or results of operations.
 
 On
December 23, 2002, an individual filed a lawsuit in Superior Court for the
County of Orange,
State  of  California,  against  TransWorld  Benefits,
Inc. (the "Company") and others.  The only cause of action alleged
against the Company in the Lawsuit is for breach of contract.  In that
cause of action, plaintiff alleged that he lent $35,000 to the Company and was
not repaid.  Plaintiff alleged that he was entitled to judgment for
$45,000, plus prejudgment interest and court costs.  On October 6,
2003, the Company filed a cross-complaint against the plaintiff  for
breach of contract and fraud alleging  that plaintiff had breached an
obligation to pay the Company $500,000 pursuant to a Stock Purchase Agreement
between plaintiff and the Company.  On or about November 17, 2003 the
company entered into a settlement agreement with plaintiff which included a full
release and was reduced to a judgment for $58,000 against TWBI in July. The
judgment was vacated and the suit was dismissed with prejudice on January 4,
2006.
 
 On or
about February 25, 2004, a firm who leased office space to the Company filed an
unlawful detainer lawsuit in the Superior Court of California, County of Orange,
against TWBI.  On or about July 14, 2004, the lessor obtained a
judgment against the TWBI for $102,580 for lease damages.
   25
  TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
 On or
about  July 23, 2007, an individual hired to perform accounting and
other services for the Company on a contract basis filed a claim for unpaid
wages in front of the labor board. Said individual obtained an award against
TWBI from the Labor Commissioner for the State of California in the amount of
$233,486 the (“Award”).  On August 7, 2007, TWBI timely filed an
appeal of the award with the Superior Court of California, County of Orange,
entitling TWBI to a trial de novo of the issues adjudicated in the award. On
December 10, the Court issued a ruling determining that the individual was not
an employee during the period in question and is not entitled to any wages from
the Company and granted judgment in favor of the Company.
 
 On June
4, 2007 in the Superior Court of California, TWBI filed a lawsuit against the
individual referenced above who made an unsuccessful claim for wages against the
company, seeking damages in excess of $1 million from the individual. The
lawsuit alleges claims for Breach of Fiduciary Duty, Negligence, Fraud,
Conversion and Declaratory Relief.  Defendant has defaulted in the
lawsuit, and the Court has entered judgment on behalf of TWBI for $5,000,000.
The Company does not expect to receive these funds.
 
 On May
26, 2007, a former executive of the Company filed suit against the Company,
alleging that he is owed compensation, benefits, common stock in the
Company , plus indemnification for amounts he paid to a third party
financier pursuant to execution of a judgment.  The plaintiff's operative
complaint asserts alleged causes of action for fraud, breach of contract, breach
of fiduciary duty, indemnity, accounting, and unfair competition.  The
plaintiff dismissed its case against the Company in exchange for each party
paying its own legal fees.
  NOTE 9 - SUBSEQUENT
EVENTS
 
 Stock
Issuances
 
 During
the quarter ended June 30, 2007, the Company issued 1,850,000 common shares at
$0.005 for services valued at $9,250. See the following section “Advisory
Committee” which further details this event.
 
 During
the quarter ended June 30, 2007, the Company exchanged 62,210,264 common shares
at prices between $0.005 and $0.05 per share for debt valued at $316,091. Of
this, two related parties of the Company accounted for 62,098,264 shares at
$0.005 per share valued at $310,491.
 
 Sale of Subsidiary
TransWorld Benefits, Inc.
 
 The
majority stockholder of the Company acquired the Company’s subsidiary TransWorld
Benefits, Inc. (TWBI) as of July 1, 2007. (See Exhibit 10.33) This divesture was
required by potential investors and partners because of excessive debt and
litigation in TWBI. TWBI had approximately $21,000 in assets and $2,610,000 in
liabilities on July 1, 2007. As consideration for the purchase, the Company
received $10,000 cash and assumed $490,000 worth of liabilities of
TWBI.
  26
  TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
  Immediately
prior to the sale, the Company contributed $1,812,617 of inter-company debt to
the capital of TWBI which originated from Company issuances of stock for debt or
services of TWBI.
 
 A Form
14C was filed on July 17, 2007.  The Securities and Exchange
Commission commented that the 14C would not be approved until the company became
current with its filings.
 
 Advisory
Committee
 
 In May
2007 the Company formed an Advisory Committee and issued 1,850,000 common shares
at $0.005 per share for services totaling $9,250.
 
 The Board
of Advisors shall have the following general responsibilities:
 
 (a)
              Advise
      regarding the general policies and activities of the Companyin the area of
      loyalty programs and overall business and
  salespractices.
 
 (b)
              Advise
      on the design and effectiveness of programs, products and services of the
      Company.
 
 (c)
              Advise
      on the programs, products and services of competitors and potential
      customers of the Company to identify strategic and marketplace
      opportunities for the Company and its products and
    services.
 
 (d)
              Review
      and advise regarding the Company’s general business and
      financial  policies and
procedures.
 
 (e)
              Assist
      in public relations.
 
 (f)
              Make
      recommendations about potential market opportunities to explore and sales
      opportunities to pursue.
 
 The
Committee of Advisors shall consist of various individuals with relevant sales,
marketing, technical, commercial, financial expertise or legal.  The
Committee of Advisors is not expected to have regular business meetings each
calendar year, however, Committee members will be called periodically to offer
advice and counsel and may elect to attend a meeting annually.
 
 On July
10, 2007, the Company held an Advisory Committee meeting.  At that
meeting, the Company announced a name change to 7G Inc.  We have the
domain name registration of 7Ginc.com.
 
 Graham Companies Assets
Acquisition
 
 On March
1, 2008, the Company acquired certain assets and liabilities of Stuart
Graham.  (See Exhibit 10.34) Graham will receive 67,000,000 shares of
the Company’s common stock and $400,000.  As a further condition, the
major stockholder of the Company, was required to buy the subsidiary of the
Company, TransWorld Benefits, Inc. which is burdened with debt and
litigation.
   27
  TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
  
 As with
all of our pending or completed acquisitions, proprietary aspects of the
Company’s business methods and related proprietary technologies are covered by
pending patents and trademarks in appropriate jurisdictions. The following are
programs acquired by the Company from the Graham Group including proprietary
patents:
 
 1.
              THANKS
      Gift Certificates
 2.
              Local
      Loyalty Programs
 3.
              CheckMate
      Rewards
 4.
              Consulting
      Services
 5.
              Anchor
      Store Program
 6.
              Payroll
      Debit Card
 7.
              Restaurant
      Search Engine
  The
following is a summary of each program
 
 THANKS Gift Certificates are
used as both a reward and an incentive by major media partners, employers and
associations. THANKS Gift Certificates are a discounted online gift certificate
that promotes local merchants, primarily restaurants. The sponsoring
organization initiates the program promoting it to their members or customers
through a variety of methods. THANKS Gift Certificates are the vehicle used to
quickly acquire merchants in a city and prepare the way for all the Company’s
loyalty programs.
 
 The Local Loyalty Program is a
new program that will follow once a geographic market is opened by the Company
with our THANKS Gift Certificates program. Most local merchants cannot afford an
electronic loyalty program because of the prohibitive cost of
entry.
 
 The Local
Loyalty program offers a merchant the opportunity to capture their loyal
customers’ data, create a data base, and reward them with a variety of offers
(that are predetermined) while tracking the effectiveness of each offer. The
merchant can go online at anytime and see what offers have been redeemed by
which customers, how much was spent by customers and when it was
spent.
 
 The Local
Loyalty program will be presented in a checkbook format, using barcodes so each
check can be recorded and tracked. This offers the merchant a loyalty-reward
program at a very inexpensive price, while still being profitable to the
Company. At the same time, the program develops an extremely valuable database
of loyal customers for the Company with excellent personal and spending
data.
 
 CheckMate Rewards. Unlike
coupon books, people tend to hold on to checkbooks and view them as a form of
payment and not a discount vehicle. CheckMate Rewards is a unique concept that
allows merchants to market their product or service in a unique format to large
corporations both locally and nationally. With the local merchant base that the
Company will secure, it is a natural fit for CheckMate to create a local
checkbook that can be sold as a premium to auto dealers, banks, credit unions,
etc. that will use CheckMate to reward loyal customers or incentives for
specific buying behavior. CheckMate can also be used by nonprofit groups to sell
as a fundraiser or as a premium for donating a specified amount.
   28
 TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
 
 Anchor Store
Program.  The company’s unique gift certificate program will
revolutionize current grocery loyalty programs.  We call this model
our Anchor Store model because we always have an anchor store or company
involved like a grocery store. We will roll out this program in a test market in
2008.
 
 Payroll Debit
Card.  Retail merchants, multi-level companies, and many other
organizations that have large numbers of employees can benefit by this payroll
card. It is especially useful for companies whose employees do not have a
traditional direct demand checking account. The prepaid debit card; used as a
payroll card, can help "unbanked" workers save money, add convenience and
security.  It also allows employees to add health benefits offered
through the card even if not otherwise offered by their employers. As the
Company builds relationships with merchants and restaurants, opportunities will
emerge to market prepaid debit cards. The Company has existing connections with
large organizations and associations that are perfect candidates for our payroll
card.
 
 Restaurant Search Engine has a
filed a patent and is a very unique site. Unlike other restaurant sites that
will only allow you to search by cuisine or area, Restaurant Search Engine will
also allow you to utilize over 100 other search filtering criteria. For example,
you might say I feel like shrimp. The site will present all the restaurants in
your area that offer shrimp, detailing prices and including reviews inputed by
diners of the restaurants. You can narrow your search by requesting an ocean
view, piano bar, or dozens of other criteria and you will be presented with
restaurants meeting your criteria. We currently have over 470,000 restaurants on
the site and we are in the process of fully populating those restaurant
profiles.
  ChatStat Letter of
Intent
 
 The
Company executed a letter of intent in September 2007 which has been amended at
various times thru June 2008 to purchase assets of ChatStat Technologies, Inc.
(“ChatStat”).  The terms of the offer upon satisfactory review of all
due diligence by the Company: 6,000,000 shares of common stock; an additional
performance based 4,000,000 common shares in increments of 800,000 shares for
achieving certain benchmarks; and approximately $468,000.
 
 ChatStat
provides every website owner and eCommerce store with live customer interaction
via instant messaging utilizing all IM platforms, tracking technology, web
analytics, multilingual language translation, VoIP, and patented moving graph
display software.  ChatStat also has a patent pending technology on a
method and system for Computer Spam elimination, in addition, ChatStat has
technology that provides public conference rooms with capability for language
translation between all participants in real time with GEO-location of
participants.
 
 Loans and Marketing
Agreement
 
 On
December 19, 2007, the Company borrowed $250,000 and executed a Subordinated
Secured Convertible Promissory Note with a company. (See exhibit 10.31) As part
of the transaction, the Company entered into a marketing agreement with a firm
related to the lender, Card Flex, a virtual bank pay card. If the Company sells
the Card flex program to individuals, it will receive $1,250,000 of
additional
  29
 TransWorld
Benefits International, Inc. and Subsidiary
 (A
Development Stage Company)
 Notes
to Condensed Consolidated Financial Statements
 For the
Periods Ended September 30, 2004 through March 31, 2006 and
 Cumulative
Amounts from Inception September 16, 1996 through March 31, 2006
 (Unaudited)
  
 borrowings
at $4.50 per card. The company will also receive income of approximately $2 per
month per card. All borrowings are guaranteed by the Company’s majority
shareholder. The note bears interest at 8% per annum, due quarterly, and matures
December 22, 2010. However, the note becomes due April 20, 2008 if the Company
fails to sell 100,000 Flex Cards by that date. The Company has not sold the
required 100,000 Flex cards as of April 20, 2008 and is in the process of
obtaining a 90 day extension. The note balance is convertible into the Company’s
common stock at $0.25 per share at any time prior to the maturity date. The
company also received warrants for 500,000 shares of common stock at $0.25 per
share exercisable through April 20, 2010.
 
 On
February 15, 2008, the Company borrowed and executed a Subordinated Secured
Promissory Note for $200,000 from an individual. (See Exhibit 10.32) The note
bears interest at 10% per annum, payable quarterly, and matures August 1, 2008.
As inducement to make the loan, the individual received 500,000 shares of the
Company’s common stock. All borrowings are guaranteed by the Company’s majority
shareholder.
 
 Office
Lease
 
 On April
19, 2007, the Company signed an operating sublease for six months at 4675
MacArthur Court, Suite 550, Newport Beach, CA.  The sublease was
extended on November 1, 2007 through the end of March 2008.  The lease
terms are $5750 a month for 4 offices, approximately 1,000 square feet with
furnishings.
   30
    Item 2. Management's
Discussion and Analysis
 
 Management’s
discussion and analysis (“MD&A”) provides supplemental information which
sets forth the major factors that have affected the Company’s financial
condition and results of operations and should be read in conjunction with the
Unaudited Consolidated Financial Statements and related notes.  The
MD&A is divided into subsections entitled “Forward Looking Information”,
“Development Stage Business Plans”, “Results of Operations”, and “Liquidity and
Capital Resources”.
 
 Forward Looking
Information
 
 This
quarterly report on Form 10-QSB contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. In addition,
the Company may make other written and oral communications from time to time
that contain such statements. Forward-looking statements include statements as
to company and industry trends, future expectations of the Company and other
matters that do not relate strictly to historical facts and are based on certain
assumptions by management. These statements are often identified by the use of
words such as "may," "will," "expect," "believe," "anticipate," "intend,"
"could," "estimate," or "continue," and similar expressions or variations. These
statements are based on the beliefs and assumptions of the management of the
Company based on information currently available to management. Such
forward-looking statements are subject to risks, uncertainties and other factors
that could cause actual results to differ materially from future results
expressed or implied by such forward looking statements. We
   31
   Item 2. Management's
Discussion and Analysis, Continued
 
 caution the
reader to carefully consider such factors. Furthermore, such
forward-looking statements speak only as of the date of this report. We
undertake no obligation to update any forward-looking statements to reflect
events or circumstances after the date of such statements.
  Development Stage Business
Plans
 
 Product
Development. We have developed our unique product line utilizing the experience
of our staff and officers in aircraft management, death care and insurance
resulting in the development of a product with unique, state-of-the-art features
and benefits. Our actuarial analysis and aircraft network constitute a
significant barrier to entry for competitors. We believe we have completed our
product research and development for the foreseeable
 future
and do not intend to spend significant resources on research and development
over the next twelve (12) months.
 
 The
Opportunity. A business opportunity, the sales of emergency travel assistance,
with both living and death benefit, including medical evacuation and
repatriation, and more, exists. We have developed a proprietary, one-of-a-kind
benefits package to capture this opportunity. The benefits are guaranteed by "A"
rated insurance companies.
 
 Business  Strategy.  We
will employ the following business strategies and goals:
 
 Bundle  living  benefits  and
repatriation services to customer driven time frames
 -  Leverage  sales  effort  through
strategic alliances with established
sales
organizations  serving  primary  markets
  -  Offer  exceptional  value,  being  the
low cost provider whenever possible
  -  Become
the "brand name" for Emergency Travel Assistance Programs worldwide
 
 -  Offer  cooperative  advertising  funds  to  expedite  market penetration.
 
 -  Develop  Emergency  Travel  Assistance  products  for
emerging markets,
and
distribution  channels,  such  as  the  internet
  -  Hire,  motivate,  and  retain  top  quality  sales  and
marketing personnel
influence"  sales  and  marketing  personnel
  -  Provide  product  enhancement  on  a  regular  basis
 
 -  Use  technology  to  lower
product costs - becoming a virtual organization
  -  Excel  in  customer  service  and  support.
 
 We will
be implementing our strategies and goals the following ways:
 
 We  are  planning
to offer easy-to-understand, and simple to purchase, Emergency
Travel  Insurance  products,  which  provide
valuable living and death benefits.
Consumers  will  be  able  to  purchase
short term, annual, or lifetime policies through  our wholesale
network of insurance companies, brokers, travel agencies, or funeral homes, as
well as the Internet, and other mass marketing venues.
 
  32
   Item 2. Management's
Discussion and Analysis, Continued
 
 We will
continue detailed research on current and future products, thereby offering
exceptional value, and in most cases, being the lowest cost provider of these
services. When funded, we are projecting a substantial advertising budget,
cooperative advertising program, and media discount opportunities, and we
believe this will position us as the "brand name" in the Emergency Travel
Insurance business. Our advertising programs will target the consumer from this
When position of strength, generating leads for our wholesale partners, with
whom we will be developing strategic alliances for quick product
rollout.
 
 We will
continue to supply our immense target markets with product enhancements and new
products, while taking our current product line to Asia and Europe by December
31, 2008.
 
 We have a
strong focus on experienced and talented management and are conveying that focus
into the sales department, where very strong "center of influence" personnel are
being hired as funding allows, with an outstanding incentive program, and the
best product line available in the industry. The diversity of the product,
purchase periods, and diverse markets, can only be managed using state of
the art technology, and substantial customer service and support all of our
strong assets.
 
 Results of
Operations
 
 For the
quarters ended September 30, 2004 thru March 31, 2006 the Company was in its
developmental stage and entirely dependent on financing through loans from its
majority shareholder or through investor financing. Accordingly, general and
administrative expenses fluctuated directly with the availability of funds and
increases or reductions were entirely attributable to this. During the quarters
ended September 30, 2004 through March 31, 2005 the general and administrative
expenses ranged from approximately $56,000 to $66,000. During the quarters ended
September 30, 2005 through March 31, 2006 the general and administrative
expenses ranged from approximately $53,000 to $70,000. The majority of expenses
were for consultants, professional fees, travel, and office leases. Before any
revenues are earned we expect to incur substantial expenses to further develop
our business plan. We need additional loans and investments in the near future
to have the opportunity to achieve our business plan in a timely
manner.
  Liquidity and Capital
Resourses
 
 We had $0
in cash and a working capital deficit of approximately $2,420,000 at March 31,
2006.  We are a development stage Company and have earned no revenues
since inception.
 
 We do not
currently have any material commitments for capital expenditures in the short
term other than those incurred in the ordinary course of business.
 
 Since
inception, our operating and investing activities have used all cash from
financing activities. We need to raise additional capital to develop and conduct
our operations. Such additional capital may be raised through public or private
financing as well as borrowings and other sources. We are currently negotiating
potential investments with several separate groups or individuals to raise money
through a private sale of stock or convertible debentures, but there can be no
assurance that additional funding will be available on favorable terms, if at
all. If adequate funds are not available, we believe that our officers and
directors will contribute
   33
   Item 2. Management's
Discussion and Analysis, Continued
 
 funds to
pay for our basic expenses, but this will not meet our cash requirements to
market according to our business plan. Therefore, we have not contemplated any
plan of liquidation in the event that we do not generate additional capital in
the near term.
 
 Item 3. Controls and
Procedures
 
 We have
no formal controls and procedures. Our principal executive and financial
officers are involved in all day to day management and operation of our
business, and our Chief Executive Officer is responsible for making all public
disclosures of material, non-public information. Each of the principal executive
officer and principal financial officer reviews all information in the periodic
reports filed with the Securities and Exchange Commission and works with
company's corporate counsel regarding the content of public disclosure of material,
non-public information through press releases and the filing of Form 8-Ks with
the Securities and Exchange Commission. We obtain the advice of our outside
legal counsel when discussing potential, material transactions such as potential
sales and capital investment. On the first Tuesday of each quarter, our
Principal Financial Officer and our Senior Vice President review our controls
and procedures to evaluate their effectiveness. Because we do not have revenue
from operations and our company is relatively small, we believe that our
informal controls and procedures are effective as of the end of the fiscal period  ended  June  30,  2003.
 
  34
  
 PART II.
OTHER INFORMATION
 
 ITEM 1.  LEGAL
PROCEEDINGS
 
 The
Company may become involved in various legal proceedings and claims which arise
in the ordinary course of its business.  Management does not believe
that
 these
matters will have a material adverse effect on the Company’s financial position
or results of operations.
 
 On
December 23, 2002, an individual filed a lawsuit in Superior Court for the
County of Orange,
State  of  California,  against  TransWorld  Benefits,
Inc. (the "Company") and others.  The only cause of action alleged
against the Company in the Lawsuit is for breach of contract.  In that
cause of action, plaintiff alleged that he lent $35,000 to the Company and was
not repaid.  Plaintiff alleged that he was entitled to judgment for
$45,000, plus prejudgment interest and court costs.  On October 6,
2003, the Company filed a cross-complaint against the plaintiff  for
breach of contract and fraud alleging  that plaintiff had breached an
obligation to pay the Company $500,000 pursuant to a Stock Purchase Agreement
between plaintiff and the Company.  On or about November 17, 2003 the
company entered into a settlement agreement with plaintiff which included a full
release and was reduced to a judgment for $58,000 against TWBI in July. The
judgment was vacated and the suit was dismissed with prejudice on January 4,
2006.
 
 On or
about February 25, 2004, a firm who leased office space to the Company filed an
unlawful detainer lawsuit in the Superior Court of California, County of Orange,
against TWBI.  On or about July 14, 2004, the lessor obtained a
judgment against the TWBI for $102,580 for lease damages.
 
 On or
about  July 23, 2007, an individual hired to perform accounting and
other services for the Company on a contract basis filed a claim for unpaid
wages in front of the labor board. Said individual obtained an award against
TWBI from the
   35
   PART II. OTHER INFORMATION-ITEM 1.  LEGAL
PROCEEDINGS, CONTINUED
 
 Labor
Commissioner for the State of California in the amount of $233,486 the
(“Award”).  On August 7, 2007, TWBI timely filed an appeal of the
award with the Superior Court of California, County of Orange, entitling TWBI to
a trial de novo of the issues adjudicated in the award. On December 10, the
Court issued a ruling determining that the individual was not an employee during
the period in question and is not entitled to any wages from the Company and
granted judgment in favor of the Company.
 
 On June
4, 2007 in the Superior Court of California, TWBI filed a lawsuit against the
individual referenced above who made an unsuccessful claim for wages against the
company, seeking damages in excess of $1 million from the individual. The
lawsuit alleges claims for Breach of Fiduciary Duty, Negligence, Fraud,
Conversion and Declaratory Relief.  Defendant has defaulted in the
lawsuit, and the Court has entered judgment on behalf of TWBI for $5,000,000.
The Company does not expect to receive these funds.
 
 On May
26, 2007, a former executive of the Company filed suit against the Company,
alleging that he is owed compensation, benefits, common stock in the
Company , plus indemnification for amounts he paid to a third party
financier pursuant to execution of a judgment.  The plaintiff's operative
complaint asserts alleged causes of action for fraud, breach of contract, breach
of fiduciary duty, indemnity, accounting, and unfair competition.  The
plaintiff dismissed its case against the Company in exchange for each party
paying its own legal fees.
  Item 2. Unregistered Sales
of Equity Securities and Use of Proceeds
  On
January 30, 2003, pursuant to the terms of the Purchase Agreement, all of the
outstanding common stock of Transworld of 5,600,000 shares was sold to TWLO in
exchange for 10,221,435 shares of TWLO common stock. As Transworld is considered
the surviving entity in this transaction (see  Note 1),  the
reduction in outstanding shares from 5,600,000 to 4,500,000 has been considered
a reverse stock split and all historic references to shares and price per share
prior to January 30, 2003 have been retroactively adjusted for this split
ratio.
 
 On
January 30, 2003, pursuant to the terms of the Purchase Agreement, the
14,534,600 shares of previously outstanding common stock of TWLC were accounted
for as an issuance of shares in a recapitalization of the Company as part of
the
 transaction
(see Note 1).  In connection with the transaction, the Company also
assumed $148,947 of TWLC liabilities.
 
 On April
29, 2003, the Company entered into a Subscription Agreement with a third party
investor, pursuant to which the investor agreed to purchase 1,000,000 shares of
the Company's common stock at $0.10 per share for $100,000.  If during
the 90 days following the closing date, the price of the Company's common stock
falls below the purchase price of $0.10, the purchase price should be adjusted
to equal the lowest trading price, but not less than $0.01 per share, and the
Company should issue to the investor the additional shares.  During
the six months ended June 30, 2003, the Company received cash of $66,000 for
1,320,000 shares ($0.05 per share) committed to be issued by the Company to this
investor.  The Company received the balance of $34,000 and the Company
issued a total of
 2,000,000
shares (as adjusted) of its common stock under this Subscription
Agreement.
 
 36
 
 
 PART II. OTHER INFORMATION -Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds,
Continued
 
 On June
28, 2003, the Company entered into an Engagement Agreement with a third party
for consulting services to be provided over a period of six months with the
following compensation terms to the third party for the services
provided:
  i)   an  initial
non-refundable retainer fee in an amount equal to $10,000 payable
in cash or in registered common stock upon acceptance of the Engagement
Agreement;
 
 ii)  a
monthly retainer thereafter of $10,000 payable in cash or
in    registered  common  stock for the
term of the Engagement Agreement;
 
 iii)
250,000 unrestricted shares of the Company's common stock upon acceptance
of the Engagement Agreement;
 
 iv)  a
warrant to purchase 250,000 shares of the Company's common stock upon
acceptance of the Engagement  Agreement, exercisable for five years at
an exercise price equal to 110% of the Company's closing price on
the date of the Engagement Agreement; and
 
 v)   a
right to purchase up to $300,000 of the Company's unrestricted common
stock at a price equal to a 30% discount to the closing bid price of
the Company's common stock as of the date of exercise.
 
 Pursuant
to the terms of the Engagement Agreement, the Company issued a total of 340,909
shares of its common stock, valued at $45,000 ($0.13 per share, which was the
fair market value of the common stock on the date the shares were earned),
related to the initial non-refundable retainer fee and the 250,000 shares
upon  finalization  of  the Engagement Agreement.
The Company issued 197,000 registered common shares in June 2003 at $.10 per
share to the third party for a $20,000 subscription receivable pursuant to the
right to purchase up to $300,000 of the Company's common stock at a 30%
discount. During the three months ended September 30, 2003, the Company issued
an additional 194,094 registered common shares for $8,000 at an average price of
$0.07 per share pursuant to the same 30% discount provision.  The
monthly retainers in August and September 2003 totaling $20,000 were paid with
288,115 registered common shares at an average price of $0.08 per
share.
 
 On July
17, 2003, the Company adopted a stock incentive plan (“the 2003 Plan”) that
authorized the issuance of 6,000,000 shares of the Company's registered common
stock. Options will vest at the discretion of the Board of Directors as
determined at the grant date and the 2003 Plan terminates on July 1,
2013.
 
 During
the year ended June 30, 2004, the Company issued 4,629,076 common shares at
prices between $0.045 and $0.175 for services valued at $356,838.
 
 During
the year ended June 30, 2004 the Company exchanged 8,868,313 common shares at
prices between $0.05 and $0.25 per share for debt valued at $848,937. Of this,
the Company’s majority shareholder accounted for 4,835,177 shares at $0.055 per
share valued at $265,935.
 
 See Note
11 - Subsequent Events for additional issuances of unregistered sales of equity
securities.
 
 All of
the proceeds from all of the unregistered sales of equity securities have been
used in the development stage of the Company to further accomplish its business
plan and to start earning revenues.
 
 
 37
 
 
 Item 4. Submission of
Matters to a Vote of Security Holders
 
 Not
applicable.
 
 Item 5. Other
Information
 
 Not
applicable.
 
 Item 6.
Exhibits
 
 3.1  Articles
of Incorporation (Charter Document)(1)
 
 3.2  Bylaws(2)
 
 4.1  8%
Convertible Debenture, dated January 29, 2003, issued to La Jolla Cove Investors,
Inc. (3)
 
 4.2  Warrant
to Purchase Common Stock, dated January 29, 2003, issued to La Jolla Cove
Investors, Inc. (3)
 
 4.3  Side
Letter Agreement between Thinka Weight-Loss Corporation and La Jolla Cove
Investors, Inc. regarding Warrant to Purchase Common Stock, dated January
29, 2003. (3)
 
 4.4  Registration
Rights Agreement, dated January 29, 2003, regarding underlying
common stock to be issued upon conversion of 8% Convertible Debenture
and exercise of Warrant to Purchase Common Stock. (3)
 
 4.5  Letter
Agreement amending 8% Convertible Debenture and Warrant to Purchase
Common Stock, dated August 14, 2003. (4)
 
 10.1  Share
Purchase Agreement (5)
 
 10.2  Sublease,
dated May 16, 2002, by and between Transworld Benefits, Inc., and DHR
International, Inc., an Illinois corporation, together with related
Indemnification Agreement, dated October 1, 2002. (6)
  10.3  Employment
Agreement ~ Charles C. Seven, by and between Transworld Benefits,
Inc. and Charles C. Seven. (3)
 
 10.5  Employment
Agreement ~ Keith Romine, by and between Transworld Benefits, Inc. and
Keith Romine. (3)
 
 10.6  Employment
Agreement ~ Ronald Robertson, by and between Transworld Benefits,
Inc. and Ronald Robertson. (3)
 
 10.7  Engagement
Letter with KnightsBridge Capital, dated June 28, 2003. (4)
 
 10.8  Note
Payable to Charles Seven on September 9, 1997. (4)
 
 10.9  Note
Payable to Charles Seven on October 17, 1996. (4)
 
 10.10  Note
Payable to Charles Seven on October 17, 1996. (4)
  10.11  Note
Payable to Charles Seven on November 1, 1996. (4)
 
 10.12  Note
Payable to Charles Seven on November 8, 1996. (4)
 
 10.13  Note
Payable to Charles Seven on December 19, 1997. (4)
   38
  
 PART II. OTHER
INFORMATION–Item 6.
Exhibits, Continued
 
 10.14  Note
Payable to Charles Seven on November 8, 1996. (4)
 
 10.15  Note
Payable to Charles Seven on December 27, 1997. (4)
 
 10.16  Note
Payable to Charles Seven on December 29, 1997. (4)
 
 10.17  Note
Payable to Charles Seven on January 8, 1997. (4)
 
 10.18  Note
Payable to Charles Seven on February 18, 1997. (4)
 
 10.19  Note
Payable to Charles Seven on February 24, 1997. (4)
 
 10.20  Note
Payable to Charles Seven on March 17, 1997. (4)
 
 10.21  Note
Payable to Charles Seven on March 7, 1997. (4)
 
 10.22  Note
Payable to Charles Seven on March 7, 1997. (4)
 
 10.23  Note
Payable to Charles Seven on April 22, 1997. (4)
 
 10.24  Note
Payable to Charles Seven on April 24, 1997. (4)
 
 10.25  Note
Payable to Charles Seven on May 14, 1997. (4)
 
 10.26  Note
Payable to Charles Seven on May 2, 1997. (4)
 
 10.27  Note
Payable to Charles Seven on August 12, 1997. (4)
 
 10.28  Note
Payable to Charles Seven on August 23, 1997. (4)
 
 10.29  Note
Payable to Charles Seven on August 28, 1997. (4)
 
 10.30  Note
Payable to Charles Seven on October 17, 1996. (4)
 
 10.31  Subordinated
Secured Convertible Promissory Note, Pledge
Agreement,    Continuing Guaranty, and Common Stock Purchase
Warrant, dated February
15, 2008 (7)
 
 10.32  Note
Payable to John Todd, dated February 15,2008 (7)
  10.33  Subsidiary
Stock Purchase Agreement Transworld Benefits Inc, dated
July 1, 2007 (7)
  10.34  Asset
Purchase Agreement with Stuart Graham, dated March 1, 2008 (7)
  31.1   Certification
of the Chief Executive Officer pursuant to Rule 13a-14(a)   or
Rule 15d-14(a) of the Securities Exchange Act of 1934 as
adopted pursuant
to Section 302 of the Sarbanes-Oxley Act
  Certification
of the Chief Financial Officer pursuant to Rule 13a-14(a)or Rule 15d-14(a) of
the Securities Exchange Act of 1934 as adopted pursuant
to Section 302 of the Sarbanes-Oxley Act
 32.1    Certification
of the Chief Executive Officer pursuant
to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act.
  32.2    Certification
of the Chief Financial Officer
pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act.
   39
   PART II. OTHER
INFORMATION–Item 6.
Exhibits, Continued
  Footnotes
to Exhibit Table:
 
 (1)  Incorporated  by
reference to our registration statement on Form SB-2 filed with  the  Securities  and  Exchange  Commission  on  July  17,  2000.
 (2)  Original  incorporated  by  reference
to our registration statement on SB-2 filed  with  the  Securities  and  Exchange  Commission  on  July
17, 2000. Amendment  to  Section  13  of  the  Bylaws  included  with  this  report.
 (3)  Incorporated  by  reference  to  our
Form 8-K filed with the Securities and Exchange  Commission  on  February  14,  2003.
 (4)  Incorporated  by
reference to our registration statement on Form SB-2 filed with  the  Securities  and  Exchange  Commission  on  August  26,  2003.
 (5)  Incorporated  by  reference  to  our
Form 8-K filed with the Securities and Exchange  Commission  on  October  15,  2002.
 (6)  Incorporated
by reference to our Form 10-QSB/A filed with the Securities and
Exchange  Commission  on  February  27,  2003.
 (7)  Incorporated
by reference to our Form 10-KSB filed with the Securities and
Exchange  Commission  on  April 30,
2008.
   40
   SIGNATURES
   Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, there unto duly authorized.
  TRANSWORLD
      BENEFITS INTERNATIONAL, INC.By:
                /s/
      Charles SevenCHARLES
      SEVENChief
      Executive OfficerDated:
                July
      31, 2008
  Pursuant
to the requirements of the Securities Exchange Act of 1934, this amended report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
  Name
                Title
                Date/s/
      Charles Seven
                Chief
      Executive Officer
                July
      31, 2008Charles
      Seven/s/
      Richard Diya
                Chief
      Financial Officer
                July
      31, 2008Richard
      Diya