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




For
the quarterly period ended September 30, 2007




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




For
the transition period from _________ to ___________




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)





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 GTHE 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 PRACTICABLE 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
      INFORMATIONItem 1.
      Financial Statements
            4Unaudited
      Condensed Balance Sheets at September 30 and June 30, 2007Unaudited
      Condensed Statements of Operations for the Three Months Ended September
      30, 2007 and 2006Unaudited
      Condensed Statements of Cash Flow for the Three Months Ended
      September 30, 2007 and 2006Item 2.
      Management's Discussion and Analysis of Financial Condition
            14Item 3.
      Controls and Procedures
            20Part II-- OTHER
      INFORMATIONItem 1. Legal
      Proceedings
            20Item 2.
      Unregistered Sales of Equity Securities and Use of Proceeds
            21Item 6.
      Exhibits
            22













PART
I -- FINANCIAL INFORMATION




Item
1. Financial Statements




Transworld
Benefits International, Inc.


(A
Development Stage Company)


Condensed
Balance Sheets


(Unaudited)




As
      of 2007September
      30,
            
            
            June
      30,Assets:Furniture
      and equipment, net of accumulated depreciation of $410
            
            $
            3,403
            
            
            $
            0Intercompany
      receivable from subsidiary
            
            
            0
            
            
            
            1,812,617Total
      assets
            
            $
            3,403
            
            
            
            1,812,617Liabilities
      and stockholders’ equity (deficiency)  )Current
      liabilities:Accounts
      payable and accrued expenses
            
            $
            300,078
            
            
            $
            4,060Accounts
      payable to related parties
            
            
            485,794
            
            
            
            0Total
      liabilities
            
            
            785,872
            
            
            
            4,060Stockholders’
      equity (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; 99,130,162 shares
      issued and outstanding as of September 30 and June 30,
2007
            
            
            99,130
            
            
            
            99,130Additional
      paid-in capital
            
            
            2,226,447
            
            
            
            2,226,447Accumulated
      deficit
            
            
            (3,108,046
            )
            
            
            (517,020
            )Total
      stockholders’ equity (deficiency)
            
            
            (782,469
            )
            
            
            1,808,557Total
      liabilities and stockholders’ equity (deficiency)
            
            $
            3,403
            
            
            $
            1,812,617




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






4






Transworld
Benefits International, Inc.


(A
Development Stage Company)


Condensed
Statements of Operations


(Unaudited)




Three
      Months Ended September 30,2007
            
            
            2006Revenues
            
            $
            -
            
            
            $
            -General
      and administrative expenses
            
            
            302,817
            
            
            
            -(Loss)
      before other income (expense)
            
            
            (302,817
            )
            
            
            -Other
      income (expense):Other
      income
            
            
            4,061
            
            
            
            -Loss
      on sale of subsidiary
            
            
            (479,653
            )
            
            
            -Loss
      on contribution of intercompany debt to subsidiary
            
            
            (1,812,617
            )
            
            
            -Net
      (loss)
            
            
            (2,591,026
            )
            
            
            -Beginning
      of year accumulated deficit
            
            
            (517,020
            )
            
            
            (517,020
            )End
      of period accumulated deficit
            
            $
            (3,108,046
            )
            
            $
            (517,020
            )Loss
      per share:Basic
      and diluted
            
            $
            (0.026
            )
            
            $
            (0.00
            )Weighted
      average number of shares outstanding:Basic
      and diluted
            
            
            99,130,162
            
            
            
            35,069,898




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






5






Transworld
Benefits International, Inc.


(A
Development Stage Company)


Condensed
Statements of Cash Flow


(Unaudited)




Three
      Months Ended September 30,2007
            
            
            2006Cash
      flows from Operating Activities:Net
      (loss)
            
            $
            (2,591,026
            )
            
            $
            0Adjustments
      to reconcile net (loss) to net cash provided by operating
      activities:Depreciation
            
            
            410
            
            
            
            -Loss
      on contribution of intercompany debt to subsidiary
            
            
            1,812,617
            
            
            
            -Changes
      in operating assets and liabilities:Accounts
      payable and accrued expenses
            
            
            296,018
            
            
            
            -Accounts
      payable to related parties
            
            
            485,794
            
            
            
            -Net
      cash provided by Operating Activities
            
            
            3,813
            
            
            
            -Cash
      flows (used in) Investing Activities:Purchases
      of furniture and equipment
            
            
            (3,813
            )
            
            
            -Cash
      flows from Financing Activities:
            
            
            -
            
            
            
            -Net
      change in cash
            
            
            -
            
            
            
            -Cash,
      beginning of year
            
            
            -
            
            
            
            -Cash,
      end of period
            
            $
            -
            
            
            $
            -Supplemental
      disclosure of cash flow information:Cash
      paid for:Interest
            
            $
            0
            
            
            $
            0




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






6






TransWorld
Benefits International, Inc.


(A
Development Stage Company)


Notes
to Condensed Financial Statements


For
the Three Months Ended September 30, 2007


(Unaudited)





Note1.Condensed
Financial Statements





The
accompanying condensed financial statements of TransWorld Benefits
International, Inc. (the “Company”)(TBII) 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 year ended June 30, 2007. 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.
Going Concern





The
Company is still in its development stage. We have a working capital deficit of
approximately $786,000 as of September 30, 2007 and we have never earned
revenues. We recognize that we must obtain additional financing by means of
equity or debt in order for us to have an opportunity for sustained profitable
operations.  In addition, no assurances can be made that financing
will be available when needed or on terms acceptable to us. We are also
dependent on the development of effective marketing strategies in a competitive
market coupled with the timeliness of the delivery of our services. These
factors, among others, raise substantial doubt regarding our ability to continue
as a going concern. The accompanying financial
statements  do  not  include  any
adjustments relating to the recoverability and
classification  of  asset  carrying  amounts
or the amount and classification of liabilities  that  might
result from the outcome of these uncertainties.





Note 3.
Organization





Change in Reporting
Entity.  The Company had a change in reporting entity on July
1, 2007 when the Company’s majority shareholder purchased the Company’s
subsidiary Transworld Benefits, Inc (TWB) (See Exhibit 10.33). Prior to this and
since January 30, 2003, the Company consisted of two entities. Transworld
Benefits International, Inc. was the parent and holding company for its
subsidiary operating company TWB. The Company is a new reporting entity per
Statement of Financial Accounting Standards No. 154 “Accounting Changes and
Error Corrections” as TWB was purchased by its majority shareholder and TWBI had
performed all operations.





This
purchase was necessitated by potential investors and partners because of
excessive debt and litigation in TWB. TWB 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 and assumed approximately $490,000 of
liabilities of TWB. Immediately prior to the sale, the Company contributed
$1,812,617 of inter-company debt to the capital of TWB which originated from
Company issuances of stock for debt and services of TWB.





Throughout
much of 2007, the Company has pursued a substantial shift in its strategic
direction, focusing on the development of a high-growth, sustainable, new
business model. While the Company was developing its new business plan, and to
ensure it could achieve a new and viable business, management moved aggressively
to






7






TransWorld
Benefits International, Inc.


(A
Development Stage Company)


Notes
to Condensed Financial Statements


For the Three Months Ended September30, 2007


(Unaudited)





reach
resolution on a number of old matters in litigation, eliminating debt incurred
in prior years, and establishing a capital formation strategy to fund merger and
acquisition activity in support of its new business plan.  The
Company’s new business plan is structured into three operating divisions:
Customer Loyalty; Employee Loyalty; Technology. See our detailed business plans
in “Development Stage Business Plans” which is within Item 2 of this
report.





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. The Company will require
substantial additional funding for continuing research and development 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 4 –
Related Party Transactions





Accounts
payable to related parties





Payments
for Company expenses and loans to the Company were made by our majority
stockholder from 2003 forward. The balance in Accounts Payable to related
parties is $485,794 and $0 at September 30, and June 30, 2007, respectively. See
Note 3, Organization and Background, pertaining to the Company’s assumption of
liabilities in the acquisition of the Company’s subsidiary by its majority
shareholder.





Note 5 –
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 September 30, 2007, 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 with a par value of $0.001 per share. Each
share is entitled to one vote on all matters submitted to stockholders. As of
September 30, 2007, 100,000,000 common shares are authorized and 99,130,162
shares are issued and outstanding.





Common
stock issuances since inception and other common stock information
follows:





In
December 1996 the Company issued 4,339,286 founder shares at $0.00124 per
share.





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 (fair market value
on







8






TransWorld
Benefits International, Inc.


(A
Development Stage Company)


Notes
to Condensed Financial Statements


For
the Three Months Ended September 30, 2007


(Unaudited)





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 Benefits Inc. (TWB) of 5,600,000 shares
was sold to TWLO in exchange for 10,221,435 shares of TWLO common stock. As TWB
is considered the surviving entity in this transaction (see Note 3), 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 3).





On April
29, 2003, the Company entered into a Subscription Agreement with an investor to
purchase 1,000,000 shares of the Company's common stock for $100,000 at $0.10
per share, or the lowest trading price above $0.01 over the next 90 days with
the Company issuing additional shares if the price falls.  During the
six months ended June 30, 2003, the Company received $66,000 for 1,320,000
shares at $0.05 per share. The Company subsequently received the $34,000 balance
and the Company issued a total of 2,000,000 shares, as adjusted, of its common
stock.





On June
28, 2003, the Company entered into an Engagement Agreement for consulting
services to be provided over a six month period. Pursuant to the terms of the
Engagement Agreement, the Company issued a total of 340,909 common shares with a
value of $45,000 at $0.13 per share pertaining to the initial non-refundable
retainer fee and to the shares due upon finalization of the 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 August and September
2003 retainers 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.





On
September 30, 2003, the Company's stockholders approved an increase in the
number of authorized common shares to 100,000,000.





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.






9






TransWorld
Benefits International, Inc.


(A
Development Stage Company)


Notes
to Condensed Financial Statements


For
the Three Months Ended September 30, 2007


(Unaudited)





During
the quarter ended June 30, 2007, the Company issued 1,850,000 common shares at
$0.005 for services valued at $9,250.





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 $316,091 of debt. Of this, two
related parties of the Company accounted for 62,098,264 shares at $0.005 per
share for $310,491 of debt.





See Note
9, Subsequent Events, for additional issuances of common stock.




Note 6 –
Basic and Diluted Loss Per Common Share





The
following table presents the basic and diluted loss per common
share:





Three
      Months Ended September 30,2007
            
            
            2006Numerator
      – net (loss)
            
            $
            (2,591,026
            )
            
            $
            0Denominator
      - weighted average shares basic and diluted
            
            
            99,130,162
            
            
            
            35,069,898(Loss)
      per common share
            
            $
            (0.026
            )
            
            $
            (0.00
            )




Note 7 –
Litigation





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.  In April
2008 the plaintiff dismissed its case against the Company with prejudice in
exchange for each party paying its own legal fees.





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 (the “Appeal”). On
December 10, 2007 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, TWBI filed a lawsuit against the individual referenced above, who made
an unsuccessful claim for wages against the company, in the Superior Court of
California, County of Orange, 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 in December 2007, the Court entered a judgment on behalf of
TWBI for $5,000,000. The collection of this judgment is highly
unlikely.







10






TransWorld
Benefits International, Inc.


(A
Development Stage Company)


Notes
to Condensed Financial Statements


For
the Three Months Ended September 30, 2007


(Unaudited)





We are
also involved from time to time in various legal proceedings incidental to our
business. While it is not feasible to predict or determine the ultimate outcome
of these matters, we believe that none of these legal proceedings will have a
material adverse effect on our financial position.





Note 8 –
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.





Note 9 –
Subsequent Events





Graham Companies Assets and
Liabilities 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 condition of the transaction, the
major stockholder of the Company bought the subsidiary, TransWorld Benefits,
Inc., which was burdened with excessive debt and litigation.





The
following are programs acquired by the Company from the Graham Group including
proprietary patents and patents pending:





1.
            THANKS
      Gift Certificates




2.
            Local
      Loyalty Programs




3.
            CheckMate
      Rewards




4.
            Anchor
      Store Programs




5.
            Payroll
      Debit Card




6.
            Restaurant
      Search Engine




7.
            Red
      Carpet Card




8.
            Promo
      Pad





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.








11






TransWorld
Benefits International, Inc.


(A
Development Stage Company)


Notes
to Condensed Financial Statements


For
the Three Months Ended September 30, 2007


(Unaudited)





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 patented
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.





Anchor Store
Programs.  The Company’s unique patent pending program will
revolutionize movie theater and grocery store loyalty programs. We call this our
Anchor Store Program because it revolves around a high traffic anchor store.
Movie theater patrons can shop at surrounding merchants at a discount while at
the same time earning free movie tickets. We plan to roll out this program in a
test market in 2008.





Payroll Debit
Card.  Retail merchants, multi-level companies, check cashing
stores, and many other organizations that have large numbers of employees or
customers 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. 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
patent pending and guarantees to save you time and money searching for the
perfect restaurant. Unlike other restaurant search engines that only allow you
to search by cuisine or zip code, 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 pricing, pictures of entrees, entire menus, and
critiques by diners of the restaurants. You can filter 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 have begun the process of populating
our site with profiles of over 470,000 restaurants.






12






TransWorld
Benefits International, Inc.


(A
Development Stage Company)


Notes
to Condensed Financial Statements


For
the Three Months Ended September 30, 2007


(Unaudited)




The Red Carpet Card program is
a customized turnkey program to help local and regional businesses develop their
business and increase profitability. It either utilizes a software loyalty
platform that we have licensed from Debit Design or it can utilize the existing
loyalty component a merchant may already have in their existing POS software.
The program offers targeted customer acquisition in conjunction with a
promotional gift card. It also offers staff training and data collection and
data management assistance. The loyalty software provides a full loyalty
solution and gift card solution for the merchant’s customers. The final
component is a customer communications system using template newsletters. The
end result is that we attract new target customers, convert those customers to
become loyal customers, provide a full loyalty solution and communicate with
them to motivate them to shop more frequently and spend more money.





The Promo Pad.This patent
pending “scratch pad” combines a to-do list with valuable merchant offers, prize
drawings, important events calendar, and more. Companies can reward their
customers with this unique and functional promo pad to generate customer
loyalty. Fundraisers can customize the promo pads to the audience and local that
is targeted. Advertisers have the opportunity to reach a targeted audience with
advertising and discount coupons in a cost effective method.




Convertible Note Payable
with Marketing Agreement; Note Payable




In
December 2007, the Company executed a $250,000 Subordinated Secured Convertible
Promissory Note. (See exhibit 10.31) As part of the transaction, the Company
entered into a marketing agreement with a Virtual Bank Pay Card company related
to the lender, Card Flex. If the Company sells the Card flex program to
individuals, it will receive $1,250,000 of additional borrowings at $4.50 per
card. All borrowings are guaranteed by the Company’s majority shareholder. The
note bears interest at 8% per annum, payable quarterly, and matures December 20,
2010. However, by terms of the agreement, the note became due April 20, 2008
because the Company failed to sell 100,000 Card Flex Cards by that date. TBII
obtained an extension until August 20, 2008. 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 lender also received 500,000 warrants each redeemable into
one common share of stock at $0.25 per warrant exercisable December 20,
2010.





In
February 2008 the Company executed a $200,000 Subordinated Secured Promissory
Note. (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
lender will receive 500,000 shares of the Company’s common stock. The Company’s
majority shareholder guaranteed the loan.





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





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”,
“Going Concern”, “Development Stage Business Plans”, “Results of Operations”,
and “Liquidity and Capital Resources”.








13






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





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 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.





Going
Concern





The
Company is still in its development stage. We have a working capital deficit of
approximately $786,000 as of September 30, 2007 and we have never earned
revenues. We recognize that we must obtain additional financing by means of
equity or debt in order for us to have an opportunity for sustained profitable
operations.  In addition, no assurances can be made that financing
will be available when needed or on terms acceptable to us. We are also
dependent on the development of effective marketing strategies in a competitive
market coupled with the timeliness of the delivery of our services. These
factors, among others, raise substantial doubt regarding our ability to continue
as a going concern. The accompanying financial
statements  do  not  include  any
adjustments relating to the recoverability and
classification  of  asset  carrying  amounts
or the amount and classification of liabilities  that  might
result from the outcome of these uncertainties.





Development Stage Business
Plans





Throughout
much of 2007, the Company has pursued a substantial shift in its strategic
direction, focusing on the development of a high-growth, sustainable, new
business model. While the Company was developing its new business plan, and to
ensure it could achieve a new and viable business, management moved aggressively
to reach resolution on a number of old matters in litigation, eliminated debt
incurred in prior years, and established a capital formation strategy to fund
merger and acquisition activity in support of its new business
plan.  In addition, the Company took steps to secure audited financial
statement for prior reporting periods, as well as make all necessary filings
with the Securities and Exchange Commission for such prior reporting
periods.





Overview of New Business
Strategy





The
Company’s new business plan is structured into three operating divisions:
Customer Loyalty Division; Employee Loyalty Division; and Technology
Division.





The
Company’s Loyalty divisions provide innovative customer and employee loyalty
solutions that meet the everyday needs of people where they work and
live.  The Company uses advanced technology and a one-of-a-kind
business model that challenges traditional loyalty methodologies in a market
rapidly growing toward $100 billion in annual expenditures.  It has
acquired valuable intellectual property rights and is led by a management team
of industry veterans. The Company’s proprietary loyalty






14






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





solutions
are designed to help overcome the high cost of developing sustainable, mutually
beneficial relationships with customers and employees that withstand the effects
of commoditization and competitive discount pricing.





The
company’s intellectual property portfolio includes one patent in the loyalty
industry and four business methodology patents in the application process. In
addition, the company has secured numerous valuable trademarks, service marks
and copyrights. The Company’s two operating divisions – the Customer Loyalty
Division and the Employee Loyalty Division – share key elements, including
advanced technologies, delivery systems, extensive marketing database, and an
unmatched prowess in product and program development.





As the
Company developed and refined technology to drive its loyalty business model,
the company also acquired proprietary technology with potentially vast
commercial potential in markets beyond its core business. As a result, the
Company’s patented and patent-pending technology solutions will address business
challenges ranging from the proliferation of spam  to the growing use
of cybercrime as a tool for terrorism.





The
planned integration of the Employee Loyalty products and group alliances
together with the Customer Loyalty programs, advertising programs, proprietary
technology, and intellectual properties, become the growth engine for the
Company.





Customer Loyalty
Division





Using
extensive experience by the Graham Companies in merchant development and product
development for the loyalty industry, the Customer Loyalty Division markets five
branded loyalty solutions to local restaurants and merchants in markets
throughout the U.S.  As these local merchant networks expand and
aggregate over time, they will become an increasingly valuable platform for
leveraging additional loyalty programs, cross-marketing, and co-marketing with
national advertisers.





Advertising
revenue is a common element of the Company’s various Customer Loyalty solutions,
as the Company’s proprietary technology integrates with an almost infinitely
customizable number of Loyalty solutions for customers.





Customer
Loyalty solutions include:





Thanks
Rewards®





Thanks
Rewards Gift Certificates are discounted online gift certificates that promote
restaurants and other local merchants and are used for both rewards and
incentives by major media partners, employers, and associations including the
use of customer identification technology that has never been used in the
loyalty industry.





Highly
customizable by design, Thanks Rewards gives merchants the ability to structure
the availability and frequency of the gift certificates according to their local
promotional needs while driving new revenue to their businesses with powerful
local promotion.





Consumers
benefit by purchasing gift certificates online with unique value while having
the opportunity to print their certificates and enjoy the benefits at local
merchants immediately.





Red
Carpet Program





The Red
Carpet Card program is a patent pending customized turnkey program to help local
and regional businesses develop their business and increase profitability.
It






15






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





either
utilizes a software loyalty platform that we have licensed from Debit Design or
it can utilize the existing loyalty component a merchant may already have in
their existing POS software. The program offers targeted customer acquisition in
conjunction with a promotional gift card. It also offers staff training and data
collection and data management assistance. The loyalty software provides a full
loyalty solution and gift card solution for the merchant’s customers. The final
component is a customer communications system using template newsletters. The
end result is that we attract new target customers, convert those customers to
become loyal customers, provide a full loyalty solution and communicate with
them to motivate them to shop more frequently and spend more money.




Checkmate
Rewards®





Checkmate
Rewards is a unique patented checkbook product with nearly unlimited market
potential and versatility. Checkbooks are most frequently used as premiums,
incentives, to say “thank you” or for fundraising programs. They are purchased
by sponsoring organizations and include checks for many kinds of local
merchants, national retailers and service providers. The elegant simplicity of
the Checkmate Rewards belies its upscale appearance, high perceived value,
efficiency, versatility and broad appeal. Checkmate Rewards have significantly
higher perceived value than coupons, have a high redemption rate and are not
easily lost.





Grocery
Anchor Merchant Rewards





Grocery
Anchor Merchant Rewards is a patent-pending loyalty system that encourages
customers of grocery retailers to accrue grocery store credits by purchasing
goods and services from other local merchants. Local merchants are willing to
fund the grocery store customer’s rebates in order to keep customers returning
to their establishments. Grocery stores and participating local merchants enjoy
mutual and reciprocal economic benefit, as grocery customers keep returning to
“shop their way to free groceries”, and neighborhood merchants benefit from
high, recurring traffic.





The most
distinguishing feature of Grocery Anchor Merchant Rewards is that it utilizes
our gift certificate system to offer customers the opportunity to enjoy a
substantial savings at local merchants while part of what they pay for the
certificate goes into a fund that they can spend at the grocery store. Like the
exclusive, protected nature of all the Company’s loyalty offerings, Grocery
Anchor Merchant Rewards is exclusive and protected by pending
patents.





Theater
Anchor Merchant Rewards





The
Company’s Theater Anchor Merchant Rewards offering utilizes the same model and
infrastructure as Grocery Anchor Merchant Rewards, but is directed toward movie
theater chains. This market segment is intensely competitive, and the
traditional market leaders must contend with new, disruptive technologies for
delivery of high quality entertainment directly into consumers’
homes.





Employee Loyalty
Division





The
Company’s Employee Loyalty Division provides traditional and non-traditional
employee benefits and employee loyalty programs that leverage its proprietary
technology, corporate alliances, consumer data, and delivery systems. The
combined operations of the Company’s Employee Loyalty Division, together with
Technology, is the primary growth engine -- for  geographic expansion,
for advertising revenue and for delivery of all the Company’s
products.








16






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





Employee
Loyalty solutions include:





At
Work Advantage®





As a
platform for marketing to HR professionals, At Work Advantage is a
business-to-business suite of employee–directed benefits and incentives. Because
the employee benefits industry has been slow to utilize new technology and
communications resources, At Work Advantage is a powerful advertising and
information medium for offering member company’s dynamic new ways to purchase
employee benefits and utilize effective and innovative new tools to evaluate the
benefit options that are available.





Payroll
Solutions





Payroll
Solutions serves an ever growing demand for prepaid cards in the payroll sector.
All bank cards are a problem for the 80 million unbanked adult Americans today,
even though that group has annual purchasing power exceeding $200 billion.
Payroll Solutions provides an alternative to payday lenders which, according to
the Center For Responsible Lending in its 2006 report, “Financial Quicksand”,
strip $4.2 billion in excessive fees from Americans each year. This report finds
that across the nation, payday borrowers are paying more in interest, at annual
rates of 400 percent, than the amount of the loan they originally
borrowed.





Representing
two payroll card providers, the Company can offer a variety of versatile payroll
solutions and recommend the best solution for any customer application. Payroll
Solutions also provides free access to 100% of pay every pay cycle, access to
major ATM and point-of-sale networks and the convenience of a card that
functions as a virtual bank account.





Technology
Division





The
Company’s technical resources are deployed in a manner that effectively separate
corporate and divisional Information Systems and Support from software
development and commercialization. Many elements of the Company’s software have
common characteristics that integrate well with each
other.  Similarly, the company’s database and sales engine lend
themselves well to certain technologies the Company intends to
commercialize.





However,
some of the Company’s technology is more suitable for large-scale licensing or
outright sale at some point in the future. The Company has patents pending for
the following technologies: automatic language prediction, advertising
translation, group based language translation improvement by user suggestions
and popular usage, moving graph 1, moving graph 2, and mput.net.





Chatstat®





Chatstat’s
premier live-chat web technology offers website owners a powerful set of live
customer interaction tools for providing live customer support and immediate
online problem-solving. With instant translation into 16 languages and support
for all seven instant messaging systems, no customer is left unassisted.
ChatStat combines unparalleled customer ease of use with advanced tracking
technology, web analytics, moving graph analytics, and the cost-savings of VoIP
call back.





Chatstat
brings previously sophisticated and prohibitively expensive technologies,
reserved for the large enterprise, into the mainstream. By combining Live Chat,
Voice Over IP, Instant Messaging, Web Analytics, & Monitoring into one easy
to use Software as a Service (SaaS) offering, every website and eCommerce vendor
in the world can more effectively communicate with their customers.







17






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





Dineasaurus.com





Dineasaurus.com
is a content and feature-rich online map-based restaurant search engine that
offers visitors a variety of choices and information that is exclusive to
Dineasaurus.  With patent pending, its exciting new interactive
capability gives restaurants the power to communicate directly with online
visitors. Benefits include customer intimacy, rewards, convenience, online
advertising revenues and the creation of an online family.





The
Dineasaurus Dining Gift Card, one valuable feature of Dineasaurus, allows
customers to download 20 gift certificates within a six month period – all for
only $20. The savings from one download more than pays for the
card.





Results of
Operations





For the
three months ended September 30, 2007 the Company had no revenue and incurred
general and administrative expenses of approximately $303,000. The majority of
expenses have been for consultants, professional fees and rent. The Company
incurred a loss of $1,812,167 when it contributed the $1,812,167 intercompany
debt to its subsidiary’s capital. This debt originated from the Company’s
issuances of common stock in exchange for subsidiary debts and services. The
Company also incurred a loss of $479,653 in the sale of its subsidiary. (See
Note 3 to the financial statements) This sale was necessary to attract potential
investors and partners as the subsidiary had excessive debt and litigation. For
the three months ended September 30, 2006 the Company had no revenue and
incurred no general and administrative expenses. In that period, the Company was
the holding Company for its subsidiary operating company. (See “New Reporting
Entity” in Note 3 to the financial statements) We expect substantial business
expenses in order to further develop our business plan before we attain a
profitable condition. We require additional loans or investments in the near
future for our business plan to succeed in a timely manner.





Liquidity and Capital
Resourses





We had $0
in cash and a working capital deficit of approximately $786,000 at September 30,
2007. 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 expenditures 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 majority
shareholder will contribute 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 outside capital in the near term.





Item 3.
Controls and Procedures





We  have  no  formal  controls  and  procedures.  Our  principal  executive  and
financial  officer  are  involved in all day to
day management and operation of our






18






Item 3.
Controls and Procedures, Continued





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 the 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.




PART
II. OTHER INFORMATION




Item1.  LegalProceedings





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.





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 (the “Appeal”). On
December 10, 2007 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, TWBI filed a lawsuit against the individual referenced above, who made
an unsuccessful claim for wages against the company, in the Superior Court of
California, County of Orange, 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 collection of this judgment is highly unlikely.





We are
also involved from time to time in various legal proceedings incidental to our
business. While it is not feasible to predict or determine the ultimate outcome
of these matters, we believe that none of these legal proceedings will have a
material adverse effect on our financial position.





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 3), the reduction in
outstanding shares from 5,600,000 to 4,500,000 has been considered a reverse
stock split and







19






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





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 (see Note
3).





On April
29, 2003, the Company entered into a Subscription Agreement with an investor to
purchase 1,000,000 shares of the Company's common stock for $100,000 at $0.10
per share, or the lowest trading price above $0.01 over the next 90 days with
the Company issuing additional shares if the price falls.  During the
six months ended June 30, 2003, the Company received $66,000 for 1,320,000
shares at $0.05 per share. The Company subsequently received the $34,000 balance
and the Company issued a total of 2,000,000 shares, as adjusted, of its common
stock.





On June
28, 2003, the Company entered into an Engagement Agreement for consulting
services to be provided over a period of six months. Pursuant to the terms of
the Engagement Agreement, the Company issued a total of 340,909 shares of its
common stock at the fair market value of $0.13 per share, value of approximately
$45,000, pertaining to the initial non-refundable retainer fee and pertaining to
the shares due 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.





During
the quarter ended June 30, 2007, the Company issued 1,850,000 common shares at
$0.005 for services valued at $9,250.





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 $316,091 of debt. Of this, two
related parties of the Company accounted for 62,098,264 shares at $0.005 per
share for $310,491 of debt.





See Note
9 to the Financial Statements, Subsequent Events, for additional issuance of
unregistered shares.





All of
the proceeds from all unregistered sales of equity securities have been used in
the development stage to further accomplish its business plan.








20








Item 6.
Exhibits




3.1
            Articles of
      Incorporation (Charter Document)(1)3.2
            Bylaws
  (2)10.31
            Subordinated Secured
      Convertible Promissory Note, Pledge Agreement, Continuing Guaranty, and
      Common Stock Purchase Warrant, dated December
      19, 2007 (3)10.32
            Note
      Payable dated February 15, 2008 (3)10.33
            Subsidiary,
      Transworld Benefits Inc, Stock Purchase Agreement dated
      July 1, 2007 (3)10.34
            Asset Purchase
      Agreement with Stuart Graham, dated March 1, 2008 (3)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 Act31.2
            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 Act32.1
            Certification of the
      Chief Executive Officer pursuant
      to 18 U.S.C. Section 1350 as adopted pursuant toSection
      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 toSection
      906 of the Sarbanes-Oxley
Act.




Footnotes
to Exhibit Table:




(1)  Incorporated  by
reference to our registration statement on Form SB-2filed
with  the  Securities  and  Exchange  Commission  on  July  17,2000.




(2)  Original  incorporated  by  reference
to our registration statement onSB-2
filed  with  the  Securities  and  Exchange  Commission  on  July17,
2000.
Amendment  to  Section  13  of  the  Bylaws  included  with  this  report.




(3)  Incorporated
by reference to our Form 10-KSB filed with the Securities and
Exchange  Commission  on  April 30,
2008.








21






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:
                  August
      29, 2008
  Pursuant
to the requirements of the Securities Exchange Act of 1934, this 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
                  August
      29, 2008Charles
      Seven/s/
      Richard Diya
                  Chief
      Financial Officer
                  August
      29, 2008Richard
      Diya
    22