UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549


_____________________





FORM 10-Q


_____________________





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





For the quarterly period ended June 30, 2011





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





For the transition period from ______to______.





Commission File Number.:  333-110324





REBORNNE (USA) INC.


(Exact name of registrant as specified in its charter)





Florida

90-0515106(State or other jurisdiction of

incorporation or organization)

(IRS Employee Identification No.)Level 23, 120 Albert Street

Auckland City, Aukland

New Zealand

1010(Address of principal executive offices)

(Zip Code)





(+0064) 9-909-8886


(Registrant’s telephone number, including area code)





Not Applicable


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





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


Yes x        No o





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


Yes x        No o





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:


Large accelerated filer
o

Accelerated filer
oNon-accelerated filer

(Do not check if a smaller reporting company)
o

Smaller reporting company
x





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


Yes o        No x





State the number of shares outstanding of each of the issuer’s classes of common equity, as of June 30, 2011:  54,807,032 shares of common stock are issued and outstanding.








REBORNNE (USA), INC.





FORM 10-Q





June 30, 2011





TABLE OF CONTENTS





PART I— FINANCIAL INFORMATION
PageItem 1.
Financial Statements.
1Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
18Item 3.
Quantitative and Qualitative Disclosures About Market Risk.
20Item 4.
Controls and Procedures.
20PART II— OTHER INFORMATIONItem 6.
Exhibits.
20SIGNATURES














PART 1 - FINANCIAL INFORMATION





Item 1. Financial Statements.





Rebornne (USA), Inc.
 
 Unaudited Consolidated Financial Statements
 
 June 30, 2011 and March 31, 2011
 
 (Stated in US Dollars)
 
 
 
 
 
 Rebornne (USA), Inc.
 Contents
PagesReport of Independent Registered Public Accounting Firm
1Consolidated Balance Sheets
2Consolidated Statements of Income
3Consolidated Statements of Changes in Stockholder’s Equity
4Consolidated Statements of Cash Flows
5Notes to Consolidated Financial Statements
6 - 17
 
 
 
 Report of Independent Registered Public Accounting Firm
 
 
 To:
The Stockholder and Board of Directors

Rebornne (USA), Inc.
 We have reviewed the accompanying interim consolidated Balance Sheets of Rebornne (USA), Inc.(“the Company”) as of June 30, 2011 and March 31, 2011, and the related statements of income, changes in stockholders’ equity, and cash flows for the three-month period ended June 30, 2011 and June 30, 2010. These interim consolidated financial statements are the responsibility of the Company's management.
 
 We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.
 
 Based on our review, we are not aware of any material modifications that should be made to the accompanying interim consolidated financial statements for them to be in conformity with U.S. generally accepted accounting principles.
 
 San Mateo, California

August 1, 2011
Samuel H. Wong & Co., LLP

Certified Public Accountants
 
 1
 
 Rebornne (USA), Inc.
 Consolidated Balance Sheets
 As of June 30, 2011 and March 31, 2011
 (Stated in US Dollars)
 
 ASSETS

Notes


06/30/2011


03/31/2011Current AssetsCash and Cash Equivalents




$
716,486


$
592,086Accounts Receivable





214,668



74,984Other Receivable





104,881



80,190Inventories


3



983,418



1,401,273Advance to Suppliers






983,816



952,865Related Parties Receivable


4



386,362



380,096Prepaid Expenses






7,122



1,075Total Current Assets






3,396,753



3,482,569Non-Current AssetsProperty, Plant & Equipment, net


5



2,404,579



2,506,049Intangible Assets


6



152,437



152,437Long-term Investment


7



29,970



29,970Other Assets






6,189



-TOTAL ASSETS





$
5,989,928


$
6,171,025LIABILITIESCurrent LiabilitiesAccounts Payable





$
307,594


$
330,947Taxes Payable


8



1,422,259



1,224,411Other Payable






183,585



168,464Current Portion of Long-term Debt


9



17,704



15,987Note Payable


10



108,300



106,706Related Party Payable






631,619



732,239Customer Deposits






689,366



1,154,280Total Current Liabilities





$
3,360,427


$
3,733,034Non-Current LiabilitiesLong-term Debt


9



44,150



45,328TOTAL LIABILITIES





$
3,404,577


$
3,778,362
 STOCKHOLDER’S EQUITYPreferred Stock ($0.001 par value, 10,000,000 shares authorized, 0 share issued and outstanding at June 30, 2011 and March 31, 2011)

Common Stock ($0.001 par value, 100,000,000 shares authorized, 54,807,032 and 52,546,997 shares issued and outstanding at June 30, 2011 and March 31, 2011 respectively)





$
54,807


$
52,547Additional Paid in Capital






707,538



468,288Retained Earnings






1,807,637



1,756,932Accumulated Other Comprehensive Income






15,369



114,896TOTAL STOCKHOLDER’S EQUITY






2,585,351



2,392,663TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY


$
5,989,928


$
61,171,025
 See Notes to Consolidated Financial Statements and Accountant’s Report
 
 2
 
 Rebornne (USA), Inc.
 Consolidated Statements of Income
 For the three month period ended June 30, 2011 and 2010
 (Stated in US Dollars)
 Note

06/30/2011


06/30/2010RevenueSales


$
1,290,149


$
1,018,780Cost of Goods Sold



713,437



384,303Gross Profit



576,712



634,477Operating ExpensesSelling Expenses



101,584



229,864General & Administrative Expenses



359,667



402,452Total Operating Expenses



461,251



632,316Operating Income



115,461



2,161Other Income (Expenses)Other Income



281



240Other Expenses



(3,792
)


(124
)Interest Income



14



56Interest Expense



(16,532
)


-Total Other Income (Expenses)



(20,029
)


172Earnings before Tax



95,432



2,333Income Tax



(44,727
)


-Net Income


$
50,705


$
2,333Earnings per share-Basic


$
0.00


$
0.00-Diluted


$
0.00


$
0.00Weighted average shares outstanding-Basic



54,807,032



26,546,997-Diluted



54,807,032



26,546,997
 
 See Notes to Consolidated Financial Statements and Accountant’s Report
 3
 Rebornne (USA), Inc.
 Consolidated Statements of Changes in Stockholder’s Equity
 For the three-month period ended and year ended June 30, 2011 and March 31, 2011
 (Stated in US Dollars)
 
 AccumulatedNumber





Additional





OtherOf


Common


Paid in


Retained


ComprehensiveShares


Stock


Capital


Earnings


Income


TotalBalance at April 1, 2010


26,546,997


$
26,547


$
835


$
1,634,480


$
(2,160
)

$
1,659,702Issuance of common stock


26,000,000



26,000



467,453



-



-



493,453Net Income


-



-



-



122,452



-



122,452Foreign Currency Translation Adjustment


-



-



-



-



117,056



117,056Balance at March  31, 2011


52,546,997



52,547



468,288



1,756,932



114,896



2,392,663Balance at April 1, 2011


52,546,997


$
52,547


$
468,288


$
1,756,932


$
114,896


$
2,392,663Issuance of common stock


2,260,035



2,260



239,250



-



-



241,510Net Income


-



-



-



50,705



-



50,705Foreign Currency Translation Adjustment


-



-



-



-



(99,527
)


(99,527
)Balance at June  30, 2011


54,807,032



54,807



707,538



1,807,637



15,369



2,585,351
 
 Comprehensive Income06/30/2011


03/31/2011


Accumulated TotalNet Income

$
50,705


$
122,452


$
173,157Foreign Currency Translation Adjustment


(99,527
)


117,056



17,529$
(48,822
)

$
239,508


$
190,686
 
 See Notes to Consolidated Financial Statements and Accountant’s Report
 
 4
 Rebornne (USA), Inc.
 Consolidated Statements of Cash Flows
 For the three-month period ended June 30, 2011 and 2010
 (Stated in US Dollars)
 
 06/30/2011


06/30/2010Cash flows from operating activitiesNet Income

$
50,705


$
2,333Depreciation


101,470



69,142Finance charges on obligations under financial leases


4,655



-Decrease/(Increase) in Accounts Receivable


(139,685
)


(79,849
)Decrease/(Increase) in Other Receivable


(24,690
)


(104,090
)Decrease/(Increase) in inventory


409,222



(106,885
)Decrease/(Increase) in Advance to Suppliers


(30,951
)


36,505Decrease/(Increase) in related party receivable


(6,266
)


(151
)Decrease/(Increase) in Prepaid Expenses


2,586



14,628Increase/(Decrease) in Note Payable


1,594



-Increase/(Decrease) in Accounts Payable


(23,353
)


89,720Increase/(Decrease) in Taxes Payable


197,848



120,327Increase/(Decrease) in other payable


15,121



16,980Increase/(Decrease) in related party payable


(100,620
)


74,568Increase/(Decrease) in Customer Deposits


(464,914
)


66,157Cash Sourced/(Used) in Operating Activities


(7,278
)

$
199,385Cash Flows from Investing ActivitiesPurchase of Property, Plant, and Equipment


-



(11,326
)Disposal (Purchase) of Other Assets


(6,189
)


(9,500
)Cash Used/(Sourced) in Investing Activities


(6,189
)


(20,826
)Cash Flows from Financing Activities






-Issuance of Common Stock


241,510



-Principal repayments of obligation under finance lease


(4,116
)


-Cash Sourced/(Used) in Financing Activities


237,394



-Net Increase/(Decrease) in Cash & Cash Equivalents for the Year


223,927



178,559Effect of Other Comprehensive Income


(99,527
)


37,758Cash & Cash Equivalents at Beginning of Year


592,086



385,445Cash & Cash Equivalents at End of Year


716,486



601,762
 
 See Notes to Consolidated Financial Statements and Accountant’s Report
 
 5
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the three-month periods ended June 30, 2011 and March 31, 2011
 
 1.
The Company and Principal Business Activities
 
 Rebornne (USA), Inc. (the “Company”), formerly BTX Holdings, Inc., is a holding company whose primary business operations are conducted through its operating subsidiaries Rebornne New Zealand Ltd. (“Rebornne NZ”), Rebornne (Guangzhou) Diary Company (“Rebornne Guangzhou”), Rebornne (Shenzhen) Dairy Company (“Rebornne Shenzhen”) and Shenzhen Xin Sheng Advertising and Strategy Ltd. (“Shenzhen Xin Sheng”).
 
 Rebornne NZ is principally engaged in formulation and production of milk powder and colostrums tablets for infants.  Rebornne NZ markets its products under the Rebornne brand name.   The Company sells to distributors in New Zealand and China.  Rebornne Guangzhou has production facilities in Guangzhou, China.  It blends and produces mainly milk powder by using Rebornne NZ’s formulations.  It packages the final milk powder products and sells them throughout China under the Rebornne brand name.   Rebornne Shenzhen operates a retail store in Shenzhen, China.  It mainly sells packaged milk powder products as well as health food.  It also has a warehouse in Shenzhen to stock its inventories.  Shenzhen Xin Sheng was set up by the Company on July 16, 2010 and it is in the business of providing advertising services.
 .
 The Company was formed under the laws of the State of Florida on April 24, 2003.  On May 28, 2010, the Company entered into a share exchange agreement with Rebornne NZ.   Rebornne NZ wholly owns Rebornne Guangzhou and Rebornne Shenzhen. Pursuant to the share exchange agreement, the Company issued 26,546,997 shares in exchange for all of Rebornne NZ’s issued and outstanding shares.  Rebornne NZ became a wholly owned subsidiary of the Company and Rebornne NZ became the Company’s controlling stockholder.
 
 The share exchange transaction has been accounted for as a recapitalization of Rebornne NZ where the Company (the legal acquirer) is considered the accounting acquiree and Rebornne NZ (the legal acquiree) is considered the accounting acquirer.  As a result of this transaction, the Company is deemed to be a continuation of the business of Rebornne NZ.
 
 Accordingly, the financial data included in the accompanying consolidated financial statements is that of the accounting acquirer (Rebornne NZ).  The historical stockholders’ equity of the accounting acquirer prior to the share exchange has been retroactively restated as if the share exchange transaction occurred as of the beginning of the first period presented.
 
 6
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the three-month periods ended June 30, 2011 and March 31, 2011
 
 2.
Summary of Significant Accounting Policies
 
 (A)
Method of Accounting
 
 The Company maintains its general ledger and journals with the accrual method of accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements.
 
 (B)
Consolidation
 
 The consolidated financial statements include all the accounts of the Company and its four wholly-owned subsidiaries. Inter-company transactions, such as sales, cost of sales, due to/due from balances, investment in subsidiary, and subsidiary’s capitalization have been eliminated.
 
 As of June 30, 2011, the detailed identities of the consolidated subsidiaries are as follows:
 
 Name of Entity
Date ofIncorporation
Place ofIncorporation
Attributable Equity Interest
Registered CapitalRebornne New Zealand Ltd.
December 17, 2001
New Zealand
100%
NZD $2,000Rebornne (Guangzhou) Dairy Company
July 10, 2006
PRC
100%
USD $1,380,000Rebornne (Shenzhen) Dairy Company
January 18, 2010
PRC
100%
USD $100,000Shenzhen Xin Sheng Advertising and Strategy Ltd.
July 16, 2010
PRC
100%
RMB $500,000
 
 (C)
Use of Estimates
 
 In the preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets, liabilities, and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting years.  These accounts and estimates include, but are not limited to, the valuation of accounts receivable, inventories, and the estimation on useful lives of property, plant and equipment.  Actual results could differ from those estimates.
 
 7
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the three-month periods ended June 30, 2011 and March 31, 2011
 
 (D)
Cash and Cash Equivalents
 
 Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
 
 (E)
Accounts Receivable
 
 Accounts receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An allowance for doubtful accounts is made when recovery of the full amount is doubtful.
 
 (F)
Inventories
 
 Inventories are stated at the lower of cost or market value. Cost is computed using the first-in, first-out method and includes all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Market value is determined by reference to the sales proceeds of items sold in the ordinary course of business or estimates based on prevailing market conditions.
 
 (G)
Advances to Suppliers
 
 Advances to suppliers represent the cash paid in advance for the purchase of goods. The advances to suppliers are interest free and unsecured.
 
 (H)
Property, Plant, and Equipment
 
 Property, plant, and equipment are stated at cost.  Repairs and maintenance to these assets are charged to expense as incurred. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized.
 
 Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the property, plant and equipment are as follows:
 
 Property and Leasehold Improvements
10 YearsEquipment and Furniture
2.5 to 10 YearsMotor Vehicles
4  Years
 
 8
 
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the three-month periods ended June 30, 2011 and March 31, 2011
 (I)
Intangible Assets
 
 Intangible assets that are acquired individually or as part of a group of assets, other than those acquired in a business combination, are initially recorded at their fair value. The cost of a group of assets acquired in a transaction is allocated to the individual assets based on their relative fair values. Goodwill does not arise in such a transaction. Intangible assets that are acquired in a business combination are accounted for in accordance with ASC Topic 805, Business Combinations. The costs of intangible assets that are developed internally, as well as the costs of maintaining or restoring intangible assets that have indeterminate lives or that are inherent in a continuing business and related to the entity as a whole, are expensed as incurred.
 
 The accounting for intangible assets, other than goodwill, subsequent to acquisition is based on the asset’s useful life. The useful life of the intangible asset is the period over which the asset is expected to contribute directly or indirectly to the entity’s future cash flows. An asset for which no legal, regulatory, contractual, competitive, economic, or other factors limit its useful life is considered to have an indefinite useful life.
 
 (J)
Long-Term Investment
 
 Investee companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity method of accounting. Under the equity method of accounting, an investee company’s accounts are not reflected within the Company’s consolidated balance sheets and statements of operations; however, the Company’s share of the earnings or losses of the investee company is reflected in the consolidated statements of operations. The Company’s carrying value in an equity method investee company is reflected in the Company’s consolidated balance sheets.
 
 When the Company’s carrying value in an equity method Investee company is reduced to zero, no further losses are recorded in the Company’s consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed additional funding. When the investee company subsequently reports income, the Company will not record its share of such income until it equals the amount of its share of losses not previously recognized.
 
 Investee companies not accounted for under the consolidation or the equity method of accounting are accounted for under the cost method of accounting. Under this method, the Company’s share of the earnings or losses of such investee companies is not included in the consolidated balance sheet or statement of operations. However, impairment charges are recognized in the consolidated statement of operations. If circumstances suggest that the value of the investee company has subsequently recovered, such recovery is not recorded.
 
 9
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the three-month periods ended June 30, 2011 and March 31, 2011
 
 (K)
Customer Deposits
 
 Customer deposits represent the money the Company has received from customers in advance for the purchase of goods. The Company considers customer deposits as a liability until the title of goods have been transferred at which point the balance will be credited to sales revenue.
 
 (L)
Comprehensive Income
 
 In accordance with SFAS No. 130, “Reporting Comprehensive Income”,comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners.  Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements.  The Company’s current components of other comprehensive income are unrealized gain or loss in investment and the foreign currency translation adjustment.
 
 (M)
Revenue Recognition
 
 Revenue from product sales is recognized net of discounts and trade allowances when the goods are shipped and title has passed.
 
 (N)
Cost of Goods Sold
 
 Cost of goods sold is primarily comprised of cost of goods.
 
 (O)
Selling Expenses
 
 Selling expenses include outbound freight, wages of the sales force, commissions, and advertising.
 
 (P)
General & Administrative Expenses
 
 General and administrative expenses are comprised of executive compensation, wages of administrative and factory staff, professional fees, depreciation, travel and lodging, meals and entertainment, utilities, and rental.
 
 (Q)
Advertising Expenses
 
 Costs related to advertising and promotion expenditures are expensed as incurred during the year.  Advertising costs are charged to selling expenses.
 
 10
 
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the three-month periods ended June 30, 2011 and March 31, 2011
 (R)
Retirement Plan
 
 The employees of the Company participate in the defined contribution retirement plans managed by the local government authorities whereby the Company is required to contribute to the schemes at fixed rates of the employees’ salary. The Company’s contributions to this plan are charged to profit or loss when incurred. The Company has no obligations for the payment of retirement and other post-retirement benefits of staff other than the contributions described above.
 
 (S)
Income Tax
 
 The Company uses the accrual method of accounting to determine and report its taxable reduction of income taxes for the year in which they are available. In accordance with SFAS No. 109 “Accounting for Income Taxes”,the Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years.  Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not that such items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.
 
 In respect of the Company and its subsidiaries domiciled and operated in New Zealand and the People’s Republic of China, the taxation of these entities is summarized below:
 
 Entities
Countries of Domicile
Income Tax RateRebornne (USA), Inc.
United States
15.00% - 35.00%Rebornne New Zealand Limited
New Zealand
30.00%Rebornne (Guangzhou) Dairy Company
PRC
25.00%Rebornne (Shenzhen) Dairy Company
PRC
25.00%Shenzhen Xin Sheng Advertising and Strategy Ltd.
PRC
25.00%
 
 (T)
Foreign Currency Translation
 
 The Company and its operating subsidiaries Rebornne New Zealand Limited, Rebornne (Guangzhou) Dairy Company, Rebornne (Shenzhen) Dairy Company and Shenzhen Xin Sheng Advertising and Strategy Ltd. maintain their financial statements in their functional currencies, which are the New Zealand dollar and the Renminbi (RMB) respectively. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction.  Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.
 
 11
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the three-month periods ended June 30, 2011 and March 31, 2011





For financial reporting purposes, the financial statements of Rebornne NZ, Rebornne Guangzhou, Rebornne Shenzhen and Shenzhen Xin Sheng Advertising and Strategy Ltd., which are prepared using their respective functional currencies, have been translated into United States dollars.  Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates, and stockholders’ equity is translated at historical exchange rates. Translation adjustments are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.





Exchange Rates
06/30/11
03/31/11
06/30/10Period end RMB : US$ exchange rate
6.4635
6.5601
6.8086Average period RMB : US$ exchange rate
6.4999
6.7087
6.8335Period end NZD : US$ exchange rate
1.2236
1.3165
1.4369Average period NZD : US$ exchange rate
1.2513
1.3658
1.4274





(U)
Financial Instruments





The Company’s financial instruments are cash and cash equivalents, accounts receivable, other receivable, advances to suppliers, related parties receivable, accounts payable, other payable, notes payable, related party payable and long-term debt. The recorded values of these financial instruments approximate their fair values due to their short-term nature.   The difference between the carrying and fair values of long-term debt is not significant.





(V)
Impairment of Intangible Assets





The Company evaluates the recoverability of identifiable intangible assets whenever events or changes in circumstances indicate that an intangible asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset. The Company measures the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. Should the sum of the expected future net cash flows be less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds its fair value. The fair value is measured based on quoted market prices, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows. The evaluation of asset impairment requires the Company to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts.





12





Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the three-month periods ended June 30, 2011 and March 31, 2011


(W)
Recent Accounting Pronouncements





In January 2010, the FASB issued ASU 2010-02, Consolidation (Topic 810) — Accounting and Reporting for Decreases in Ownership of a Subsidiary — A Scope Clarification. ASU 2010-02 clarifies that the scope of previous guidance in the accounting and disclosure requirements related to decreases in ownership of a subsidiary apply to (i) a subsidiary or a group of assets that is a business or nonprofit entity; (ii) a subsidiary that is a business or nonprofit entity that is transferred to an equity method investee or joint venture; and (iii) an exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity. ASU 2010-02 also expands the disclosure requirements about deconsolidation of a subsidiary or derecognition of a group of assets to include (i) the valuation techniques used to measure the fair value of any retained investment; (ii) the nature of any continuing involvement with the subsidiary or entity acquiring a group of assets; and (iii) whether the transaction that resulted in the deconsolidation or derecognition was with a related party or whether the former subsidiary or entity acquiring the assets will become a related party after the transaction. The provisions of ASU 2010-02 will be effective for the first reporting period beginning after December 13, 2009. The adoption of this standard did not have a material impact on the financial position, results of operations or cash flows of the Company.





In January 2010 the FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820) —Improving Disclosures About Fair Value Measurements. ASU 2010-06 clarifies the requirements for certain disclosures around fair value measurements and also requires registrants to provide certain additional disclosures about those measurements. The new disclosure requirements include (i) the significant amounts of transfers into and out of Level 1 and Level 2 fair value measurements during the period, along with the reason for those transfers, and (ii) separate presentation of information about purchases, sales, issuances and settlements of fair value measurements with significant unobservable inputs. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of this standard did not have a material impact on the financial position, results of operations or cash flows of the Company.





(X)
Subsequent Events





The Company evaluates subsequent events that have occurred after the consolidated balance sheet date but before the consolidated financial statements are issued. There are two types of subsequent events:  (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) nonrecognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. The Company has evaluated subsequent events, and based on this evaluation, the Company did not identify any recognized or nonrecognized subsequent events that would have required adjustments to the consolidated financial statements.


13
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the three-month periods ended June 30, 2011 and March 31, 2011


3.
Inventories


06/30/2011


03/31/2011Raw materials

$
65,933


$
156,213Finished goods


917,485



1,245,060$
983,418


$
1,401,273








4.
Related Parties Receivable


06/30/2011


03/31/2011Rebornne Trading Company Limited

$
48,540


$
47,825Rebornne Dairy Dongying Company


135,370



133,377Pai Cun (Guangzhou) Health Limited


202,452



198,894$
386,362


$
380,096





The Company, Pai Cun (Guangzhou) Health Limited and Rebornne Trading Company Limited have common shareholders, whereas Rebornne NZ has an ownership interest in Rebornne Dairy Dongying Company. The amounts due from these related parties have no specific terms of repayment and are non-interest bearing and unsecured.





5.
Property, Plant, and Equipment





Accumulated06/30/2011

Cost


Depreciation


NetProperty and Leasehold Improvements

$
800,697


$
278,384


$
522,313Equipment and Furniture


2,048,006



468,983



1,579,023Motor Vehicles


396,653



93,410



303,243$
3,245,356



840,777



2,404,579Accumulated03/31/2011

Cost


Depreciation


NetProperty and Leasehold Improvements

$
800,697


$
254,500


$
546,197Equipment and Furniture


2,048,006



407,066



1,640,940Motor Vehicles


396,653



77,741



318,912$
3,245,356


$
739,307


$
2,506,049





14
 
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the three-month periods ended June 30, 2011 and March 31, 2011


6.
Intangible Assets





Intangible assets consist of the exclusive right to distribute the Rebornne Colostrums products and the related customer contracts.  Pursuant to the distributor right agreement dated December 1, 2010 between Rebornne NZ and Hainan Guo Jian High-tech Milk Industry Company Limited (“Hainan), Rebornne NZ agreed to purchase the exclusive distribution network of the Rebornne Colostrums products and related customers from Hainan by issuing 1.8 million common stock of Rebornne (USA), Inc. and paying RMB $3 million in cash as consideration.  As of March 30, 2011, Rebornne NZ paid $152,437 in cash (RMB $1 million).  The 1.8 million common stock of Rebornne (USA), Inc. and the remaining cash payment of RMB $2 million will be issued by December 2011 as agreed between both parties.  As there are no legal, regulatory, contractual, competitive, economic or other factors limiting the useful life of these intangible assets, they are considered to have an indefinite useful life and no amortization is taken.  Instead, they will be tested for impairment annually.








7.
Long-Term Investment





In April 2008, Rebornne NZ entered into an agreement to acquire 60% interest in Rebornne Dairy Dongying Company (“Rebornne Dongying”).  Rebornne Dongying is located is Shandong, PRC.  Rebornne Dongying’s primary business activity is production of fresh milk.  As consideration for the 60% interest, Rebornne NZ committed to contribute $2,303,945 (RMB$15,750,000) in capital by April 29, 2010.  As of March 31, 2011, the Company has contributed $29,970 in cash.  The Company has also contributed a milk powder formulation to Rebornne Dongying. The milk powder formulation has been appraised at $841,123 (RMB$5,750,000).





The Company has not recognized an intangible asset on its balance sheet related to the milk powder formulation; the Company believes there is a difference in accounting recognition between PRC GAAP and US GAAP for the milk powder formulation.  Under PRC GAAP, the milk powder formulation can be recognized as an intangible asset; however, the Company, from a conservative interpretation of US GAAP, has accounted for the milk powder formulation as research and development costs that have been expensed to the statements of operations in prior periods that are not presented herein.





The cash contribution made by Rebornne NZ does not exceed 20% of the net assets of Rebornne Dongying.  Neither the Company nor Rebornne NZ has not been able to exert significant influence over Rebornne Dongying in terms of management of the finances and business operations for the periods presented; therefore, in light of the foregoing circumstance, the Company, at June 30, 2011 and March 31, 2011, has accounted for its investment in Rebornne Dongying using the cost method.  If in the future the Company is able to exert more significant influence or increase its capital contribution, the Company would change the method for which it accounts for its investment in Rebornne Dongying.


15
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the three-month periods ended June 30, 2011 and March 31, 2011


8.
Taxes Payable


06/30/2011


03/31/2010Value Added Tax

$
1,194,654


$
1,042,213Other Tax


14,720



12,263Income Tax Payable


212,885



169,935$
1,422,259


$
1,224,411








9.
Note Payable





The note is payable to an unrelated individual. It is unsecured, due on demand and bears interest at 5% per month.





10.
Related Party Payable and Transactions





Related party payable relates to amounts owing to the shareholder of the Company.  It has no specific terms of repayment and is non-interest bearing.





In addition, the sole shareholder received $50,000 and $3,725 in remuneration from its wholly owned subsidiaries for the three-month periods ended June 30, 2011 and June 30, 2010 respectively.





11.
Long-term Debt


06/30/2011


03/31/2011Motor Vehicle Loan


61,854


$
61,315Less: Current Portion


(17,704
)


(15,987
)44,150


$
45,328





Long-term debt relates to a motor vehicle loan.  It matures in July 2014, is secured by the motor vehicle, bears interest at 12% per annum and is repayable at NZ$ 2,443 per month.





16


12.
Commitments





The Company and its four wholly owned subsidiaries have operating leases for their premises expiring between October 2011 and May 2016.  The minimum lease payments for the next six fiscal years are as follows:





2012
$  104,3572013
$  133,9612014
$    95,4362015
$    95,4362016
$    95,4362017
$    15,906





13.
Economic, Political, and Legal Risks





The Company’s operations in China are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the economic, political, legal environment, and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in China, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, restriction on international remittances, and rates and methods of taxation, among other things.





17





Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.





The following discussion and analysis of the results of operations and financial condition of the Company for the three months ended June 30, 2011 and 2010 should be read in conjunction with its financial statements. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Special Note Regarding Forward-Looking Statements and Business sections in our Form 10-K for the year ended March 31, 2011 as filed with the Securities and Exchange Commission. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.





COMPANY OVERVIEW





We operate our business through Rebornne NZ, which was incorporated in Auckland, New Zealand in 2001 by its sole shareholder and owner Dairy Global.  Rebornne NZ is a growing dairy product company in New Zealand with subsidiaries in the PRC. We produce, market, and sell our products under the “Rebornne” brand name. We focus on selling New Zealand produced colostrums and infant formula products in China, which included both premium and a more affordable series, targeted towards the general masses. In order to sell our products, we have established an extensive sales and distribution network nationwide throughout China.





RESULTS OF OPERATIONS





Results of Operations for the Three-Month Period Ended June 30, 2011 as Compared to the Three-Month Period Ended June 30, 2010





The following tables set forth key components of our results of operations for the period indicated, in US dollars, and key components of our revenue for the period indicated, in US dollars. The discussion following the table is based on the audited results. Percentage of difference is calculated for better comparison.





For the Three Months EndedJune 30, 2011


June 30, 2010


DifferenceUSD


%


USD


%


%RevenuesSales


1,290,149



100.0



1,018,780



100.0



26.64Cost of Goods Sold


713,437



55.30



384,303



37.72



85.64Gross profit


576,712



44.70



634,477



62.28



(9.10
)Operating ExpensesSelling Expenses


101,584



7.87



229,864



22.56



(55.81
)General & Administrative Expenses


359,667



27.88



402,452



39.50



(10.63
)Total Operating Expenses


461,251



35.75



632,316



62.07



(27.05
)Operating Income


115,461



8.95



2,161



0.212



5242.9Other Income (Expenses)Other Income


281



0.022



240



0.024



17.08Other Expenses


(3,792
)


(0.29
)


(124
)


(0.012
)


2958.1Interest Income


14



0.001



56



(0.005
)


(75.0
)Interest Expense


(16,532
)


(1.28
)


-



-



-Total Other Income/ (Expenses)


(20,029
)


(1.55
)


172



(20,201
)


(11744.8
)Earnings before Tax


95,432



7.40



2,333



93,099



3990.5Income Tax


(44,727
)


(3.47
)


-



-



-Net Income


50,705



3.93



2,333



0.229



2073.4





Net Revenue:





Net revenue increased by $271,369 or 26.64% from $1,018,780 for the three-month ended June 30, 2010 to $1,290,149 for the three-month ended June 30, 2011. An increasing number of selling points to more than 2000 areas in Year 2011 is the main reason that increased the net revenue of the ended period.


Cost of sales:





Our cost of sales increased by $329,134 or 85.64% from $384,303 for the three-month ended June 30, 2010 to $713,437 for the three-month ended June 30, 2011. The cost of sales increased is in the line of the increased in net revenue.





18


Gross profit:





Gross profit is slightly decreased by $57,765 or 9.10% from $634,477 for the three-month ended June 30, 2010 to $576,712 for the three-month ended June 30, 2011. The little drop of gross profit is due to the huge cost of sales increased.





Operating Expenses:





The total operating expenses decreased by $171,065 or 27.05% from $632,316 for the three-month ended June 30, 2010 to $461,251 for the three-month ended June 30, 2011. The Selling Expenses have decreased by $128,280 or 55.81% from year 2010 which is the main factor that result in total operating expenses decreasing. The main expenses included promotion and advertisements cost of about $42,000 was lesser than then expenses in year 2010. General & Administrative (G&A), has a mild drop at $42,785 or 10.63% in Total Operating Expenses. The main expenses cost in G & A section included employee salaries, employee benefits and office rental/expenses.





Operating Income:





The operating income was $115,461 for the three-month ended June 30, 2011 as compared to $2,161 for three-month ended June 30, 2010, a very sharp rise in the total of 113,300 or 5242.9%. The great increase in operating income for this ended period is due to the huge decrease of total operating expenses and the increase of net revenue.


Net Income:





The net income was $2,333 for the three-month ended June 30, 2010 as compared to $50,705 for the three-month ended June 30, 2011, representing a great increase at $48,372 or 2073.4%. The net income increased dramatically because the net revenue increased gradually in accompany with large decrease in total operating expenses in year 2011.





Liquidity and Capital Resources





The following table sets forth the summary of our cash flows stated in US Dollar for the Three-Month Ended June 30, 2011 and 2010.





June 30, 2011
June 30, 2010Cash Flows from Operating Activities
(7,278)
199,385Cash Flows from Investing Activities
(6,189)
(20,826)Cash Flows from Financing Activities
237,394
-Net Increase/(Decrease) in Cash & Cash Equivalents for the Period
223,927
178,559Effect of other Comprehensive Income
(99,527)
37,758Cash & Cash Equivalents at Beginning of Period
592,086
385,445Cash & Cash Equivalents at End of Period
716,486
601,762





Operating Activities:





During the three-month ended June 30, 2011, net cash provided by operating activities was ($7,278) as compared to net cash used for operating activities of $199,385 in the three-month ended June 30, 2010.





Investing Activities:





The cash flows from investing activities showed negative are due to the accumulated depreciation with current inventories.





Our total cash and cash equivalents increased to $716,486 as of June 30, 2011, as compared to $601,762 as of June 30, 2010. The primary uses of cash are for selling and marketing expenses, development expenses and investment capital.





Recent Accounting Pronouncements





In January 2010, the FASB issued ASU 2010-02, Consolidation (Topic 810) — Accounting and Reporting for Decreases in Ownership of a Subsidiary — A Scope Clarification. ASU 2010-02 clarifies that the scope of previous guidance in the accounting and disclosure requirements related to decreases in ownership of a subsidiary apply to (i) a subsidiary or a group of assets that is a business or nonprofit entity; (ii) a subsidiary that is a business or nonprofit entity that is transferred to an equity method investee or joint venture; and (iii) an exchange of a group of assets that constitutes a business or nonprofit activity for a noncontrolling interest in an entity. ASU 2010-02 also expands the disclosure requirements about deconsolidation of a subsidiary or derecognition of a group of assets to include (i) the valuation techniques used to measure the fair value of any retained investment; (ii) the nature of any continuing involvement with the subsidiary or entity acquiring a group of assets; and (iii) whether the transaction that resulted in the deconsolidation or derecognition was with a related party or whether the former subsidiary or entity acquiring the assets will become a related party after the transaction. The provisions of ASU 2010-02 will be effective for the first reporting period beginning after December 13, 2009. The adoption of this standard did not have a material impact on the financial position, results of operations or cash flows of the Company.





19





In January 2010 the FASB issued ASU 2010-06, Fair Value Measurements and Disclosures (Topic 820) —Improving Disclosures About Fair Value Measurements. ASU 2010-06 clarifies the requirements for certain disclosures around fair value measurements and also requires registrants to provide certain additional disclosures about those measurements. The new disclosure requirements include (i) the significant amounts of transfers into and out of Level 1 and Level 2 fair value measurements during the period, along with the reason for those transfers, and (ii) separate presentation of information about purchases, sales, issuances and settlements of fair value measurements with significant unobservable inputs. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009. The adoption of this standard did not have a material impact on the financial position, results of operations or cash flows of the Company.





OFF-BALANCE SHEET ARRANGEMENTS





We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).





Item 3. Quantitative and Qualitative Disclosures about Market Risks.





Not applicable because we are a smaller reporting company.





Item 4. Controls and Procedures.





Evaluation of Disclosure Controls and Procedures





Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”),of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.





Changes in Internal Control over Financial Reporting





There have been no significant changes in our internal controls over financial reporting that occurred during the last fiscal quarter that has materially affected or is reasonably likely to materially affect our internal controls.





PART II - OTHER INFORMATION





Item 6. Exhibits.





Exhibit No.
Description31.1*
Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1**
Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.101***
Interactive Data File (Form 10-Q for the quarterly period ended June 30, 2011 furnished in XBRL).





*
Filed herewith.**
Furnished herewith.***
The Company will furnish Exhibit 101 by September 14, 2011, as permitted under the rules of the SEC.





20





SIGNATURES





Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




REBORNNE (USA), INC.Date:  August 22, 2011
By:
/s/ Dairy GlobalDairy GlobalPresident, Chief Executive Officer and Chief Financial Officer(Duly Authorized Officer, Principal Executed Officer and Principal Financial Officer)




21