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 December 31, 2010





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


For the transition period from ______to______.





REBORNNE (USA) INC.


(Exact name of registrant as specified in the Charter)





Florida

333-110324

90-0515106(State or other jurisdiction of

incorporation or organization)

(Commission File No.)

(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


(Issuer Telephone number, including area code)





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 o        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 filer.  See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one):





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 February 15, 2011:  54,800,000 shares of common stock.











REBORNNE (USA), INC.





FORM 10-Q





December 31, 2010





TABLE OF CONTENTS





PART I— FINANCIAL INFORMATIONItem 1.
Financial Statements
1Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
20Item 3.
Quantitative and Qualitative Disclosures About Market Risk
255Item 4T.
Controls and Procedures
25PART II— OTHER INFORMATIONItem 1.
Legal Proceedings
26Item 1A.
Risk Factors
26Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
26Item 3.
Defaults Upon Senior Securities
26Item 4.
(Removed and Reserved)
26Item 5.
Other Information
26Item 6.
Exhibits
26SIGNATURES
27










PART 1 - FINANCIAL INFORMATION





Item 1.     Financial Statements








Rebornne (USA), Inc.
 
 Unaudited Consolidated Financial Statements
 
 December 31, 2010 and March 31, 2010
 
 (Stated in US Dollars)






















Rebornne (USA), Inc.




Contents
PagesReport of Independent Registered Public Accounting Firm
1Consolidated Balance Sheets
2Consolidated Statements of Operations
3Consolidated Statements of Changes in Stockholder’s Equity
4Consolidated Statements of Cash Flows
5 – 6Notes to Consolidated Financial Statements
7 - 19




















To:     The Stockholder and Board of Directors


Rebornne (USA), Inc.











Report of Independent Registered Public Accounting Firm








We have reviewed the accompanying consolidated balance sheets of Rebornne (USA), Inc. as of December 31, 2010 and March 31, 2010, and the related consolidated statements of operations, changes in stockholders' equity, and cash flows for the nine-month periods ended December 31, 2010 and March 31, 2010. These interim 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 United States generally accepted accounting principles.










San Mateo, California

January 21, 2011
Samuel H. Wong & Co., LLP

Certified Public Accountants









-1-




Rebornne (USA), Inc.
 Consolidated Balance Sheets
 As of December 31 and March 31, 2010
 (Stated in US Dollars)




ASSETS

Notes


12/31/2010


3/31/2010Current AssetsCash and Cash Equivalents




$
586,579


$
385,445Accounts Receivable





80,830



1,926Other Receivable





71,138



27,221Inventories


3



1,140,416



429,738Advance to Suppliers






954,908



55,753Related Parties Receivable


4



573,385



174,543Total Current Assets






3,407,256



1,074,626Non-Current AssetsProperty, Plant & Equipment, net


5



2,234,461



2,286,977Long-Term Investment


6



29,970



29,970Other Assets






8,318



2,984TOTAL ASSETS






5,680,005


$
3,394,557LIABILITIESCurrent LiabilitiesAccounts Payable





$
225,716


$
18,502Taxes Payable


7



1,036,365



622,288Other Payable






575,932



61,573Current Portion of Long-term Debt


9



15,617



-Related Party Payable


8



664,035



973,385Customer Deposits






640,329



69,107Total Current Liabilities






3,157,994



1,734,855Non-Current LiabilitiesLong-term Debt


9



49,962



-TOTAL LIABILITIES






3,207,956



1,734,855





STOCKHOLDER’S EQUITYPreferred Stock ($0.001 par value, 10,000,000 shares authorized, 0 share issued and outstanding at December 31 and March 31, 2010)

Common Stock ($0.001 par value, 100,000,000 shares authorized, 52,546,997 and 26,546,997 shares issued and outstanding at December 31 and March 31, 2010 respectively)



52,547



26,547Additional Paid in Capital



494,835



835Retained Earnings



1,832,775



1,634,480Accumulated Other Comprehensive Income



91,892



(2,160
)TOTAL STOCKHOLDER’S EQUITY



2,472,049



1,659,702TOTAL LIABILITIES AND STOCKHOLDER’S EQUITY


$
5,680,005


$
3,394,557






See Notes to Consolidated Financial Statements and Accountant’s Report
 -2-




Rebornne (USA), Inc.
 Consolidated Statements of Operations
 For the three and nine-month periods ended December 31, 2010 and 2009
 (Stated in US Dollars)





3 Months


9 Months


3 Months


9 MonthsEnded


Ended


Ended


EndedNote


12/31/2010


12/31/2010


12/31/2009


12/31/2009RevenueSales





$
938,901


$
3,666,365


$
1,081,345


$
3,484,800Cost of Goods Sold






168,400



1,520,002



616,145



1,924,358Gross Profit






770,501



2,146,363



465,200



1,560,442Operating ExpensesSelling Expenses






209,043



530,283



166,715



682,148General & Administrative Expenses






480,751



1,372,748



274,796



727,762Total Operating Expenses






689,794



1,903,031



441,511



1,409,910Operating Income






80,707



243,332



23,689



150,532Other Income (Expenses)Other Income






308



321



-



853Other Expenses






-



(3,547
)


(136
)


(226
)Interest Income






-



105



-



8Interest Expense






(2,064
)


(3,447
)


(782
)


(1245
)Total Other Income (Expenses)






(1,756
)


(6,568
)


(918
)


(610
)Earnings before Tax






78,951



236,764



22,771



149,922Income Tax






(38,469
)


(38,469
)


-



-Net Income





$
40,482


$
198,295


$
22,771


$
149,922





Earnings per share-Basic


0.00



0.00



0.00



0.00-Diluted


0.00



0.00



0.00



0.00Weighted average shares outstanding-Basic


52,546,997



52,546,997



6,546,997



26,546,997-Diluted


52,546,997



52,546,997



26,546,997



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
 As of December 31, 2010 and March 31, 2010
 (Stated in US Dollars)


AccumulatedNumber





Additional





Otherof


Common


Paid in


Retained


ComprehensiveShares


Stock


Capital


Earnings


Income


TotalBalance at April 1, 2009


26,546,997


$
26,547


$
835


$
2,519,984


$
9,748


$
2,557,114Net Income


-



-



-



334,573



-



334,573Distribution of Dividends


-



-



-



(1,220,077
)


-



(1,220,077
)Foreign Currency Translation Adjustment


-



-



-



-



(11,908
)


(11,908
)Balance at March 31, 2010


26,546,997


$
26,547


$
835


$
1,634,480


$
(2,160
)

$
1,659,702Balance 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



494,000



-



-



520,000Net Income


-



-



-



198,295



-



198,295Distribution of Dividends


-



-



-



-



-



-Foreign Currency Translation Adjustment


-



-



-



-



94,052



94,052Balance at December  31, 2010


52,546,997


$
52,547


$
494,835


$
1,832,775


$
91,892


$
2,472,049





Comprehensive Income12/31/2010


3/31/2010


Accumulated TotalNet Income

$
198,295


$
334,573


$
532,868Foreign Currency Translation Adjustment


94,052



(11,908
)


82,144292,347


$
322,665


$
615,012





See Notes to Consolidated Financial Statements and Accountant’s Report
 -4-







Rebornne (USA), Inc.
 Consolidated Statements of Cash Flows
 As of December 31, 2010 and March 31, 2010
 (Stated in US Dollars)




3 Months


9 Months


3 Months


9 MonthsEnded


Ended


Ended


Ended12/31/2010


12/31/2010


12/31/2009


12/31/2009Cash Flows from Operating ActivitiesCash Received from Customers

$
969,614


$
4,114,765


$
1,017,843


$
3,401,086Cash Paid to Suppliers & Employees


(1,837,308
)


(4,594,719
)


(765,487
)


(2,139,467
)Cash Paid for Selling Expenses


(56,431
)


(196,849
)


(183,190
)


(540,573
)Cash Received for Other Income


308



321



-



853Cash Paid for Other Expenses


-



(3,547
)


(136
)


(226
)Interest Received


-



105



-



8Interest Paid


(2,064
)


(3,447
)


(782
)


(1,245
)VAT and Other Tax (Payments)/Refunds Received


158,014



375,608



39,635



92,926Cash Sourced/(Used) in Operating Activities


(767,867
)


(307,763
)


107,883



813,362Cash Flows from Investing ActivitiesPurchase of Property, Plant, and Equipment


(35,391
)


(89,478
)


-



(301,308
)Proceeds from Disposal of Property, Plant and Equipment


-



3,100



-



-Purchase of Other Assets


-



(5,334
)


-



(4
)Payment for Long-term Investment


-



-



-



(30,299
)Cash Used/(Sourced) in Investing Activities


(35,391
)


(91,712
)


-



(331,611
)Cash Flows from Financing ActivitiesIssuance of Common Stock


520,000



520,000



-



-Payment of Long-term Debt


(11,256
)


(13,443
)


-



-Cash Sourced/(Used) in Financing Activities


508,744



506,557



-



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


(294,514
)


107,082



107,883



481,751Effect of Other Comprehensive Income


30,874



94,052



(14,848
)


(3,162
)Cash & Cash Equivalents at Beginning of Period


850,219



385,445



389,218



3,664Cash & Cash Equivalents at End of Period


586,579



586,579



482,253



482,253Non-cash Investing ActivityPurchase of Motor Vehicle by Way of Long-term Debt


-



66,628



-



-






See Notes to Consolidated Financial Statements and Accountant’s Report
 -5-




Rebornne (USA), Inc.
 Reconciliation of Net Income to Cash Sourced/(Used) in Operations
 For the three- and nine-month periods ended December 31, 2010 and 2009
 (Stated in US Dollars)


3 Months


9 Months


3 Months


9 MonthsEnded


Ended


Ended


Ended12/31/2010


12/310/2010


9/30/2009


9/30/2009Net Income

$
40,482


$
198,295


$
22,771


$
149,922Adjustments to Reconcile Net Income toNet Cash Provided by Operating Activities:Depreciation


78,294



214,645



65,912



201,422Loss on Disposal of Property, Plant and Equipment


-



3,271



-



-Decrease/(Increase) in Accounts Receivable


(55,099
)


(78,904
)


(16,968
)


(43,688
)Decrease/(Increase) in Other Receivable


(11,071
)


(43,917
)


(75,259
)


(102,577
)Decrease/(Increase) in Inventories


364,994



(710,678
)


(275,094
)


(80,049
)Decrease/(Increase) in Advance to Suppliers


(878,113
)


(899,155
)


43,464



(46,136
)Decrease/(Increase) in Related Parties Receivable


41,636



(398,842
)


(45,885
)


(106,237
)Increase/(Decrease) in Accounts Payable


(592,277
)


207,214



223,073



197,890Increase/(Decrease) in Taxes Payable


196,483



414,077



39,635



92,926Increase/(Decrease) in Other Payable


32,682



514,359



(36,502
)


46,389Increase/(Decrease) in Related Party Payable


(82,761
)


(299,350
)


134,011



440,948Increase/(Decrease) in Customer Deposits


96,883



571,222



28,725



62,551Total of all adjustments


(808,349
)


(506,058
)


85,112



663,440Cash Sourced (Used) in Operation

$
(767,867
)

$
(307,763
)

$
107,883


$
813,362








See Notes to Consolidated Financial Statements and Accountant’s Report
 -6-


Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010







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.











-7-





Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010





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 three 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 December 31, 2010, 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.








-8-


Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010








(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; major improvements enhancing the function and/or useful life are capitalized.  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.





Property, plant, and equipment are depreciated using the straight-line or declining balance method over their estimated useful lives.  Their useful lives are as follows:





Fixed Assets Classification
Useful LivesProperty and Leasehold Improvements
10 YearsEquipment and Furniture
2.5 to 10 YearsMotor Vehicles
4 to 10 Years




-9-
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010






(I)
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.





(J)
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.





(K)
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.







-10-


Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010





(L)
Revenue Recognition





Revenue from product sales is recognized net of discounts and trade allowances when the goods are shipped and title has passed.





(M)
Cost of Goods Sold





Cost of goods sold is primarily comprised of cost of goods, and other purchasing and receiving overhead costs.




(N)
Selling Expenses





Selling expenses include outbound freight, wages of the sales force, client entertainment, commissions, and advertising.





(O)
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, utility, and rental.





(P)
Advertising Expenses





Costs related to advertising and promotion expenditures are expensed as incurred during the year.  Advertising costs are charged to selling expense.





(Q)
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.





(R)
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.




-11-


Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010




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%





(S)
Foreign Currency Translation





The Company and its operating subsidiaries Rebornne New Zealand Limited, Rebornne (Guangzhou) Dairy Company and Rebornne (Shenzhen) Dairy Company 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.





For financial reporting purposes, the financial statements of Rebornne NZ, Rebornne Guangzhou and Rebornne Shenzhen, 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.






-12-
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010




Exchange Rates

12/31/10


03/31/10


12/31/09Period end RMB : US$ exchange rate


6.6118



6.8361



6.8372Average period RMB : US$ exchange rate


6.7600



6.8383



6.8390Period end NZD : US$ exchange rate


1.3009



1.4073



1.3938Average period HKD : US$ exchange rate


1.3806



1.4845



1.5083





(T)
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 and related party payable. The recorded values of these financial instruments approximate their fair values due to their short-term nature.





(U)
Recent Accounting Pronouncements





In May 2009, the FASB issued SFAS No. 165, Subsequent Events (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosing of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. SFAS 165 does not significantly change the types of subsequent events that an entity reports, but it requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. SFAS 165 is effective for interim or annual reporting requirements ending after June 15, 2009. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows of the Company.





In June 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-01, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162(“ASU 2009-01”). ASU 2009-01 established the Accounting Standards Codification (the “Codification”) as the source of authoritative GAAP recognized by the FASB to be applied to nongovernmental entities. The Codification supersedes all prior non-SEC accounting and reporting standards. Following ASU 2009-01, the FASB will not issue new accounting standards in the form of FASB Statements, FASB Staff Positions, or Emerging Issues Task Force abstracts. ASU 2009-01 also modifies the existing hierarchy of GAAP to include only two levels — authoritative and non-authoritative. ASU 2009-01 is effective for financial statements issued for interim and annual periods ending after September 15, 2009, and early adoption was not permitted. The adoption of this standard did not have an impact on the financial position, results of operations or cash flows of the Company.





-13-
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010








In August 2009, the FASB issued ASU 2009-05, Fair Value Measurements and Disclosures (Topic 820) - Measuring Liabilities at Fair Value (“ASU 2009-05”). ASU 2009-05 addresses concerns in situations where there may be a lack of observable market information to measure the fair value of a liability, and provides clarification in circumstances where a quoted market price in an active market for an identical liability is not available. In these cases, reporting entities should measure fair value using a valuation technique that uses the quoted price of the identical liability when that liability is traded as an asset, quoted prices for similar liabilities, or another valuation technique, such as an income or market approach. ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. ASU 2009-05 is effective for the first reporting period subsequent to August 2009 and the adoption of this update is not expected to have a material impact on the financial position, results of operations, or cash flows of the Company.





In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140 (“SFAS 166”). SFAS 166 amends the application and disclosure requirements of SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities — a Replacement of FASB Statement 125(“SFAS 140”), removes the concept of a “qualifying special purpose entity” from SFAS 140 and removes the exception from applying FASB Interpretation (“FIN”) No. 46(R), Consolidation of Variable Interest Entities — an Interpretation of ARB No. 51 (“FIN 46(R)”) to qualifying special purpose entities. SFAS 166 is effective for the first annual reporting period that begins after November 15, 2009, and early adoption is not permitted. The adoption of this standard is not anticipated to have a material impact on the financial position, results of operations or cash flows of the Company.





In October 2009, the FASB issued ASU 2009-13, Revenue Recognition (Topic 605) — Multiple-Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task Force (“ASU 2009-13”). ASU 2009-13 addresses the accounting for multiple-deliverable arrangements where products or services are accounted for separately rather than as a combined unit, and addresses how to separate 71 deliverables and how to measure and allocate arrangement consideration to one or more units of accounting. Existing GAAP requires an entity to use vendor-specific objective evidence (“VSOE”) or third-party evidence of a selling price to separate deliverables in a multiple-deliverable selling arrangement. As a result of ASU 2009-13, multiple-deliverable arrangements will be separated in more circumstances than under current guidance. ASU 2009-13 establishes a selling price hierarchy for determining the selling price of a deliverable. The selling price will be based on VSOE if it is available, on third-party evidence if VSOE is not available, or on an estimated selling price if neither VSOE nor third-party evidence is available. ASU 2009-13 also requires that an entity determine its best estimate of selling price in a manner that is consistent with that used to determine the selling price of the deliverable on a stand-alone basis, and increases the disclosure requirements related to an entity’s multiple-deliverable revenue arrangements. ASU 2009-13 must be prospectively applied to all revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, and early adoption is permitted. Entities may elect, but are not required, to adopt the amendments retrospectively for all periods presented. The Company expects to adopt the provisions of ASU 2009-13 on January 1, 2011 and does not believe that the adoption of this standard will have a material impact on the financial position, results of operations, or cash flows of the Company.






-14-
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010





In December 2009, the FASB issued ASU 2009-17, Consolidations (Topic 810) — Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. ASU 2009-17 replaces the quantitative-based risk and rewards calculation for determining which reporting entity, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which reporting entity has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more effective for identifying which reporting entity has a controlling financial interest in a variable interest entity. ASU 2009-17 also requires additional disclosures about a reporting entity’s involvement in variable interest entities. The provisions of ASU 2009-17 are to be applied beginning in the first fiscal period beginning after November 15, 2009. The Company adopted ASU 2009-17 on January 1, 2010 and does not anticipate that the adoption of this standard will have a material effect on the financial position, results of operations, or cash flows of the Company.





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 Company adopted the provisions of ASU 2010-02 on January 1, 2010 and does not anticipate that the adoption of this standard will have a material impact on the financial position, results of operations, or cash flows of the Company.






-15-


Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010


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 Company adopted the provisions of ASU 2010-06 on January 1, 2010 and does not anticipate that the adoption of this standard will have a material impact on the financial position, results of operations, or cash flows of the Company.





(V)
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.





3.
Inventories





12/31/2010


3/31/2010Raw materials

$
436,530


$
49,808Finished goods


703,886



379,930$
1,140,416


$
429,738




-16-


Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010




4.
Related Parties Receivable





12/31/2010


03/31/2010Rebornne Trading Company Limited

$
47,450


$
48,004Rebornne Dairy Dongying Company


207,881



126,539Pai Cun (Guangzhou) Health Limited


318,054



-$
573,385


$
174,543





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





Accumulated12/31/2010

Cost


Depreciation


NetProperty and Leasehold Improvements

$
794,436


$
232,880


$
561,556Equipment and Furniture


1,702,908



360,595



1,342,313Motor Vehicles


395,248



64,656



330,592$
2,892,592


$
658,131


$
2,234,461Accumulated3/31/2010

Cost


Depreciation


NetProperty and Leasehold Improvements

$
765,056


$
96,457


$
668,599Equipment and Furniture


1,638,590



221,329



1,417,261Motor Vehicles


323,544



122,427



201,117$
2,727,190


$
440,213


$
2,286,977








-17-


Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010





6.
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 September 30, 2010, 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 September 30, 2010 and March 31, 2010, 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.





7.
Taxes Payable





12/31/2010


03/31/2010Value Added Tax

$
880,021


$
524,971Other Tax


32,856



19,405Income Tax Payable


123,488



77,912$
1,036,365


$
622,288







-18-
 
 Rebornne (USA), Inc.
 Notes to Consolidated Financial Statements
 As of and for the nine-month periods ended December 31, 2010 and March 31, 2010


8.
Related Party Payable





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.





9.
Long-term Debt





12/31/2010


03/31/2010Motor Vehicle Loan

$
65,579


$
-Less: Current Portion


15,617



-$
49,962


$
-




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 $2,443 per month.





10.
Commitments





The Company and its three wholly owned subsidiaries have operating leases for their premises expiring between October 2010 and May 2016.  The minimum lease payments until March 31, 2011 and for the next four fiscal years are as follows:





2011                      $  29,484


2012                      $  97,687


2013                      $  92,720


2014                      $  98,529


2015                      $  98,529





11.
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.










-19-





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





The following discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to future events or our future performance. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this prospectus. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.





Company Overview





Rebornne (USA) Inc. f/k/a BTX Holdings, Inc. was incorporated under the laws of the State of Florida on April 24, 2003. Activities during the development stage include developing the business plan, acquiring technology and raising capital.





Pursuant to a share purchase agreement, dated December 30, 2005, BioTex Corporation, consummated an agreement with Rebornne (USA) Inc. f/k/a BTX Holdings, Inc., pursuant to which BioTex Corporation, exchanged all of its 180,551 then issued and outstanding shares of common stock for 179,145 shares or approximately 89% of the common stock of Rebornne (USA) Inc. f/k/a BTX Holdings, Inc. Effective March 8, 2010, we spun-off and sold BioTex Corp to Scott Silverman, the former President of the Company, in exchange for (i) the forgiveness of accrued salary of $397,169 owed to him as of January 29, 2010, (ii) the return and cancellation of his outstanding stock options and (iii) the cancellation of his employment agreement.





On January 29, 2010, the Company entered into a share purchase agreement (the “Purchase Agreement”) with Rebornne New Zealand Limited (“Rebornne”). On March 22, the Company completed the transactions contemplated by the Purchase Agreement pursuant to which the Company issued a total of 750,000 shares (post reverse split), representing approximately 51% of the issued and outstanding common stock of the Company after the reverse split on the closing date, to Rebornne for a cash payment of $240,000. As a result, Rebornne became the majority shareholder of the Company.  The transaction resulted in a change in control of the Company.





In connection with the change of control transaction, Scott J. Silverman resigned from the Board of Directors effective April 2, 2010, which is ten (10) days following the filing and mailing of the Schedule 14f-1 as promulgated by the Securities Exchange Act of 1934. On March 22, 2010, Mr. Silverman resigned from all his positions as officer of the Company effectively immediately. Dairy Global was appointed as the sole officer of the Company effectively immediately and appointed as the sole director effective April 12, 2010.





On March 22, 2010, a 1-for-1.422 reverse stock split (pro-rata decrease) of our issued and outstanding shares of common stock was declared effective by OTC Corporate Actions, as well as our corporate name changing from “BTX Holdings Inc.” to “Rebornne (USA), Inc.”





On May 28, 2010, we acquired Rebornne New Zealand Limited, a New Zealand Corporation, (“Rebornne NZ”) through a share exchange transaction. Pursuant to the terms of the exchange agreement, we acquired all of the outstanding shares of Rebornne NZ and in exchange, we issued an aggregate of 26,546,997 shares of our common stock to the Rebornne NZ shareholders, their designees or assigns, which totals 92.2% of our issued and outstanding shares on a fully diluted bases as of and immediately after the Closing of the Share Exchange.   Rebornne NZ 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 People’s Republic of China. 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, covering a total of 9,000 (increasing) sale locations throughout China.




-20-


Results of Operations





Results of Operations for the Three Months ended December 31, 2010 Compared to the Three Months ended December 31, 2009





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.





31/12/2010


31/12/2009


DifferenceFor three months ended

USD


%


USD


%


%RevenuesSales


938,901



100.0



1,081,345



100.0



(13.17
)Cost of Goods Sold


168,400



17.94



616,145



56.98



(72.67
)Gross profit


770,501



82.06



465,200



43.02



65.63Operating ExpensesSelling Expenses


209,043



22.26



166,715



15.42



25.39General & Administrative Expenses


480,751



51.20



274,796



25.41



74.95Total Operating Expenses


689,794



73.47



441,511



40.83



56.23Operating Income


80,707



8.60



23,689



2.19



240.69Other Income (Expenses)Other Income


308



0.03



-



-



-Other Expenses


-



-



(136
)


(0.01
)


-Interest Income


-



-



-



-



-Interest Expense


(2,064
)


(0.22
)


(782
)


(0.07
)


163.9Total Other Income/ (Expenses)


(1,756
)


(0.19
)


(918
)


(0.08
)


91.29Earnings before Tax


78,951



8.41



22,771



2.11



246.72Income Tax


(38,469
)


(4.10
)


-



-



-Net Income


40,482



4.31



22,771



2.11



77.78





Net Revenue:





Net revenue for the three months ended December 31, 2010 decreased by USD142,444 or 13.17% from USD 1,081,345 for the three months ended December 31, 2009 to USD938,901. The net revenue was decreased slightly might affect by the colostrums product sales. We are having long negotiation about withdrawing distributor right of colostrums from our current colostrums distributor. And hence there was no order been placed since October 2010.





Cost of sales:





Our cost of sales decreased by USD447,745 or 72.67% from USD616,145 for the three months ended December 30, 2009 to USD168,400 for the three months ended December 31, 2010. The decrease of cost of sales might due to the reason that less manufacturing was happened during this period.





Gross profit:





Gross profit increased by USD305,301 or 65.63% from USD465,200 for the three months ended December 31, 2009 to USD 770,501 for the three months ended December 31, 2010. The gross profit increased since there is a huge decrease of cost of goods sold.





Operating Expenses:





The total operating expenses increased by USD 248,283 or 56.23% from USD 441,511 for the three months ended December 31, 2009 to USD689,794 for the three months ended December 31, 2010. The selling expenses in 2009 were mainly for Rebornne products air freight shipment and business trip. However the selling expenses in 2010 are mainly applied for products promotions, business conference events, professional fees and increased numbers of employees.





Operating Income:





The operating income was USD80,707 for the three months ended December 31, 2010 compared to USD23,689 for three months ended December 31, 2009, there is a significant increase of USD57,018 or 240.69%. The operating income in 2010 has increased is due to the gradual gross profit rose.





Net Income:





The net income was USD22,771 for the three months ended December 31, 2009 compared to USD40,482 for the three months ended December 31, 2010,  show an increase of USD 17,771 or 77.78%. The net income increases because the revenues have increased.




-21-


Results of Operations for the Nine Months ended December 31, 2010 Compared to the Nine Months ended December 31, 2009





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.





30/9/2010


30/9/2009


DifferenceFor the Nine Months Ended

USD


%


USD


%


%RevenuesSales


3,666,365



100.0



3,484,800



100.0



5.21Cost of Goods Sold


1,520,002



41.46



1,924,358



55.22



(21.01
)Gross profit


2,146,363



58.54



1,560,442



44.78



37.55Operating ExpensesSelling Expenses


530,283



14.46



682,148



19.57



(22.26
)General & Administrative Expenses


1,372,748



37.44



727,762



20.88



88.63Total Operating Expenses


1,903,031



51.91



1,409,910



40.46



34.98Operating Income


243,332



6.64



150,532



4.32



61.65Other Income (Expenses)Other Income


321



0.01



853



0.02



(62.37
)Other Expenses


(3,547
)


(0.10
)


(226
)


(0.01
)


1469.45Interest Income


105



0.002



8



0.00



1212.5Interest Expense


(3,447
)


(0.09
)


(1245
)


(0.04
)


176.87Total Other Income/ (Expenses)


(6,568
)


(0.18
)


(610
)


(0.02
)


976.72Earnings before Tax


236,764



6.46



149,922



4.30



57.92Income Tax


(38,469
)


(1.05
)


-



-



-Net Income


198,295



5.41



149,922



4.30



32.27





Net Revenue:





Net revenue for the nine months ended December 31, 2010 increased by USD181, 565 or 5.21% from USD 3,484,800 for the nine months ended December 31, 2009 to USD 3,666,365 in December 31, 2010. The sales in 2010 seem to getting better compared to 2009.





Cost of sales:





The cost of sales decreased by USD404, 356 or 21.01% from USD1, 924,358 for the nine months ended December 31, 2009 to USD1, 520,002 for the nine months ended December 31, 2010. The reason for cost of sales is higher in 2009 is because there were large amount of goods manufactured in the year end of 2009.





Gross profit:





Gross profit increased by USD585, 921 or 37.55% from USD 1,560,442 for the nine months ended December 31, 2009 to USD 2,146,363 for the nine months ended December 31, 2010. The increase of gross profit is in the line of the increase in revenues nine months ended 2010.





Operating Expenses:





The total operating expenses increased by USD 493,121 or 34.98% from USD1, 409,910 for the nine months ended December 31, 2009 to USD 1903,031 for the nine months ended December 31, 2010. The increase of the total operating expenses is because the business is expanding and more promotion events had been running and professional fees applied.





Operating Income:





The operating income was USD243, 332 for the nine months ended December 31, 2010 compared to USD150, 532 for nine months ended December 31, 2009, there is increase of USD92, 800 or 61.65%. The reason for the increase is because our revenues have increased smoothly.





Net Income:





The net income was USD 149,922 for the nine months ended December 31, 2009 compared to USD198, 295 for the nine months ended December 31, 2010, a gradual increase of USD 48,373 or 32.27%. The increase in net revenues is the main reason to lead the increase in net income.




-22-




Liquidity and Capital Resources





The following table sets forth the summary of our cash flows stated in US Dollar for the three months ended December 31, 2009 and 2010.





31/12/2010


31/12/2009Cash Flows from Operating Activities


(767,867
)


107,883Cash Flows from Investing Activities


(35,391
)


-Cash Flows from Financing Activities


508,744



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


(294,514
)


107,883Effect of other Comprehensive Income


30,874



(14,848
)Cash & Cash Equivalents at Beginning of Period


850,219



389,218Cash & Cash Equivalents at End of Period


586,579



482,253





Operating Activities:





During the three months ended December 31, 2010, net cash provided by operating activities was (USD767,867), as compared to net cash used for operating activities of USD107,883 in the three months ended December 31, 2009. The negative cash flows from operating activities in 2010 is mainly because payment for a big order of products in the early October and also involve the compensation of colostrums distributor right from current distributor.





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 USD586,579 as December 30, 2010, as compared to USD482, 253 as of December 31, 2009. The primary uses of cash are for selling and marketing expenses, development expenses and investment capital.





Critical Accounting Policies





Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.





Recent Accounting Pronouncements





In May 2009, the FASB issued SFAS No. 165, Subsequent Events (“SFAS 165”). SFAS 165 establishes general standards of accounting for and disclosing of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. SFAS 165 does not significantly change the types of subsequent events that an entity reports, but it requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. SFAS 165 is effective for interim or annual reporting requirements ending after June 15, 2009. The adoption of this standard did not have a material impact on our financial position, results of operations or cash flows of the Company.





In June 2009, the FASB issued Accounting Standards Update (“ASU”) 2009-01, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162(“ASU 2009-01”). ASU 2009-01 established the Accounting Standards Codification (the “Codification”) as the source of authoritative GAAP recognized by the FASB to be applied to nongovernmental entities. The Codification supersedes all prior non-SEC accounting and reporting standards. Following ASU 2009-01, the FASB will not issue new accounting standards in the form of FASB Statements, FASB Staff Positions, or Emerging Issues Task Force abstracts. ASU 2009-01 also modifies the existing hierarchy of GAAP to include only two levels — authoritative and non-authoritative. ASU 2009-01 is effective for financial statements issued for interim and annual periods ending after September 15, 2009, and early adoption was not permitted. The adoption of this standard did not have an impact on the financial position, results of operations or cash flows of the Company.





In August 2009, the FASB issued ASU 2009-05, Fair Value Measurements and Disclosures (Topic 820) - Measuring Liabilities at Fair Value (“ASU 2009-05”). ASU 2009-05 addresses concerns in situations where there may be a lack of observable market information to measure the fair value of a liability, and provides clarification in circumstances where a quoted market price in an active market for an identical liability is not available. In these cases, reporting entities should measure fair value using a valuation technique that uses the quoted price of the identical liability when that liability is traded as an asset, quoted prices for similar liabilities, or another valuation technique, such as an income or market approach. ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. ASU 2009-05 is effective for the first reporting period subsequent to August 2009 and the adoption of this update is not expected to have a material impact on the financial position, results of operations, or cash flows of the Company.




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In June 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140 (“SFAS 166”). SFAS 166 amends the application and disclosure requirements of SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities — a Replacement of FASB Statement 125(“SFAS 140”), removes the concept of a “qualifying special purpose entity” from SFAS 140 and removes the exception from applying FASB Interpretation (“FIN”) No. 46(R), Consolidation of Variable Interest Entities — an Interpretation of ARB No. 51 (“FIN 46(R)”) to qualifying special purpose entities. SFAS 166 is effective for the first annual reporting period that begins after November 15, 2009, and early adoption is not permitted. The adoption of this standard is not anticipated to have a material impact on the financial position, results of operations or cash flows of the Company.





In October 2009, the FASB issued ASU 2009-13, Revenue Recognition (Topic 605) — Multiple-Deliverable Revenue Arrangements, a consensus of the FASB Emerging Issues Task Force (“ASU 2009-13”). ASU 2009-13 addresses the accounting for multiple-deliverable arrangements where products or services are accounted for separately rather than as a combined unit, and addresses how to separate 71 deliverables and how to measure and allocate arrangement consideration to one or more units of accounting. Existing GAAP requires an entity to use vendor-specific objective evidence (“VSOE”) or third-party evidence of a selling price to separate deliverables in a multiple-deliverable selling arrangement. As a result of ASU 2009-13, multiple-deliverable arrangements will be separated in more circumstances than under current guidance. ASU 2009-13 establishes a selling price hierarchy for determining the selling price of a deliverable. The selling price will be based on VSOE if it is available, on third-party evidence if VSOE is not available, or on an estimated selling price if neither VSOE nor third-party evidence is available. ASU 2009-13 also requires that an entity determine its best estimate of selling price in a manner that is consistent with that used to determine the selling price of the deliverable on a stand-alone basis, and increases the disclosure requirements related to an entity’s multiple-deliverable revenue arrangements. ASU 2009-13 must be prospectively applied to all revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010, and early adoption is permitted. Entities may elect, but are not required, to adopt the amendments retrospectively for all periods presented. The Company expects to adopt the provisions of ASU 2009-13 on January 1, 2011 and does not believe that the adoption of this standard will have a material impact on the financial position, results of operations, or cash flows of the Company.





In December 2009, the FASB issued ASU 2009-17, Consolidations (Topic 810) — Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. ASU 2009-17 replaces the quantitative-based risk and rewards calculation for determining which reporting entity, if any, has a controlling financial interest in a variable interest entity with an approach focused on identifying which reporting entity has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance and (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. An approach that is expected to be primarily qualitative will be more effective for identifying which reporting entity has a controlling financial interest in a variable interest entity. ASU 2009-17 also requires additional disclosures about a reporting entity’s involvement in variable interest entities. The provisions of ASU 2009-17 are to be applied beginning in the first fiscal period beginning after November 15, 2009. The Company adopted ASU 2009-17 on January 1, 2010 and does not anticipate that the adoption of this standard will have a material effect on the financial position, results of operations, or cash flows of the Company.





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 Company adopted the provisions of ASU 2010-02 on January 1, 2010 and does not anticipate that the adoption of this standard will 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 Company adopted the provisions of ASU 2010-06 on January 1, 2010 and does not anticipate that the adoption of this standard will have a material impact on the financial position, results of operations, or cash flows of the Company.




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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 4T. 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





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.





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PART II - OTHER INFORMATION





Item 1. Legal Proceedings





We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.





Item 1A. Risk Factors





Not applicable because we are a smaller reporting company.





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





None.





Item 3. Defaults Upon Senior Securities.





None





Item 4. (Removed and Reserved)





Item 5. Other Information





None.





Item 6. Exhibits





(a)         Exhibits





31.1 Certifications pursuant to Section 302 of Sarbanes Oxley Act of 2002





32.1 Certifications pursuant to Section 906 of Sarbanes Oxley Act of 2002





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SIGNATURES





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





REBORNNE (USA), INC.Date:  February 22, 2011
By:
/s/ Dairy GlobalDairy GlobalPresident,Chief Executive Officer,

Chief Financial Officer











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