As filed with the Securities and Exchange Commission on June 21, 2006

                           Registration No. 333-125344
================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                 AMENDMENT NO. 1
                                       TO

                                   FORM SB-2
                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933
                               EYI INDUSTRIES INC.
                (Name of registrant as specified in its charter)


              Nevada                           2833                   88-0407078
                                                                
   (State or Other Jurisdiction     (Primary Standard Industrial    (I.R.S. Employer
of Incorporation or Organization)    Classification Code Number)    Identification No.)


                                                         Jay Sargeant
           7865 Edmonds Street                        7865 Edmonds Street
               Burnaby, BC                                Burnaby, BC
              Canada V3N 1B9                            Canada V3N 1B9
               604-759-5031                              604-759-5031
      (Address and telephone number              (Name, address, and telephone
     of principal executive offices)             number of agent for service)
                                   Copies to:
         Clayton E. Parker, Esq.                   Ronald S. Haligman, Esq.
 Kirkpatrick & Lockhart Nicholson Graham       Kirkpatrick & Lockhart Nicholson
                   LLP                                    Graham LLP
       201 South Biscayne Boulevard              201 South Biscayne Boulevard
                Suite 2000                                Suite 2000
           Miami, Florida 33131                      Miami, Florida 33131
        Telephone: (305) 539-3300                 Telephone: (305) 539-3300
        Telecopier: (305) 358-7095                Telecopier: (305) 358-7095

Approximate  date of  commencement  of proposed  sale of the  securities  to the
public:  As  soon as  practicable  after  this  registration  statement  becomes
effective.

If any of the  securities  being  registered on this Form are to be offered on a
delayed or continuous  basis  pursuant to Rule 415 under the  Securities  Act of
1933 check the following box. |X|

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the  Securities  Act  registration  statement  number of the  earlier  effective
registration statement for the same offering. |_|

If this Form is a  post-effective  amendment filed pursuant to Rule 462(c) under
the  Securities  Act,  check  the  following  box and  list the  Securities  Act
registration  statement  number of the  earlier  of the  effective  registration
statement for the offering. |_|

If this is a  post-effective  amendment  filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier  effective  registration  statement for the same
offering. |_|

If delivery  of the  prospectus  is  expected  to be made  pursuant to Rule 434,
please check the following box. |_|


                         CALCULATION OF REGISTRATION FEE


                                                            Proposed Maximum      Proposed Maximum            Amount
Title Of Each Class                       Amount             Offering Price           Aggregate          Of Registration
Of Securities To Be Registered       To Be Registered         Per Share(1)        Offering Price(1)           Fee(3)
------------------------------       ----------------         ------------        -----------------           ------
                                                                                                 
Common stock, par value $0.001
per share                             739,976,079 (2)                $0.03          $22,199,282.37           $2,375.32
                                      ---------------                -----          --------------           ---------
TOTAL                                 739,976,079 (2)                $0.03          $22,199,282.37           $2,375.32
                                      ===============                =====          ==============           =========



(1)   Estimated  solely for the  purpose of  calculating  the  registration  fee
      pursuant to Rule 457(c) under the Securities Act of 1933. For the purposes
      of this  table,  we have used the  average  of the  closing  bid and asked
      prices as of June 1, 2006.

(2)   Of these  shares,  615,663,401  shares  are  being  registered  underlying
      convertible debentures, 124,062,678 shares are being registered underlying
      warrants  and 250,000  shares were  previously  issued  under a consulting
      agreement.


(3)   Registration fee has previously been paid.


The Registrant hereby amends this  Registration  Statement on such date or dates
as may be necessary to delay its effective date until the Registrant  shall file
a further amendment which specifically  states that this Registration  Statement
shall  thereafter  become  effective  in  accordance  with  Section  8(a) of the
Securities  Act of  1933 or  until  this  Registration  Statement  shall  become
effective on such date as the Commission,  acting pursuant to said Section 8(a),
may determine.




        PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION, DATED JUNE 21, 2006


                               EYI INDUSTRIES INC.
                       739,976,079 SHARES OF COMMON STOCK

      This  Prospectus  relates to the sale of up to  739,976,079  shares of EYI
Industries'  common  stock  by  certain  persons,   who  are,  or  will  become,
stockholders of EYI Industries.

      Please refer to "Selling Stockholders" beginning on page 18.

      EYI  Industries is not selling any shares of common stock in this offering
and therefore will not receive any proceeds from this offering. We did, however,
receive proceeds from the sale of convertible  debentures and we are registering
shares  of  common  stock  underlying  these   convertible   debentures  in  the
accompanying registration statement.

      The  shares of common  stock are  being  offered  for sale by the  selling
stockholders at prices established on the Over-the-Counter Bulletin Board during
the term of this offering.  These prices will fluctuate  based on the demand for
the shares of common stock.  On June 1, 2006,  the last reported  sales price of
our common stock was $0.03 per share.

      Brokers or dealers  effecting  transactions in these shares should confirm
that the shares are registered  under  applicable state law or that an exemption
from registration is available.

      Our common stock is quoted on the  Over-the-Counter  Bulletin  Board under
the symbol "EYII."

      These securities are speculative and involve a high degree of risk. Please
refer to "Risk Factors" beginning on page 6.

      No underwriter or person has been engaged to facilitate the sale of shares
of common stock in this  offering.  This offering will terminate 24 months after
the accompanying  registration statement is declared effective by the Securities
and  Exchange  Commission.  None of the  proceeds  from the sale of stock by the
selling stockholder will be placed in escrow, trust or any similar account.

      The  information  in this  Prospectus  is not complete and may be changed.
This selling  stockholders  may not sell these securities until the accompanying
registration  statement  filed with the  Securities  and Exchange  Commission is
effective. This Prospectus is not an offer to sell these securities in any state
where the offer or sale is not permitted.

      The Securities and Exchange  Commission  and state  securities  regulators
have not  approved  or  disapproved  these  securities,  or  determined  if this
Prospectus  is truthful or  complete.  Any  representation  to the contrary is a
criminal offense.

                 The date of this Prospectus is ______ __, 2006



                                TABLE OF CONTENTS

PROSPECTUS SUMMARY                                                             1
THE OFFERING                                                                   2
SUMMARY CONSOLIDATED FINANCIAL INFORMATION                                     3
FORWARD-LOOKING STATEMENTS                                                    16
SELLING STOCKHOLDERS                                                          17
USE OF PROCEEDS                                                               19
PLAN OF DISTRIBUTION                                                          20
MANAGEMENT'S DISCUSSION AND ANALYSIS  OF FINANCIAL CONDITION AND RESULTS OF
  OPERATIONS                                                                  21
DESCRIPTION OF BUSINESS                                                       31
MANAGEMENT                                                                    51
FISCAL YEAR END OPTIONS/SAR VALUES                                            55
DESCRIPTION OF PROPERTY                                                       58
LEGAL PROCEEDINGS                                                             59
PRINCIPAL SHAREHOLDERS                                                        60
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                62
MARKET PRICE OF AND DIVIDENDS  ON THE REGISTRANT'S COMMON EQUITY AND OTHER
  SHAREHOLDER MATTERS                                                         64
DESCRIPTION OF SECURITIES                                                     69
EXPERTS                                                                       73
LEGAL MATTERS                                                                 73
AVAILABLE INFORMATION                                                         73
INDEX TO FINANCIAL STATEMENTS                                                F-i
PART II                                                                     II-1

--------------------------------------------------------------------------------

Our audited financial statements for the fiscal year December 31, 2005 are
contained in our Annual Report on Form 10-KSB.

                                       i


                               PROSPECTUS SUMMARY

      The following Prospectus Summary contains the most material information on
EYI Industries Inc. You should read the entire Prospectus  carefully,  including
"Risk  Factors"  and our  Financial  Statements  and the notes to the  Financial
Statements before making any investment decision.

                                   OUR COMPANY

      We are in the business of selling,  marketing,  and distributing a product
line  consisting  of  approximately   27  nutritional   products  in  three  (3)
categories,  dietary  supplements,  personal care products and water  filtration
systems. Our most successful product is Calorad, a liquid collagen-based dietary
supplement  presently available on the market. Our products are marketed through
a network  marketing  program in which IBAs  (Independent  Business  Associates)
purchase  products  for  resale  to  retail  customers  as well as for their own
personal use. We have a list of over 380,000 IBAs, of which  approximately 8,500
we consider  "active".  An "active" IBA is one who purchased our products within
the preceding 12 months.  Over 1,200 of these IBAs are considered "very active".
A "very active" IBA is one who is on our automatic Convenience Program (formally
called Auto-Ship Program) and is current with their annual  administration  fee.
Our  Convenience  Program allows our IBAs to set up a reoccurring  order that is
automatically shipped to them each month.

      Our  independent  auditors  have added an  explanatory  paragraph to their
audit issued in  connection  with the financial  statements  for the years ended
December 31, 2005 and December 31, 2004,  relative to our ability to continue as
a  going  concern.  We  have  negative  working  capital  of  $1,578,076  and an
accumulated deficit of $12,223,137 incurred through March 31, 2006, which raises
substantial doubt about our ability to continue as a going concern.  Our ability
to obtain  additional  funding will determine our ability to continue as a going
concern.  Accordingly,  there is substantial doubt about our ability to continue
as a going concern. Our financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

      We have a history of losses.  We have  incurred  an  operating  loss since
inception and had an  accumulated  deficit of  $12,223,137 as of March 31, 2006.
For the three  months  ended March 31, 2006 and 2005,  we incurred a net loss of
$875,922 and $783,788,  respectively.  For the year ended  December 31, 2005 and
2004,  we  incurred  a net  loss of  $4,262,011  and  $4,462,795,  respectively.
Consequently,  we will in all likelihood, have to rely on external financing for
all of our capital requirements.  Future losses are likely to continue unless we
successfully implement our business plan, which calls for us to secure both debt
and equity  financing  while  pursuing  acquisitions  and/or joint ventures with
companies in the nutritional supplement industry.

      The IBAs in our network are  encouraged  to recruit  interested  people to
become  new  distributors  of our  products.  New IBAs are  placed  beneath  the
recruiting  IBA in the  "network"  and are  referred  to as being in that  IBA's
"down-line"  organization.  Our marketing plan is designed to provide incentives
for  IBAs  to  build,   maintain  and  motivate  an  organization  of  recruited
distributors  in  their   down-line   organization  to  maximize  their  earning
potential.  IBAs generate income by purchasing our products at wholesale  prices
and  reselling  them at retail  prices.  IBAs also earn  commissions  on product
purchases generated by their down-line organization.

      On an ongoing basis we review our product line for  duplication  and sales
trends and make adjustments accordingly.  As of March 31, 2006, our product line
consisted of: (i) 18 dietary supplement products;  (ii) 7 personal care products
consisting  primarily  of  cosmetic  and skin care  products;  and (iii) 2 water
filtration  system  products.   Our  products  are  primarily   manufactured  by
Nutri-Diem,  Inc.,  a  related  party,  and  sold  by us  under  a  license  and
distribution  agreement  with  Nutri-Diem  Inc.  Certain of our own products are
manufactured  for us by  third  party  manufacturers  pursuant  to  formulations
developed  for us.  Our  products  are sold to our IBAs  located  in the  United
States, Canada and Asia.

      We  believe  that our  network  marketing  system is  suited to  marketing
dietary  supplements,  personal  care  products  and water  filtration  systems,
because  sales of such products are  strengthened  by ongoing  personal  contact
between IBAs and their  customers.  Our network  marketing  system  appeals to a
broad  cross-section of people,  particularly those looking to supplement family
income or who are  seeking  part-time  work.  IBAs are  given  the  opportunity,
through  our  sponsored  events and  training  sessions,  to network  with other
distributors, develop selling skills and establish personal goals. We supplement
monetary incentives with other forms of recognition, in order to motivate IBAs.

                                    ABOUT US

      Our  principal  place of  business  is  located  at 7865  Edmonds  Street,
Burnaby,  BC  Canada,  V3N 1B9 and  our  telephone  number  at that  address  is
604-759-5031.



                                  THE OFFERING

      This offering  relates to the sale of common stock by certain  persons who
are, or will become, our stockholders. The selling stockholders consist of:

o     Cornell Capital Partners,  which intends to sell up to an aggregate amount
      of 431,894,379 shares of common stock,  which includes  307,831,701 shares
      underlying   convertible  debentures  and  124,062,678  shares  underlying
      warrants.


o     TAIB Bank,  B.S.C.,  which  intends to sell up to an  aggregate  amount of
      171,031,292 shares of common stock underlying convertible debentures.


o     Certain Wealth,  Ltd.,  which intends to sell up to an aggregate amount of
      136,800,408 shares of common stock underlying convertible debentures.

o     Rajesh  Raniga,  our Chief  Financial  Officer,  who intends to sell up to
      250,000 shares issued pursuant to a Consulting Agreement.


Common Stock Offered                739,976,079 shares

Offering Price                      Market price

Common Stock Outstanding            260,273,921 shares
Before The Offering(1)

Common Stock Outstanding            1,000,000,000
After The Offering(2)

Use Of Proceeds                     We will not receive any of the proceeds from
                                    the   sale   of   stock   by   the   selling
                                    stockholders. See "Use of Proceeds."

Risk                                Factors  The   securities   offered   hereby
                                    involve a high degree of risk and  immediate
                                    substantial   dilution  and  should  not  be
                                    purchased by investors who cannot afford the
                                    loss of their entire  investment.  See "Risk
                                    Factors" and "Dilution."

Dividend                            Policy We do not intend to pay  dividends on
                                    our  common  stock.  We plan to  retain  any
                                    earnings  for  use in the  operation  of our
                                    business and to find future growth.

Over-The-Counter                    EYII
Bulletin Board Symbol

----------
(1)   Based on shares outstanding as of June 1, 2006.

(2)   Assumes  that  all  739,726,079  shares,  which  are  offered  under  this
      Prospectus,  pursuant to the conversion of convertible  debentures and the
      exercise of warrants are issued.

                                       2


                   SUMMARY CONSOLIDATED FINANCIAL INFORMATION

      The following is a summary of our Financial Statements, which are included
elsewhere in this  Prospectus.  You should read the following data together with
the "Management's  Discussion and Analysis of Financial Condition and Results of
Operations" section of this Prospectus as well as with our Financial  Statements
and the notes therewith.



                                                                For the Three     For the Year     For the Year
                                                                Months Ended         Ended             Ended
                                                                  March 31,       December 31,     December 31,
                                                                     2006             2005             2004
STATEMENT OF OPERATION DATA:                                     (Unaudited)       (Audited)         (Audited)
----------------------------                                     -----------       ---------         ---------
                                                                                        
Revenue                                                        $   1,108,759    $   4,980,408    $   6,085,831

Cost Of Goods Sold                                                   287,952        1,165,976        1,252,118
                                                               -------------    -------------    -------------

Gross Profit Before Commission Expense                               820,807        3,814,432        4,833,713
                                                               -------------    -------------    -------------
Commission Expense                                                   385,443        1,930,925        2,486,743
                                                               -------------    -------------    -------------
Gross Profit After Cost of Goods Sold and Commission Expense         435,364        1,883,507        2,346,743
                                                               -------------    -------------    -------------

Operating Expenses
  Consulting fees                                                    259,736        1,250,278        1,438,362
  Legal and professional                                              74,482          306,948          321,713
  Customer service                                                    40,416          198,500          393,244
  Finance and administration                                         499,973        1,378,118        2,101,842
  Sales and marketing                                                 78,624           15,741          154,638
  Telecommunications                                                  30,660          946,331          492,847
  Wages and benefits                                                 277,571        1,282,438        1,152,728
  Warehouse expense                                                   62,898          171,724          231,268
                                                               -------------    -------------    -------------
    Total Operating Expenses                                       1,324,360        5,550,077        6,286,642
                                                               -------------    -------------    -------------

Loss from Operations                                                (888,996)      (3,666,570)      (3,939,899)
                                                               -------------    -------------    -------------

Other Income (Expenses)                                               (4,346)        (299,835)        (271,346)

Net Loss Before Taxes                                               (893,342)      (3,966,405)      (4,211,245)

Provision For Taxes                                                       --               --               --
                                                               -------------    -------------    -------------

Net Loss Before Allocation To Minority Interest                     (893,342)      (3,966,405)      (4,211,245)

Allocation Of Loss To Minority Interest                               17,420           84,762           88,755

Loss From Discontinued Operations                                         --         (380,368)        (340,305)
                                                               -------------    -------------    -------------

Net Loss                                                       $    (875,922)   $  (4,262,011)   $  (4,462,795)
                                                               =============    =============    =============

Basic And Diluted Net Loss Per Common Share                              nil    $       (0.02)   $       (0.03)
                                                               =============    =============    =============

Weighted Average Number Of Common Stock Shares Outstanding       250,936,751      200,846,048      157,060,345
                                                               =============    =============    =============


                                       3




                                                            March 31,      December 31,     December 31,
                                                               2006            2005            2004
BALANCE SHEET DATA:                                        (Unaudited)      (Audited)       (Audited)
-------------------                                        -----------      ---------       ---------
                                                                                  
Current Assets
  Cash                                                     $    190,837    $     25,639    $         --
  Restricted cash                                                    --              --         100,248
  Accounts receivable                                            94,119          48,783          36,061
  Related party receivables                                          --              --              --
  Prepaid expenses                                               18,485          12,387         852,764
  Inventory                                                     279,225         295,248         239,641
                                                           ------------    ------------    ------------
    Total Current Assets                                        582,666         382,057       1,228,714
                                                           ------------    ------------    ------------

Property, Plant and Equipment, Net                               63,720          49,671          32,596
Deposits                                                         62,336          67,603           2,236
Intangible Assets                                                14,487          15,044          16,561
                                                           ------------    ------------    ------------

    Total Assets                                           $    723,209    $    514,375    $  1,280,107
                                                           ============    ============    ============

Current Liabilities
  Bank indebtedness                                        $         --    $         --    $     72,456
  Accounts payable and accrued liabilities                    1,427,120       1,929,409       1,141,001
  Accounts payable - related parties                            643,622         328,038         159,455
  Interest payable, convertible debt                                 --              --          10,616
  Notes payable - related party                                  90,000          90,000          90,000
  Convertible debt-related party, net of discount                    --              --         379,724
  Customer deposits                                                  --              --              --
   Loan payable, Cornell                                             --              --              --
                                                           ------------    ------------    ------------
    Total Current Liabilities                                 2,160,742       2,347,087       1,853,252
Net Liabilities from discontinued operations                    375,344         375,344         405,838
Minority Interest in Subsidiary                                 244,636         262,057         346,819
                                                           ------------    ------------    ------------

Stockholders' Equity (Deficit)
  Common stock                                                  260,273         217,600         162,753
  Discount on common stock                                           --              --              --
  Additional paid-in capital                                  7,397,617       6,155,518       3,048,606
  Stock warrants                                              2,702,734       2,698,984       2,563,043
  Subscription Receivable                                      (195,000)       (195,000)        (15,000)
  Accumulated deficit                                       (12,223,137)    (11,347,215)     (7,085,205)
                                                           ------------    ------------    ------------
    Total Stockholders' Equity (Deficit)                     (2,057,513)     (2,470,113)     (1,325,802)
                                                           ------------    ------------    ------------

    Total Liabilities And Stockholders' Equity (Deficit)   $    723,209    $    514,375    $  1,280,107
                                                           ============    ============    ============


================================================================================

                                       4


                                  RISK FACTORS

      WE ARE SUBJECT TO VARIOUS  RISKS THAT MAY  MATERIALLY  HARM OUR  BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS. YOU SHOULD CAREFULLY CONSIDER THE
RISKS AND UNCERTAINTIES DESCRIBED BELOW AND THE OTHER INFORMATION IN THIS FILING
BEFORE  DECIDING  TO  PURCHASE  OUR  COMMON  STOCK.  IF ANY OF  THESE  RISKS  OR
UNCERTAINTIES  ACTUALLY OCCUR,  OUR BUSINESS,  FINANCIAL  CONDITION OR OPERATING
RESULTS  COULD BE  MATERIALLY  HARMED.  IN THAT CASE,  THE TRADING  PRICE OF OUR
COMMON STOCK COULD DECLINE AND YOU COULD LOSE ALL OR PART OF YOUR INVESTMENT.

                          RISKS RELATED TO OUR BUSINESS

We Have Historically Lost Money And Losses May Continue In The Future

      We have a history of losses.  We have  incurred  an  operating  loss since
inception and had an accumulated  deficit of $12,223,137  and  $11,347,215 as of
March 31, 2006 and December 31, 2005, respectively. Consequently, we will in all
likelihood,  have  to  rely  on  external  financing  for  all  of  our  capital
requirements.  Future  losses  are  likely to  continue  unless we  successfully
implement our business  plan,  which calls for us to secure both debt and equity
financing  while pursuing  acquisitions  and/or joint ventures with companies in
the nutritional supplement industry.

We Have Been Subject To A Going Concern Opinion From Our Independent Auditors

      Our  independent  auditors  have added an  explanatory  paragraph to their
audit issued in connection  with the financial  statements  for the period ended
December 31, 2005,  relative to our ability to continue as a going  concern.  We
have negative  working capital of $1,578,076 and $1,965,030 as of March 31, 2006
and December 31, 2005,  respectively,  and an accumulated deficit of $12,223,137
incurred  through  March 31,  2006,  which  raises  substantial  doubt about our
ability to continue as a going concern. Our ability to obtain additional funding
will determine our ability to continue as a going concern. Accordingly, there is
substantial  doubt  about  our  ability  to  continue  as a going  concern.  Our
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

If We Are Unable To Raise Additional Capital To Finance Operations, We Will Need
To Curtail Or Cease Our Business Operations

      We have relied on significant  external  financing to fund our operations.
As of March 31, 2006, we had $190,837 in cash and our total current  assets were
$582,666.  As of December 31, 2005, we had $25,639 in cash and our total current
assets were $382,057.  Our current  liabilities  were $2,160,742 and $2,347,087,
respectively,  as of March 31, 2006 and December 31, 2005. We will need to raise
additional  capital  to fund  our  anticipated  operating  expenses  and  future
expansion.  Among other things,  external financing may be required to cover our
operating costs. Unless we obtain profitable operations,  it is unlikely that we
will be able to secure financing from external  sources.  In the event we do not
obtain the necessary financing to fund our anticipated  operating  expenses,  we
will be forced to reduce our personnel and curtail other operating expenses.

      The sale of our common  stock to raise  capital may cause  dilution to our
existing shareholders. Our inability to obtain adequate financing will result in
the need to curtail business operations. Any of these events would be materially
harmful to our business and may result in a lower stock price.  Our inability to
obtain adequate financing will result in the need to curtail business operations
and you could lose your entire investment.

Our Common  Stock May Be Affected By Limited  Trading  Volume And May  Fluctuate
Significantly

      Our common stock is traded on the  Over-the-Counter  Bulletin  Board.  Our
common stock is thinly traded compared to larger, more widely known companies in
the  nutritional  supplement  industry.  Thinly  traded common stock can be more
volatile than common stock traded in an active public  market.  The high and low
bid price of our  common  stock  for the last two  years  was  $0.39 and  $0.02,
respectively.  Our common stock has experienced,  and is likely to experience in
the future,  significant  price and volume  fluctuations,  which could adversely
affect the market  price of our common  stock  without  regard to our  operating
performance. In addition, we believe that factors such as quarterly fluctuations
in our financial  results and changes in the overall economy or the condition of
the  financial  markets  could cause the price of our common  stock to fluctuate
substantially.

                                       5


Our Common Stock Is Deemed To Be "Penny Stock," Which May Make It More Difficult
For Investors To Sell Their Shares Due To Suitability Requirements

      Our common stock is deemed to be "penny  stock" as that term is defined in
Rule 3a51-1 promulgated under the Securities  Exchange Act of 1934. Penny stocks
are stock:

      o     With a price of less than $5.00 per share;

      o     That are not traded on a "recognized" national exchange;

      o     Whose prices are not quoted on the Nasdaq automated quotation system
            (Nasdaq  listed stock must still have a price of not less than $5.00
            per share); or

      o     In issuers with net  tangible  assets less than $2.0 million (if the
            issuer has been in continuous operation for at least three years) or
            $5.0 million (if in continuous operation for less than three years),
            or with  average  revenues  of less than $6.0  million  for the last
            three years.

      Broker/dealers  dealing in penny stocks are required to provide  potential
investors  with a  document  disclosing  the  risks of penny  stocks.  Moreover,
broker/dealers  are required to determine whether an investment in a penny stock
is a suitable  investment for a prospective  investor.  These  requirements  may
reduce  the  potential  market for our common  stock by  reducing  the number of
potential investors. This may make it more difficult for investors in our common
stock to sell  shares to third  parties or to  otherwise  dispose of them.  This
could cause our stock price to decline.

The Issuance Of Preferred  Stock May Entrench  Management Or Discourage A Change
Of Control

      Our Articles of  Incorporation  authorize the issuance of up to 10,000,000
shares of preferred stock that would have designations  rights,  and preferences
determined from time to time by our Board of Directors.  Accordingly,  our Board
of Directors is empowered,  without  stockholder  approval,  to issue  preferred
stock with  dividends,  liquidation,  conversion,  voting,  or other rights that
could  adversely  affect the voting  power or other rights of the holders of our
common stock. In the event of issuance, the preferred stock could be used, under
certain  circumstances,  as a method of  discouraging,  delaying or preventing a
change in control of the  company  or,  alternatively,  granting  the holders of
preferred  stock such rights as to entrench  management.  Current members of our
management  that are large  stockholders  may have peculiar  interests  that are
different form other stockholders.  Therefore,  conflicting interests of certain
members of management and our stockholders may lead to stockholders  desiring to
replace  these  individuals.  In the event this  occurs  and the  holders of our
common stock desired to remove current management, it is possible that our Board
of  Directors  could issue  preferred  stock and grant the holders  thereof such
rights and  preferences so as to discourage or frustrate  attempts by the common
stockholders to remove current management. In doing so, management would be able
to  severely  limit  the  rights of  common  stockholders  to elect the Board of
Directors.  In addition,  by issuing  preferred stock,  management could prevent
other  shareholders from receiving a premium price for their shares as part of a
tender offer.

We May Not Be Able To Compete Effectively  Against Our Competitors,  Which Could
Force Us to Curtail Or Cease Business Operations

      Many of our  competitors  have  significantly  greater  name  recognition,
financial resources and larger distribution  channels. In addition, our industry
is  characterized  by low  barriers  to  entity,  which  means we may face  more
competitors in the future. If we are not able to compete effectively against our
competitors,  we will be forced to curtail or cease our business operations. Our
main competitors are Usana Health Sciences,  Relive  International and Mannatech
Incorporated  based on product  offerings  and sales pay  structure.  Our market
share in the nutrition supplement industry is very small at this time.

Investors  Should Not Rely On An Investment In Our Stock For The Payment Of Cash
Dividends

      We have not paid any cash  dividends  on our  capital  stock and we do not
anticipate  paying cash  dividends in the future.  Investors  should not make an
investment in our common stock if they require dividend income. Any return on an
investment in our common stock will be as a result of any appreciation,  if any,
in our stock price.

                                       6


There Are No Conclusive  Studies  Regarding The Medical  Benefits Of Nutritional
Products

      Many of the ingredients in our current products,  and we anticipate in our
future  products,  will be vitamins,  minerals,  herbs and other  substances for
which there is not a long history of human consumption.  Although we believe all
of our  products  to be safe  when  taken as  directed  by us,  there is  little
experience  with human  consumption  of certain of these product  ingredients in
concentrated  form.  In  addition,  we  are  highly  dependent  upon  consumers'
perception  of the  safety  and  quality  of our  products,  as well as  similar
products  distributed by other companies.  We could be adversely affected in the
event any of our products or any similar products distributed by other companies
should prove or be asserted to be harmful to consumers. In addition,  because of
our dependence  upon consumer  perceptions,  adverse  publicity  associated with
illness or other adverse effects  resulting from  consumers'  failure to consume
our  products  as we suggest  or other  misuse or abuse of our  products  or any
similar  products  distributed by other companies could have a material  adverse
effect on the results of our operations and financial condition.

Adverse  Publicity With Respect To Nutritional  Products May Force Us To Curtail
Or Cease Our Business Operations

      In the future,  scientific  research and/or publicity may not be favorable
to  the  nutritional  product  market  or  any  particular  product,  or  may be
inconsistent with any earlier favorable research or publicity. Future reports of
research that are unfavorable to nutritional  products could force us to curtail
or cease our  business  operations.  Because  of our  dependence  upon  consumer
perceptions,  adverse publicity associated with illness or other adverse effects
resulting  from  the  consumption  of  our  products  or  any  similar  products
distributed  by other  companies  could  have a material  adverse  effect on our
operations.  Such  adverse  publicity  could arise even if the  adverse  effects
associated with such products  resulted from consumers'  failure to consume such
products as directed.  In addition, we may not be able to counter the effects of
negative publicity concerning the efficacy of our products.  Any such occurrence
could have a negative  effect on our operations and force us to curtail or cease
our business operations.

We Will  Have to  Develop  New  Products  In Order To Keep  Pace  With  Changing
Consumer  Demands  Or We  Could Be  Forced  to Cease  Or  Curtail  Our  Business
Operations

      The dietary supplement industry is highly competitive and characterized by
changing consumer preferences and continuous  introduction of new products.  Our
goal  is  to  expand  our  portfolio  of  dietary  supplement  products  through
acquisition of existing  companies and/or products serving niche segments of the
industry.  New  products  must be  introduced  in a timely and regular  basis to
maintain  distributor  and  consumer  interest  and appeal to  varying  consumer
preferences.

      We believe that any future success of our company will depend, in part, on
our ability to anticipate changes in consumer  preferences and acquire,  manage,
develop and introduce,  in a timely manner, new products that adequately address
such  changes.  If we are unable to develop and introduce new products or if our
new  products  are not  successful,  our  sales  may be  adversely  affected  as
customers  seek  competitive  products.  In the past,  we have  engaged  in very
limited  research  and  development  with  respect  to  the  development  of new
products,  as indicated by our lack of research and  development  expenses.  Our
lack of experience in developing and introducing new products  combined with our
limited  financial  resources may prevent us from  successfully  developing  and
introducing  any new  products in the future.  Any  reduction  in  purchases  or
consumption  of our  existing  products  could  force us to curtail or cease our
business operations.

If We Fail To Further  Penetrate  And Expand Our  Business In Existing  Markets,
Then The  Growth In Sales Of Our  Products,  Along With Our  Operating  Results,
Could Be Negatively Impacted

      The success of our  business is  contingent  on our ability to continue to
grow  by  further   penetrating   existing   markets,   both   domestically  and
internationally.  Our ability to further penetrate  existing markets in which we
compete is subject to numerous  factors,  many of which are out of our  control.
For example,  government  regulations  in both our  domestic  and  international
markets can delay or prevent the  introduction,  or require the reformulation or
withdrawal, of some of our products, which could negatively impact our business,
financial  condition and results of  operations.  Also,  our ability to increase
market  penetration in certain countries may be limited by the number of persons
in a given country inclined to pursue a network marketing business  opportunity.
Moreover,  our growth will depend upon  improved  training and other  activities
that enhance  distributor  retention in our markets.  As we continue to focus on
expanding our existing international  operations may increase,  which could harm
our financial conditional and operating results.

                                       7


Failure To Expand Into, Or To Succeed In, New  International  Markets Will Limit
Our Ability To Grow Sales Of Our Products

      We believe that our ability to achieve  future growth is dependent in part
on our ability to continue our international  expansion efforts.  However, there
can be no assurance that we could be able to enter new international  markets on
a timely  basis,  or that new  markets  would be  profitable.  We must  overcome
significant  regulatory and legal barriers  before we can begin marketing in any
foreign market. Our operations in some markets also may be adversely affected by
political, economic and social instability in foreign countries.

      We  may  be  required  to  reformulate  certain  of  our  products  before
commencing  sales in a given  country.  Once we have  entered a market,  we must
adhere to the regulatory and legal requirements of that market. No assurance can
be given that we would be able to  successfully  reformulate our products in any
of our potential  international markets to meet local regulatory requirements or
attract local customers. The failure to do so could result in increased costs of
producing products and adversely affect our financial condition. There can be no
assurance  that we would be able to obtain  and  retain  necessary  permits  and
approvals.

      Also, it is difficult to assess the extent to which our products and sales
techniques would be accepted or successful in any given country.  In addition to
significant  regulatory  barriers,  we may also  encounter  problems  conducting
operations in new markets with  different  cultures and legal systems from those
encountered elsewhere.

      Additionally,  in many markets,  other network marking  companies  already
have significant market penetration, the effect of which could be to desensitize
the  local  distributor  population  to a new  opportunity,  or to  make it more
difficult for us to recruit  qualified  distributors.  There can be no assurance
that,  even if we were able to commence  operations  in new  foreign  countries,
there  would  be a  sufficiently  large  population  of  potential  distributors
inclined to participate in a network  marketing system offered by us. We believe
our future  success could depend in part on our ability to seamlessly  integrate
our business methods,  including our distributor  compensation  plan, across all
markets in which our products are sold.  There can be no assurance that we would
be able to further develop and maintain a seamless compensation program.

We Are Dependent On Our IBAs For Our Product  Marketing  Efforts;  The Loss of A
Significant  Number Of IBA's Or The Loss Of A Key IBA Could Adversely Affect our
Sales

      Our  success and growth  depend  upon our  ability to attract,  retain and
motivate  our  network  of IBAs who market our  products.  IBAs are  independent
contractors who purchase products directly from us for resale and their own use.
IBAs typically  offer and sell our products on a part-time  basis and may engage
in other business activities, possibly including the sale of products offered by
our competitors.  Typically,  we have  non-exclusive  arrangements with our IBAs
which  may  be  canceled  on  short  notice  and  contain  no  minimum  purchase
requirements.  While we encourage  IBAs to focus on the purchase and sale of our
products,  they may give  higher  priority  to other  products,  reducing  their
efforts  devoted to marketing  our  products.  Also,  our ability to attract and
retain IBAs could be negatively  affected by adverse  publicity  relating to us,
our  products  or our  operations.  In  addition,  as a  result  of our  network
marketing  program,  the down-line  organizations  headed by a relatively  small
number of key IBAs are responsible for a significant percentage of total sales.

      The loss of a significant  number of IBAs,  including any key IBA, for any
reason, could adversely affect our sales and operating results, and could impair
our ability to attract new IBAs. The loss of any IBAs could  potentially  reduce
our sales and force us to curtail or cease our business operations.  There is no
assurance that our network  marketing  program will continue to be successful or
that we will be able to retain or expand our current  network of IBAs.  Also, if
our IBAs do not accept recent changes to our  commission  plan, our business may
be adversely affected.

Since We Cannot Exert The Same Level Of Influence Or control Over Our IBAs As We
Could If They Were Our Own  Employees,  Our IBAs Could  Fail to Comply  With Our
Distributor  Policies and  Procedures,  Which Could Result In Claims  Against Us
That Could Harm Our Financial Condition and Operating Results

      Our IBAs are independent  contractors  and,  accordingly,  we are not in a
position to directly provide the same direction,  motivation and oversight as we
would if our distributors were our own employees.  As a result,  there can be no
assurance that our distributors will participate in our marketing  strategies or
plans,  accept our  introduction of new products or comply with our IBA Policies
and Procedures.

                                       8


      Government  Regulation  By The  Food  And Drug  Administration  And  Other
Federal  And State  Entities  Of Our  Products  Can Impact Our Ability To Market
Products

      The  manufacturing,   processing,  formulation,  packaging,  labeling  and
advertising  of  nutritional  products are subject to  regulation by one or more
federal agencies, including the Food and Drug Administration,  the Federal Trade
Commission, the Consumer Product Safety Commission, the United States Department
of   Agriculture,   the  United  States  Postal   Service,   the  United  States
Environmental   Protection  Agency  and  the  Occupational   Safety  and  Health
Administration.  These  activities are also regulated by various agencies of the
states and localities,  as well as of foreign  countries,  in which our products
may be sold. We may incur significant costs in complying with these regulations.
In the event we cannot comply with government regulations affecting our business
and products, we may be forced to curtail or cease our business operations.

      On March 7, 2003,  the FDA proposed a new  regulation  to require  current
good manufacturing practices, or cGMPs, affecting the manufacturing, packing and
holding  of  dietary  supplements.   The  proposed  regulation  would  establish
standards to ensure that dietary  supplements  and dietary  ingredients  are not
adulterated  with  contaminants  or  impurities  and are  labeled to  accurately
reflect the active  ingredients and other  ingredients in the products.  It also
includes proposed  requirements for designing and constructing  physical plants,
establishing  quality  control  procedures,  and  testing  manufactured  dietary
ingredients  and  dietary  supplements,  as well as  proposed  requirements  for
maintaining  records for handling  consumer  complaints  related to current good
manufacturing  practices.  The final rule resulting from this rulemaking process
is  currently  undergoing  review  by  the  Office  of  Management  and  Budget.
Publication of the final rule is expected in the next several weeks.  Because of
the long delay in issuing the final rule,  there is considerable  uncertainty as
to the provisions of the final rule, and as to how large an impact the rule will
have on the dietary supplement industry.

      We  market   products   that  fall  under  two  types  of  Food  and  Drug
Administration  regulations:  dietary supplements and personal care products. In
general, a dietary supplement:

      o     is a product (other than tobacco) that is intended to supplement the
            diet that bears or  contains  one or more of the  following  dietary
            ingredients:  a vitamin,  a mineral,  a herb or other botanical,  an
            amino acid, a dietary  substance  for use by man to  supplement  the
            diet  by  increasing  the  total  daily  intake,  or a  concentrate,
            metabolite,   constituent,   extract,   or   combinations  of  these
            ingredients.

      o     is intended for ingestion in pill, capsule, tablet, or liquid form.

      o     is not  represented  for use as a  conventional  food or as the sole
            item of a meal or diet.

      o     is labeled as a "dietary supplement."

      Personal  care  products  are intended to be applied to the human body for
cleansing,  beautifying,  promoting  attractiveness,  or altering the appearance
without affecting the body's structure or functions. Included in this definition
are  products  such as skin creams,  lotions,  perfumes,  lipsticks,  fingernail
polishes, eye and facial make-up preparations,  shampoos,  permanent waves, hair
colors,  toothpastes,  deodorants,  and  any  material  intended  for  use  as a
component of a cosmetic product.  The Food & Drug  Administration  has a limited
ability to regulate personal care products.

      Dietary  supplements must follow labeling  guidelines outlined by the FDA.
Neither  dietary  supplements  nor personal care  products  require FDA or other
government approval or notification to market in the United States.

      Under the Dietary  Supplement Health and Education Act of 1994,  companies
that  manufacture  and  distribute  dietary   supplements  are  limited  in  the
statements  that they are  permitted  to make about  nutritional  support on the
product label without FDA approval.  In addition,  a  manufacturer  of a dietary
supplement  must have  substantiation  for any such  statement made and must not
claim to diagnose,  mitigate, treat, cure or prevent a specific disease or class
of disease.  The product label must also contain a prominent  disclaimer.  These
restrictions may restrict our flexibility in marketing our product.

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

                                       9


Dietary Supplements

      o     Calorad (R)

      o     Agrisept-L (R)

      o     Oxy-Up (R)

      o     Triomin

      o     Noni Plus (R)

      o     Iso-Greens (R)

      o     Definition (R) (drops)

      o     Prosoteine (R)

Personal Care Products

      o     Definition (R)(cream)

      o     Calorad (R) (cream)

Water Filtration Products

      o     Code Blue (TM)

      o     Code Blue (TM) Filter

      The processing,  formulation,  packaging, labeling and advertising of such
products,  however,  are subject to regulation by one or more federal  agencies,
including the FDA, the Federal Trade  Commission,  the Consumer  Products Safety
Commission,  the  Department of  Agriculture  and the  Environmental  Protection
Agency. Our activities are also subject to regulation by various agencies of the
states and localities in which our products are sold.  Among other things,  such
regulation puts a burden on our ability to bring products to market. Any changes
in the current regulatory  environment could impose requirements that would make
bringing  new  products to market  more  expensive  or restrict  the ways we can
market our products.

      No governmental  agency or other third party makes a  determination  as to
whether our products qualify as dietary supplements,  personal care and/or water
filtration  products  or  neither.  We  make  this  determination  based  on the
ingredients contained in the products and the claims we make for the products.

If The Federal Trade  Commission Or Certain  States Object To Our Product Claims
And  Advertising We May Be Forced To Give Refunds,  Pay Damages,  Stop Marketing
Certain Products Or Change Our Business Methods

      The Federal Trade  Commission  and certain  states  regulate  advertising,
product  claims,  and  other  consumer  matters,  including  advertising  of our
products.  In the past several years the Federal Trade Commission has instituted
enforcement  actions against several dietary  supplement  companies for false or
deceptive advertising of certain products. We provide no assurance that:

      o     the Federal  Trade  Commission  will not question our past or future
            advertising or other operations; or

      o     a state will not interpret product claims  presumptively valid under
            federal law as illegal under that state's regulations.

      Also,  our IBAs and their  customers may file actions on their own behalf,
as a class  or  otherwise,  and may  file  complaints  with  the  Federal  Trade
Commission or state or local consumer affairs  offices.  These agencies may take
action on their own initiative or on a referral from IBAs,  consumers or others.
If taken, such actions may result in:

      o     entries of consent decrees;

                                       10


      o     refunds of amounts paid by the complaining IBA or consumer;

      o     refunds to an entire class of IBAs or customers;

      o     other damages; and

      o     changes in our method of doing business.

A Complaint  Based On The Activities Of One IBA,  Whether Or Not Such Activities
Were  Authorized By Us, Could Result In An Order Affecting Some Or All IBAs In A
Particular State, And An Order In One State Could Influence Courts Or Government
Agencies In Other States

      Our IBAs act as independent sales people and are not closely supervised by
EYI or supervised by us at all. We have little or no control or knowledge of our
IBAs' actual sales  activities  and  therefore,  we have little or no ability to
ensure that our IBAs comply with regulations and rules regarding how they market
and sell our products. It is possible that we may be held liable for the actions
of our IBAs.  Proceedings  resulting from any complaints in connection  with our
IBAs'  marketing and sales  activities may result in significant  defense costs,
settlement  payments  or  judgments  and  could  force to  curtail  or cease our
business operations.

      If our  network  marketing  program is shown to  violate  federal or state
regulations,  we may be unable to market our  products.  Our  network  marketing
program  is  subject  to a number  of  federal  and state  laws and  regulations
administered by the Federal Trade  Commission and various state agencies.  These
laws  and  regulations  include  securities,   franchise  investment,   business
opportunity  and  criminal  laws  prohibiting  the use of  "pyramid" or "endless
chain" types of selling organizations.  These regulations are generally directed
at ensuring that product sales are  ultimately  made to consumers (as opposed to
other IBAs) and that advancement  within the network  marketing program is based
on sales of products,  rather than investment in the company or other non-retail
sales related criteria.

      The  compensation  structure of a network  marketing  organization is very
complex.

      Compliance  with all of the applicable  regulations  and laws is uncertain
because of:

      o     the evolving interpretations of existing laws and regulations, and

      o     the enactment of new laws and  regulations  pertaining in general to
            network marketing organizations and product distribution.

      We have not obtained  any  no-action  letters or advance  rulings from any
federal or state securities  regulator or other  governmental  agency concerning
the legality of our operations.  Also, we are not relying on a formal opinion of
counsel to such effect. Accordingly there is the risk that our network marketing
system  could  be  found  to  be  in  noncompliance  with  applicable  laws  and
regulations,  which could have a material  adverse effect on us. Such a decision
could require modification of our network marketing program,  result in negative
publicity, or have a negative effect on IBA morale and loyalty. In addition, our
network  marketing  system  will be subject to  regulations  in foreign  markets
administered  by  foreign  agencies  should  we  expand  our  network  marketing
organization into such markets.

The  Legality Of Our Network  Marketing  Program Is Subject To  Challenge By Our
IBAs

      We are subject to the risk of  challenges  to the  legality of our network
marketing organization by our IBAs, both individually and as a class. Generally,
such challenges would be based on claims that our network  marketing program was
operated as an illegal "pyramid scheme" in violation of federal securities laws,
state unfair  practice and fraud laws and the Racketeer  Influenced  and Corrupt
Organizations  Act. An illegal  pyramid  scheme is generally a marketing  scheme
that promotes  "inventory  loading" and does not  encourage  retail sales of the
products  and  services to ultimate  consumers.  Inventory  loading  occurs when
distributors purchase large quantities of non-returnable inventory to obtain the
full amount of compensation  available under the network marketing  program.  In
the event of challenges to the legality of our network marketing organization by
our IBAs, there is no assurance that we will be able to demonstrate that

      o     our network marketing policies were enforced and

                                       11


      o     the  network  marketing  program and IBAs'  compensation  thereunder
            serve as safeguards to deter inventory  loading and encourage retail
            sales to the ultimate consumers.

Proceedings  Resulting  From Claims Could Result in  Significant  Defense Costs,
Settlement Payments Or Judgments, And Could Have A Material Adverse Effect On Us

      One of our previous competitors,  Nutrition for Life International, Inc. a
multi-level  seller of personal care and nutritional  supplements,  announced in
1999  that it had  settled  class  action  litigation  brought  by  distributors
alleging fraud in connections with the operation of a pyramid scheme.  Nutrition
for Life  International  agreed to pay in excess of  $3,000,000 to settle claims
brought on behalf of its distributors and certain purchasers of its stock.

      We believe that our marketing program is significantly  different from the
program  allegedly  promoted by Nutrition  for Life  International  and that our
marketing  program is not in  violation  of  anti-pyramid  laws or  regulations.
However,  there can be no assurance  that claims  similar to the claims  brought
against  Nutrition  For  Life  International  and  other  multi-level  marketing
organizations will not be made against us, or that we would prevail in the event
any such claims were made. Furthermore,  even if we were successful in defending
against any such claims, the costs of conducting such a defense, both in dollars
spent and in  management  time,  could be  material  and  adversely  affect  our
operating results and financial condition.  In addition,  the negative publicity
of such a suit  could  adversely  affect our sales and  ability  to attract  and
retain IBAs.

A Large Portion Of Our Sales Is Attributable To Calorad

      A  significant  portion of our net sales is expected to be dependent  upon
our Calorad product. Calorad has traditionally  represented more than 70% of our
net sales and,  although we hope to expand and diversify our product  offerings,
Calorad  is  expected  to  provide  a  large  portion  of our net  sales  in the
foreseeable  future.  If  Calorad  loses  market  share  or  loses  favor in the
marketplace, our financial results will suffer.

Our  Products  Are  Subject  To  Obsolescence;  Which  Could  Reduce  Our  Sales
Significantly

      The  introduction  by us or our  competitors of new dietary  supplement or
personal care products offering increased  functionality or enhanced results may
render our existing products obsolete and unmarketable.  Therefore,  our ability
to  successfully  introduce  new products  into the market on a timely basis and
achieve  acceptable  levels of sales has and will  continue to be a  significant
factor  in our  ability  to grow  and  remain  competitive  and  profitable.  In
addition, the nature and mix of our products are important factors in attracting
and maintaining our network of IBAs, which  consequently  affects demand for our
products.  Although we seek to introduce additional products, the success of new
products is subject to a number of conditions,  including  customer  acceptance.
There can be no assurance  that our efforts to develop  innovative  new products
will be successful or that customers will accept new products.

      In  addition,  no  assurance  can be  given  that new  products  currently
experiencing strong popularity will maintain their sales over time. In the event
we are unable to successfully  increase the product mix and maintain competitive
product  replacements  or  enhancements  in a timely  manner in  response to the
introduction of new products,  competitive or otherwise,  our sales and earnings
will be materially and adversely affected.

We Have No Manufacturing Capabilities And We Are Dependent Upon Nutri-Diem, Inc.
And Other Companies To Manufacture Our Products

      We have no  manufacturing  facilities  and have no  present  intention  to
manufacture  any of our dietary  supplement  and personal care products or water
filtration   system.  We  are  dependent  upon  relationships  with  independent
manufacturers to fulfill our product needs.  Nutri-Diem,  Inc., a related party,
manufactures and supplies more than 80% of our products.  We have contracts with
Nutri-Diem that require us to purchase set amounts of its manufactured  products
for at least the next five years and possibly the next ten years. It is possible
that these contracts with Nutri-Diem, Inc. could become unfavorable,  and we may
not be able to use other  manufacturers to provide us with these services if our
terms with Nutri-Diem,  Inc. become unfavorable. In addition, we must be able to
obtain our dietary  supplement and personal care products at a cost that permits
us to  charge a price  acceptable  to the  customer,  while  also  accommodating
distribution  costs and third party sales  compensation.  Competitors who do own
their own  manufacturing  may have an advantage over us with respect to pricing,
availability  of  product  and in  other  areas  through  their  control  of the
manufacturing process. In addition, because our agreement with Nutri-Diem,  Inc.
requires  us to  mandatory  purchase  minimums,  we face  that  risk that we may
receive purchase orders for sufficient amounts of product that will enable us to
sell the  quantities  that we are required to  purchase.  In the event that this
occurs,  we will be forced to hold larger  quantities of inventory,  which could
adversely affect our cash flow and our ability to pay our operating expenses. In
addition,  if we are forced to hold longer quantities of inventory,  we face the
risk that our  inventory  becomes  obsolete with the passage of large amounts of
time.

                                       12


      We may not be able to deliver  various  products to our customers if third
party providers fail to provide necessary ingredients to us. We are dependent on
various third  parties for various  ingredients  for our  products.  Some of the
third parties that provide  ingredients to us have a limited  operating  history
and are themselves  dependent on reliable delivery of products from others. As a
result,  our ability to deliver  various  products to our users may be adversely
affected  by the  failure of these  third  parties to provide  reliable  various
ingredients for our products.

We Are  Materially  Dependent  Upon Our Key  Personnel  And The Loss Of Such Key
Personnel Could Result In Delays In The  Implementation  Of Our Business Plan Or
Business Failure

      We depend upon the continued  involvement of Jay Sargeant,  our President,
Chief  Executive  Officer and  Director,  and Dori O'Neill,  our Executive  Vice
President,  Chief Operations Officer,  Secretary,  Treasurer and Director. As we
are a developing  company,  the further  implementation  of our business plan is
dependent  on the  entrepreneurial  skills  and  direction  of  management.  Mr.
Sargeant  and Mr.  O'Neill who guide and direct our  activity  and vision.  This
direction  requires an awareness  of the market,  the  competition,  current and
future markets and technologies  that would allow us to continue our operations.
The loss or lack of availability of these individuals could materially adversely
affect our business and operations.  We do not carry "key person" life insurance
for these officers and directors, and we would be adversely affected by the loss
of these two key consultants.

      We Face Substantial  Competition In The Dietary Supplement,  Personal Care
Industry And Water Filtration  Category Including Products That Compete Directly
With Calorad

      The dietary  supplement and personal care industry is highly  competitive.
It is  relatively  easy for new  companies  to  enter  the  industry  due to the
availability of numerous contract manufacturers, a ready availability of natural
ingredients and a relatively relaxed regulatory environment.  Numerous companies
compete with us in the development,  manufacture and marketing of supplements as
their sole or principal business. Generally, these companies are well funded and
sophisticated in their marketing approaches.

Depending On The Product Category, Our Competition Varies

      Calorad  competes   directly  with  Colvera,   a  product  with  different
ingredients but a similar concept.  Additionally,  Calorad  competes  indirectly
with food plans such as Weight  Watchers and meal  replacement  products such as
Slim Fast.  Our Noni Plus product  competes with  Tahitian Noni and others.  Our
other products have similar well-funded and sophisticated competitors. Increased
competitive  activity from such companies could make it more difficult for us to
increase or keep market share,  since such companies have greater  financial and
other resources available to them and possess far more extensive  manufacturing,
distribution and marketing capabilities.

We May Be  Subject  To  Products  Liability  Claims  And May Not  Have  Adequate
Insurance  To Cover Such  Claims.  As With  Other  Retailers,  Distributors  And
Manufacturers Of Products That Are Designed To Be Ingested,  We Face An Inherent
Risk Of  Exposure To Product  Liability  Claims In The Event That The Use Of Our
Products Results In Injury

      We,  like any  other  retailers  and  distributors  of  products  that are
designed to be ingested,  face an inherent risk of exposure to product liability
claims in the event that the use of our products results in injury.  Such claims
may include,  among others,  that our products  contain  contaminants or include
inadequate instructions as to use or inadequate warnings concerning side effects
and  interactions  with other  substances.  With  respect  to product  liability
claims,  we have coverage of $2,000,000  per  occurrence  and  $2,000,000 in the
aggregate.  Because our policies are purchased on a year-to-year basis, industry
conditions or our own claims experience could make it difficult for us to secure
the necessary insurance at a reasonable cost. In addition, we may not be able to
secure insurance that will be adequate to cover liabilities. We generally do not
obtain  contractual  indemnification  from parties  supplying  raw  materials or
marketing our products. In any event, any such indemnification is limited by its
terms and, as a practical matter, to the creditworthiness of the other party. In
the event that we do not have adequate insurance or contractual indemnification,
liabilities  relating to defective  products could require us to pay the injured
parties' damages which are significant compared to our net worth or revenues.

                                       13


We May Be Adversely Affected By Unfavorable Publicity Relating To Our Product Or
Similar Products Manufactured By Our Competitors

      We believe  that the  dietary  supplement  products  market is affected by
national media attention  regarding the  consumption of these  products.  Future
scientific  research or publicity may be unfavorable  to the dietary  supplement
products market  generally or to any particular  product and may be inconsistent
with earlier favorable research or publicity.  Adverse publicity associated with
illness or other adverse  effects  resulting  from the  consumption  of products
distributed by other companies,  which are similar to our products, could reduce
consumer demand for our products and consequently  our revenues.  This may occur
even if the publicity did not relate to our products. Adverse publicity directly
concerning our products could be expected to have an immediate  negative  effect
on the market for that product.

Because We Have Few Proprietary Rights, Others Can Provide Products And Services
Substantially Equivalent To Ours

      We hold no patents.  We believe that most of the technology  used by us in
the design and  implementation  of our  products  may be known and  available to
others.

      Consequently, others may be able to formulate products equivalent to ours.
We rely on  confidentiality  agreements  and trade  secret  laws to protect  our
confidential  information.  In  addition,  we  restrict  access to  confidential
information on a "need to know" basis.  However,  there can be no assurance that
we will be able to maintain the confidentiality of our proprietary information.

      If our pending trademark or other proprietary rights are violated, or if a
third party claims that we violate its trademark or other proprietary rights, we
may be required to engage in litigation.  Proprietary rights litigation tends to
be costly  and time  consuming.  Bringing  or  defending  claims  related to our
proprietary  rights may require us to redirect our human and monetary  resources
to address those claims.

      We Often Use Our Securities As Consideration  In Contracts  Related To Our
Operations; Which Will Cause Existing Shareholders To Experience Dilution

      We often issue our securities as consideration in contracts related to our
operations.  We issued our securities in these  transactions  primarily  because
historically we have had insufficient cash to fund our operations. Over the past
two years,  we have issued  6,226,190  shares of our common stock and  2,650,000
stock options for consideration  other than cash. As a result of such issuances,
existing  shareholders  of EYI  have  experienced  a  dilutive  impact  o  their
ownership of our company. We may be forced to issue additional securities of EYI
in the future  transactions in lieu for cash and  shareholders  would experience
additional dilution.

                         RISKS RELATED TO THIS OFFERING

Future Sales By Our  Stockholders  May Adversely  Affect Our Stock Price And Our
Ability To Raise Funds In New Stock Offerings

      Sales of our common stock in the public  market  following  this  offering
could lower the market  price of our common  stock.  Sales may also make it more
difficult for us to sell equity securities or  equity-related  securities in the
future at a time and price that our management  deems acceptable or at all. Some
of our  shareholders,  including  officers  and  directors  are the  holders  of
"restricted securities". These restricted securities may be resold in the public
market only if registered or pursuant to an exemption from registration. Some of
these  shares may be resold  under Rule 144.  As of June 1, 2006,  approximately
119,038,472 shares of our common stock are deemed restricted.

      Upon  completion of this offering,  and assuming all shares  registered in
this  offering  are resold in the  public  market,  there will be an  additional
739,726,079  shares of common stock  outstanding.  All of these shares of common
stock may be immediately  resold in the public market upon  effectiveness of the
accompanying registration statement.

Existing Shareholders Will Experience  Significant Dilution From The Issuance Of
Our Common Stock Upon Conversion Of Convertible Debentures And Warrants

      The issuance of our common stock upon conversion of convertible debentures
and warrants will have a dilutive impact on our stockholders.  At a recent stock
price of $0.03, we would have to issue  187,500,000  shares of common stock upon
conversion of convertible debentures and 124,062,678 shares upon the exercise of
warrants. We are registering 615,663,401 shares of our common stock for issuance
upon  conversion  of  convertible  debentures  and  124,062,678  shares upon the
exercise  of  warrants.  If we need to issue  more than  615,663,401  shares for
conversion of the convertible  debentures in the principal amount of $4,500,000,
we  will  have  to  obtain  shareholder   approval  to  amend  our  Articles  of
Incorporation to increase our authorized common stock above 1,000,000,000 shares
and we will have to file a new  registration  statement  covering any additional
shares.

                                       14


The  Selling  Stockholders  Intend To Sell Their  Shares Of Common  Stock In The
Market, Which Sales May Cause Our Stock Price To Decline

      The selling stockholders intend to sell in the public market the shares of
common  stock  being  registered  in  this  offering.  That  means  that  up  to
739,976,079  shares of common  stock,  the number of shares being  registered in
this offering may be sold. Such sales may cause our stock price to decline.

The Sale Of Material Amounts Of Common Stock Under The Accompanying Registration
Statement Could Encourage Short Sales By Third Parties

      The significant downward pressure on our stock price caused by the sale of
the shares being  registered in the  accompanying  registration  statement could
cause our stock price to decline,  thus  allowing  short sellers of our stock an
opportunity  to take  advantage of any  decrease in the value of our stock.  The
presence of short  sellers in our common stock may further  depress the price of
our common stock.

The Price You Pay In This Offering Will Fluctuate

      The price in this offering will fluctuate  based on the prevailing  market
price of the common stock on the Over-the-Counter  Bulletin Board.  Accordingly,
the price you pay in this  offering  may be higher or lower than the prices paid
by other people participating in this offering.

The  Issuance Of Shares Of Common  Stock Under This  Offering  Could Result In A
Change Of Control

      We are  registering  739,976,079  shares of common stock in this offering.
These shares  represent  approximately  74% of our authorized  capital stock and
would  upon  issuance  represent   approximately  74%  of  the  then-issued  and
outstanding  common stock and we anticipate all such shares will be sold in this
offering.  If all or a significant block of these shares are held by one or more
shareholders working together,  then such shareholder or shareholders would have
enough shares to exert significant influence on EYI Industries.

                                       15


                           FORWARD-LOOKING STATEMENTS

Risks Associated With Forward-Looking Statements

      This Prospectus  contains  certain  forward-looking  statements  regarding
management's  plans and objectives  for future  operations  including  plans and
objectives  relating  to our  planned  marketing  efforts  and  future  economic
performance.  The  forward-looking  statements and associated risks set forth in
this  Prospectus  include or relate to, among other  things,  (a) our  projected
sales and profitability,  (b) our growth  strategies,  (c) anticipated trends in
our industry, (d) our ability to obtain and retain sufficient capital for future
operations,  and (e) our anticipated needs for working capital. These statements
may be found under "Management's  Discussion and Analysis or Plan of Operations"
and  "Business,"  as well as in this  Prospectus  generally.  Actual  events  or
results may differ materially from those discussed in forward-looking statements
as a result  of  various  factors,  including,  without  limitation,  the  risks
outlined  under  "Risk  Factors"  and  matters   described  in  this  Prospectus
generally. In light of these risks and uncertainties,  there can be no assurance
that the  forward-looking  statements  contained in this Prospectus will in fact
occur.

      The  forward-looking  statements herein are based on current  expectations
that  involve  a  number  of  risks  and  uncertainties.   Such  forward-looking
statements are based on assumptions that we will be able to make acquisitions on
a timely basis, that we will retain the acquiree's customers, that there will be
no material  adverse  competitive or  technological  change in conditions in our
business,  that demand for our products will  significantly  increase,  that our
President and Chief  Executive  Officer will remain  employed as such,  that our
forecasts  accurately  anticipate  market  demand,  and  that  there  will be no
material  adverse  change  in our  operations  or  business  or in  governmental
regulations  affecting us or our manufacturers  and/or suppliers.  The foregoing
assumptions  are based on judgments with respect to, among other things,  future
economic,  competitive and market conditions, and future business decisions, all
of which are difficult or impossible to predict accurately and many of which are
beyond  our  control.  Accordingly,  although  we believe  that the  assumptions
underlying the  forward-looking  statements are reasonable,  any such assumption
could prove to be inaccurate  and therefore  there can be no assurance  that the
results  contemplated  in  forward-looking   statements  will  be  realized.  In
addition,  as  disclosed  elsewhere  in  the  "Risk  Factors"  section  of  this
prospectus,  there are a number of other  risks  inherent  in our  business  and
operations  which  could  cause  our  operating  results  to vary  markedly  and
adversely from prior results or the results  contemplated by the forward-looking
statements.  Growth in absolute and  relative  amounts of cost of goods sold and
selling,  general and administrative expenses or the occurrence of extraordinary
events  could  cause  actual  results  to  vary   materially  from  the  results
contemplated by the forward-looking statements.  Management decisions, including
budgeting,  are subjective in many respects and periodic  revisions must be made
to reflect actual conditions and business developments,  the impact of which may
cause us to alter marketing,  capital investment and other  expenditures,  which
may also  materially  adversely  affect our results of  operations.  In light of
significant  uncertainties inherent in the forward-looking  information included
in this prospectus,  the inclusion of such information should not be regarded as
a representation  by us or any other person that our objectives or plans will be
achieved.

      Some  of the  information  in  this  Prospectus  contains  forward-looking
statements that involve  substantial risks and  uncertainties.  Any statement in
this  prospectus  and in the  documents  incorporated  by  reference  into  this
prospectus  that  is  not  a  statement  of an  historical  fact  constitutes  a
"forward-looking  statement".  Further,  when we use the words "may",  "expect",
"anticipate",  "plan", "believe",  "seek",  "estimate",  "internal", and similar
words,  we intend to identify  statements and  expressions  that may be forward-
looking  statements.  We believe it is important to  communicate  certain of our
expectations to our investors.  Forward-looking statements are not guarantees of
future performance. They involve risks, uncertainties and assumptions that could
cause our  future  results to differ  materially  from  those  expressed  in any
forward-looking  statements.  Many  factors are beyond our ability to control or
predict.  You are  accordingly  cautioned  not to place  undue  reliance on such
forward-looking statements.  Important factors that may cause our actual results
to differ from such forward-looking  statements include, but are not limited to,
the risk factors  discussed  below.  Before you invest in our common stock,  you
should be aware that the occurrence of any of the events  described  under "Risk
Factors"  in  this  Prospectus  could  have a  material  adverse  effect  on our
business,  financial  condition  and results of operation.  In such a case,  the
trading  price of our common stock could  decline and you could lose all or part
of your investment.

                                       16


                              SELLING STOCKHOLDERS

      The   following   table   presents   information   regarding  the  selling
stockholders.  A description of each selling  shareholder's  relationship to EYI
Industries  and how each selling  shareholder  acquired the shares to be sold in
this offering is detailed in the information immediately following this table.



                                                        Percentage of                     Percentage of
                                                         Outstanding                       Outstanding
                                           Shares           Shares          Shares           Shares
                                        Beneficially     Beneficially     to be Sold      Beneficially
                                        Owned Before     Owned Before       in the            Owned
Selling Stockholder                       Offering       Offering(1)       Offering      After Offering
-------------------                     -------------    -----------       --------      --------------
                                                                                       
Cornell Capital Partners, L.P.          13,675,000(2)           4.99%    431,894,379(3)            0%

Taib Bank, B.S.C.(2)                    13,675,000(2)           4.99%    171,031,292(4)            0%

Certain Wealth, Ltd.                    13,675,000(2)           4.99%    136,800,402(5)            0%

Rajesh Raniga                              350,000(6)               *        250,000(7)            *
                                        ------------                     -------------
      TOTAL                               41,375,000                       739,976,073
                                        ============                     =============

---------------

*     Less than 1%.

(1)   Applicable  percentage  of  ownership  is based on  260,273,921  shares of
      common stock  outstanding  as of June 1, 2006,  together  with  securities
      exercisable or  convertible  into shares of common stock within 60 days of
      June 1, 2006, for each stockholder.  Beneficial ownership is determined in
      accordance  with the rules of the Securities  and Exchange  Commission and
      generally  includes voting or investment power with respect to securities.
      Shares of common stock subject to securities  exercisable  or  convertible
      into shares of common stock that are currently  exercisable or exercisable
      within 60 days of June 1, 2006 are deemed to be beneficially  owned by the
      person holding such securities for the purpose of computing the percentage
      of ownership of such person,  but are not treated as  outstanding  for the
      purpose of computing the  percentage  ownership of any other person.  Note
      that affiliates are subject to Rule 144 and Insider trading  regulations -
      percentage computation is for form purposes only.

(2)   Please note that the terms of the  convertible  debentures held by Cornell
      Capital Partners, L.P., Taib Bank, B.S.C. and Certain Wealth, Ltd. provide
      that in no event shall the holder be  entitled to convert the  convertible
      debentures  for a number  of  shares  which,  upon  giving  effect  to the
      conversion,  would cause the aggregate number of shares beneficially owned
      by such  holder  and its  affiliates  to exceed  4.99% of the  outstanding
      shares of EYI Industries following such conversion. Because the conversion
      price may  fluctuate  based on the market  price of our stock,  the actual
      number of shares to be issued upon  conversion  of the  debentures  may be
      higher or  lower.  We are  registering  615,663,401  shares to cover  such
      conversions for the convertible debenture holders.

(3)   Includes  307,831,701  shares  of  common  stock  underlying   convertible
      debentures and 124,062,678 shares underlying warrants.

(4)   Represents  171,031,292  shares of  common  stock  underlying  convertible
      debentures.

(5)   Represents  136,800,402  shares of  common  stock  underlying  convertible
      debentures.

(6)   Includes  250,000 shares issued in connection with a Consulting  Agreement
      and 100,000 shares which may be acquired pursuant to the exercise of stock
      options.

(7)   Represents  250,000  shares  issued  in  connection  with  the  Consulting
      Agreement, dated December 27, 2003.

      The  following   information   contains  a  description  of  each  selling
shareholder's  relationship  to EYI Industries and how each selling  shareholder
acquired  the  shares  to  be  sold  in  this  offering.  None  of  the  selling
stockholders  have  held a  position  or  office,  or have  any  other  material
relationship, with EYI Industries, except as follows:

Shares Acquired In Financing Transactions With EYI Industries


      Secured  Convertible  Debentures.  On April 24,  2006,  we entered  into a
secured convertible  debenture  transaction with Cornell Capital Partners,  Taib
Bank,  B.S.C.  and Certain Wealth,  Ltd. in the principal  amount of $4,500,000.
Pursuant to a Securities  Purchase  Agreement,  on April 24, 2006 EYI Industries
received net  proceeds of  $1,305,000,  associated  with the issuance of secured
convertible  debentures in the principal  amount of $1,500,000 and we will issue
additional secured convertible  debentures in the principal amount of $1,500,000
two (2) business days prior to filing the  accompanying  registration  statement
and we will issue  additional  secured  convertible  debentures in the principal
amount  of  $1,500,000   two  (2)  business  days  prior  to  the   accompanying
registration  statement being declared  effective by the Securities and Exchange
Commission. On June 8, 2006, we received net proceeds of $1,350,000,  associated
with the issuance of the second tranche of secured convertible debentures in the
principal  amount of  $1,500,000.  On June 20, 2006,  we receive net proceeds of
$1,350,000, associated  with  the  issuance  of the  third  tranche  of  secured
convertible  debentures in the principal amount of $1,500,000,  in the following
amounts:  $750,000 to Cornell Capital Partners,  $416,667 to TAIB Bank,  B.S.C.,
and $333,333 to Certain  Wealth,  Ltd. The secured  convertible  debentures  are
convertible at the holder's option any time up to maturity at a conversion price
equal to the lower of (i) $0.06 or (ii) 80% of the lowest daily volume  weighted
average price of our common stock for the 5 trading days  immediately  preceding
the conversion  date. The secured  convertible  debentures are secured by all of
EYI Industries' assets. The secured convertible  debentures accrue interest at a
rate of 10% per  year  and  have a term of 3 years.  In the  event  the  secured
convertible  debentures  are  redeemed,  then EYI  Industries  will issue to the
holders a warrant to purchase  100,000 shares for every $100,000  redeemed at an
exercise price equal to 20% of the principal amount being redeemed.  The holders
purchased the secured  convertible  debentures  from EYI Industries in a private
placement on April 24, 2006.  EYI  Industries  is  registering  in this offering
615,663,401   shares  of  common  stock   underlying  the  secured   convertible
debentures.


                                       17


      Pursuant  to the  terms  of the  Securities  Purchase  Agreement  and  the
issuance of our secured convertible  debentures,  on April 24, 2006 we issued to
Cornell Capital Partners  seventeen (17) warrants to purchase up to an aggregate
124,062,678  shares of our common  stock at the  discretion  of Cornell  Capital
Partners   (collectively,   the   "Warrants")   each  for   good  and   valuable
consideration.  Pursuant to the terms of the Warrants,  Cornell Capital Partners
is entitled to purchase  from us: (1)  10,416,650  shares of our common stock at
$0.02 per share,  (2) 13,888,866  shares of our common stock at $0.03 per share,
(3)  10,416,650  shares of our common  stock at $0.04 per share,  (4)  8,333,320
shares of our  common  stock at $0.05 per  share,  (5)  6,944,433  shares of our
common  stock at $0.06 per share,  (6)  5,952,371  shares of our common stock at
$0.07 per share,  (7) 11,250,000  shares of our common stock at $0.08 per share,
(8)  10,000,000  shares of our common stock at $0.09 per share,  (9)  19,000,000
shares of our common  stock at $0.10 per  share,  (10)  8,181,818  shares of our
common stock at $0.11 per share,  (11)  7,500,000  shares of our common stock at
$0.12 per share,  (12) 3,333,333  shares of our common stock at $0.15 per share,
(13)  2,500,000  shares of our common stock at $0.20 per share,  (14)  2,000,000
shares of our common  stock at $0.25 per  share,  (15)  1,666,666  shares of our
common stock at $0.30 per share,  (16)  1,428,571  shares of our common stock at
$0.35 per share and (17) 1,250,000 shares of our common stock at $0.40 per share
upon  surrender  of the Warrants (or as  subsequently  adjusted  pursuant to the
terms of each Warrant) . Each Warrant has "piggy back"  registration  rights and
shall  expire  five (5) years from the date of  issuance,  on or about April 24,
2011.

      There are certain risks related to sales by Cornell Capital Partners, Taib
Bank, B.S.C. and Certain Wealth, Ltd. including:

      o     The  outstanding  shares  will be issued  based on  discount  to the
            market rate.  As a result,  the lower the stock  price,  the greater
            number of shares that will be issued to these selling  stockholders.
            This could result in substantial  dilution to the interests of other
            holders of common stock.

      o     To the extent the selling  stockholders sell their common stock, the
            common stock price may decrease due to the additional  shares in the
            market. This could allow these selling  stockholders to sell greater
            amounts of common stock,  the sales of which would  further  depress
            the stock price.

      o     The significant  downward  pressure on the price of the common stock
            as the selling  stockholders  sell material amounts of common stocks
            could  encourage  short sales by others.  This could  place  further
            downward pressure on the price of the common stock.

Other Information Regarding The Selling Shareholders

      Cornell  Capital  Partners.  All investment  decisions of Cornell  Capital
Partners are made by its general partner,  Yorkville Advisors, LLC. Mark Angelo,
the managing  member of Yorkville  Advisors,  makes the investment  decisions on
behalf of Yorkville Advisors. Cornell Capital Partners acquired all shares being
registered in this offering in financing transactions with EYI Industries.

      Taib Bank,  B.S.C. All investment  decisions of Taib Bank, B.S.C. are made
by Larry Chaleff, its Managing Director.

      Certain Wealth, Ltd. All investment  decisions of Certain Wealth, Ltd. are
made by Larry Chaleff, its Managing Director.

      Rajesh Raniga is our Company's Chief Financial Officer.

                                       18


                                 USE OF PROCEEDS

      This Prospectus  relates to shares of our common stock that may be offered
and  sold  from  time to time by  Cornell  Capital  Partners.  There  will be no
proceeds  to us from the  sale of  shares  of  common  stock  in this  offering.
However, we did receive proceeds pursuant to the issuance of secured convertible
debentures in the principal  amount equal to $4,500,000,  which we are using for
general  working  capital  purposes,  including,  among other things,  sales and
marketing,  product  development,  operations,  international  expansion,  sales
communication and debt retirement.

                                       19


                              PLAN OF DISTRIBUTION

      The selling  stockholders have advised us that the sale or distribution of
EYI Industries'  common stock owned by the selling  stockholders may be effected
directly to purchasers by the selling  stockholders or by pledgees,  transferees
or  other  successors  in  interest,  as  principals  or  through  one  or  more
underwriters,  brokers,  dealers  or  agents  from  time  to time in one or more
transactions  (which  may  involve  crosses  or block  transactions)  (i) on the
over-the-counter  market  or in any  other  market  on  which  the  price of EYI
Industries' shares of common stock are quoted or (ii) in transactions  otherwise
than on the over-the-counter market or in any other market on which the price of
EYI Industries'  shares of common stock are quoted.  Any transferees and pledges
will  be  identified  by  a   post-effective   amendment  to  the   accompanying
registration  statement.  Any of such  transactions  may be  effected  at market
prices  prevailing  at the time of sale,  at prices  related to such  prevailing
market prices, at varying prices determined at the time of sale or at negotiated
or fixed  prices,  in each case as  determined  by a selling  stockholder  or by
agreement between a selling  stockholder and underwriters,  brokers,  dealers or
agents, or purchasers.  If the selling  stockholders effect such transactions by
selling their shares of EYI Industries' common stock to or through underwriters,
brokers,  dealers or agents, such underwriters,  brokers,  dealers or agents may
receive  compensation in the form of discounts,  concessions or commissions from
the selling stockholders or commissions from purchasers of common stock for whom
they  may act as  agent  (which  discounts,  concessions  or  commissions  as to
particular  underwriters,  brokers,  dealers or agents may be in excess of those
customary in the types of transactions involved). Any brokers, dealers or agents
that  participate  in the  distribution  of the common stock may be deemed to be
underwriters,  and any  profit  on the  sale of  common  stock  by them  and any
discounts,  concessions  or  commissions  received  by  any  such  underwriters,
brokers,  dealers  or  agents  may be deemed to be  underwriting  discounts  and
commissions under the Securities Act.

      Under the securities  laws of certain  states,  the shares of common stock
may be sold in such  states  only  through  registered  or  licensed  brokers or
dealers.  The selling  stockholders are advised to ensure that any underwriters,
brokers,  dealers  or agents  effecting  transactions  on behalf of the  selling
stockholders are registered to sell securities in all fifty states. In addition,
in certain  states the shares of common  stock may not be sold unless the shares
have been  registered or qualified  for sale in such state or an exemption  from
registration or qualification is available and is complied with.

      Our common stock is deemed to be "penny  stock" as that term is defined in
Rule 3a51-1 promulgated under the Securities  Exchange Act of 1934. Penny stocks
are  stock:  (i) with a price of less than  $5.00 per  share;  (ii) that are not
traded on a "recognized" national exchange; (iii) whose prices are not quoted on
the Nasdaq  automated  quotation  system  (Nasdaq listed stock must still have a
price of not less than $5.00 per share);  or (iv) in issuers  with net  tangible
assets less than $2.0  million (if the issuer has been in  continuous  operation
for at least three years) or $5.0 million (if in  continuous  operation for less
than three  years),  or with average  revenues of less than $6.0 million for the
last three years.

      Broker/dealers  dealing in penny stocks are required to provide  potential
investors  with a  document  disclosing  the  risks of penny  stocks.  Moreover,
broker/dealers  are required to determine whether an investment in a penny stock
is a suitable  investment for a prospective  investor.  These  requirements  may
reduce  the  potential  market for our common  stock by  reducing  the number of
potential investors. This may make it more difficult for investors in our common
stock to sell  shares to third  parties or to  otherwise  dispose of them.  This
could cause our stock price to decline.

      We will pay all the expenses  incident to the  registration,  offering and
sale  of  the  shares  of  common  stock  to the  public  hereunder  other  than
commissions, fees and discounts of underwriters, brokers, dealers and agents. We
estimate  that  the  expenses  of  the  offering  to  be  borne  by us  will  be
approximately  $85,000.  The  estimated  offering  expenses  consist  of:  a SEC
registration  fee of $2,375,  printing  expenses of $5,000,  accounting  fees of
$20,000, legal fees of $50,000 and miscellaneous expenses of $7,625. We will not
receive any  proceeds  from the sale of any of the shares of common stock by the
selling stockholders.

      The  selling  stockholders  should  be aware  that  the  anti-manipulation
provisions  of  Regulation M under the Exchange Act will apply to purchases  and
sales of shares of common stock by the selling stockholders,  and that there are
restrictions on market-making  activities by persons engaged in the distribution
of the shares.  Under  Registration M, the selling  stockholders or their agents
may not bid for,  purchase,  or  attempt  to  induce  any  person  to bid for or
purchase,   shares  of  common  stock  of  EYI  Industries  while  such  selling
stockholder  is  distributing  shares covered by this  Prospectus.  Accordingly,
except as noted below, the selling stockholders are not permitted to cover short
sales by purchasing  shares while the  distribution is taking place. The selling
stockholders  are advised  that if a  particular  offer of common stock is to be
made on terms  constituting  a material  change from the  information  set forth
above with respect to the Plan of Distribution,  then, to the extent required, a
post-effective  amendment to the  accompanying  registration  statement  must be
filed with the Securities and Exchange Commission.

                                       20


                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      THE  FOLLOWING   INFORMATION  SHOULD  BE  READ  IN  CONJUNCTION  WITH  THE
CONSOLIDATED  FINANCIAL  STATEMENTS  OF EYI  AND  THE  NOTES  THERETO  APPEARING
ELSEWHERE  IN THIS  FILING.  STATEMENTS  IN  THIS  MANAGEMENT'S  DISCUSSION  AND
ANALYSIS OR PLAN OF  OPERATION  AND  ELSEWHERE IN THIS  PROSPECTUS  THAT ARE NOT
STATEMENTS   OF   HISTORICAL   OR  CURRENT  FACT   CONSTITUTE   "FORWARD-LOOKING
STATEMENTS."

Overview

      We are in the business of selling,  marketing,  and distributing a product
line consisting of  approximately 27 nutritional  products in three  categories,
dietary  supplements,  personal  care  products  and drinking  water  filtration
systems.  Currently,  our product line  consists  of: (i) 18 dietary  supplement
products;  (ii) 7 personal  care products  consisting  primarily of cosmetic and
skin care products;  and (iii) 2 drinking water filtration products that make up
the Code Blue(TM) which removes  contaminants  from potable water.  Our products
are primarily  manufactured by Nutri-Diem,  Inc. a related party, and sold by us
under a license and distribution agreement with Nutri-Diem,  Inc. Certain of our
own products are  manufactured for us by third party  manufacturers  pursuant to
formulations  developed  for us. Our  products  are sold in the  United  States,
Canada and Asia. Our products are marketed through a network  marketing  program
in which independent  business associates purchase products for resale to retail
customers as well as for their own personal  use. We have a list of over 380,000
independent  business  associates,  of which  approximately  8,500  we  consider
"active".  An "active"  independent  business associate is one who purchased our
products within the preceding 12 months.

      Our  independent  auditors  have added an  explanatory  paragraph to their
audit issued in connection  with the financial  statements  for the period ended
December 31, 2005,  relative to our ability to continue as a going  concern.  We
have negative  working  capital of  approximately  $1,965,000 and an accumulated
deficit  incurred  through  December  31,  2005  of  $11,347,215,  which  raises
substantial doubt about our ability to continue as a going concern.  As of March
31, 2006,  we had a working  capital  deficit of $1,578,076  and an  accumulated
deficit of $12,223,137.  Our ability to obtain additional funding will determine
our ability to continue as a going  concern.  Accordingly,  there is substantial
doubt about our ability to continue as a going concern. Our financial statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.

      We have a history of losses.  We have  incurred  an  operating  loss since
inception and had an  accumulated  deficit of  $12,223,137 as of March 31, 2006.
For the three months  ended March 31, 2006,  we incurred a net loss of $875,922.
For the year ended December 31, 2005, we incurred a net loss of $4,262,011.  For
the year  ended  December  31,  2004,  we  incurred  a net  loss of  $4,462,795.
Consequently,  we will in all likelihood, have to rely on external financing for
all of our capital requirements.  Future losses are likely to continue unless we
successfully implement our business plan, which calls for us to secure both debt
and equity financing.

Critical Accounting Policies

      The  preparation  of financial  statements in conformity  with  accounting
principles  generally  accepted in the United States  requires our management to
make estimates and  assumptions  that affect the reported  amounts of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting periods. Actual results may differ from those estimates.

      Our management  routinely  makes judgments and estimates about the effects
of  matters  that are  inherently  uncertain.  As the  number of  variables  and
assumptions  affecting  the  probable  future  resolution  of the  uncertainties
increase,  these  judgments  become even more  subjective  and complex.  We have
identified  certain  accounting  policies,  described  below,  that are the most
important to the  portrayal of our current  financial  condition  and results of
operations.

Accounting For Stock Options And Warrants Granted To Employees And Non-Employees

      Statement of  Financial  Accounting  Standards  No. 123,  "Accounting  for
Stock-Based Compensation" ("SFAS No. 123"), defines a fair value-based method of
accounting for stock options and other equity instruments.  We have adopted this
method,  which measures  compensation costs based on the estimated fair value of
the award and recognizes that cost over the service period.

                                       21


Derivative Instruments

      The Financial  Accounting  Standards  Board issued  Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities"   (hereinafter  "SFAS  No.  133"),  as  amended  by  SFAS  No.  137,
"Accounting for Derivative  Instruments and Hedging Activities - Deferral of the
Effective  Date of FASB No.  133",  and SFAS No.  138,  "Accounting  for Certain
Derivative  Instruments  and  Certain  Hedging  Activities",  and SFAS No.  149,
"Amendment of Statement 133 on Derivative  Instruments and Hedging  Activities".
These  statements  establish  accounting and reporting  standards for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts, and for hedging activities. They require that an entity recognize all
derivatives  as either  assets or  liabilities  in the balance sheet and measure
those instruments at fair value.

      At December 31, 2005, EYI has not engaged in any  transactions  that would
be considered derivative instruments or hedging activities.

Earnings Per Share

         EYI has adopted Statement of Financial Accounting Standards No. 128,
which provides for calculation of "basic" and "diluted" earnings per share.
Basic earnings per share includes no dilution and is computed by dividing net
income (loss) available to common shareholders by the weighted average common
shares outstanding for the period. Diluted earnings per share reflect the
potential dilution of securities that could share in the earnings of an entity
similar to fully diluted earnings per share. Basic and diluted loss per share
were the same, at the reporting dates, as inclusion of the common stock
equivalents would be anti-dilutive.

Foreign Currency Translation And Other Comprehensive Income

      EYI has adopted Financial  Accounting Standard No. 52. Monetary assets and
liabilities  denominated in foreign currencies are translated into United States
dollars at rates of  exchange  in effect at the  balance  sheet  date.  Gains or
losses are included in income for the year. Non-monetary assets, liabilities and
items  recorded  in income  arising  from  transactions  denominated  in foreign
currencies  are  translated  at rates of  exchange  in effect at the date of the
transaction.

      As EYI's functional currency is the U.S. dollar, and all translation gains
and losses are transactional,  EYI has no assets with value recorded in Canadian
dollar  and  there  is no  recognition  of  other  comprehensive  income  in the
financial statements.

Foreign Currency Valuation And Risk Exposure

      While EYI's functional currency is the U.S. dollar and the majority of its
operations are in the United States, EYI maintains its main operations office in
Burnaby,  British Columbia.  The assets and liabilities relating to the Canadian
operations are exposed to exchange rate fluctuations.  Assets and liabilities of
EYI's  foreign  operations  are  translated  into U.S.  dollars at the  year-end
exchange rates,  and revenue and expenses are translated at the average exchange
rate  during the  period.  The net effect of exchange  difference  arising  from
currency  translation  is  disclosed as a separate  component  of  stockholders'
equity.  Realized  gains and  losses  from  foreign  currency  transactions  are
reflected in the results of operations.

Income Taxes

      EYI  accounts  for income  taxes  under the  provisions  of  Statement  of
Financial  Accounting  Standards No. 109,  "Accounting  for Income Taxes".  This
statement  requires the  recognition of deferred tax  liabilities and assets for
the future  consequences of events that have been recognized in EYI consolidated
financial  statement or tax returns.  Measurement of the deferred items is based
on enacted tax laws. In the event the future consequences of differences between
financial reporting bases and tax bases of EYI assets and liabilities results in
a deferred tax asset,  SFAS No. 109 requires an evaluation of the probability of
being  able to  realize  the  future  benefits  indicated  by such an  asset.  A
valuation  allowance related to a deferred tax asset is recorded when it is more
likely than not that some  portion or all of the  deferred tax asset will not be
realized.

Long-Lived Assets

      In accordance  with Statement of Financial  Accounting  Standards No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets".  This standard
establishes a single accounting model for long-lived assets to be disposed of by
sale,  including  discontinued  operations,  and requires that these  long-lived
assets be measured  at the lower of  carrying  amount or fair value less cost to
sell, whether reported in continuing operations or discontinued operations.

                                       22


      Accordingly,  EYI reviews the  carrying  amount of  long-lived  assets for
impairment where events or changes in  circumstances  indicate that the carrying
amount may not be recoverable. The determination of any impairment would include
a comparison of estimated  future cash flows  anticipated to be generated during
the remaining  life of the assets to the net carrying  value of the assets.  For
the year ended December 31, 2005, no impairments have been identified.

Revenue Recognition

      The  Company is in the  business  of selling  nutritional  products in two
categories:  dietary  supplements and personal care products.  Sales of personal
care products  represent  less than 5% of the overall  revenue and therefore are
not classified  separately in the financial  statements.  The Company recognized
revenue  from  product  sales when the  products are shipped and title passes to
customer. Administrative fees charged to the Independent Business Associates are
included in the gross sales and  amounted  $128,967  and  $190,340  for the year
ended December 31, 2005 and December 31, 2004 respectively.

Segment Information

      EYI  adopted  Statement  of  Financial   Accounting   Standards  No.  131,
"Disclosures   about  Segments  of  an  Enterprise  and  Related   Information,"
(hereafter  "SFAS No. 131") which supersedes SFAS No. 14,  "Financial  Reporting
for  Segments  of a  Business  Enterprise,"  replacing  the  "industry  segment"
approach with the "management"  approach. The management approach designates the
internal  organization that is used by management for making operating decisions
and assessing performance as the source of EYI reportable segments. SFAS No. 131
also requires  disclosures  about  products and services,  geographic  areas and
major  customers.  The  adoption  of SFAS No. 131 did not affect EYI  results of
operations or financial position.

Recent Accounting Pronouncements

      New  accounting  pronouncements  that have a current  or future  potential
impact on our financial statements are as follows:

      In March 2006, the Financial  Accounting  Standards Board issued Statement
of  Financial  Accounting  Standards  No.  156,  "Accounting  for  Servicing  of
Financial  Assets--an  amendment  of FASB  Statement  No.  140." This  statement
requires an entity to recognize a servicing  asset or servicing  liability  each
time it undertakes an obligation to service a financial asset by entering into a
servicing  contract  in any of  the  following  situations:  a  transfer  of the
servicer's  financial assets that meets the requirements for sale accounting;  a
transfer of the  servicer's  financial  assets to a  qualifying  special-purpose
entity in a guaranteed  mortgage  securitization in which the transferor retains
all of the resulting securities and classifies them as either available-for-sale
securities  or  trading  securities;  or  an  acquisition  or  assumption  of an
obligation to service a financial asset that does not relate to financial assets
of the servicer or its consolidated affiliates.  The statement also requires all
separately recognized servicing assets and servicing liabilities to be initially
measured at fair value,  if  practicable  and permits an entity to choose either
the  amortization or fair value method for subsequent  measurement of each class
of servicing  assets and  liabilities.  The statement  further  permits,  at its
initial adoption,  a one-time  reclassification of available for sale securities
to trading  securities by entities with  recognized  servicing  rights,  without
calling into question the treatment of other available for sale securities under
Statement 115, provided that the available for sale securities are identified in
some  manner as  offsetting  the  entity's  exposure to changes in fair value of
servicing assets or servicing liabilities that a servicer elects to subsequently
measure at fair value and requires separate presentation of servicing assets and
servicing  liabilities  subsequently  measured at fair value in the statement of
financial  position and additional  disclosures  for all  separately  recognized
servicing  assets and  servicing  liabilities.  This  statement is effective for
fiscal years beginning  after September 15, 2006, with early adoption  permitted
as of the beginning of an entity's fiscal year. Management believes the adoption
of this  statement will have no impact on the Company's  financial  condition or
results of operations.

                                       23


      In  February  2006,  the  Financial   Accounting  Standards  Board  issued
Statement of Financial  Accounting  Standards No. 155,  "Accounting  for Certain
Hybrid  Financial  Instruments,  an Amendment of FASB Standards No. 133 and 140"
(hereinafter  "SFAS No. 155").  This  statement  established  the accounting for
certain derivatives embedded in other instruments.  It simplifies accounting for
certain hybrid financial  instruments by permitting fair value remeasurement for
any hybrid instrument that contains an embedded  derivative that otherwise would
require  bifurcation  under SFAS No. 133 as well as eliminating a restriction on
the passive  derivative  instruments  that a qualifying  special-purpose  entity
("SPE") may hold under SFAS No. 140.  This  statement  allows a public entity to
irrevocably elect to initially and subsequently measure a hybrid instrument that
would be required to be separated  into a host  contract and  derivative  in its
entirety at fair value (with  changes in fair value  recognized  in earnings) so
long as that  instrument is not designated as a hedging  instrument  pursuant to
the statement.  SFAS No. 140 previously prohibited a qualifying  special-purpose
entity  from  holding a  derivative  financial  instrument  that  pertains  to a
beneficial  interest other than another derivative  financial  instrument.  This
statement is effective for fiscal years beginning after September 15, 2006, with
early  adoption  permitted  as of the  beginning  of an  entity's  fiscal  year.
Management  believes the adoption of this  statement  will have no impact on the
Company's financial condition or results of operations.

      In May 2005, the Financial  Accounting Standards Board issued Statement of
Financial   Accounting   Standards  No.  154,   "Accounting  Changes  and  Error
Corrections,"  (hereinafter "SFAS No. 154") which replaces Accounting Principles
Board  Opinion  No.  20,  "Accounting  Changes,"  and  SFAS  No.  3,  "Reporting
Accounting Changes in Interim Financial Statements - An Amendment of APB Opinion
No. 28." SFAS No. 154 provides  guidance on accounting for and reporting changes
in  accounting  principle  and error  corrections.  SFAS No. 154  requires  that
changes in  accounting  principle  be applied  retrospectively  to prior  period
financial  statements and is effective for fiscal years beginning after December
15, 2005. The Company does not expect SFAS No. 154 to have a material  impact on
its consolidated financial position, results of operations, or cash flows.

      In March 2005, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation  No. 47 ("FIN 47"),  "Accounting for Conditional Asset Retirement
Obligations."  FIN 47  clarifies  that the term  "conditional  asset  retirement
obligation,"  which as used in SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations,"  refers  to a legal  obligation  to  perform  an asset  retirement
activity in which the timing and (or) method of settlement are  conditional on a
future event that may or may not be within the control of the entity. The entity
must record a liability for a "conditional"  asset retirement  obligation if the
fair value of the obligation can be reasonably estimated.  FIN 47 also clarifies
when an entity would have sufficient information to reasonably estimate the fair
value of an asset retirement  obligation.  FIN 47 is effective no later than the
end of fiscal years ending after December 15, 2005.

      In December  2004,  the  Financial  Accounting  Standards  Board  issued a
revision to Statement of Financial  Accounting  Standards No. 123R,  "Accounting
for Stock Based  Compensation."  This  statement  supersedes APB Opinion No. 25,
"Accounting  for Stock  Issued to  Employees,"  and its  related  implementation
guidance.   This  statement   establishes   standards  for  the  accounting  for
transactions  in which an entity  exchanges its equity  instruments for goods or
services.  It also addresses  transactions in which an entity incurs liabilities
in  exchange  for  goods or  services  that are  based on the fair  value of the
entity's  equity  instruments  or that may be settled by the  issuance  of those
equity   instruments.   This  statement  focuses  primarily  on  accounting  for
transactions in which an entity obtains employee services in share-based payment
transactions.  This statement does not change the accounting  guidance for share
based  payment  transactions  with  parties  other than  employees  provided  in
Statement of Financial  Accounting  Standards No. 123. This  statement  does not
address the accounting for employee share ownership plans,  which are subject to
AICPA  Statement of Position  93-6,  "Employers'  Accounting  for Employee Stock
Ownership Plans." The Company has previously adopted SFAS 123 and the fair value
of accounting  for stock options and other equity  instruments.  The Company has
determined  that  there  was no  impact  to its  financial  statements  from the
adoption of this new statement.

      In January 2003,  the  Financial  Accounting  Standards  Board issued FASB
Interpretation  No.  46  "Consolidation  of  Variable  Interest   Entities,   an
Interpretation  of ARB No. 51"  (hereinafter  "FIN 46"). FIN 46 requires certain
variable interest entities to be consolidated by the primary  beneficiary of the
entity if the equity investors in the entity do not have the  characteristics of
a controlling  financial  interest or do not have sufficient  equity at risk for
the entity to finance its activities without additional  subordinated  financial
support from other  parties.  FIN 46 is effective for all new variable  interest
entities  created or acquired  after January 31, 2003.  The provisions of FIN 46
must be applied for the first interim or annual period  beginning after June 15,
2003.  The Company does not have any entities  that  require  disclosure  or new
consolidation as a result of adopting the provisions of FIN 46.

Off-Balance Sheet Arrangements

      We have no  off-balance  sheet  arrangements  that have or are  reasonably
likely to have a current or future effect on our financial condition, changes in
financial  condition,  revenues or expenses,  results of operations,  liquidity,
capital expenditures or capital resources.

                                       24


Results Of Operations

      The  following  table  summarizes  operating  results as a  percentage  of
revenue, respectively, for the periods indicated:

      Three Months Ended March 31, 2006 As Compared to March 31, 2005



                                                                 Three            Three
                                                                 Months          Months
                                                                March 31,       March 31,
                                                                   2006           2005                    Variance
                                                               ----------       ----------        -------------------------
                                                                                                         
Revenue                                                        $1,108,759       $1,313,768        -$205,010         -15.60%
Cost of goods sold                                               $287,952         $251,149          $36,803          14.65%
                                                               ----------       ----------          -------           ----
Gross profit before commissions expense                          $820,807       $1,062,619         $241,813         -22.76%

Commission expense                                               $385,443         $471,605         -$86,162         -18.27%
Gross profit after cost of goods sold and commissions            $435,364         $591,015        -$155,651         -26.34%
                                                               ----------       ----------          -------           ----

Operating expenses                                             $1,324,361       $1,237,108          $87,253           7.05%
                                                               ----------       ----------          -------           ----
Loss from operations                                            -$888,996        -$646,093        -$242,903         -37.60%
                                                               ==========       ==========          =======           ====


      Revenues

      During the three  months  ended  March 31,  2006 we had total  revenues of
$1,108,759  as compared to  revenues of  $1,313,768  for the same period in 2005
which  represents  a decline of $205,010 or 15.6%.  The decrease in our revenues
can be primarily attributed to the following factors:

      o     Our inability to attract new IBA's

      o     Lack of IBA participation in our auto-ship program

      o     our inability to fund  marketing  initiatives  and programs that may
            promote growth within new markets and existing ones

      Gross Profit

      During the three  months  ended  March 31,  2006 as  compared  to the same
period in 2005,  we had gross profits of $820,807 and  $1,062,620  respectively.
This represents a decline of $241,813 or 22.76%. The decline in our gross profit
is  primarily  attributed  to our  decreased  binary  sales in relation to other
revenue segments that have a higher percentage of cost-of-goods.

      Revenue By Segments

      The following table  summarizes our four revenue  segments as a percentage
of total revenue, respectively, for the periods indicated:

                        Three Months     Three Months
Revenue by Segments    March 31, 2006   March 31, 2005          Variance
-------------------    --------------   --------------    --------------------
Administration fees           $39,990          $41,096       -$1,106    -2.69%
Binary Sales                 $762,195         $948,422     -$186,227   -19.64%
Direct sales                 $201,677         $212,741      -$11,064    -5.20%
Affiliate sales              $100,612          $82,745       $17,867    21.59%
Sales Aids                     $4,285           $4,065          $220     5.41%
Warehouse                          --           24,700       -24,700     -100%
                           ----------       ----------      --------    -----
                           $1,108,759       $1,313,768     -$205,010   -15.60%
                           ==========       ==========      ========    =====

                                       25


      Details of the most  significant  changes from the quarter ended March 31,
2006 to the year ended March 31, 2005 are detailed below:

      Binary sales - The binary sales segment represents  $762,195 or 69% of the
total  revenue  earned  during the quarter  ended March 31, 2006, as compared to
$948,422 or 74% of the total revenues  earned during the quarter ended March 31,
2005.  Management  believes  that our  inability to properly  fund our marketing
initiatives  hindered  growth  and  retention  in this  segment.  EYI pays out a
maximum of 50% commission on binary sales.

      Direct sales - The direct sales segment represents  $201,677 or 18% of the
total  revenue  earned  during the quarter  ended March 31, 2006, as compared to
$212,741 or 17% of the total revenues  earned during the quarter ended March 31,
2005. No commissions are paid out on direct sales.

      Affiliate sales - The affiliate sales segment represents $100,612 or 9% of
the total revenue earned during the quarter ended March 31, 2006, as compared to
$82,745 or 6% of the total  revenues  earned  during the quarter ended March 31,
2005. EYI pays approximately 31% commissions on direct sales.

Expenses

      Operating Expenses

      The following  table  summarizes  operating  expenditures  for the periods
indicated:

Operating Expenses



                                Three Months     Three Months
                               March 31, 2006   March 31, 2005          Variance
                               --------------   --------------    --------------------
                                                                    
Consulting fees                      $259,736         $237,962     $21,774      9.15%
Legal and professional fees           $74,482          $69,125      $5,357      7.75%
Customer service                      $40,416          $86,534    -$46,118    -53.29%
Finance and administration           $499,973         $208,080    $291,893    140.28%
Sales and marketing                   $78,624           $3,718     $74,906   2014.68%
Telecommunications                    $30,660         $119,162    -$88,502    -74.27%
Wages and benefits                   $277,571         $406,627   -$129,056    -31.74%
Warehouse expense                     $62,898         $105,900    -$43,002    -40.61%
                                   ----------       ----------     -------      ----
                                   $1,324,360       $1,237,108     $87,252      7.05%
                                   ==========       ==========     =======      ====


      We  incurred  operating  expenses in the amount of  $1,324,361  during the
three months ended March 31, 2006,  compared to $1,237,108  for the three months
ended March 31, 2005. The following  explains the most  significant  changes for
the periods presented:

      Consulting  Fees - For the three months  ended March 31, 2006,  consulting
fees  totaled  $259,736 as compared to $237,962 for the three months ended March
31, 2005.  The net  difference  of $21,774 or 9.15% is  attributed to additional
fees paid to consultants to assist in Sales & Marketing, Operations and Investor
Relations

      Customer  Service - For the three months  ended March 31,  2006,  customer
services  fees  totaled  $40,416  and  represented  3% of  our  total  operating
expenditures,  as compared to $86,534 or 7% of the total operating  expenditures
for the three months  ended March 31, 2005.  These  expenditures  represent  the
services  provided  by EYI  Corp.  pursuant  to the  terms of  their  management
agreement with our subsidiary  Essentially Yours Industries,  Inc. ("EYII"). The
reduction of expenditures  is related to EYII utilizing other service  providers
to provide the services that were previously provided by EYI Corp.

      Finance and  Administration  - For the three  months ended March 31, 2006,
finance and  administration  fees totaled  $499,973 and  represented  38% of our
total  operating  expenditures,  as  compared  to  $208,080  or 17% of the total
operating  expenditures  for the three  months  ended  March 31,  2005.  The net
increase of $291,893 or 140.28% is primarily attributed to three main factors:

      o     Additional finance charges of approximately $165,000

                                       26


      o     Expenditures relating to Hong Kong operations of $67,000

      o     Investor relations fees of $58,000

      Sales  and  Marketing  - The Sales and  Marketing  expenses  for the three
months  ended  March 31,  2006 were  $78,624 as compared to $3,718 for the three
months  ended  March  31,  2005.  We  expensed  approximately  $28,000  for cost
associated with the registration of Code Blue in China. In addition, we expensed
approximately $40,000 for the Hong Kong Grand Opening event.

      Wages and Benefits - For the three months ended March 31, 2006,  wages and
benefits   totaled   $277,571  and   represented  21%  of  our  total  operating
expenditures, as compared to $406,627 or 33% of the total operating expenditures
for the three months ended March 31,  2005.  During the quarter  ended March 31,
2005, we expensed approximate $134,000 for vested employee stock options whereas
for the same quarter in the 2006, no employee stock options vested.

      Warehouse Expenses - For the three months ended March 31, 2006,  warehouse
expense totaled $62,898 and represented 5% of our total operating  expenditures,
as compared to $105,900 or 9% of the total operating  expenditures for the three
months ended March 31, 2005. The decline in attributed primarily to our decision
to close  our  fulfillment  center,  Halo  Distribution  LLC in  April  2005 and
outsource this service to a third party provider.

Summary Of Year End Results

      Year Ended December 31, 2005 As Compared To December 31, 2004



                                              Year ended     Year ended
                                              December 31,   December 31,
                                                  2005           2004               Variance
                                              -----------    -----------    ----------------------
                                                                                
Revenue                                        $4,980,408     $6,085,830    -$1,105,422    -18.16%
Cost of goods sold                             $1,165,976     $1,252,118       -$86,142     -6.88%
                                               ----------     ----------    -----------    -------
Gross profit before commissions expense        $3,814,432     $4,833,713    -$1,019,280    -21.09%

Commission expense                             $1,930,925     $2,486,970      -$556,045    -22.36%
                                               ----------     ----------    -----------    -------
Gross profit after cost of goods sold and      $1,883,508     $2,346,742      -$463,235    -19.74%
commissions

Operating expenses                             $5,550,077     $6,286,641      -$736,564    -11.72%
                                               ----------     ----------    -----------    -------
Loss from operations                          -$3,666,570    -$3,939,899      -$273,329     -6.94%
                                               ==========     ==========    ===========    =======


Year Ended December 31, 2005 Compared To Year Ended December 31, 2004

      Revenues

      During  the  year  ended  December  31,  2005  we had  total  revenues  of
$4,980,408  and gross  profits of  $1,883,508  or 38%  compared  to  revenues of
$6,085,831  and gross  profits of  $2,346,743  or 39%  during  the period  ended
December 31, 2004.  We  experienced  a total decline in revenue of $1,105,422 or
18% primarily due to the following factors:

      o     our  inability to attract new IBAs and retain  existing  IBAs in our
            network.

      o     our inability to fund  marketing  initiatives  and programs that may
            promote growth within new markets and existing ones.

      o     Lack of IBA participation in our autoship program.

                                       27


Revenue By Segments

      The following table  summarizes our four revenue  segments as a percentage
of total revenue, respectively, for the periods indicated:

Revenue By Segments

                         Year ended      Year ended
                        December 31,    December 31,
                            2005             2004              Variance
                        -----------     -----------    -----------------------
Administration fees        $128,967        $190,340       -$61,373     -32.24%
Binary Sales             $3,758,260      $4,734,697      -$976,437     -20.62%
Direct sales               $779,028        $885,314      -$106,286     -12.01%
Affiliate sales            $304,568        $265,435        $39,134      14.74%
Sales Aids                   $9,585         $10,045          -$460      -4.58%
                         ----------      ----------     ----------      -----
                         $4,980,408      $6,085,830    -$1,105,422     -18.16%
                         ==========      ==========     ==========      =====

      Details of the most  significant  changes from the year ended December 31,
2005 to the year ended December 31, 2004 are detailed below:

      Binary Sales - The binary sales  segment  represents  $3,758,260 or 75% of
the total revenue earned during the year ended December 31, 2005, as compared to
$4,734,697  or 78% of the total  revenues  earned  during the short period ended
December 31, 2004.  Management  believes that our inability to properly fund our
marketing  initiatives  hindered growth and retention in this segment.  EYI pays
out a maximum of 50% commission on binary sales.

      Direct Sales - The direct sales segment represents  $779,028 or 16% of the
total  revenue  earned  during the year ended  December 31, 2005, as compared to
$885,314 or 15% of the total revenues  earned during the year ended December 31,
2004. No commissions are paid out on direct sales.

      Affiliate Sales - The affiliate sales segment represents $304,568 or 6% of
the total revenue earned during the year ended December 31, 2005, as compared to
$265,435 or 4% of the total  revenues  earned during the year ended December 31,
2004. EYI pays approximately 31% commissions on direct sales.

Expenses

      Operating Expenses

      The following table summarizes  operating  expenditures as a percentage of
total operating expenses, respectively, for the periods indicated:

Operating Expenses

                               Year Ended     Year Ended
                              December 31,   December 31,
                                  2005           2004            Variance
                              -----------    -----------   -------------------
Consulting fees                $1,250,278     $1,438,362   -$188,083   -13.08%
Legal and professional fees      $306,948       $321,713    -$14,765    -4.59%
Customer service                 $198,500       $393,244   -$194,744   -49.52%
Finance and administration     $1,378,118     $2,101,842   -$723,724   -34.43%
Sales and marketing               $15,741       $154,638   -$138,897   -89.82%
Telecommunications               $946,331       $492,847    $453,483    92.01%
Wages and benefits             $1,282,438     $1,152,728    $129,711    11.25%
Warehouse expense                $171,724       $231,268    -$59,544   -25.75%
                               ----------     ----------   ---------    -----
                               $5,550,077     $6,286,641   -$736,564   -11.72%
                               ==========     ==========   =========    =====

                                       28


      We incurred  operating  expenses in the amount of $5,550,077  for the year
ended  December 31, 2005,  compared to $6,286,641  for the period ended December
31, 2004.  The overall  decline was 736,564 or 12%. The  following  explains the
most significant changes during the periods presented:

      Consulting  Fees - For the year ended December 31, 2005,  consulting  fees
totaled $1,250,278 and represented 23% of our total operating  expenditures,  as
compared to $1,438,362 or 23% of the total operating expenditures for the period
ended  December 31, 2004. The total decline of $188,083 or 13% s attributed to a
lesser amount of vested stock options issued to consultants during 2005.

      Customer Service - For the year ended December 31, 2005, customer services
fees totaled $198,500 and represented 4% of our total operating expenditures, as
compared to $393,244 or 6% of the total  operating  expenditures  for the period
ended December 31, 2004. In April 2004, we acquired our customer service support
department through a management  agreement with EYI Corp. Also in April 2004, we
hired our own  employees to perform this  function  and  therefore,  the related
expenses are included under Wages and Benefits.

      Finance and Administration - For the year ended December 31, 2005, finance
and  administration  expenditures  totaled $1,378,118 and represented 25% of our
total  operating  expenditures,  as compared to  $2,101,842  or 33% of the total
operating  expenditures  for the period ended December 31, 2004. The results for
2004 were higher as a result of expensing of stock  options and due to expensing
$390,000 in financing costs during the year ended December 31, 2004.

      Telecommunications   -   For   the   year   ended   December   31,   2005,
telecommunications  totaled  $946,331 and represented 17% of our total operating
expenditures,  as compared to $492,483 or 8% of the total operating expenditures
for the period ended December 31, 2004. Telecommunications increased $453,483 or
92% as we fully  expensed the remaining  balance of the Eyewonder  communication
component and application fees in the amount of $466,666.

      Wages and  Benefits  - For the year ended  December  31,  2005,  wages and
benefits  totaled   $1,282,438  and  represented  23%  of  our  total  operating
expenditures,   as  compared  to  $1,152,728  or  18%  of  the  total  operating
expenditures  for the period ended  December 31, 2004.  The increased  wages and
benefit expense is attributed to our increased staffing during 2005.

      Warehouse  Expense  - For the year  ended  December  31,  2005,  warehouse
expenses   totaled   $171,724  and   represented  3%  of  our  total   operating
expenditures,  as compared to $231,268 or 4% of the total operating expenditures
for the period ended December 31, 2004.  The overall  decrease of $59,544 or 26%
is attributed to the discontinuation of operations of Halo Distribution LLC.

Liquidity And Financial Condition

         Cash and Working Capital

                                As at           As at
                             March 31,      December 31,
                               2006             2005            Variance
                           -----------      -----------    ---------------------
Current assets                $582,666          382,057     $200,609      52.51%
Current Liabilities          2,160,742        2,347,087    -$186,345      -7.94%
                           -----------      -----------    ---------     ------
Working Capital (deficit)  -$1,578,077      -$1,965,030     $386,953      19.69%
                           ===========      ===========    =========     ======

      We had cash of  $190,837  as at March  31,  2006,  compared  with  cash of
$25,639 as at December 31, 2005. We had a working  capital  deficit at March 31,
2006 and December 31, 2005 of $1,578,077 and $1,965,030 respectively.

Liabilities



                                               As at             As at
                                              March 31,       December 31,
                                                2006             2005                 Variance
                                             -----------      -----------      ---------------------
                                                                                  
Accounts payable and accrued liabilities      $1,427,120       $1,929,049      -$501,929     -26.02%
Accounts payable - related parties              $643,622         $328,038       $315,584      96.20%
Notes payable - related party                    $90,000          $90,000             $0       0.00%
                                              ----------       ----------      ---------     ------
                                              $2,160,742       $2,347,087      -$186,345      -7.94%
                                              ==========       ==========      =========     ======


                                       29


      We had a decrease  of 26.02% in Accounts  Payable and Accrued  Liabilities
during the three months ended March 31, 2006. We also experienced an increase of
96.20% in Accounts  Payable-Related  Parties  during this same  period.  In both
cases, the majority of the variance is due to a reclassification of debt owed to
two of our officers in the amount of $334,175. This amount was reclassified from
Accounts Payable and Accrued Liabilities to Accounts Payable - Related Parties.

Cash Used in Operating Activities

      Cash used in  operating  activities  for the three  months ended March 31,
2006 was  $901,226  compared to  $157,219  for the  comparative  period in 2005,
representing an increase of $743,707 or 472%.

Cash Provided by Financing Activities

      Cash provided by financing activities for the three months ended March 31,
2006 was  $1,084,565,  compared to $141,324 for the three months ended March 31,
2005. Our financing  activities are primarily  through our financing  agreements
with Cornell Capital LLC.

Financing Requirements

      Our consolidated  interim financial statements included in this Prospectus
have been prepared  assuming that we will continue as a going concern.  As shown
in the  accompanying  financial  statements,  we had negative working capital of
approximately $1,578,000 and an accumulated deficit of approximately $12,223,000
incurred through March 31, 2006.

      Our  current  sources of working  capital  are  sufficient  to satisfy our
anticipated  current  working capital needs. On April 24, 2006 we entered into a
Securities  Purchase  Agreement with the Cornell  Capital  Partners,  Taib Bank,
B.S.C., and Certain Wealth,  Ltd. Pursuant to this agreement,  we agreed to sell
to these  entities  secured  convertible  debentures in the aggregate  principal
amount of $4,500,000.  We believe that this financing  arrangement  will provide
the necessary cash flow to meet our operational needs for the next 24 months.

      In the event that this  financing  does not support our  operational  cash
flow  requirements,  then we may have to scale back our plan of  operations  and
operating  expenditures.  We  anticipate  that we will  continue to incur losses
until such time as the revenues we are able to generate from sales and licensing
of  our  products  exceed  our  increased  operating  expenses.   We  base  this
expectation in part on the expectation  that we will incur  increased  operating
expenses in completing  our stated plan of operations  and there is no assurance
that we will generate revenues that exceed these expenses.

                                       30


                             DESCRIPTION OF BUSINESS

Overview

      We are in the business of selling,  marketing,  and distributing a product
line consisting of  approximately 27 nutritional  products in three  categories,
dietary  supplements,  personal care products and water filtration systems.  Our
most successful product is Calorad, a liquid  collagen-based  dietary supplement
presently available in the market. These products are marketed through a network
marketing  program  in which IBAs  (Independent  Business  Associates)  purchase
products for resale to retail  customers as well as for their own personal  use.
We have a list of over 380,000  IBAs, of which  approximately  8,500 we consider
"active". An "active" IBA is one who purchased our products within the preceding
12 months.  Over  1,200 of these  IBAs are  considered  "very  active".  A "very
active" IBA is one who is on our  automatic  Convenience  Program and is current
with their annual administration fee.

      The IBAs in our network are  encouraged  to recruit  interested  people to
become  new  distributors  of our  products.  New IBAs are  placed  beneath  the
recruiting  IBA in the  "network"  and are  referred  to as being in that  IBA's
"down-line"  organization.  Our marketing plan is designed to provide incentives
for  IBAs  to  build,   maintain  and  motivate  an  organization  of  recruited
distributors  in  their   down-line   organization  to  maximize  their  earning
potential.  IBAs generate income by purchasing our products at wholesale  prices
and  reselling  them at retail  prices.  IBAs also earn  commissions  on product
purchases generated by their down-line organization.

      On an ongoing basis we review our product line for  duplication  and sales
trends and make adjustments accordingly.  As of March 31, 2006, our product line
consisted of: (i) 18 dietary supplement products;  (ii) 7 personal care products
consisting  primarily  of  cosmetic  and skin care  products;  and (iii) 2 water
filtration  system  products.   Our  products  are  primarily   manufactured  by
Nutri-Diem,  Inc.,  a  related  party,  and  sold  by us  under  a  license  and
distribution  agreement  with  Nutri-Diem  Inc.  Certain of our own products are
manufactured  for us by  third  party  manufacturers  pursuant  to  formulations
developed  for us.  Our  products  are sold to our IBAs  located  in the  United
States, Canada and Asia.

      We  believe  that our  network  marketing  system is  suited to  marketing
dietary  supplements,  personal  care  products  and water  filtration  products
because  sales of such products are  strengthened  by ongoing  personal  contact
between IBAs and their  customers.  Our network  marketing  system  appeals to a
broad  cross-section of people,  particularly those looking to supplement family
income or who are  seeking  part-time  work.  IBAs are  given  the  opportunity,
through  our  sponsored  events and  training  sessions,  to network  with other
distributors, develop selling skills and establish personal goals. We supplement
monetary incentives with other forms of recognition in order to motivate IBAs.

Recent Corporate Developments

      We experienced the following significant  developments through the date of
this filing and during fiscal 2006:


      o     On April 24, 2006, we entered a Securities  Purchase  Agreement with
            Cornell Capital Partners, Taib Bank, B.S.C. and Certain Wealth, Ltd.
            pursuant  to which we  entered  into the  following  agreements:  an
            Investor  Registration Rights Agreement,  Irrevocable Transfer Agent
            Instructions and a Security Agreement.  Pursuant to the terms of the
            Securities Purchase Agreement, we may sell convertible debentures to
            these  entities in the principal  amount of $4,500,000  plus accrued
            interest which are  convertible  into shares of our common stock. Of
            this amount  $1,500,000 has been received,  $1,500,000  must be paid
            two (2) business days prior to the date a registration  statement is
            filed with the  Securities  and Exchange  Commission  and $1,500,000
            shall be paid two (2)  business  days  prior to the date  that  such
            registration  statement is declared  effective by the Securities and
            Exchange Commission.  We received net proceeds of $1,305,000 (net of
            fees associated with the issuance of the convertible  debentures) on
            April 27, 2006 in  connection  with the  issuance of  $1,500,000  of
            convertible debentures in the following principal amounts:  $750,000
            to Cornell  Capital  Partners,  $416,667 to Taib Bank,  B.S.C.,  and
            $333,333  to  Certain  Wealth,  Ltd.  pursuant  to the  terms of the
            Securities  Purchase  Agreement.  On June 8, 2006,  we received  net
            proceeds of $1,350,000,  associated  with the issuance of the second
            tranche of secured convertible debentures in the principal amount of
            $1,500,000 in the following  principal amounts:  $750,000 to Cornell
            Capital  Partners,  $416,667 to TAIB Bank,  B.S.C.,  and $333,333 to
            Certain  Wealth,  Ltd. On June 20, 2006,  we receive net proceeds of
            $1,350,000,  associated  with the  issuance of the third  tranche of
            secured   convertible   debentures  in  the   principal   amount  of
            $1,500,000,  in the following  amounts:  $750,000 to Cornell Capital
            Partners,  $416,667 to TAIB Bank,  B.S.C.,  and  $333,333 to Certain
            Wealth, Ltd.



                                       31


      o     Pursuant to the terms of the Securities  Purchase  Agreement and the
            issuance of our convertible debentures,  on April 24, 2006 we issued
            to Cornell Capital  Partners  seventeen (17) warrants to purchase up
            to an  aggregate  124,062,678  shares  of our  common  stock  at the
            discretion  of Cornell  Capital  Partners each for good and valuable
            consideration. Pursuant to the terms of the warrants Cornell Capital
            Partners is entitled to purchase from us: (1)  10,416,650  shares of
            our common stock at $0.02 per share,  (2)  13,888,866  shares of our
            common stock at $0.03 per share, (3) 10,416,650 shares of our common
            stock at $0.04 per share,  (4) 8,333,320  shares of our common stock
            at $0.05 per share,  (5)  6,944,433  shares of our  common  stock at
            $0.06 per share,  (6) 5,952,371  shares of our common stock at $0.07
            per share,  (7)  11,250,000  shares of our common stock at $0.08 per
            share, (8) 10,000,000 shares of our common stock at $0.09 per share,
            (9) 19,000,000  shares of our common stock at $0.10 per share,  (10)
            8,181,818  shares  of our  common  stock at $0.11  per  share,  (11)
            7,500,000  shares  of our  common  stock at $0.12  per  share,  (12)
            3,333,333  shares  of our  common  stock at $0.15  per  share,  (13)
            2,500,000  shares  of our  common  stock at $0.20  per  share,  (14)
            2,000,000  shares  of our  common  stock at $0.25  per  share,  (15)
            1,666,666  shares  of our  common  stock at $0.30  per  share,  (16)
            1,428,571  shares  of our  common  stock at $0.35 per share and (17)
            1,250,000  shares  of our  common  stock at  $0.40  per  share  upon
            surrender of the Warrants (or as subsequently  adjusted  pursuant to
            the  terms  of  each  Warrant)  .  Each  Warrant  has  "piggy  back"
            registration rights and shall expire five (5) years from the date of
            issuance, on or about April 24, 2011.

      o     On April  6,  2006,  Essentially  Yours  Industries  (International)
            Limited ("EYIINT"), our wholly owned subsidiary,  signed a Letter of
            Intent and Good Faith  Commitment  ("LOI")  with Raul  Bautista  and
            Rommel  Panganiban to act as managing  partners and distributors for
            the  Philippines.  The LOI is subject to the entry into a definitive
            agreement between the parties on or before July 1, 2006.

      o     On April 3, 2006,  we signed a termination  agreement  ("Termination
            Agreement")  with Cornell Capital  Partners  terminating our Standby
            Equity  Distribution  Agreement,  Registration  Rights Agreement and
            Escrow  Agreement  previously  entered  into  with  Cornell  Capital
            Partners on May 13, 2005.

      o     On March 14, 2006,  we entered into an agreement  with Porter Public
            Relations,  Inc. ("Porter") pursuant to which Porter will provide us
            with certain public relations  services to promote the launch of the
            Code  Blue  water   filtration   system  and  the  Longevity  Series
            consisting of Calorad(R),  Prosoteine(R)  and Calorad(R)  Cream.  In
            consideration  of which we agreed to pay  Porter a fee of $5,000 per
            month  for up to 40 hours per  month.  The  agreement  is based on a
            month to month term.

      o     On February 6, 2006,  the Jay Sargeant  Trust was  dissolved and the
            related  shares were disbursed to the  beneficiaries.  In connection
            with this  transaction,  268,639  common  shares  were  returned  to
            treasury at par value.

      o     On January 27, 2006, we entered into a Consulting Agreement with Mr.
            Lou Prescott,  for a period of six (6) months and US$5,000 per month
            to provide EYI with assistance in developing Mr. Prescott's business
            to business  marketing  model for EYI.  Pursuant to the terms of the
            agreement we also agreed to purchase Mr. Prescott's gold lead system
            and during the term of the agreement,  to provide Mr.  Prescott with
            100% of the leads generated by the system.

      o     On January  19,  2006,  we entered  into an  agreement  with  Global
            Consulting Group Inc.  ("Global") on a month to month basis.  Global
            provides investor  relations services and creates investor awareness
            for a fee of $15,000.00 USD per month. This agreement was terminated
            on April 17, 2006.

      o     On December 21, 2005,  we entered  into a Settlement  Agreement  and
            Mutual Release with Business Centers, LLC and Halo Distribution, LLC
            in settlement of the legal action commenced  against EYI by Business
            Centers,  LLC On June,  2005.  See  "Item  3. - Legal  Proceedings",
            below.

      o     On December 6, 2005,  we  incorporated  a wholly  owned  subsidiary,
            Essentially  Yours Industries  (International)  Inc. ("EYI INTL") to
            facilitate our expansion throughout other Southeast Asian countries.

      o     On December 2, 2005, we held our 2005 Annual General Meeting ("AGM")
            in Las Vegas,  Nevada. At the AGM the stockholders voted to increase
            the number of our authorized shares of common stock from 300,000,000
            to 1,000,000,000 and appointed Mr. Dori O'Neill and Mr. Jay Sargeant
            as Directors.

                                       32


      o     On September 23, 2005, EYI and Essentially  yours  Industries  (Hong
            Kong) Limited ("EYI HK"), our wholly owned subsidiary,  entered into
            an  agency   agreement  (the  "Agency   Agreement")  with  Guangzhou
            Zhongdian Enterprises (Group) Co. Ltd. ("GZE") and China Electronics
            Import and Export South China Corporation ("CEIEC"). Pursuant to the
            terms of the  Agency  Agreement,  EYI HK  granted  to CEIEC  and its
            wholly owned subsidiary GZE, the exclusive right to distribute EYI's
            Code  Blue(TM)  water  filtration  systems  (the  "Water  Filtration
            Systems") in China for a period of two years subject to, among other
            things, the following conditions:  (i) CEIEC purchasing a minimum of
            4,000,000 Water Filtration  Systems in each year commencing in 2006;
            (ii)  EYI HK  issuing  an  exclusive  agency  certificate  to  CEIEC
            confirming the grant of agency rights;  (iii)EYI HK guaranteeing the
            safety of its products to be sold on the Chinese market and that the
            packaging  specifications  will meet the product safety standard and
            packaging  standards as required in China;  (iv) CEIEC committing to
            the  purchase  (the  "Purchase   Plan"):  of  the  amount  of  Water
            Filtration  Systems outlined in the following purchase plan; (v) If,
            in any year CEIEC purchases  fewer than 4,000,000  Water  Filtration
            Systems in the  Purchase  Plan it will  cease to have the  exclusive
            agency  rights to the Water  Filtration  Systems but  continue to be
            non-exclusive agents of EYI HK; (vi) If, in any year CEIEC purchases
            fewer than one-half of the Water Filtration  Systems in the Purchase
            Plan,  EYI HK may  at its  option  adjust  the  price  of the  Water
            Filtration  Systems  supplied to CEIEC under the Purchase  Plan; and
            (vii) CEIEC agree to obtain all  required  regulatory  approvals  in
            China  relating  to the  marketing  and  distribution  of the  Water
            Filtration  Systems.  Pursuant to the terms of the Agency Agreement,
            CEIEC  reserves  the  right,  upon  reasonable  notice to EYI HK, to
            increase,  or decrease the number of Water  Filtration  System units
            that it purchases  under the Purchase Plan,  based on its evaluation
            of market demand in China,  and agreed to commence  purchases  under
            the Purchase Plan in October  2005,  and place  subsequent  purchase
            orders on a quarterly  basis. The parties agreed that CEIEC may upon
            reasonable  notice to EYI HK,  assign  its  interest  in the  Agency
            Agreement  to its  nominee  company,  but  remains  a  party  to the
            agreement notwithstanding any such assignment. As of March 30, 2006,
            the Company has not received any purchase orders from CEIEC.  Due to
            delays  by MARTI not  providing  adequate  Code Blue  pitcher/filter
            samples,  the  product  was  unable  to meet  the  deadline  for the
            December product review. Code Blue pitcher/filters are now slated to
            be included in the March 2006 quarterly Chinese  government  product
            review.

      o     EYI HK entered into a Logistics Management Agreement dated September
            1,  2005  with  All  In  One  Global   Logistics   Ltd.  to  provide
            international freight, warehousing and distribution services in Hong
            Kong for a period of two years.

      o     On  September  1, 2005,  EYI  entered  into an  agreement  for legal
            services  with  M.  Ali  Lakhani   Personal  Law  Corporation   (the
            "Contractor") to provide EYI and its subsidiaries with certain legal
            services in  exchange  for a monthly fee of US $8,000 and a one time
            issuance  of 500,000  restricted  shares of our common  stock to the
            Contractor  or  its  nominee,   pursuant  to  Regulation  S  of  the
            Securities Act of 1933. The contract is on a month-to-month basis.

      o     On August 28, 2005, we incorporated a wholly subsidiary, EYI HK. The
            EYI HK office  consists  of the  entire  15th  floor in a  centrally
            located building at No. 1 Minden Avenue, Tsim Sha Tsui, Kowloon. The
            office is intended to be used to service  distributors and provide a
            product pick up depot for Code Blue(TM)  water  filtration  systems,
            Calorad(R),  Prosoteine(R)  Agrisept-L(R),  Definition(R)  cream and
            drops and the newest EYI product, Calorad Cream. The new office will
            also play a role in supporting the sales, distribution and logistics
            of the CEIEC agency  agreement.  In connection  with opening our new
            office in Hong Kong,  on  September  28, 2005 EYI HK entered  into a
            Lease with  Dombas  Estates  Limited  for the lease of office  space
            located at Nos.  1-3,  15th Floor of No. 1 Minden  Avenue,  Tsim Sha
            Tsui, Kowloon. The lease is for a two year term at a monthly rent of
            approximately $3,500 USD (HK$22,920).

      o     On September  12,  2005,  we retired  $5,000 of the Taib Bank,  E.C.
            debenture  plus  $14,245 in interest by  converting  375,146  common
            shares.

      o     On August 16,  2005,  we  retired  $170,000  of the Taib Bank,  E.C.
            debenture  plus $10,830 in interest by converting  4,487,096  common
            shares.

      o     On August  15,  2005,  we retired  $75,000  of the Taib  Bank,  E.C.
            debenture by converting 2,027,027 common shares.

      o     On August 1, 2005,  we entered into a  promissory  note with Cornell
            Capital  Partners,  LP  ("Cornell")  for  the  principal  sum of One
            Million  (U.S.)  dollars  ($1,000,000)  and  payable by one  initial
            payment of One Hundred  Thousand  Dollars  ($100,000);  eleven equal
            weekly installments of Seventy Five Thousand Dollars ($75,000);  and
            one  additional  installment  of One  Hundred  Five  Thousand  Eight
            Hundred  Eighty  Seven  Dollars and Sixty Seven Cents  ($105,887.67)
            commencing  September  3,  2005.  Interest  on this  note is  twelve
            percent (12%) per annum.  The  promissory  note was fully retired on
            December 16, 2005.

                                       33


      o     On  August  3,  2005,  the  Company  retired  the  Cornell  $250,000
            debenture  signed on June 22, 2004, plus a 20% premium of $50,000 by
            using the cash proceeds of the  promissory  note signed on August 1,
            2005.

      o     On July 28, 2005,  we entered into an Investor  Relations  Agreement
            (the "IR Agreement")  with Agora Investor  Relations Corp ("AGORA").
            Pursuant to the terms of the  agreement  AGORA  agreed to provide us
            with certain  services  including  marketing,  branding and investor
            communication  services, in consideration of which we agreed to: (i)
            pay AGORA a fee of $2,500 per month commencing August 1, 2005 (which
            fee  has  been  paid);  and  (ii)  issue  to  AGORA  warrants  to be
            registered  by us to  purchase  350,000  shares of our common  stock
            exercisable  at price of $0.06 per share and  vesting  over a twelve
            month period. The agreement is for an initial term of August 1, 2005
            to July 31, 2006 and is renewable at EYI's option for an  additional
            term of 12 months under the same terms and conditions. On October 5,
            2005 we amended the IR Agreement  with Agora.  The IR Agreement  was
            amended to provide for the issuance of 250,000  restricted shares of
            our common  stock in place of the  warrants  to be received by Agora
            initially under the IR Agreement. The shares were issued pursuant to
            Regulation 5 of the  Securities  Act of 1933 and  Canadian  National
            Instrument 45-106 on the basis that Agora is an accredited investor.

      o     On  May  27,  2005,  we  filed  a  registration  statement  on  SB-2
            (Registration  No.  333-125344)  registering  the  resale  of  up to
            97,264,558  shares of our common  stock to be sold by certain of our
            stockholders,  including up to an aggregate of 85,000,000  shares of
            our  common  stock  pursuant  to  our  Standby  Equity  Distribution
            Agreement with Cornell Capital Partners.  The registration statement
            was subsequently  declared  effective by the SEC on July 29, 2005.

      o     On May 13,  2005,  we  entered  into a Standby  Equity  Distribution
            Agreement  with  Cornell  Capital  Partners,  pursuant  to  which we
            entered  into  the  following  agreements:   a  Registration  Rights
            Agreement,  an Escrow  Agreement,  and a Placement Agent  Agreement.
            Pursuant  to  the  terms  of the  new  Standby  Equity  Distribution
            Agreement,  we may, at our discretion,  periodically  issue and sell
            shares  of our  common  stock  for a  total  purchase  price  of $10
            million.   If  we  request   advances   under  the  Standby   Equity
            Distribution  Agreement,  Cornell  Capital  Partners  will  purchase
            shares of our  common  stock for 98% of the lowest  volume  weighted
            average  price  on the  Over-the  Counter  Bulletin  Board  or other
            principal  market on which our common stock is traded for the 5 days
            immediately  following  the advance  notice  date.  Cornell  Capital
            Partners will retain 5% of each advance under the new Standby Equity
            Distribution  Agreement.  We may not request advances in excess of a
            total of $10  million.  Pursuant  to the  terms of our  Registration
            Rights  Agreement  and the standby  Equity  Agreement  with  Cornell
            Capital  Partners,  we agreed to register and  qualify,  among other
            things,  the additional shares due to Cornell Capital Partners under
            the  Standby  Equity  Distribution  Agreement  under a  registration
            statement  filed with the SEC. We signed a Termination  Agreement on
            May 13,  2005,  for the purpose of  terminating  our Standby  Equity
            Distribution  Agreement,  Registration  Rights  Agreement and Escrow
            Agreement  previously  entered into with Cornell Capital Partners on
            June 22, 2004.  During the year ended December 31, 2005, the Company
            issued   40,874,047   common  shares  to  Cornell  in  exchange  for
            $1,700,000.

      o     On May 11, 2005, we entered into a Reseller Agreement with MARTI for
            a term of five (5) years,  pursuant to which MARTI appointed EYII as
            the exclusive  distributor  of certain  specially  formulated  MARTI
            products on a consignment basis and provided EYII with 1000 units of
            inventory for sale to its  customers,  proceeds of which are subject
            to fee  payments to MARTI as set out in the  schedules  accompanying
            the agreement.

      o     On April 29, 2005,  Essentially Yours  Industries,  Inc., our wholly
            owned  subsidiary  ("EYII")  signed a letter of intent with Metals &
            Arsenic  Removal  Technology,  Inc.  ("MARTI")  for the  purpose  of
            marketing  certain  of  MARTI's  products  provided  to  EYII  on  a
            consignment  basis and  assigning  marketing  rights to  certain  of
            MARTI's  product  lines to EYII,  subject  to  EYII's  entry  into a
            definitive  agreement with MARTI by November 1, 2005.  Subsequently,
            on May 11, 2005 EYII entered into Reseller  Agreement with MARTI for
            a term of five (5) years,  pursuant to which MARTI appointed EYII as
            the exclusive  distributor  of certain  specially  formulated  MARTI
            products on a consignment basis and provided EYII with 1000 units of
            inventory for sale to its  customers,  proceeds of which are subject
            to fee  payments to MARTI as set out in the  schedules  accompanying
            the agreement.

                                       34


      o     On  April  25,  2005,  we filed a letter  with  the  Securities  and
            Exchange  Commission  requesting the withdrawal of our  registration
            statement on Form SB-2,  originally  filed on September 17, 2004. We
            intend to file a new registration statement on Form-SB-2 registering
            the resale of  97,264,558  shares of our common  stock held or to be
            sold  by  certain  of our  stockholders,  including  Cornell,  which
            intends  to sell up to an  aggregate  of  85,000,000  shares  of our
            common stock pursuant to our Standby Equity  Distribution  Agreement
            with Cornell.

      o     On  April  22,  2005,  EYII  entered  into  a  Fulfillment  Services
            Agreement with Source 1 Fulfillment  ("Source One") to warehouse and
            ship our products.  Pursuant to the terms of the  agreement,  Source
            One agreed to provide certain  storage and  fulfillment  services to
            EYII at the rates set out in the schedules to the agreement.  Source
            One also agreed to pay a referral  commission of 10% of all handling
            fees for any client EYII brings to Source One. The  agreement is for
            a term  of one  year  and  automatically  renews  each  year  unless
            terminated  by  either  party in  accordance  with the  terms of the
            agreement.  Subsequently,  in May, 2005, we ceased  warehousing  and
            distributing  our products  through Halo  Distribution LLC ("Halo"),
            our  wholly  owned  subsidiary.  We  presently  intend  to  continue
            warehousing and shipping our products through Source one.

      o     On April 4, 2005, we entered into a redemption  agreement  with TAIB
            Bank E.C.  pursuant to which TAIB agreed to acquire by  assignment a
            two year 5% secured convertible  debenture issued to Cornell Capital
            Partners,  L.P.  in  the  amount  of  $245,000,  and a two  year  5%
            convertible  debenture in the amount of $5,000 held by Kent Chou, in
            consideration  of which we agreed not to modify or  renegotiate  the
            terms of our Standby  Equity  Distribution  Agreement  with  Cornell
            Capital Partners,  and to use any proceeds obtained by EYI under the
            Standby  Equity  Distribution  Agreement  to  make  payments  on the
            debentures. The debentures were assigned to TAIB on April 4, 2005.

      o     On February  24, 2005,  we received a loan of $200,000  from Cornell
            Capital  Partners  secured by a secured  promissory  note. Under the
            terms of the Secured Note, the loan is payable by April 24, 2005 and
            accrues  interest at a rate of 12% per annum. In connection with the
            issuance of the Secured Note, we agreed to: (i) pay Cornell  Capital
            Partners  a  fee  of  $20,000;   and  (ii)  pay  Yorkville  Advisors
            Management  LLC a  structuring  fee in the  amount of  $2,500.  As a
            condition to Cornell  Capital  Partners' entry into the Secured Note
            on February 24, 2005, an employee of EYI, Janet  Carpenter,  entered
            into a guaranty agreement with Cornell Capital Partners and a pledge
            and escrow  agreement,  Ms.  Carpenter  agreed  to:  (i)  personally
            guarantee the payment and  performance  obligations of EYI under the
            Secured Note; and (ii) pledge to Cornell Capital Partners  3,000,000
            shares of EYI held by her to secure the obligations of EYI under the
            Secured  Note.  In  consideration  of Ms.  Carpenter  providing  the
            guarantee  and pledge,  EYI entered  into a bonus  shares  agreement
            dated  February  14, 2005 with Ms.  Carpenter,  pursuant to which we
            agreed to issue to Ms. Carpenter  800,000 shares of our common stock
            at a deemed price of $0.05 per share.  The shares were issued to Ms.
            Carpenter  pursuant to Regulation S of the  Securities  Act on April
            29, 2005.

      o     On February 10, 2005,  we entered into a loan  agreement  with Janet
            Carpenter,  pursuant to which we loaned Ms.  Carpenter  $180,000 for
            the purpose of exercising  3,000,000  incentive stock options issued
            to Ms. Carpenter under our stock compensation  program.  The loan is
            payable on demand and  accrues  interest  at a rate of 4% per annum.
            The loan was secured by a promissory note dated  effective  February
            10, 2005 and deemed to be a subscription  receivable.  On August 10,
            2005,  the  promissory  note was  re-assigned  to  Winslow  Drive in
            exchange for the 3,000,000 shares.

      o     In January,  2005,  our wholly owned  subsidiary  642706 B.C.  Ltd.,
            doing  business as EYI  Management,  entered into a lease  agreement
            with  Golden  Plaza  Company  Ltd.  and  681563,  for the purpose of
            leasing a 12,200  square foot building  located in Burnaby,  British
            Columbia,  Canada.  The  lease is for a term of seven  years  ending
            December 31, 2011 and  renewable  for an  additional  period of five
            years.

Corporate Organization

      We were  incorporated  under  the laws of the  State of Nevada on June 27,
1996, under the name of "Inter N. Corporation".  From 1999 to 2002, our business
plan was to create a  product  line of  miniaturized  microchip  technology  for
insertion  into  inanimate  objects or injection  under the skin of animals.  We
again changed the focus of our business,  to oil and gas  opportunities in 2002.
From 1999 to 2003 we were a  non-operating  company with limited assets and were
not able to raise sufficient funds to fund our business operations.  On December
31, 2003,  we completed a share  exchange (the  "Exchange")  with certain of the
shareholders (the "EYI  Shareholders")  of Essentially Yours Industries,  Inc. a
Nevada  Corporation  ("EYI  Nevada"),  under a Share Exchange  Agreement,  dated
November 4, 2003, (the "Exchange Agreement").

                                       35


      Under the terms of the Exchange Agreement, we issued 117,991,875 shares of
our  common  stock,  representing  approximately  79.9% of our  then-outstanding
common stock, to the EYI  shareholders in exchange for 15,372,733  shares of EYI
Nevada common stock held by them. As a result, we underwent a change of control.
Following   completion  of  the  Exchange,   the  EYI  shareholders   controlled
approximately  79.9% of our outstanding common stock and we owned  approximately
97.9% of EYI Nevada's issued and  outstanding  capital stock. As a result of the
transaction,  we acquired the  business of EYI Nevada and EYI Nevada  became our
majority-owned subsidiary.  Concurrent with the acquisition, we changed our name
to "EYI Industries,  Inc.", our officers and directors resigned, and nominees of
the EYI Shareholders were elected as successors.

Subsidiaries And Affiliates

      We  presently  have  eight  subsidiaries  through  which  we  conduct  our
operations, described as follows:

      o     Essentially Yours Industries,  Inc., a Nevada Corporation  (Majority
            Owned).  EYI  Nevada  was  organized  on  June  20,  2002  upon  the
            completion  of a merger  between  Burrard  Capital  Corp.,  a Nevada
            Corporation,  and  Essentially  Yours  Industries,  Inc.,  a  Nevada
            Corporation.  The resulting  merged entity  continued under the name
            Essentially Yours Industries,  Inc. EYI Nevada is our majority owned
            subsidiary which presently conducts our US business operations.

      o     642706 B.C. Ltd., dba EYI  Management,  located in Burnaby,  British
            Columbia  (Wholly Owned),  provides  accounting,  customer  service,
            marketing and financial advisory services to us. 642706 B.C. Ltd. is
            our wholly owned  subsidiary and has experience in marketing  health
            and wellness products and experience in financial  reporting for the
            United States and Canada.

      o     Essentially  Yours Industries  (International)  Limited,  located in
            Hong  Kong,  (Wholly  Owned),  subsidiary  of  EYI  Industries  Inc.
            incorporated on December 6, 2005.

      o     Essentially  Yours Industries  (Hong Kong) Limited,  located in Hong
            Kong, (Wholly Owned), subsidiary of EYI Industries Inc. incorporated
            on August, 22, 2005.

      o     Essentially  Yours  Industries  (Canada),  Inc.  (Wholly  Owned),  a
            Canadian Federal Corporation, was incorporated in September 2002 and
            is located in Burnaby, British Columbia, and handles Canadian sales,
            Canadian sales taxes and Canadian reporting.

      o     World Wide  Buyers'  Club Inc.,  a Nevada  Corporation  (51% Owned).
            World  Wide  Buyers'  Club Inc.  was  organized  by a joint  venture
            agreement effective May 6, 2004.

      o     RGM International,  Inc., a Kentucky Corporation (Wholly Owned). RGM
            was incorporated in July 1997. RGM is a dormant  investment  company
            which holds 1% of Halo.

      o     Halo Distribution LLC, 7109 Global Drive, Louisville, Kentucky. Halo
            was organized on January 15, 1999 in the state of Kentucky.  Halo is
            owned  99%  by  Essentially  Yours  Industries,  Inc.  and 1% by RGM
            International,  Inc.  Halo  was  the  distribution  center  for  the
            Company's  product,  in addition to other products,  until April 30,
            2005, at which time the Company made the decision to discontinue its
            operations.

      The  following  are our  affiliates  who are  controlled by certain of our
directors and shareholders, as described below:

      o     Nutri-Diem,   Inc.,  470,  Boul.  Sir  Wilfrid-Laurier   bureau  103
            Mont-St-Hilaire,   Quebec,   Canada.   Nutri-Diem,   Inc.   is   the
            manufacturing  facility in Quebec that supplies approximately 87% of
            our  products.   EYI  Nevada  negotiated  with  Nutri-Diem  Inc.  an
            exclusive  Distribution and Licensing  Agreement where by EYI Nevada
            will sell the  products  of  Nutri-Diem  Inc.,  such as Calorad  and
            Agrisept-L,  in the United  States and Canada,  and elsewhere in the
            world, subject to suitable arrangements.  Michel Grise, President of
            Nutri-Diem, Inc. is one of our shareholders and a director of one of
            our subsidiaries.

                                       36


      o     Essentially  Yours  Industries  Corp.,  located  in  Burnaby,  B.C.,
            provides services to EYI Nevada under a management agreement.  These
            services   consist  of  the   following:   computer  and  management
            information  systems and support.  Payments due under the management
            agreement  are at cost of services  plus a mark-up of  approximately
            5%.  Essentially  Yours Industries Corp. is controlled by certain of
            our  shareholders  including Jay  Sargeant,  our President and Chief
            Executive Officer.

Key Operating Strengths

      We believe the source of our success is  primarily  attributed  to our IBA
support programs coupled with our IBA compensation programs. We provide our IBAs
with quality products and competitive  commission programs,  along with training
and  motivational  events and  services.  We believe that we have  established a
strong operating  platform to support IBAs and facilitate future growth. The key
components of this platform include the following:

      o     quality dietary  supplements,  water filtration systems and personal
            care  products  that appeal to consumers  demands for products  that
            contribute to a healthy lifestyle;

      o     a compensation program that permits IBAs to earn income from profits
            on the resale of products and residual income from product purchases
            within an IBAs' down-line organization, as well as to participate in
            various non- cash awards;

      o     a  communications  program that seeks to effectively and efficiently
            communicate  with IBAs by utilizing new  technologies  and marketing
            techniques, as well as motivational events and training seminars;

      o     a  continual  expansion  and  improvement  of our  product  line and
            marketing plan;

      o     an in-house marketing department; and

      o     employment  of computer  technology  to provide  timely and accurate
            product order processing,  weekly commission  payment processing and
            detailed IBA earnings statements.

Growth Strategy

      New Product Introduction. During 2005, we introduced our new product, Code
Blue(TM).  The initial  shipment  of Code Blue  Filters did not meet EYI product
specifications.  However,  in January of 2006, we received a revised  version of
the Code  Blue  filter  called  the G-4  which we  believe,  meets  our  product
specifications.

      We intend to  aggressively  promote Code Blue systems  through a year long
promotional tour campaign  ("North  American Tour" or "Tour").  Our intent is to
host  approximately  120 regional  training meetings with audiences of up to 100
people  and 30 larger  conferences  in  targeted  cities  where we can train and
market to larger  audiences of 150 to 300. We have selected cities to host these
events  where we  believe  there is a  greater  interest  in the  product  and a
concentration  of our  active  IBAs.  We intend to use a group of 5 to 6 veteran
IBA's to act as our Regional Trainers and to work in concert with our management
team to promote, coordinate, and host these events. We anticipate that the total
cost of the North  American  Tour campaign will be  approximately  $240,000.  We
anticipate an offset to this cost by way of sales that occur at these events and
through ongoing  residual sales generated by the new IBAs enrolled in our system
as a result of this Tour.

      International Expansion. We opened our Hong Kong office in September 2005.
The office is intended to be used to service  distributors and provide a product
pick up depot for Code Blue(TM),  Calorad(R),  Prosoteine(R),  Agrisept-L(R) and
Definition(R)  drops and cream,  and the newest EYI product,  Calorad Cream. The
new  office  will also play a role in  supporting  the sales,  distribution  and
logistics of the CEIEC agency agreement.

      In January 2006, we relocated our Executive  Vice  President and COO, Dori
O'Neill to Hong Kong for six months after which,  Mr.  O'Neill will continue his
work in Asia from his office in Burnaby,  BC and through periodic trips to Asia.
Mr. O'Neill is expected to play a key role in our Asian market  initiative.  His
initial focus will be to introduce and train our unified  global binary  program
to new Asian IBAs. In addition,  Mr. O'Neill will also focus on researching  and
reviewing other locations and markets for expansion.

      In   April   2006,   our   subsidiary,    Essentially   Yours   Industries
(International)  Limited,  signed a Letter of Intent and Good  Faith  Commitment
with Raul  Bautista  and  Rommel  Panganiban  to act as  managing  partners  and
distributors for the Philippines.  Once a definitive  agreement is reached,  EYI
will work with this group to get them operational within one to two months.

                                       37


Industry Overview

      Over the  past  several  years,  widely  publicized  reports  and  medical
research  findings  have  suggested a  correlation  between the  consumption  of
dietary supplements and the reduced incidence of certain diseases.  Thousands of
such  reports  and  research   findings  can  be  found  on  the   International
Bibliographic  Information on Dietary  Supplements  (IBIDS) database produced by
the Office of Dietary  Supplements.  In 1995, US Congress established the Office
of Dietary  Supplements,  a division of the National  Institutes  of Health,  to
conduct  and  coordinate  research  into  the  role of  dietary  supplements  in
maintaining health and preventing disease. In addition, Congress has established
the Office of Alternative  Medicine within the National  Institutes of Health to
foster research into alternative medical  treatments,  which may include natural
remedies.

Products

      Our  product  line  consists  of  products  in the  categories  of dietary
supplements,  water filtrations systems and personal care products. We currently
market approximately 27 products.  For the year ended December 31, 2005, Calorad
sales  represented  over 87% of our net sales and is expected to provide a large
portion of our net sales in the foreseeable future.

Dietary Supplements

      We offer 18 products  in the dietary  supplement  category  which  contain
herbs,  vitamins,  minerals and other natural ingredients.  As stated above, the
dietary supplement product Calorad is expected to provide a large portion of our
net sales in the  foreseeable  future.  The  following  products  represent  the
majority of our product sales in the dietary supplement category:

      o     Agrisept-L(R): Agrisept-L is a dietary supplement of citrus extracts
            used as a germicide.

      o     Calorad(R):  Calorad is a liquid collagen-based  dietary supplement.
            Calorad is available in three formulas: beef, fish, and AM.

      o     Definition(R)  (drops):  Definition  is  a  natural  herbal  product
            designed  to feed and  nurture the female  breast.  This  product is
            available in both cream and drop formulations.

      o     Iso-Greens(R):  Iso-Greens is a nutrient-rich green food supplement.
            The  vegetables in Iso-Greens  combine to supply 39 of the vitamins,
            minerals and amino acids found in food, including Vitamin B-12.

      o     Noni  Plus(R):  Noni fruit is an extract of organic  noni and liquid
            trace  minerals  and it is has been  around for  centuries,  used by
            natives  and  ancient  healers  of many  countries  during  the last
            several thousand years to treat many ailments. We have combined this
            fruit with our own Dead Sea ionic minerals.

      o     Oxy-Up(R): Oxy-Up is a liquid stabilized oxygen supplement.

      o     Prosoteine(R):  Prosoteine is a plant based, natural, stimulant-free
            liquid protein supplement.

      o     Triomin: Triomin is a liquid trace mineral dietary supplement.

Personal Care Products

      We offer 7 personal care products.  The following  product  represents the
majority of our product sales in the personal care category:

      o     Calorad(R) (cream):  Calorad cream is a topical serum with a base of
            nourishing  collagen  that  lavishes  and aids the skin  during  the
            natural aging  process.  The  exclusive  mixture of  ingredients  in
            Calorad cream  stimulate,  moisturize and nourish to  bio-illuminate
            skin.  The  active   ingredients  in  Calorad  cream  are  extremely
            compatible  with the  biologic  structure  of the  human  skin.  The
            formulation is a unique  selection of the most recent  biotechnology
            ingredients,  working in perfect  synergy,  easily  penetrating  the
            cellular metabolism level of the skin.

                                       38


      o     Definition(R) (cream):  Definition is a safe, non-invasive,  natural
            herbal product  designed to feed and nurture the female breast.  The
            perfectly selected ingredients work in harmony,  helping the body to
            maintain the nutritional  needs of the mammary glands. It works with
            the body's  natural  capabilities  to maintain the shape and tone of
            youth in the female breast.

Water Filtration Systems

      o     Code Blue(TM) Water Filtration  System:  Code Blue is a pour through
            drinking water filtration  system  (containing a pitcher and filter)
            that reduces  Arsenic,  Chlorine,  Nitrates,  Nitrites,  Mercury and
            other contaminants from potable water.

      o     Code Blue(TM) Filter:  Code Blue(TM) Filter is a filter that reduces
            Arsenic,   Chlorine,   Nitrates,   Nitrites,   Mercury   and   other
            contaminants from potable water.

      Promotional  Materials.  We will  also  derive  revenues  from the sale of
various  educational and promotional  materials designed to aid our distributors
in maintaining  and building their  businesses.  Such materials  include various
sales aids,  informational  videotapes and cassette recordings,  and product and
marketing brochures.  We produce many of our promotional  materials in-house and
have the  capability  to create  just-in-time  marketing  pieces  as needed  and
constantly update our marketing material.

      New  Product  Identification.  We expand  our  product  line  through  the
development  of new  products.  New product  ideas are derived  from a number of
sources,   including  trade   publications,   scientific  and  health  journals,
consultants,  distributors  and other third parties.  Prior to  introducing  new
products,  we  investigate  product  formulation  as it  relates  to  regulatory
compliance and other issues.

      We  rely  upon  Nutri-Diem,  Inc.  and  other  manufacturers,  independent
researchers and vendor research  departments for product  development  services.
When a new product  concept is  identified  or when an existing  product must be
reformulated,  the new product  concept or  reformulation  project is  generally
submitted to Nutri-Diem,  Inc. or other manufacturers for technical  development
and implementation.  Nutri-Diem owns all of the rights to the products that they
produce.  We do not incur any expense  for the  development  of any  products by
Nutri-Diem.   We  continually   review  our  existing   products  for  potential
enhancements to improve their effectiveness and marketability. While we consider
our product formulations to be proprietary trade secrets,  such formulations are
not patented.  Accordingly,  there is no assurance that another company will not
replicate one or more of our products.

      Product  Procurement  and  Distribution  Insurance.  More  than 87% of our
product line in the dietary  supplement  category is manufactured by Nutri-Diem,
Inc., a related party, utilizing theirs and our product formulations, as well as
product  formulations  it licenses to us. A majority of our product  line in the
personal care category is also manufactured by Nutri-Diem, Inc.

      We have  contracts  with  Nutri-Diem,  Inc. that grant to us the exclusive
license and right to market, sell and distribute in Canada and the United States
and a non-exclusive  right to market on the Internet  certain  products owned by
Michel Grise  Consultant,  Inc., a Quebec  corporation,  which is  controlled by
Michel Grise. To maintain the license and  distribution  rights granted by those
contracts, we are obligated to purchase from Nutri-Diem, Inc. during that period
commencing on June 1, 2003, and  continuing  through and including May 31, 2004,
products totaling  $1,530,000.  Those contracts also specify that for the period
from June 1, 2004 to May 31, 2005, we are required to purchase from  Nutri-Diem,
Inc. products totaling  $3,825,000.  Additionally,  those contracts specify that
for each year  commencing on June 1, and ending on May 31 thereafter  during the
term of that agreement we are required to purchase products totaling $5,355,000.

      The provisions of those contracts specify that Nutri-Diem, Inc. will offer
us the right to sell, market and distribute in those territories any new product
developed by Nutri-Diem, Inc.

      If we are not in  default  at the  expiration  of the  initial  five  year
period,  those  contracts  will be  automatically  renewed for another five year
period.  In the  event we fail to make the  minimum  purchase  during  any year,
Nutri-Diem, Inc. has the option, to require us to pay Nutri-Diem, Inc. an amount
equal to 15% of the  difference  between the minimum  amount for the  respective
year and the amount of actual purchases during that year.  Additionally,  in the
event that we do not purchase the minimum amount during any particular  year and
do not pay Nutri-Diem,  Inc. that 15%, Nutri-Diem,  Inc. at its sole discretion,
may  terminate  the  respective  contract  or cause the  license  granted in the
contract to be non-exclusive.

                                       39


      In the  event  the  relationship  with  any of our  manufacturers  becomes
impaired,  we will be required to obtain alternative  manufacturing  sources for
our products.

      In such event,  there is no assurance that the manufacturing  processes of
our current manufacturers can be replicated by another manufacturer.  We believe
that we would be able to obtain  alternative  sources of our dietary  supplement
and personal care products.  A significant delay or reduction in availability of
products,  however,  could  have a  material  adverse  effect  on our  business,
operating  results  and  financial  condition.  We, as with other  marketers  of
products that are intended to be ingested, face the inherent risk of exposure to
product  liability  claims in the event that the use of our products  results in
injury. We maintain product liability insurance coverage with coverage limits of
$2,000,000  per  occurrence  and  $2,000,000  aggregate.  Although  we have  not
experienced any successful product liability claims, such claims could result in
material losses.

      All of the  items in our  product  line  include a  customer  satisfaction
guarantee.  Within 30 days of  purchase,  any retail  customer or IBA who is not
satisfied with our product for any reason may return it or any unused portion to
the distributor  from whom it was purchased or to us for a full refund or credit
toward the purchase of another product. IBAs may obtain replacements from us for
products returned to them by retail customers, if they return such products on a
timely  basis.  Furthermore,  in most  jurisdictions,  we  maintain  a  buy-back
program.  Under this program,  we will repurchase products sold to a distributor
(subject to a 10% restocking charge), provided that the distributor resigns as a
distributor and returns the product in marketable  condition  within one year of
original  purchase,  or  longer  where  required  by  applicable  state  law  or
regulations.  We  believe  this  buy-back  program  addresses  a  number  of the
regulatory  compliance issues pertaining to network marketing systems. We expect
that the cost of products returned to us will be less than 2% of gross sales.

      Below is a summary of return  information based on our sales  transactions
that were paid by credit card for the year ended December 31, 2005:



Month                Deposit          Sales         Returns      Chargebacks     Adj./Disc.     Net Deposit
-----                -------          -----         -------      -----------     ----------     -----------
                                                                                 
January-05          $450,314        $454,121         $3,389             $321        $13,955        $436,456
February-05         $461,522        $468,356         $6,834             $187        $13,799        $447,536
March-05            $437,991        $441,628         $2,912             $602        $13,744        $424,371
April-40            $407,146        $410,358         $2,799             $283        $13,221        $394,055
May-05              $396,850        $398,839         $1,583               $0        $12,788        $384,468
June-05             $396,087        $399,330         $2,901             $615        $12,519        $383,295
July-05             $482,022        $484,192         $2,170               $0        $15,550        $466,472
August-05           $405,372        $407,915         $2,125               $0        $12,829        $392,961
September-05        $362,821        $371,611         $8,664             $120        $11,774        $351,053
October-05          $407,788        $410,394         $2,009             $567        $12,835        $394,984
November-05         $418,535        $425,971         $6,941             $142        $13,867        $405,021
December-05         $310,393        $318,161         $7,769           $3,529        $10,185        $296,680
                  ----------      -----------       -------           ------       --------      -----------
                  $4,936,840      $4,990,877        $50,096           $6,365       $157,066      $4,777,351
                  ==========      ===========       =======           ======       ========      ===========
                                      100.00%         -1.00%           -0.13%         -3.15%          95.72%


      Our specific refund policies are as follows:

Retail Customer Guarantee

      o     A retail  customer may return  defective,  unused  product (at least
            50%) to his/her IBA within thirty (30) days of purchase for exchange
            or full refund.

      o     A written  statement must be obtained from the customer  stating the
            reason for dissatisfaction.

      o     The  original  retail  receipt  showing  the date of  purchase  must
            accompany a written request for a return.

      o     A copy of the  Customer  Refund Form must be  completed  in full and
            returned to EYI with the  aforementioned  documentation  and product
            (when product is requested).

      o     Upon  receipt of the  statement,  retail  receipt  and the  returned
            product, EYI will promptly replace any returned product to the IBA.

                                       40


      o     IBAs failure to comply with this guarantee  policy may be reason for
            termination.

      o     On product purchases of more than a one (1) month supply, the thirty
            (30) day rule applies to the purchase (unless otherwise  promised by
            IBA to  his/her  retail  customer.  In  this  instance,  the  IBA is
            responsible to uphold  his/her retail  guarantee to the customer not
            EYI).

Refund To Independent Business Associates

      If an IBA is not satisfied with a given EYI product,  EYI will replace the
product  with a  product  of same or like  value,  less  shipping  and  handling
charges. If requested EYI will issue a credit for the purchase less shipping and
handling.  This credit must be used within thirty (30) days of being issued. The
request for a  replacement  must occur within thirty (30) days of receipt of the
product by the IBA and the product must be in re-sale condition upon return.

      IBAs must  provide  proof of  purchase  and cover the cost of the  product
return.

      Note the following condition for refunds:

      o     EYI does not issue any refunds for product(s)  previously  certified
            as sold  under the 70% rule.  The 70% rule is  described  in our IBA
            Policies and  Procedures as their  requirement to have sold at least
            70% of their  previous  order before  reording.  As well, the refund
            will be less commission paid on the returned product.

Distribution And Marketing

      Our product line is distributed  from a third party warehouse in Bensalem,
PA, our facility and warehouse in Burnaby,  British Columbia, our 18 consignment
centers located  throughout USA and Canada, or from our office in Kowloon,  Hong
Kong.

      We distribute our product line through our network  marketing system where
Independent  Business  Associates  ("IBAs")  purchase  product at wholesale  and
through  person-to-person  contact,  re-sell  the product at retail  prices.  At
December 31, 2005, we had  approximately  8,500  "active" IBAs. To be considered
"active" a distributor  must have purchased our products within the preceding 12
months. Our IBAs are independent contractors who purchase products directly from
us for  resale to retail  consumers.  IBAs may elect to work on a  full-time  or
part-time  basis.  We believe our network  marketing  system  appeals to a broad
cross-section of people, particularly those seeking to:

      o     supplement family income,

      o     start a home business, or

      o     pursue employment  opportunities other than conventional,  full-time
            employment.

      o     A majority of our IBAs sell our products on a part-time basis.

      o     We believe that our network  marketing  system is ideally  suited to
            marketing  our  product  line  because  sales  of our  products  are
            strengthened by ongoing  personal  contact between retail  consumers
            and IBAs, many of whom use our products  themselves.  Sales are made
            through   direct   personal   sales   presentations,   as   well  as
            presentations  made to groups.  These sales  methods are designed to
            encourage   individuals   to  purchase  our  products  by  informing
            potential  customers  and IBAs of our  product  line and  results of
            personal  use, and the  potential  financial  benefits of becoming a
            distributor.   Our  marketing   efforts  are  typically  focused  on
            middle-income families and individuals.

      Our network marketing program encourages  individuals to develop their own
down-line network marketing organizations. Each new IBA is either linked to:

      o     the  existing   distributor   that   personally   enrolled  the  new
            distributor into our network marketing program, or

      o     the existing distributor in the enrolling distributor's down-line as
            specified by the enrolling distributor at the time of enrollment.

                                       41


      Growth of an IBAs'  down-line  organization is dependent on the recruiting
and  enrollment of additional  IBAs by the  distributor  or the IBAs within such
distributor's  down-line  organization.  We  currently  do not keep records that
would enable us to calculate IBA turnover frequency. We are currently working on
a program that may enable us in the future to track IBA turnover.

      IBAs are encouraged to assume  responsibility  for training and motivation
of other IBAs within their  down-line  organization  and to conduct  opportunity
meetings as soon as they are appropriately trained. We strive to maintain a high
level of motivation,  morale,  enthusiasm and integrity among the members of our
network  marketing  organization.  We believe this result is achieved  through a
combination of products,  sales incentives,  personal recognition of outstanding
achievement,  and quality  promotional  materials.  Under our network  marketing
program,  IBAs purchase  sales aids from us and assume the costs of  advertising
and marketing our product line to their customers, as well as the direct cost of
recruiting  new IBAs.  We believe that this form of sales  organization  is cost
efficient,  because  our direct  sales  expenses  are  primarily  limited to the
payment of commissions, which are only incurred when products are sold.

      We continually strive to improve our marketing  strategies,  including the
compensation  structure within our network marketing program and the variety and
mix of products in our line,  to attract and motivate  IBAs.  These  efforts are
designed to increase IBAs' monthly product sales and the recruiting of new IBAs.

      Growth of our network  marketing  program is in part  attributable  to our
incentive  structure.  IBAs earn profits by purchasing  from our product line at
wholesale  prices and  selling our product  line to their  customers  at retail.
Additionally,  we have a  commission  structure  which  provides  for payment of
commissions on product purchases made by other IBAs in a distributor's down-line
organization.

      IBAs derive this commission  income mainly through their Business  Volume,
as described below.

      Business  Volume  is  assigned  to  most  of our  products  and is used to
calculate sales commission.  The Business Volume,  in most instances,  is 50% of
the wholesale  cost of a product.  Commissions  are based on the total  Business
Volume which has been generated both  personally and through the IBAs' down-line
activity.   Therefore,  as  a  down-line  grows,  it  is  possible  for  greater
commissions  to be earned.  None of our IBAs have derived $1 million per year or
greater for the years ended 2005, 2004, 2003 or 2002.

      In order for an IBA to earn commissions, there are four requirements:

      o     an IBA needs to create a  Business  Center  by  filling  out our IBA
            Application and Agreement Form;

      o     an IBA needs to qualify  his  Business  Center  with a 100  Business
            Volume order of our products;

      o     an IBA needs to activate his Business  Center by making two personal
            sales to two  people who become  qualified  IBAs  within one year of
            entry into the business; and

      o     to be eligible for commission, an IBA needs to be current with their
            annual administration fee.

      The average  commission  earned by our IBAs during the twelve month period
starting  on January 1, 2005 and ending on December  31, 2005 was  approximately
$210.

      To aid IBAs in  easily  meeting  the  monthly  personal  product  purchase
requirement to qualify for  commission,  we developed the  "Auto-ship  Program."
Under  the  Auto-ship  Program  purchasing  arrangement,  each  Business  Center
establishes  a standing  product  order (20 Business  Volume  minimum)  which is
automatically  charged to a credit card or  deducted  from a bank  account  each
month prior to shipment of the ordered products. Additionally,  Auto-ship allows
IBAs to purchase certain products at reduced prices. As of December 31, 2005, we
had over 1,200 IBAs participating in the Convenience Program.

      Under  our  Consignment  Center  Program,  we  designate  IBAs to  operate
consignment   centers.   Each  Consignment   Center  functions  as  our  product
distribution center,  carrying our products.  As of December 31, 2005, we had 18
consignment  centers.  Consignment  centers  provide  hubs of local  product and
business training. They sell to customers at the point of purchase,  teach sales
and marketing techniques,  distribute literature about our products and business
while lowering our shipping and data-entry costs.

                                       42




                           EYI CONSIGNMENT CENTER LIST
--------------------------------------------------------------------------------

OWNER NAME              ADDRESS                           CITY                STATE    ZIP
----------              -------                           ----                -----    ---
                                                                           
Petra Olivares          #320 Calle Benitez Castano        San Juan            PR       00912

Audrey Franklin         102 Merchants Drive               Norcross            GA       30093

Vicki Oei               15300 N 90th Street, Suite 700    Scottsdale          AZ       85260

Gary Young              52 Lurline Drive                  Covington           LA       70433

Brenda Noble            223 Centre Street North           Brampton            ON       L6V 2R2

Mercy Girala-Tye        3325 W 183 Street                 Torrance            CA       90504

Paula Cabunoc           16312 45th Place South            Tukwila             WA       98188

Ron & Donna Boersema    86 East 33rd Street               Holland             MI       49423

Monty Pearson           HC 11 Box 69B                     Kamiah              ID       83536

Libby Lefler            222 Valleyview Rd.                Highland            MO       65669

Jose Corzo              #3750 SW 185 Avenue               Miramar             FL       33029

Michael Degroat         9 Volunteer Way                   Waymart             PA       18472

Wyla Wilkie             310 Woolworth Street              Houston             TX       77020

Richard Ridley          4716 Western Ave                  Knoxville           TN       37921

Denise Hulse            2208 N. Stoneybrook               Wichita             KS       67226

Jack Herd               2704 Market Street                Camphill            PA       17011

Michael Whelan Sr.      2476 Pine Road                    Huntingdon Valley   PA       19006

Robert Norton           6881 Creekcove Way                Midvale             UT       84047


      We maintain a computerized  system for processing  distributor  orders and
calculating  commission  payments,  which  enables  us to  remit  such  payments
promptly to IBAs. We believe that prompt and accurate  remittance of commissions
is vital  to  recruiting  and  maintaining  IBAs,  as well as  increasing  their
motivation  and  loyalty  to us. We  calculate  the  commissions  weekly and pay
commissions biweekly.

      We are committed to providing the best possible  support to our IBAs. IBAs
in our network  marketing program are provided training guides and are given the
opportunity  to  participate  in  our  training  programs.   We  sponsor  weekly
conference calls for our IBAs, which include  testimonials  from successful IBAs
and satisfied customers, as well as current product and promotional information.

      We  produce  weekly  newsletters  which  provide  information  on us,  our
products  and  network  marketing  system.  The  newsletter  is designed to help
recruit new IBAs by answering  commonly  asked  questions  and includes  product
information and business  building  information.  The newsletter also provides a
forum  for us to  give  additional  recognition  to  our  IBAs  for  outstanding
performance.  In addition,  we sponsor training sessions for our IBAs across the
United  States and Canada.  At these  training  sessions  IBAs are  provided the
opportunity to learn more about our product line and selling  techniques so that
they can build their businesses more rapidly.

      We also maintain an Internet  site,  www.eyicom.com,  which is an integral
part  of  our  product  sales,  customer  retention,  IBA  recruitment  and  IBA
development   efforts.   Approximately   7,300  of  our   IBAs   are   networked
electronically,  allowing them access to marketing  information and sales leads.
Further,  we provide  IBAs with a free  e-commerce  Internet  "home page" to aid
their marketing efforts.

                                       43


Government Regulation

      In the United  States (as well as in any  foreign  markets in which we may
sell  our  products),  we  are  subject  to  laws,  regulations,  administrative
determinations,  court decisions and similar constraints (as applicable,  at the
federal, state and local levels) (hereinafter "regulations").  These regulations
include and pertain to, among others:

      o     the formulation,  manufacture,  packaging,  labeling,  distribution,
            importation, sale and storage of our products,

      o     our product  claims and  advertising  (including  direct  claims and
            advertising as well as claims and advertising by  distributors,  for
            which we may be held responsible), and

      o     our network marketing organization.

      We believe we are currently in  compliance  with all  regulations.  In the
past,  we have met and passed  inspections  by the United  States  Food and Drug
Administration  ("FDA").  Our past FDA violations are as follows:  on October 7,
2002, we had a Food and Drug label  inspection.  A notice to re-label on Calorad
was  submitted on October 9, 2002.  A panel was added to our Calorad  product to
round the  calories  to be in  compliance  with the DSHEA Act of 1994.  The "may
proceed"  release was issued on November 6, 2002.  On February 2, 2004, a notice
to redeliver from the Department of  Treasury/United  States Customs  Service in
Detroit,  Michigan was issued  requesting an inspection  and import permit along
with an original CFI certificate  (Canadian Food Inspection Agency Certificate).
On entry number  #336-0214262-5.  We met all  requirements  and the shipment was
released on February 27, 2004. On August 16, 2005 a hold was designated on entry
number  #336-0524098-8.  Samples were collected by the FDA and sent to a lab for
analysis on August 18, 2005.  This was a routine  sampling that the FDA performs
on  products  at any given time to ensure  product  contents  match the  product
labels. Testing was completed and the product was released on September 8, 2005.
On October 5, 2005 we received a hold from the FDA for two products,  requesting
label  clarification  on one product  and  clarification  on website  claims for
another  product.  On November  21, 2005 the first  product was  released  under
direction to make a small label adjustment on the next product run. We intend to
comply with this request.  On November 15, 2005 the second  product was released
after review of marketing materials available on the internet.

      Formulations: We are reliant on our manufacturers' knowledge and expertise
as they develop our formulas.  We do investigate  the individual  ingredients to
ensure  they fall under the 1994 DSHEA Act  definitions  as well as the Food and
Drug Administration  ("FDA") cosmetic regulations.  We also receive confirmation
that all preservatives are GRAS (generally recognized as safe).

      Manufacturing: We are reliant on our manufacturers that they are compliant
with GMP regulations and safety regulations put forth by the FDA.

      Packaging:  We are reliant on our  manufacturers  that our packaging is in
compliance with FDA regulations.

      Labeling:  We  consult  with our FDA  attorneys  on a  need-to-know  basis
regarding labeling and have an in-house labeling  specialist that is experienced
in the 1994 DSHEA Act.

      Distribution:  Our facility has Food Grade Certification  within the State
of Pennsylvania and is also registered with the FDA as a Food Grade Facility.

      Sale and Storage:  We have an in house  Quality  Control  department  that
oversees  this area, as well as ensures our  distribution  facility is compliant
with all applicable laws in this area.

      Importation:  We have an  in-house  purchasing  agent  that works with all
applicable  laws  with  respect  to  NAFTA,   bio-terrorism   and   agricultural
requirements,  as well as a  brokerage  firm that  works for us. We have  always
successfully  imported product to the United States with very few inspections or
violations.

                                       44


Products

      The formulation,  manufacture,  packaging, storing, labeling, advertising,
distribution  and sale of our  products  are  subject to  regulation  by federal
agencies,  including  the  Food  and  Drug  Administration,  the  Federal  Trade
Commission, the Consumer Product Safety Commission, the United States Department
of  Agriculture,  the  Environmental  Protection  Agency,  and the United States
Postal  Service.  Our activities  are also regulated by various  agencies of the
states,  localities  and foreign  countries  in which our products are or may be
manufactured,  distributed  and  sold.  The  Food and  Drug  Administration,  in
particular,  regulates  the  formulation,  manufacture  and  labeling of dietary
supplements,  cosmetics and skin care products,  including some of our products.
Food and Drug  Administration  regulations  require us and our suppliers to meet
relevant regulatory good manufacturing practices for the preparation,  packaging
and  storage  of  these  products.  Good  manufacturing  practices  for  dietary
supplements  have yet to be  promulgated,  but are expected to be proposed.  The
Dietary  Supplement  Health and Education Act of 1994 revised the  provisions of
the Federal Food,  Drug and Cosmetic Act concerning the composition and labeling
of dietary  supplements,  which we believe is generally favorable to the dietary
supplement  industry.  The Dietary Supplement Health and Education Act created a
new statutory class of "dietary  supplements." This new class includes vitamins,
minerals,  herbs,  amino  acids and other  dietary  substances  for human use to
supplement the diet. In general,  a dietary  supplement is a product (other than
tobacco) that is intended to  supplement  the diet that bears or contains one or
more of the following dietary ingredients: a vitamin, a mineral, a herb or other
botanical,  an amino acid, a dietary  substance for use by man to supplement the
diet by  increasing  the  total  daily  intake,  or a  concentrate,  metabolite,
constituent,  extract,  or  combinations of these  ingredients;  is intended for
ingestion in pill,  capsule,  tablet, or liquid form; is not represented for use
as a conventional  food or as the sole item of a meal or diet; and is labeled as
a "dietary supplement." However, the Dietary Supplement Health and Education Act
("DSHEA") grandfathered, with certain limitations, dietary ingredients that were
on the market  before  October 15, 1994. A dietary  supplement  containing a new
dietary  ingredient  and placed on the market on or after  October 15, 1994 must
have a  history  of use or other  evidence  establishing  a basis  for  expected
safety.  Manufacturers  of  dietary  supplements  having a  "structure-function"
statement  must have  substantiation  that the  statement  is  truthful  and not
misleading.

      The  majority  of our sales  come from  products  that are  classified  as
dietary  supplements under the Federal Food, Drug and Cosmetic Act. The labeling
requirements for dietary  supplements  have been set forth in final  regulations
with respect to labels  affixed to  containers  beginning  after March 23, 1999.
These regulations include how to declare nutrient content  information,  and the
proper detail and format  required for the  "supplemental  facts" box. We revise
our product labels in compliance  with these  regulations.  The costs of product
re-labeling were immaterial. Many states have also recently become active in the
regulation of dietary supplement products. These states may require modification
of labeling or formulation of certain of our products sold in these states.

      In January 2000,  the FDA published a final rule that defines the types of
statements that can be made concerning the effect of a dietary supplement on the
structure  or  function  of the body  pursuant  to the  DSHEA.  Under the DSHEA,
dietary  supplement  labeling may bear  "structure/function"  claims,  which are
claims that the products  affect the structure or function of the body,  without
prior FDA approval.  They may not without prior FDA approval,  bear a claim that
they can prevent, treat, cure, mitigate or diagnose disease,  otherwise known as
a "drug  claim".  The final rule  describes  how the FDA will  distinguish  drug
claims from  structure/function  claims. Dietary supplements,  like conventional
foods,  are also  permitted to make "health  claims",  which are claims that are
exempt from  regulation as "drug" claims  pursuant to the amendments to the FDCA
established  by the NLEA in  1990.  A  "health  claim"  is a  claim,  ordinarily
approved  by the FDA  regulation,  on a food  or  dietary  supplement  product's
labeling that  "characterizes  the relationship of any substance to a disease or
health-related  condition".  To help assure that foods,  dietary supplements and
cosmetics comply with the provisions of the FDCA and FDA's regulations,  the FDA
has numerous enforcement tools,  including the ability to issue warning letters,
initiate product seizures and injunctions and pursue criminal penalties.

      The manufacturer of dietary supplements is subject to existing FDA current
good manufacturing  practices,  or "cGMP",  regulations for food. In March 2003,
the FDA proposed detailed cGMP regulations specifically for dietary supplements.
The FDA is expected to publish final cGMP regulations for dietary supplements in
the near future.

      Personal  care  products  are intended to be applied to the human body for
cleansing,  beautifying,  promoting  attractiveness,  or altering the appearance
without affecting the body's structure or functions. Included in this definition
are  products  such as skin creams,  lotions,  perfumes,  lipsticks,  fingernail
polishes, eye and facial make-up preparations,  shampoos,  permanent waves, hair
colors,  toothpastes,  deodorants,  and  any  material  intended  for  use  as a
component of a cosmetic product.  The Food & Drug  Administration  has a limited
ability to regulate personal care products.  The Food & Drug  Administration can
regulate  personal care products after they are  introduced  into the market and
can review personal care products and their  ingredients  after they are sold to
the public.

      As a marketer of products that are ingested by  consumers,  we are subject
to the risk that one or more of the  ingredients  in our products may become the
subject of adverse regulatory action.

      A small  portion of our products  sold in Canada have  separate  labels or
combination  labels to satisfy Canadian  compliance  organizations,  such as the
Food  Inspection  Agency  and Health  Canada.  Health  Canada is moving  towards
stricter  compliance  guidelines  for dietary  supplement  products  through its
recently  created Office of Natural Health Products.  New compliance  guidelines
through  the  Office of Natural  Health  Products  may  affect the  formulation,
manufacture, packaging, storing, labeling, advertising, distribution and sale of
our products in Canada.  We plan to comply with all  regulations  promulgated by
Office of  Natural  Health  Products.  Due to the small  percentage  of sales in
Canada, we do not hold separate Canadian labels for our complete product line.

                                       45


      In foreign markets,  prior to commencing operations and prior to making or
permitting  sales of our  products,  we may be required  to obtain an  approval,
license or  certification  from the  country's  ministry of health or comparable
agency.  Prior to entering a new market in which a formal  approval,  license or
certificate  is  required,  we will be required to work  extensively  with local
authorities to obtain the requisite  approvals.  The approval process  generally
will require us to present each product and product  ingredient  to  appropriate
regulators  and,  in some  instances,  arrange  for testing of products by local
technicians  for  ingredient  analysis.  Such  approvals may be  conditioned  on
reformulation  of our  products or may be  unavailable  with  respect to certain
products or ingredients.

Product Claims And Advertising

      The Federal Trade  Commission  and certain  states  regulate  advertising,
product  claims,  and  other  consumer  matters,  including  advertising  of our
products.  All  advertising,  promotional  and  solicitation  materials  used by
distributors require our approval prior to use. The Federal Trade Commission has
in the past several years instituted enforcement actions against several dietary
supplement  companies for false and misleading  advertising of certain products.
In addition,  the Federal Trade Commission has increased its scrutiny of the use
of  testimonials.  We have not been  the  target  of  Federal  Trade  Commission
enforcement action. There is no assurance that:

      o     the Federal Trade  Commission  will not question our  advertising or
            other operations in the future,

      o     a state will not interpret product claims  presumptively valid under
            federal law as illegal under that state's regulations, or

      o     future  Federal Trade  Commission  regulations or decisions will not
            restrict the permissible scope of such claims.

      We are also  subject  to the risk of  claims  by  distributors  and  their
customers who may file actions on their own behalf, as a class or otherwise, and
may file complaints with the Federal Trade Commission or state or local consumer
affairs offices.  These agencies may take action on their own initiative against
us for alleged  advertising  or product  claim  violations or on a referral from
distributors,  consumers or others.  Remedies sought in such actions may include
consent decrees and the refund of amounts paid by the complaining distributor or
consumer,  refunds to an entire class of  distributors  or  customers,  or other
damages,  as well as changes in our method of doing business.  A complaint based
on the practice of one  distributor,  whether or not we authorized the practice,
could  result in an order  affecting  some or all  distributors  in a particular
state. Also, an order in one state could influence courts or government agencies
in other states considering  similar matters.  Proceedings  resulting from these
complaints  may result in  significant  defense  costs,  settlement  payments or
judgments and could have a material  adverse effect on us. The FTC has increased
its scrutiny of the use of distributor  testimonials.  Although it is impossible
for us to monitor all the product claims made by our  independent  distributors,
we make efforts to monitor distributor  testimonials and restrict  inappropriate
distributor  claims.  The FTC has been more  aggressive in pursuing  enforcement
against dietary supplement  products since the passage of DSHEA in 1994, and has
brought numerous actions against dietary supplement companies, some resulting in
several   million  dollar  civil  penalties   and/or   restitution  as  well  as
court-ordered injunctions.

Compliance Efforts

      We  attempt  to remain in full  compliance  with all  applicable  laws and
regulations  governing  the  manufacture,   labeling,  sale,  distribution,  and
advertising  of our dietary  supplements.  We retain  special  legal counsel for
advice on both US Food and Drug  Administration  and US Federal Trade Commission
legal issues.

Network Marketing System

      Our network  marketing  system is subject to a number of federal and state
regulations  administered  by the Federal  Trade  Commission  and various  state
agencies.  These  regulations  are  generally  directed at ensuring that product
sales are ultimately  made to consumers (as opposed to other  distributors)  and
that advancement  within an organization be based on sales of the organization's
products,  rather than investment in the  organization or other non-retail sales
related  criteria.  For  instance,  in certain  markets  there are limits on the
extent  to  which   distributors  may  earn  royalties  on  sales  generated  by
distributors that were not directly sponsored by the distributor.

                                       46


      Our network  marketing  program and  activities are subject to scrutiny by
various state and federal governmental  regulatory agencies to ensure compliance
with various types of laws and regulations.  These laws and regulations  include
securities,   franchise  investment,  business  opportunity  and  criminal  laws
prohibiting   the  use  of  "pyramid"  or  "endless   chain"  types  of  selling
organizations.  The compensation structure of such selling organizations is very
complex, and compliance with all of the applicable laws is uncertain in light of
evolving  interpretation  of  existing  laws and the  enactment  of new laws and
regulations pertaining to this type of product distribution.  We have an ongoing
compliance  program with assistance  from legal counsel  experienced in the laws
and regulations  pertaining to network sales organizations.  We are not aware of
any legal actions pending or threatened by any governmental authority against us
regarding the legality of our network marketing operations.

      We currently have IBAs in the United States, Canada and Southeast Asia. We
review  the  requirements  of  various  states,  as well as  seek  legal  advice
regarding the structure and operation of our selling organization to ensure that
it  complies  with all of the  applicable  laws and  regulations  pertaining  to
network sales organizations. On the basis of these efforts and the experience of
our management, we believe that we are in compliance with all applicable federal
and state regulatory requirements. We have not obtained any no-action letters or
advance  rulings  from  any  federal  or  state  security   regulator  or  other
governmental  agency  concerning  the  legality  of our  operations,  nor are we
relying on a formal  opinion of counsel to such  effect.  We,  accordingly,  are
subject to the risk that, in one or more of our markets,  our  marketing  system
could be found to not comply with applicable laws and  regulations.  Our failure
to comply with these regulations could have a material adverse effect on us in a
particular market or in general.

      We are subject to the risk of  challenges  to the  legality of our network
marketing organization,  including claims by our distributors, both individually
and as a class. Most likely these claims would be based on our network marketing
program  allegedly being operated as an illegal "pyramid scheme" in violation of
federal  securities laws, state unfair practice and fraud laws and the Racketeer
Influenced and Corrupt Organizations Act.

      We  believe  that our  network  marketing  system is not  classified  as a
pyramid  scheme under the standards set forth in applicable  law. In particular,
in most jurisdictions,  we maintain an inventory buy-back program to address the
problem of "inventory loading." Pursuant to this program, we repurchase products
sold to a distributor  (subject to a 10%  restocking  charge)  provided that the
distributor  returns  the  product in  marketable  condition  within one year of
original  purchase,  or  longer  where  required  by  applicable  state  law  or
regulations.

      Our literature  provided to distributors  describes our buy-back  program.
However, as is the case with other network marketing companies,  the commissions
paid  by us to our  distributors  are  based  on  product  purchases,  including
purchases  of  products   that  are   personally   consumed  by  the   down-line
distributors. Basing commissions on sales of personally consumed products may be
considered an inventory loading purchase. Furthermore, distributors' commissions
are based on the  wholesale  prices  received by us on product  purchases or, in
some cases, based upon the particular product purchased, on prices less than the
wholesale prices.

      To further address the problem of "inventory  loading," our IBAs must sell
at least 70% of their inventory before they can reorder.

      In the  event of  challenges  to the  legality  of our  network  marketing
organization by distributors, we would be required to:

      o     demonstrate that our network marketing policies are enforced, and

      o     demonstrate  that the network  marketing  program and  distributors'
            compensation  thereunder  serve as  safeguards  to  deter  inventory
            loading and encourage retail sales to the ultimate consumers.

Competition

      We are subject to significant  competition  in recruiting  IBAs from other
network  marketing  organizations,  including  those that market products in the
dietary  supplement  and  personal  care  categories,  as well as other types of
products.  There are more than 300  companies  worldwide  that  utilize  network
marketing  techniques,  many of which are substantially  larger, offer a greater
variety of products, and have available considerably greater financial resources
than us. Our ability to remain competitive  depends, in significant part, on our
success in recruiting and retaining IBAs through an attractive  commission  plan
and other incentives. We believe that our commission plan and incentive programs
provide our IBAs with significant  income  potential.  However,  there can be no
assurance that our programs for  recruitment and retention of IBAs will continue
to be successful.

                                       47


      In addition,  the business of marketing products in the dietary supplement
and personal care categories is highly competitive. This market segment includes
numerous  manufacturers,  other network marketing companies,  catalog companies,
distributors,  marketers,  retailers and physicians that actively compete in the
sale of such  products.  We also compete with other  providers of such products,
especially  retail  outlets,  based upon  convenience  of purchase and immediate
availability  of the purchased  product.  The market is highly  sensitive to the
introduction  of new  products or weight  management  plans  (including  various
prescription  drugs) that may rapidly capture a significant share of the market.
As a result,  our  ability  to remain  competitive  depends,  in part,  upon the
successful introduction and addition of new products to our line.

      Depending  on  the  product  category,  our  competition  varies.  Calorad
competes  directly  with Colvera,  a product with  different  ingredients  but a
similar concept. Additionally,  Calorad competes indirectly with food plans such
as Weight  Watchers and meal  replacement  products such as Slim Fast.  Our Noni
Plus product competes with Tahitian International and others. Our other products
have similar well funded and sophisticated  competitors.  Increased  competitive
activity from such companies  could make it more difficult for us to increase or
keep  market  share,  since such  companies  have  greater  financial  and other
resources  available  to them  and  possess  far more  extensive  manufacturing,
distribution and marketing capabilities.

      Our network marketing competitors include small, privately held companies,
as well as larger,  publicly held companies with greater financial resources and
greater product and market  diversification  and  distribution.  Our competitors
include Reliv  International,  Mannatech  Incorporated,  Usana Health  Services,
Alticor Inc. (Amway Corp.),  Avon Products Inc.,  Herbalife Ltd., Mary Kay Inc.,
Metaluca,  Inc.,  Nature's  Sunshine  Products Inc., Nu Skin Enterprises Inc. as
well as mass retail establishments.

Employees

      As at June 1, 2006 we had 37 employees and managers.  Of this total, 3 are
executive officers,  4 are in accounting,  11 are in operations,  4 are in sales
and marketing, 4 are in sales communication,  4 are in information systems, 1 is
in product development,  4 are in our warehouse and 2 are in administration.  We
consider our employee  relations to be good.  None of our  employees or managers
are  members  of a  trade  union  and  we  have  not  experienced  any  business
interruption as a result of any labor disputes.

Research And Development Expenditures

      We have not incurred any research or development  expenditures  during our
last two fiscal years.

Intellectual Property

      We use several  trademarks and trade names in connection with our products
and  operations,  as further  described  below.  We rely on common law trademark
rights to protect our  unregistered  trademarks.  Common law trademark rights do
not provide  with the same level of  protection  as afforded by a United  States
federal  registration  of a trademark.  Also,  common law  trademark  rights are
limited to the  geographic  area in which the  trademark  is actually  used.  In
addition,  our product  formulations  are not  protected  by patents and are not
patentable.  Therefore,  there can be no assurance that another company will not
replicate one or more of our products.

      We have a License  Agreement with  Nutri-Diem that gives EYI the exclusive
right to use the trademarks  solely in connection  with the sale,  marketing and
distribution of the products.  Our agreement  states that we have  non-exclusive
rights to use the  trademarks on the Internet.  The agreement is based on a five
year term,  with  automatic  renewal for another five year period.  We also have
license  agreement which gives EYI the exclusive right to the trademarks for the
purpose of sales and marketing  activities.  The agreement is based on a 50 year
term with a yearly renewal each year thereafter.

      On June 30, 2002, the following Nutri-Diem trademarks were licensed to EYI
Nevada  pursuant to the  Marketing and  Distribution  Agreement in place between
Nutri-Diem  and EYI  Nevada.  The owner of the  trademarks  set out in the table
below is Michel Grise Consultants Inc., an associated  company of Nutri-Diem and
is controlled by Michel Grise, one of the directors of EYI Nevada:

                                       48




Product                                                         Status
-------                                                         ------

                                                             
Agrisept-L(R)                                                   Registered Trademark

Beaugest(R)                                                     Registered Trademark

Bellaffina(R)                                                   Registered Trademark

Calorad(R)                                                      Registered Trademark

Citrex(R)                                                       Registered Trademark

Citrio(R)                                                       Registered Trademark

Definition(R)                                                   Registered Trademark

Emulgent(R)                                                     Registered Trademark

Fem Fem(R)                                                      Registered Trademark

Golden Treat(R)                                                 Registered Trademark

Hom Hom(R)                                                      Registered Trademark

Invisible(R)                                                    Registered Trademark

Livocare(R)                                                     Registered Trademark

Melan Plus(R)                                                   Registered Trademark

Neocell(R)                                                      Registered Trademark

NRG(R)                                                          Registered Trademark

Parablast(R)                                                    Registered Trademark

Parattack(R)                                                    Registered Trademark

Prosoteine(R)                                                   Registered Trademark

Sea Krit(R)                                                     Registered Trademark


      On June 30, 2002,  EYI Nevada  acquired a license from  Essentially  Yours
Industries  Corp.,  an  affiliated  company,  to use the  below  trademarks  and
formulas  for a term of 50 years,  renewable  at the  option of EYI  Nevada on a
yearly basis  thereafter at the same yearly rate of $1.00 per year, from year to
year:



Copyright/Trademark                                             Status of Application
-------------------                                             ---------------------
                                                             

Citri-plus(R)                                                   Registered Trademark

EYI w/design(R)                                                 Registered Trademark

Essential Marine(R)                                             Registered Trademark

Essentially Yours(R)                                            Registered Trademark

Essentially Yours Industries Corp. (with design) (R)            Registered Trademark


                                       49




Copyright/Trademark                                             Status of Application
-------------------                                             ---------------------
                                                             

Iso greens(R)                                                   Registered Trademark

         The following additional products are licensed to EYI Nevada:

Just Go Pro!(R)                                                 Registered Trademark

Oxy Up(TM)                                                      Registered Trademark

The Ultimate Performance Enhancer!(R)                           Registered Trademark

Code Blue DRINK ONLY THE WATER(R)                               Pending Trademark

How do you take your water...with or without Arsenic?!(R)       Pending Trademark


                                       50


                                   MANAGEMENT

Directors And Executive Officers

      Our directors, executive officers and key employees as of June 1, 2006 are
as follows:



Name              Age   Position with the Company                    Date First Elected or Appointed
----              ---   -------------------------                    -------------------------------

                                                            
Jay Sargeant      58    President, Chief Executive Officer and       Director, Chief Executive Officer and
                        Director                                     President since December 31, 2003

Dori O'Neill      46    Executive Vice-President, Treasurer, Chief   Executive Vice-President, Treasurer, Chief
                        Operations Officer, Secretary and Director   Operations Officer, Secretary and Director
                                                                     since December 31, 2003

Rajesh Raniga     40    Chief Financial Officer                      Chief Financial Officer since January 1, 2004


      Set forth below is a brief  description  of the  background  and  business
experience  of each of our  executive  officers and  directors for the past five
years:

      Jay Sargeant. Mr. Sargeant has been our President, Chief Executive Officer
and a member of our Board of Directors  since  December 31, 2003.  Mr.  Sargeant
graduated  from Boston State College in 1979 with a Bachelors  Degree in English
Literature and Psychology. From 1995 until June 30, 2002, the date of our merger
with  Essentially  Yours  Industries,  Inc.,  Mr.  Sargeant  was a  director  of
Essentially Yours Industries, Corp. a Canadian Federal corporation. Mr. Sargeant
has  resigned  as a  member  of the  Board of  Directors  of  Essentially  Yours
Industries,  Corp.  to  concentrate  on our sales  and  marketing  efforts.  Mr.
Sargeant was a founder of Essentially Yours Industries, Corp.

      Dori O'Neill.  Mr.  O'Neill has been our Executive Vice  President,  Chief
Operations  Officer and a member of our Board of  Directors  since  December 31,
2003.  From 1997 to June 2002,  Mr.  O'Neill  served as a Vice  President  and a
member of the Board of  Directors  of  Essentially  Yours  Industries  Corp.,  a
Canadian Federal corporation, from December 2001 to June 2002. From 1994 through
1998 Mr. O'Neill was a self-employed consultant.

      Rajesh  Raniga.  Mr.  Raniga has been our Chief  Financial  Officer  since
January 1, 2004.  Mr.  Raniga is a Certified  General  Accountant.  From 1989 to
present Mr. Raniga has practiced  with Delves Freer  Anderson  Raniga Caine as a
general partner. In his private practice, prior to joining us, he specialized in
auditing  publicly-listed  companies as well as acquisitions and mergers. He has
also sat on the Board of Directors and served as the Chief Financial  Officer of
Uniserve  Communications  Services Inc., an internet  service provider listed on
the TSX Venture Exchange in Canada.

Family Relationships

      There is no family relationship between any of our officers or directors.

Directors

      Our Board of Directors consists of 3 (three) seats.  Directors serve for a
term of one year and stand for election at our annual  meeting of  stockholders.
Pursuant  to our  Bylaws,  as amended,  a majority  of  directors  may appoint a
successor to fill any vacancy on the Board of Directors.

Terms Of Office

      Our directors  are  appointed for one-year  terms to hold office until the
next annual general  meeting of the holders of our common stock or until removed
from office in  accordance  with our by-laws.  Our officers are appointed by our
Board of Directors and hold office until removed by our Board of Directors.

                                       51


Committees Of The Board Of Directors

      Audit Committee

      The  entire  board  of  directors  performs  the  functions  of  an  audit
committee,  but no written charter governs the actions of the board of directors
when  performing  the  functions of an audit  committee.  The board of directors
approves the selection of our  independent  accountants  and meets and interacts
with  the  independent  accountants  to  discuss  issues  related  to  financial
reporting.  In addition, the board of directors reviews the scope and results of
the audit with the  independent  accountants,  reviews with  management  and the
independent accountants our annual operating results,  considers the adequacy of
our internal  accounting  procedures and considers other auditing and accounting
matters including fees to be paid to the independent auditor and the performance
of the independent auditor.

      We presently do not have a compensation  committee, an executive committee
of our  board of  directors,  stock  plan  committee  or any  other  committees.
However,  our board of directors will consider  establishing  various committees
during the current fiscal year.

      Audit Committee Financial Expert

      Our Board of Directors  has  determined  that we do not  presently  have a
director who meets the definition of an "audit committee  financial  expert." We
believe that the cost related to  appointing a financial  expert to our Board of
Directors at this time is prohibitive.

      Nomination Committee

      Our board of  directors  does not maintain a  nominating  committee.  As a
result, no written charter governs the director nomination process.  The size of
EYI and the size of the  board of  directors,  at this  time,  do not  require a
separate  nominating  committee.  Our independent  directors annually review all
director performance over the past year and make recommendations to the board of
directors  for  future  nominations.  When  evaluating  director  nominees,  our
independent directors consider the following factors:

      (i) The appropriate size of EYI's board of directors;

      (ii)  The  needs  of EYI  with  respect  to  the  particular  talents  and
experience of its directors;

      (iii)  The  knowledge,  skills  and  experience  of  nominees,   including
experience in finance,  administration or public service, in light of prevailing
business  conditions and the knowledge,  skills and experience already possessed
by other members of the board;

      (iv) Experience with accounting rules and practices; and

      (v) The desire to balance  the  benefit of  continuity  with the  periodic
injection of the fresh perspective provided by new board members.

      Other  than the  foregoing,  there  are no  stated  minimum  criteria  for
director nominees,  although the board of directors may also consider such other
factors as it may deem are in the best interests of EYI and its stockholders. In
addition,  the Board of Directors  identifies  nominees by first  evaluating the
current members of the board willing to continue in service.  Current members of
the board with skills and  experience  that are relevant to our business and who
are  willing to continue in service are  considered  for  re-nomination.  If any
member of the board does not wish to continue in service or if the board decides
not to  re-nominate  a member for  re-election,  the board then  identifies  the
desired skills and  experience of a new nominee in light of the criteria  above.
Current  members of the board of  directors  are polled  for  suggestions  as to
individuals  meeting the criteria  described above. The board may also engage in
research to identify qualified  individuals.  To date, we have not engaged third
parties to identify or evaluate  or assist in  identifying  potential  nominees,
although we reserve the right in the future to retain a third party search firm,
if necessary.  The board of directors  does not typically  consider  stockholder
nominees because it believes that its current  nomination  process is sufficient
to identify directors who serve our best interests.

                                       52


Code Of Ethics

      We adopted a Code of Ethics  applicable  to our Chief  Executive  Officer,
Chief  Financial  Officer,   Corporate  Controller  and  certain  other  finance
executives,  which is a "code of ethics" as defined by  applicable  rules of the
SEC.  Our Code of Ethics is attached to our Annual  Report on Form 10-KSB  filed
with the SEC on April 14, 2004. If we make any  amendments to our Code of Ethics
other than technical,  administrative,  or other non-substantive  amendments, or
grant any waivers,  including implicit waivers,  from a provision of our Code of
Ethics to our chief executive officer, chief financial officer, or certain other
finance executives,  we will disclose the nature of the amendment or waiver, its
effective date and to whom it applies in a Current Report on Form 8-K filed with
the SEC.

Compliance With Section 16(a) Of The Securities Exchange Act

      Section  16(a) of the Exchange Act  requires  our  executive  officers and
directors,  and persons who beneficially own more than ten percent of our equity
securities,  to file  reports of  ownership  and changes in  ownership  with the
Securities  and Exchange  Commission.  Officers,  directors and greater than ten
percent shareholders are required by SEC regulation to furnish us with copies of
all  Section  16(a)  forms they file.  Based on our review of the copies of such
forms  received  by us,  we  believe  that up to June 1,  2006 all  such  filing
requirements  applicable  to our  officers  and  directors  were  complied  with
exception that reports were filed late by the following persons:



                                                                                            Transactions    Known Failures
                                                                         Number of Late      Not Timely        to File a
Name and Principal Position                                                  Reports          Reported       Required Form
---------------------------                                              --------------     ------------    --------------
                                                                                                              
Jay Sargeant,
President, Chief Executive Officer, and Director                                      2                2                --

Dori O'Neill
President, Chief Operations Officer, Secretary, Treasurer and Director                1                1                --

Bruce A. Nants
Former Director                                                                     N/A              N/A               N/A


                                       53


ITEM 10.  EXECUTIVE COMPENSATION

      The  following  table  shows  all  the  cash   compensation  paid  by  EYI
Industries,  as well as certain other  compensation paid or accrued,  during the
fiscal years ended  December 31, 2005,  2004 and 2003 to EYI  Industries'  named
executive officers. No restricted stock awards, long-term incentive plan payouts
or other types of compensation,  other than the  compensation  identified in the
chart below, were paid to these executive officers during these fiscal years.

                           SUMMARY COMPENSATION TABLE



                                           Annual Compensation                           Long Term Compensation
                               ----------------------------------------    -------------------------------------------------
                                                                                                      LTIP
                                                           Other Annual     Restricted    Options/*   payouts     All Other
Name             Title         Year    Salary   Bonus      Compensation    Stock Awarded  SARs (#)      ($)     Compensation
----------------------------------------------------------------------------------------------------------------------------
                                                                                     
Jay Sargeant(1)  President,    2005         --       --       $240,000 (2)            --   1,500,000       --             --
                 CEO and       2004         --       --       $240,000 (2)            --   4,200,000       --             --
                 Director      2003         --       --       $240,000 (2)            --          --       --             --

Dori O'Neill(3)  Chief         2005         --       --       $240,000 (2)            --   1,500,000       --             --
                 Operations    2004         --       --       $240,000 (4)            --   7,400,000       --             --
                 Officer,      2003         --       --       $180,000 (4)            --          --       --             --
                 Secretary,
                 Treasurer
                 And Director

Maurizio         Former        2005        N/A      N/A                N/A           N/A         N/A      N/A            NA/
Forigo(5)        President     2004
                 and                       N/A      N/A                N/A           N/A         N/A      N/A            N/A
                 CEO           2003         --       --                 --            --          --       --             --


---------------

(1)   Mr. Sargeant was appointed as our President and Chief Executive Officer on
      December 31, 2003.

(2)   We paid  management  consulting  fees to Flaming  Gorge,  Inc.,  a private
      company controlled by Mr. Sargeant,  our President,  CEO and director, for
      his  management  of the  operation  of the company  and our  subsidiaries,
      reporting to the Board of Directors,  and  appointing  managers to oversee
      certain  departments.  Mr.  Sargeant is compensated at the rate of $20,000
      per month,  on a month to month basis  commencing  November  5, 2002.  The
      agreement  was for an  initial  five-year  term,  which  is  automatically
      renewable on a year-to-year basis.  Effective January 1, 2004, we extended
      the consulting agreement of Mr. Sargeant for an additional five years.

(3)   Mr.  O'Neill  was  appointed  as  our  Executive   Vice-President,   Chief
      Operations Officer, Secretary, Treasurer, on December 31, 2003.

(4)   We paid management  consulting fees to O'Neill Enterprises Inc., a private
      company  controlled by Mr.  O'Neill,  our Executive  Vice-President,  COO,
      Secretary,  Treasurer  and  director,  for  the  management  of day to day
      activities and operations of the company and our subsidiaries. Mr. O'Neill
      is compensated at the rate of $15,000 per month, on a month to month basis
      commencing  November 5, 2002.  The agreement was for an initial  five-year
      term, which is automatically  renewable on a year-to-year basis. Effective
      January 1, 2004,  we increased the  consulting  fees payable to O'Neill to
      $20,000 per month, and extended the term by five years.
(5)   Mr. Forigo resigned as our President and CEO on December 31, 2003.

      The following table contains information  regarding options granted during
the year ended December 31, 2005 to EYI Industries' named executive officer.

                                       54


                             OPTION/SAR GRANTS TABLE



                                                              % Total
                                                           Options/SARs
                                                            Granted to
                                             No. of        Employees in
                                           Securities       year ended
                                           Underlying       December 31      Exercise or
                                          Options/SARs         2005           Base Price
Name                                      Granted (#)           (%)         ($ per Share)    Expiration Date
----                                      ------------     ------------     -------------    ---------------
                                                                                 
Jay Sargeant                                 1,500,000               20%            $0.06        02/09/07
President, Chief Executive Officer
and Director

Dori O'Neill                                 1,500,000               20%            $0.06        02/09/07
Secretary, Treasurer and Director


      The following table contains  information  regarding  options exercised in
the year ended  December  31,  2005,  and the  number of shares of common  stock
underlying  options  held as of December  31,  2005,  by EYI  Industries'  named
executive officer.

                        AGGREGATED OPTIONS/SAR EXERCISES
                             IN LAST FISCAL YEAR AND
                       FISCAL YEAR END OPTIONS/SAR VALUES



                                                                Number of Securities Underlying      Value of Unexercised
                                                                    Unexercised Options/SARs      In-the-Money Options/SARs
                                     Shares                                at FY-End                      at FY-End
                                  Acquired on        Value       -----------------------------    ---------------------------
                                    Exercise       Realized                   (#)                            ($)
                                  -----------      --------      -----------------------------    ---------------------------
Name                                  (#)             ($)        Exercisable     Unexercisable    Exercisable   Unexercisable
----                              -----------      --------      -----------     -------------    -----------   -------------
                                                                                              
Jay Sargeant                               --      $     --        2,299,750                --             --              --
President,
Chief Executive Officer and
Director

Dori O'Neill                               --      $     --        2,500,000                --             --              --
Secretary, Treasurer and
  Director


Security Ownership Of Management

      We are not  aware of any  arrangement  that  might  result  in a change in
control in the future.

Securities Authorized For Issuance Under Equity Compensation Plans

      The following table sets forth certain  information  concerning all equity
compensation  plans previously  approved by stockholders and all previous equity
compensation  plans not  previously  approved  by  stockholders,  as of the most
recently  completed  fiscal year.  On February 17, 2004,  our board of directors
approved the Stock Compensation  Program (the "Plan"). The Plan became effective
on March 30, 2004. Under the Plan,  options to purchase up to 25,000,000  shares
of our common stock may be granted to our employees,  officers,  directors,  and
eligible  consultants of our company. The Plan provides that the option price be
the fair  market  value of the stock at the date of grant as  determined  by the
Board of Directors.  Options granted become exercisable and expire as determined
by the Board of Directors.

                                       55


             EQUITY COMPENSATION PLAN INFORMATION AS AT June 1, 2006
             -------------------------------------------------------



                                                                                                   Number of securities
                                                                            Weighted-average      remaining available for
                                                Number of securities to    exercise price of       issuance under equity
                                                be issued upon exercise       outstanding           compensation plans
                                                of outstanding options,    options, warrants       (excluding securities
                                                  warrants and rights          and rights        reflected in column (a))
Plan Category                                             (a)                     (b)                       (c)
-------------                                   -----------------------    ------------------    ------------------------
                                                                                        
Equity Compensation Plans approved by
security holders                                                    Nil                   N/A                         N/A

Equity Compensation Plans not approved by
security holders                                             16,252,390       $0.14 per share                     211,000
                                                -----------------------    ------------------    ------------------------
Total                                                        16,252,390       $0.14 per share                     211,000
                                                =======================    ==================    ========================


Stock Compensation Program

      On February 17, 2004, we established our Stock Compensation  Program.  The
purpose  of the  Plan  is to  advance  the  interests  of our  company  and  our
stockholders by  strengthening  our ability to obtain and retain the services of
the types of employees,  consultants, officers and directors who will contribute
to our long term success and to provide  incentives which are linked directly to
increases   in  stock  value  which  will  inure  to  the  benefit  of  all  our
stockholders.  The  Plan is  administered  by our  Board  of  Directors  or by a
committee  of two or more  non-employee  directors  appointed  by the  Board  of
Directors  (the  "Administrator").  Subject to the  provisions of the Plan,  the
Administrator  has full and final authority to grant the awards of stock options
and to determine the terms and conditions of the awards and the number of shares
to be issued  pursuant  thereto.  Options  granted  under the Plan may be either
"incentive  stock  options,"  which qualify for special tax treatment  under the
Internal  Revenue Code of 1986,  as amended,  (the "Code"),  nonqualified  stock
options or restricted shares.

      All of our employees and members of our Board of Directors are eligible to
be granted  options.  Individuals  who have  rendered or are  expected to render
advisory or consulting services to us are also eligible to receive options.  The
maximum  number of shares of our common stock with  respect to which  options or
rights may be granted under the Plan to any  participant  is 25,000,000  shares,
subject to certain adjustments to prevent dilution.

      The exact terms of the option granted are contained in an option agreement
between us and the person to whom such option is granted. Eligible employees are
not  required  to pay  anything  to  receive  options.  The  exercise  price for
incentive stock options must be no less than 70% of the fair market value of the
common stock on the date of grant.  The exercise  price for  nonqualified  stock
options is determined by the Administrator in its sole and complete  discretion.
An option  holder may exercise  options  from time to time,  subject to vesting.
Options will vest immediately upon death or disability of a participant and upon
certain change of control events.

      The  Administrator  may  amend  the Plan at any  time  and in any  manner,
subject to the following:  (1) no recipient of any award may, without his or her
consent,  be deprived thereof or of any of his or her rights  thereunder or with
respect  thereto  as a result  of such  amendment  or  termination;  and (2) any
outstanding  incentive  stock option that is  modified,  extended,  renewed,  or
otherwise altered must be treated in accordance with Section 424(h) of the Code.

      The Plan  terminates on March 30, 2014 unless sooner  terminated by action
of the Board of  Directors.  All awards  granted under the Plan expire ten years
from  the  date of  grant,  or  such  shorter  period  as is  determined  by the
Administrator.  No option is exercisable by any person after such expiration. If
an award expires,  terminates or is canceled, the shares of our common stock not
purchased thereunder may again be available for issuance under the Plan.

      We filed a  registration  statement  under the  Securities Act of 1933, as
amended,  to register the  25,000,000  shares of our common  stock  reserved for
issuance under the Plan on March 30, 2004.

Repricing of Options in 2004

      During the year ended December 31, 2004,  our board of directors  approved
the re-pricing of: (i) options to purchase  3,200,000 shares of our common stock
granted in favor of Mr. Sargeant,  our President and Chief Executive  Officer on
April 30,  2004 at a price of $0.19;  and (ii)  options  to  purchase  3,200,000
shares of our common stock granted in favor of Mr. O'Neill,  our Chief Operating
Officer on April 30, 2004 at a price of $0.19.  The option  price was reduced to
$0.08 per share in order that the exercise price was more reflective of the then
current  trading  price of our common stock and in order to provide a continuing
performance incentive. The 6,400,000 options were cancelled on December 27, 2004
and  3,200,000  options were issued on December 27, 2004 to each of Mr.  O'Neill
and Mr.  Sargeant to replace  their  cancelled  options.  The new options have a
$0.08  exercise  price and expire  December  27,  2006.  On February 9, 2005 the
Company cancelled  3,200,000  options for both Mr. O'Neill and Mr. Sargeant.  On
the same date the Company issued 1,500,000  options at $0.06 to both Mr. O'Neill
and Mr. Sargeant.

                                       56


Compensation Arrangements

      Compensation Of Directors

      All of our directors receive reimbursement for out-of-pocket  expenses for
attending Board of Directors  meetings.  From time to time we may engage certain
members of the Board of Directors  to perform  services on behalf of the Company
and may compensate such persons for the performance of those services.

      In November  2002,  we entered  into a consulting  agreement  with Flaming
Gorge,  Inc.,  a  company  controlled  by Jay  Sargeant,  our  President,  Chief
Executive  Officer  and a member of our  Board of  Directors.  Pursuant  to this
agreement,   we  agreed  to  pay  Flaming  Gorge,  Inc.  $20,000  per  month  in
consideration of management  consulting services provided by Mr. Sargeant to us.
The agreement  automatically  renews on a  year-to-year  basis at the end of the
initial five (5) year term.  Effective  January 1, 2004, we extended the term of
the agreement for five years.

      In November  2002,  we entered  into a consulting  agreement  with O'Neill
Enterprises,  Inc., a company  controlled  by Dori O'Neill,  our Executive  Vice
President,  Chief Operations Officer,  Secretary,  Treasurer and a member of our
Board of  Directors.  Pursuant  to the  agreement,  we agreed to pay $15,000 per
month in consideration of management consulting services provided by Mr. O'Neill
to us. This agreement automatically renews on a year-to-year basis at the end of
the initial five (5) year term.  Effective  January 1, 2004,  we  increased  the
consulting fees payable to O'Neill  Enterprises,  Inc., to $20,000 per month for
management consulting services provided by Mr. O'Neill and extended the term for
five years.

      Long-Term Incentive Plans

      We do not have any long-term  incentive  plans,  pension plans, or similar
compensatory plans for our directors or executive officers.

                                       57


                             DESCRIPTION OF PROPERTY

      Our principal  office is located at 7865 Edmonds  Street,  Burnaby,  B.C.,
Canada,  V3N 1B9.  The rent from  January 1, 2005 to December  31, 2005 was at a
rate of CDN$12,000.00 plus GST per month.  January 1, 2005 to April 30, 2005 was
a rent free period.  The lease is for a period of seven years commencing January
1, 2005 and our monthly  rent  increases by CDN$500 per month in January of each
year.

      We also have an office  located at Units  1-2,  15th  Floor,  No. 1 Minden
Avenue, Tsim Sha Tsui Kowloon. On September 28, 2005 EYI HK entered into a Lease
with Dombas Estates Limited for the lease of the office space.  The lease is for
a two year term at a monthly rent of approximately $3,500 USD (HK$22,920).

Location       Term of Lease            Square Feet  Monthly Lease Commitment
--------       -------------            -----------  ------------------------
Burnaby, B.C.  Seven years, commencing  12,200       CDN$12,000 + GST per month
               January 1, 2005                       from January 1, 2005 to
                                                     December 1, 2005 (January
                                                     1, 2005-April 30, 2005 was
                                                     a rent free period).

Hong Kong      Two years, commencing    1,200        US $3,500(HK $22,920)per
               September 28, 2005                    month

                                       58


                                LEGAL PROCEEDINGS

      Other than as described  below,  we are not a party to any material  legal
proceedings  and to  our  knowledge,  no  such  proceedings  are  threatened  or
contemplated.

      1. Oppression Action by Lavorato/Heyman

      In 2002,  an  oppression  action was  commenced  in the  Supreme  Court of
British  Columbia by the plaintiffs  Brian Lavorato,  Geraldine Heyman and their
respective holding companies,  alleging that Essentially Yours Industries Corp.,
our affiliate,  had improperly  vended assets into Essentially Yours Industries,
Inc., our wholly owned subsidiary,  as part of a corporate restructuring alleged
to be oppressive to the  plaintiffs.  As of April 4, 2003,  the lawsuit has been
settled and was  subsequently  dismissed by the plaintiffs by consent,  with the
exception of claims  asserted by the  plaintiffs  against  Thomas K. Viccars,  a
former  in-house  counsel  of  Essentially  Yours  Industries,  Corp.,  who  may
potentially  assert a third party claim against  Essentially  Yours  Industries,
Inc. On May 1, 2006 we entered into a settlement  agreement with Thomas Viccars,
pursuant  to  which  we will  pay  $60,000  to Mr.  Viccars  in full  and  final
settlement of all claims against EYI.

      2. Action By Suhl, Harris and Babich

      In 2003 a  consolidated  action was brought by the  plaintiffs  Wolf Suhl,
Christine  Harris and Edward  Babich in the  Supreme  Court of British  Columbia
pursuant to an order pronounced in the New Westminster Registry under Action No.
S061589 on May 7, 2003,  which allowed the  plaintiffs to proceed with an action
against   Essentially  Yours   Industries,   Inc.  The  plaintiffs  allege  that
Essentially  Yours  Industries,  Inc.  holds certain of its products or revenues
derived therefrom as trust property for the benefit of the plaintiffs.

      The claim is for an  aggregate  of 4.9% of the  wholesale  volume of sales
generated by Essentially Yours Industries, Inc. from the alleged trust property,
and for damages and costs. A consolidated statement of defense has been filed by
Essentially Yours Industries,  Inc., and interrogatories have been responded to.
Management  believes  this claim to be without  merit and intends to  vigorously
defend  against  this claim.  In  February  2006,  the Supreme  Court of British
Columbia  made an order that EYI and Mr. Jay  Sargeant be added to the  lawsuit,
and the Writ of Summons and  Statement of Claim be amended to add the  following
claims:  (a) against EYI, damages for unjust  enrichment and breach of trust for
any amount found to be owing by Essentially Yours Industries, Inc. plus interest
and costs;  and (b) against Jay  Sargeant,  damages  for unjust  enrichment  and
breach  of  trust  for  any  amount  found  to be  owing  by  Essentially  Yours
Industries,  Inc. or Barry La Rose,  plus  interest and costs.  The  Plaintiffs'
total claim is approximately $478,000. On April 13, 2006, the plaintiffs amended
their  pleadings to assert claims against EYI and Jay Sargeant.  EYI has entered
an  Appearance  to the action and plans to file a Defence.  Jay Sargeant has not
been served with process.  This matter is set for trial commencing September 11,
2006. The parties are presently negotiating to settle these claims.

      3. Lease Agreement with Business Centers, LLC

      In February 1999 our  subsidiary,  Halo  Distribution,  LLC entered into a
Lease  Agreement  with  Business  Centers,  LLC  (the  "Landlord").  This  Lease
Agreement  was  extended  for a period of three  years on January  5,  2004.  We
received a letter dated  August 2, 2005  notifying us of a default by Halo under
the lease  agreement  and notice that the  landlord  intends to  commence  legal
proceedings  against  Halo and EYI for the sum of $150,000 for  defaulted  lease
payments.  We received a statement of claim from the landlord in November,  2005
naming Halo and us as defendants and requesting  payment of the defaulted  lease
payments.  On December 21, 2005 we entered into a written  Settlement  Agreement
and Release with Halo  Distribution,  LLC and Business Centers,  LLC agreeing to
the terms and conditions of the settlement set forth in the agreement.  Pursuant
to the terms of the settlement  agreement we agreed to transfer  property with a
value of $46,875 to the Landlord in exchange for a release of all claims against
EYI or its subsidiaries.

                                       59


                             PRINCIPAL SHAREHOLDERS

Security Ownership Of Certain Beneficial Owners And Management

      The following table sets forth information about the beneficial  ownership
of our common  stock as of June 1, 2006,  by (i) each  person who we know is the
beneficial owner of more than 5% of the outstanding  shares of common stock (ii)
each  of our  directors  or  those  nominated  to be  directors,  and  executive
officers, and (iii) all of our directors and executive officers as a group.



                             Name and Address                     Amount and Nature                 Percentage
  Title of Class            of Beneficial Owner                of Beneficial Ownership          of Common Stock(1)
  --------------            -------------------                -----------------------          ------------------

Directors and Executive Officers
--------------------------------
                                                                                              
Common Stock             Jay Sargeant                                 44,958,896 shares                17.30%
                         3324 Military Avenue                    Direct and Indirect(2)
                         Los Angeles, California

Common Stock             Dori O'Neill                                 12,363,361 shares                 4.75%
                         6520 Walker Avenue                      Direct and Indirect (3)
                         Burnaby, British Columbia
                         Canada

Common Stock             Rajesh Raniga                                   350,000 shares                    *
                         13357-56 Avenue                         Direct and Indirect(4)
                         Surrey, British Columbia
                         Canada

Common Stock             All Directors and Executive Officers         57,672,257 shares                22.15%
                         as a Group (Three Persons)                 Direct and Indirect

Holders of More than 5% of Our Common Stock
-------------------------------------------

Common Stock             Barry Larose                                 22,067,084 shares                 8.47%
                         20080 84th Avenue                                 Indirect (5)
                         Langley, British Columbia
                         Canada

Common Stock             Jay Sargeant                                 44,958,896 shares                17.30%
                         3324 Military Avenue                    Direct and Indirect(2)
                         Los Angeles, California

Common Stock             Dori O'Neill                                 12,363,361 shares                 4.75%
                         6520 Walker Avenue                     Direct and Indirect (3)
                         Burnaby, British Columbia
                         Canada


-------------

*     Represents less than 1%.

(1)   Applicable  percentage  of  ownership  is based on  260,273,921  shares of
      common  stock  outstanding  as of June 1, 2006  together  with  securities
      exercisable or  convertible  into shares of common stock within 60 days of
      June 1, 2006 for each stockholder.  Beneficial  ownership is determined in
      accordance  with the  rules of the SEC and  generally  includes  voting or
      investment  power  with  respect  to  securities.  Shares of common  stock
      subject to securities  exercisable  or  convertible  into shares of common
      stock that are currently exercisable or exercisable within 60 days of June
      1, 2006 are deemed to be  beneficially  owned by the person  holding  such
      options for the purpose of computing  the  percentage of ownership of such
      person,  but are not treated as  outstanding  for the purpose of computing
      the percentage ownership of any other person.

(2)   The  shares  are held as  follows:  (i)  146,419  shares  held by Mr.  Jay
      Sargeant (ii) 50,000 shares are held by Northern Colorado, Inc., a company
      controlled  by Mr.  Sargeant;  (iii)  42,462,727  shares are held by Viper
      Network Inc., a company controlled by Mr. Sargeant;  (iv) 2,299,750 shares
      which may be acquired by Mr.  Sargeant  on  exercise  of  incentive  stock
      options within 60 days of June 1, 2006.

(3)   The shares are held as follows:  2,454,500  shares of our common stock are
      held by Dori  O'Neill  directly,  7,308,861  shares  are  held by  O'Neill
      Enterprises Inc., a company controlled by Mr. O'Neill and 2,500,000 shares
      may be acquired by Mr.  O'Neill on exercise  of  incentive  stock  options
      within 60 days of June 1, 2006.

                                       60


(4)   Consists of 250,000  shares held directly by Mr. Raniga and 100,000 shares
      which may be acquired by Mr. Raniga on exercise of incentive stock options
      within 60 days of June 1, 2006.

(5)   Barry Larose  indirectly holds 23,249,249  shares which are currently held
      in trust.

                                       61


                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      Except as described  below,  none of the following  parties has, since our
date of incorporation,  had any material  interest,  direct or indirect,  in any
transaction  with us or in any presently  proposed  transaction that has or will
materially affect us, other than noted in this section:

      o     Any of our directors or officers;

      o     Any person proposed as a nominee for election as a director;

      o     Any person who  beneficially  owns,  directly or indirectly,  shares
            carrying  more  than  10%  of  the  voting  rights  attached  to our
            outstanding shares of common stock;

      o     Any of our promoters; and

      o     Any relative or spouse of any of the  foregoing  persons who has the
            same house as such person.

      In November  2002,  we entered  into a consulting  agreement  with O'Neill
Enterprises,  Inc., a company  controlled  by Dori O'Neill,  our Executive  Vice
President,  Chief Operations Officer,  Secretary,  Treasurer and a member of our
Board of  Directors.  Pursuant  to the  agreement,  we agreed to pay $15,000 per
month in consideration of management consulting services provided by Mr. O'Neill
to us. This agreement  automatically  renewed on a year-to-year basis at the end
of the initial five (5) year term.  Effective  January 1, 2004, we increased the
consulting  fee  payable to Mr.  O'Neill  to $20,000  per month with a five year
extension.

      In November  2002,  we entered  into a consulting  agreement  with Flaming
Gorge,  Inc.,  a  company  controlled  by Jay  Sargeant,  our  President,  Chief
Executive  Officer  and a member  of our  Board of  Directors.  Pursuant  to the
agreement,  we agreed to pay $20,000 per month in  consideration  of  management
consulting services provided by Mr. Sargeant to us. This agreement automatically
renewed on a  year-to-year  basis at the end of the initial  five (5) year term.
Effective January 1, 2004, we extended the consulting  agreement of Mr. Sargeant
for an additional five year extension.

      On May 27, 2002,  pursuant to a Declaration of Trust and the revised First
Amendment to Trust Agreement dated December 23, 2003,  91,874,538  shares of our
common  stock  were  held by Jay  Sargeant  as  trustee  on  behalf  of  certain
beneficiaries.  Of the 91,874,538 shares held pursuant to the trust,  26,397,436
of the shares were owned by Mr. Sargeant beneficially.  The trust was unwound in
March, 2006.

      In January  2004,  the Company  entered into a consulting  agreement  with
Rajesh Raniga Inc ("RR INC") whereas Rajesh Raniga, the principal of RR INC., is
to  act  as  our  Chief  Financial  Officer  on  a  month  to  month  basis  for
consideration of $150 CAD per hour with a minimum charge of $2,000 CAD per month
and 250,000  shares of our common stock.  In January,  2004,  we issued  250,000
shares of restricted  common stock to Rajesh Raniga Inc. as compensation for the
high degree of responsibility  associated with the position,  and the assistance
provided with the share exchange transaction with Safe ID. Mr. Raniga became our
chief financial  officer on January 1, 2004.  Rajesh Raniga,  nor RR INC., is an
employee of the Company, but rather RR INC. is an independent contractor.

      During the year ended December 31, 2004, we purchased approximately 90% of
our  products  for resale from  Nutri-Diem  Inc.,  a company  owned in part by a
director of our company.

      On April 30,  2004,  we  entered  into an  amendment  to our  License  and
Distribution  Agreement with Nutri-Diem,  lowering the amount of expenditures we
are required to make under the  agreement.  Pursuant to the term of the original
License and  Distribution  Agreement,  we were  required to expend the following
amounts on purchasing the products of Nutri-Diem over the term of the Agreement:
(i) from June 1, 2003 to May 31, 2004, the minimum amount of CDN$7,000,000, (ii)
from June 1, 2004 to May 31, 2005 the minimum amount of CDN$20,000,000 and (iii)
for each year thereafter, CDN$50,000,000. Pursuant to the terms of the amendment
to the License and  Distribution  Agreement we are presently  required to expend
the following  amounts on purchasing the products of Nutri-Diem over the term of
the License and Distribution  Agreement:  (i) from June 1, 2003 to May 31, 2004,
$1,530,000,  from June 1, 2004 to May 31, 2005,  $3,825,000,  and (iii) for each
year  thereafter,  $5,355,000.  We  reduced  the  minimum  purchase  amounts  as
management did not believe that those amounts were  achievable in the respective
time period. For the twelve months ended December 31, 2004 and December 31, 2003
we purchased product from Nutri-Diem  totaling $1,640,857 CAD and $2,318,073 CAD
respectively. Nutri-diem earns a gross profit of 34% to 39% on all product sales
to EYI.

                                       62


      Effective  January 1, 2004, we: (i) increased the consulting  fees payable
to O'Neill  Enterprises Inc., a private company  controlled by Mr. O'Neill,  our
Executive Vice-President,  COO, Secretary, Treasurer and director to $20,000 per
month,  and  extended  the term by five  years;  (ii)  extended  the  consulting
agreement  with  Flaming  Gorge,  Inc.,  a  private  company  controlled  by Mr.
Sargeant,  our President,  Chief Executive  Officer and a member of our Board of
Directors  for an  additional  term of five  years;  and  (iii)  entered  into a
consulting agreement with Rajesh Raniga to act as our Chief Financial Officer on
a month to month  basis for  consideration  of  CDN$150  per hour with a minimum
charge of  CDN$2,000  per month and  250,000  shares of our  common  stock to be
issued pursuant to Regulation S of the Securities Act.

      We have  contracts  with  Nutri-Diem,  Inc. that grant to us the exclusive
license and right to market, sell and distribute in Canada and the United States
and a non-exclusive  right to market on the Internet  certain  products owned by
Michel Grise  Consultant,  Inc., a Quebec  corporation,  which is  controlled by
Michel Grise. Mr. Grise is a director of our subsidiary EYI Nevada.  To maintain
the license and distribution rights granted by those contracts, we are obligated
to purchase from Nutri-Diem, Inc. during that period commencing on June 1, 2003,
and continuing through and including May 31, 2004, products totaling $1,530,000.
Those  contracts  also  specify that for the period from June 1, 2004 to May 31,
2005,  we are  required to purchase  from  Nutri-Diem,  Inc.  products  totaling
$3,825,000.  Additionally, those contracts specify that for each year commencing
on June 1, and ending on May 31 thereafter  during the term of that agreement we
are required to purchase products totaling  $5,355,000.  The provisions of those
contracts specify that Nutri-Diem,  Inc. will offer us the right to sell, market
and  distribute in those  territories  any new product  developed by Nutri-Diem,
Inc.

      On  February  10,  2005,  we  entered  into a loan  agreement  with  Janet
Carpenter, pursuant to which we loaned Ms. Carpenter $180,000 for the purpose of
exercising  3,000,000  incentive stock options issued to Ms. Carpenter under our
stock compensation  program.  The loan is payable on demand and accrues interest
at a rate of 4% per  annum.  The loan was  secured  by a  promissory  note dated
effective  February  10,  2005.  On  August  10,  2005 the  promissory  note was
re-assigned to Winslow Drive in exchange for 3,000,000 shares.


                                       63


                          MARKET PRICE OF AND DIVIDENDS
         ON THE REGISTRANT'S COMMON EQUITY AND OTHER SHAREHOLDER MATTERS

      Our common stock has been listed on the NASD OTC Electronic Bulletin Board
sponsored by the National  Association  of Securities  Dealers,  Inc.  under the
symbol  "EYI" since  January  30,  2004  following  completion  of the  Exchange
Agreement  among  our  company,   certain  of  our   shareholders  and  Safe  ID
Corporation,  see "Item 1. Description of Business" above. The shares of Safe ID
Corporation  traded on the OTC BB under the symbol  "MYID" from January 17, 2001
to January 30, 2004. The following  table contains the reported high and low bid
prices for the common stock as reported on the OTC BB for the periods indicated.

      The following  table sets forth the high and low bid prices for the common
stock as reported on the Over-the-Counter  Bulletin Board for each quarter since
January 2003 for the periods indicated.  Such information  reflects inter dealer
prices without retail  mark-up,  mark down or commissions  and may not represent
actual transactions.

      The following table sets forth,  for the period  indicated,  the bid price
range of our common stock.

YEAR 2003                                             High Bid           Low Bid
---------                                             --------           -------
Quarter Ended March 31, 2003                            $0.265            $0.051
Quarter Ended June 30, 2003                             $0.110            $0.032
Quarter Ended September 30, 2003                        $0.340            $0.050
Quarter Ended December 31, 2003                         $0.335            $0.190

YEAR 2004                                             High Bid           Low Bid
---------                                             --------           -------
Quarter Ended March 31, 2004                            $0.300            $0.190
Quarter Ended June 30, 2004                             $0.320            $0.180
Quarter Ended September 30, 2004                        $0.300            $0.110
Quarter Ended December 31, 2004                         $0.140            $0.050

YEAR 2005                                             High Bid           Low Bid
---------                                             --------           -------
Quarter Ended March 31, 2005                            $0.190            $0.030
Quarter Ended June 30, 2005                             $0.060            $0.020
Quarter Ended September 30, 2005                        $0.190            $0.030
Quarter Ended December 31, 2005                         $0.120            $0.020

YEAR 2006                                             High Bid           Low Bid
---------                                             --------           -------
Quarter Ended March 31, 2006                            $0.052           $0.0170
Quarter Ended June 30, 2006 (Through June 1)            $0.040           $0.0230

      On June 1, 2006,  the closing price of our common stock as reported on the
Over-the-Counter  Bulletin Board was $0.03 per share. As of June 1, 2006, we had
approximately  159 holders of common stock and 260,273,921  shares of our common
stock were  issued  and  outstanding.  Many of our  shares are held in  brokers'
accounts,  so we are  unable  to give an  accurate  statement  of the  number of
shareholders.

Dividends

      We have not paid any  dividends on our common stock and do not  anticipate
paying any cash  dividends in the  foreseeable  future.  We intend to retain any
earnings to finance  the growth of the  business.  We cannot  assure you that we
will ever pay cash  dividends.  Whether we pay any cash  dividends in the future
will depend on the financial condition,  results of operations and other factors
that the Board of Directors will consider.

                                       64


Recent Sales Of Unregistered Securities


      On April 24, 2006 we entered a Securities  Purchase Agreement with Cornell
Capital Partners,  Taib Bank, B.S.C. and Certain Wealth,  Ltd. pursuant to which
we entered  into the  following  agreements:  an  Investor  Registration  Rights
Agreement,  Irrevocable  Transfer Agent  Instructions and a Security  Agreement.
Pursuant to the terms of the Share Purchase  Agreement,  we may sell convertible
debentures to these entities in the principal  amount of $4,500,000 plus accrued
interest which are  convertible  into shares of our common stock. Of this amount
$1,500,000 has been paid, $1,500,000 must be paid two (2) business days prior to
the date a  registration  statement  is filed with the  Securities  and Exchange
Commission and $1,500,000  shall be paid two (2) business days prior to the date
that such  registration  statement is declared  effective by the  Securities and
Exchange Commission.  We received proceeds of $1,305,000 (net of fees associated
with the issuance of the convertible debentures) on April 27, 2006 in connection
with the issuance of  $1,500,000  of  convertible  debentures  in the  following
principal amounts: $750,000 to Cornell Capital Partners,  $416,667 to Taib Bank,
B.S.C.,  and  $333,333  to Certain  Wealth,  Ltd.  pursuant  to the terms of the
Securities  Purchase  Agreement.  On June 8, 2006,  we received  net proceeds of
$1,350,000,  associated  with the issuance of the second  tranche of convertible
debentures  in the principal  amount of  $1,500,000  in the following  principal
amounts:  $750,000 to Cornell Capital Partners,  $416,667 to TAIB Bank,  B.S.C.,
and $333,333 to Certain  Wealth,  Ltd. On June 20, 2006, we receive net proceeds
of  $1,350,000,  associated  with the  issuance of the third  tranche of secured
convertible  debentures in the principal amount of $1,500,000,  in the following
amounts:  $750,000 to Cornell Capital Partners,  $416,667 to TAIB Bank,  B.S.C.,
and $333,333 to Certain  Wealth,  Ltd. Each of the  convertible  debentures  was
issued  pursuant to section 4(2) and Rule 506 of Regulation D of the  Securities
Act.


      Pursuant  to the  terms  of the  Securities  Purchase  Agreement  and  the
issuance of our convertible  debentures,  on April 24, 2006 we issued to Cornell
Capital  Partners  seventeen  (17)  warrants  to  purchase  up to  an  aggregate
124,062,678  shares of our common  stock at the  discretion  of Cornell  Capital
Partners each for good and valuable consideration.  Pursuant to the terms of the
warrants,  Cornell  Capital  Partners  is  entitled  to  purchase  from us:  (1)
10,416,650  shares of our common stock at $0.02 per share, (2) 13,888,866 shares
of our common  stock at $0.03 per  share,  (3)  10,416,650  shares of our common
stock at $0.04 per share,  (4) 8,333,320 shares of our common stock at $0.05 per
share,  (5)  6,944,433  shares  of our  common  stock at $0.06  per  share,  (6)
5,952,371 shares of our common stock at $0.07 per share,  (7) 11,250,000  shares
of our common  stock at $0.08 per  share,  (8)  10,000,000  shares of our common
stock at $0.09 per share, (9) 19,000,000 shares of our common stock at $0.10 per
share,  (10)  8,181,818  shares of our  common  stock at $0.11 per  share,  (11)
7,500,000  shares of our common stock at $0.12 per share,  (12) 3,333,333 shares
of our common  stock at $0.15 per  share,  (13)  2,500,000  shares of our common
stock at $0.20 per share, (14) 2,000,000 shares of our common stock at $0.25 per
share,  (15)  1,666,666  shares of our  common  stock at $0.30 per  share,  (16)
1,428,571  shares of our  common  stock at $0.35  per  share and (17)  1,250,000
shares of our common stock at $0.40 per share upon surrender of the warrants (or
as subsequently  adjusted  pursuant to the terms of each warrant) . Each warrant
has "piggy  back"  registration  rights and shall expire five (5) years from the
date of issuance, on or about April 24, 2011.

      On October 10, 2005, we issued 500,000  shares of restricted  common stock
to  our  legal  consultant  pursuant  to a  contract  for  legal  services.  All
securities  were endorsed with a restrictive  legend pursuant to Regulation S of
the  Securities  Act of 1933  confirming  that the  securities  cannot be resold
without  registration  under the Securities Act or an applicable  exemption from
the registration requirements of the Securities Act.

      On October 10, 2005, we also issued  250,000  shares of restricted  common
stock to Agora  pursuant to our investor  relations  agreement  with Agora.  All
securities  were endorsed with a restrictive  legend pursuant to Regulation S of
the  Securities  Act of 1933  confirming  that the  securities  cannot be resold
without  registration  under the Securities Act or an applicable  exemption from
the registration requirements of the Securities Act.

      On June 9, 2005, we issued  1,000,000 shares of common stock and 3,000,000
warrants for the purchase of shares of our common stock at an exercise  price of
$0.02 per share to one investor.  The shares were purchased from us in a private
placement  transaction  pursuant to Rule 506 of  Regulation D of the  Securities
Act. All securities were endorsed with a restrictive  legend confirming that the
securities cannot be resold without  registration under the Securities act or an
applicable exemption from the registration requirements of the Securities Act.

      On January 1, 2004 the Company entered into an agreement with a consultant
to provide  services in exchange for 250,000 common shares at $0.28.  During the
quarter ended March 31, 2004 we issued  100,000  shares of our common stock at a
price of $0.28 per share to a  consultant  in respect  of fees owed for  certain
consulting services provided to us by the consultant. All securities issued were
endorsed with a restrictive  legend  confirming  that the  securities  cannot be
resold without  registration under the Securities Act or an applicable exemption
from the  registration  requirements  of the  Securities  Act.  The issuance was
completed  pursuant to Section 4(2) of the  Securities Act on the basis that the
consultant was a sophisticated investor.

      During the quarter  ended June 30, 2004,  we issued  50,000  shares of our
common  stock at a price of $0.22 per share to a  consultant  in respect of fees
owed for  certain  consulting  services  provided to us by the  consultant.  All
securities  issued were endorsed with a restrictive  legend  confirming that the
securities cannot be resold without  registration under the Securities Act or an
applicable  exemption from the registration  requirements of the Securities Act.
The issuance was completed pursuant to Section 4(2) of the Securities Act on the
basis that the consultant was a sophisticated investor.

                                       65


      During the quarter  ended June 30, 2004,  we issued  5,476,190  units at a
price of $0.21 per unit to  Eyewonder  in  respect of  certain  amounts  owed to
Eyewonder under our Letter Agreement with Eyewonder.  Each unit was comprised of
one share of our common stock and one share purchase warrant entitling Eyewonder
to  purchase  one share of our common  stock at an  exercise  price of $0.30 per
share for a period  expiring May 4, 2009.  Eyewonder is a  subcontractor,  which
provides  streaming  video  technology  to EYI.  The Company  believes  that the
Eyewonder  transaction was not a related party  transaction,  as the Company and
Eyewonder had no prior  relationship  and no  individuals  and/or  entities were
related to the Company and  Eyewonder.  The issuance was  completed  pursuant to
Section  4(2)  of  the  Securities  Act  on  the  basis  that  Eyewonder  was  a
sophisticated investor.

      As of June 7, 2004,  we completed  the sale of 136,548 units at a price of
$0.21  per unit for  proceeds  of  $28,675  to seven  investors.  Each  unit was
comprised of one share of our common stock and one share purchase warrant.  Each
share purchase  warrant  entitles the holder to purchase one share of our common
stock at a price of $0.30 per share for the three year period following closing.
A total of 136,548 shares and 136,548 share purchase  warrants were issued.  The
purchasers consisted of seven "accredited investors",  as defined by Rule 501 of
Regulation D of the Securities  Act. The sales were  completed  pursuant to Rule
506 of Regulation D of the Securities  Act. All securities  issued were endorsed
with a  restrictive  legend  confirming  that the  securities  cannot  be resold
without  registration  under the Securities Act or an applicable  exemption from
the registration requirements of the Securities Act.

      On June 22, 2004, we issued 1,266,589 and 33,411  restricted shares of our
common stock to Cornell Capital Partners and Newbridge  Securities  Corporation,
respectively  in payment of certain  fees owed to Cornell  Capital  Partners and
Newbridge  under the terms of the Standby  Equity  Distribution  Agreement and a
Placement Agent Agreement.  All issuances were completed pursuant to Rule 506 of
Regulation D of the  Securities  Act on the basis that Newbridge and Cornell are
"accredited investors", as defined by Rule 501 of Regulation D of the Securities
Act. All securities  issued were endorsed with a restrictive  legend  confirming
that the securities cannot be resold without  registration  under the Securities
Act  or an  applicable  exemption  from  the  registration  requirements  of the
Securities Act.

      On  June  22,  2004,  we  entered  into a  secured  convertible  debenture
transaction  with Cornell Capital  Partners in the principal amount of $500,000.
The sale of these Secured  Convertible  Debentures is complete.  EYI  Industries
received $250,000 from the issuance of the first Secured  Convertible  Debenture
on June 22, 2004,  and we received  $250,000 five  business  days  following the
filing of the  accompanying  registration  statement.  The  Secured  Convertible
Debentures are  convertible at the holder's  option any time up to maturity at a
conversion  price equal to the lower of (i) 120% of the closing bid price of the
common  stock as of the date of  issuance,  or (ii)  80% of the  average  of the
lowest daily volume weighted average price of our common stock for the 5 trading
days  immediately  preceding the  conversion  date.  At maturity,  the remaining
unpaid  principal and accrued  interest  under the  debentures  shall be, at our
option,  either paid or  converted  into shares of common  stock at a conversion
price  equal to the lower of (i) 120% of the  closing  bid  price of the  common
stock as of the date of issuance or (ii) 80% of the lowest  closing bid price of
the common stock for the lowest  trading days of the 5 trading days  immediately
preceding the conversion date. The Secured  Convertible  Debenture is secured by
all of  EYI  Industries'  assets.  The  Secured  Convertible  Debentures  accrue
interest  at a rate of 5% per year and have a term of 3 years.  In the event the
Secured Convertible  Debentures are redeemed,  then EYI Industries will issue to
the holders a warrant to purchase  50,000 shares for every $100,000  redeemed at
an  exercise  price of 120% of the closing  bid price as of June 22,  2004.  The
holders  purchased the Secured  Convertible  Debentures from EYI Industries in a
private  placement on June 22, 2004. On September 24, 2004, we issued the second
secured  convertible  debenture in the  principal  amount of $250,000 to Cornell
Capital  Partners on the same terms and  conditions  as the secured  convertible
debenture  described  above.  EYI  Industries  is  registering  in this offering
8,352,823 shares of common stock underlying the Secured Convertible  Debentures.
On April 4,  2005,  Cornell  Capital  Partners  assigned  all of its  rights and
interests in the secured convertible debentures to Taib Bank E.C. All investment
decisions of Taib Bank E.C. are made by Larry Chaleff, its Managing Director. In
addition,  on April 4, 2005, EYI  Industries  and Taib Bank E.C.  entered into a
Redemption  Agreement,  whereby EYI Industries  agreed to first use any proceeds
received by EYI Industries under the Equity Distribution  Agreement with Cornell
Capital  Partners to redeem any remaining  principal and accrued  interest under
the assigned Secured Convertible Debentures.

                                       66




                                                                       Share of
                                                                     Common Stock
Year           Name of Holder                  Date                      Sold         Reason Shares Issued
----           --------------                  ----                  ------------     --------------------
                                                                          
2005           Janet Carpenter                 February 2005                800,000   Shares in lieu of guarantee and
                                                                                      pledge

               Private Placement at $0.02 per
               unit warrants at $0.02          June 2005                  1,000,000   Private Placement, raise capital

                                                                                      Shares issued in connection
                                                                                      with investor relations
               AGORA Investor Relations Corp.  July 2005                    250,000   agreement

               M. Ali Lakhani Personal Law                                            Shares issued as signing bonus
               Corporation                     September 2005               500,000   for agreement for legal services

2004           Private Placement at            January 2004                 857,143   Private Placement
               $0.14 per unit: warrants                                               raise capital
               at $0.20

               Rajesh Raniga Inc.              January 2004                 250,000   Consulting Fees
                                                                                      valued at $0.28 per share

               Private Placement at            March 2004                   609,312   Private Placement
               $0.21 per unit; warrants                                               raise capital
               at $0.30

               Equis Capital Corp.             March 2004                   100,000   Consulting Fees

               Eyewonder Inc.                  May 2004                   5,476,190   Service Fees

               Michael Hatrak                  May 2004                      50,000   Consulting Fees

               Private Placement at            June 2004                    566,833   Private Placement to
               $0.21 per unit; warrants                                               raise capital
               at $0.30

               Cornell Capital Partners, LP    June 2004                  1,266,589   Commitment fee
                                                                                      pursuant to Standby
                                                                                      Equity Distribution Agreement

               Newbridge Securities            June 2004                     33,411   Placement Agent fee
               Corporation                                                            in connection with
                                                                                      Standby Equity Distribution
                                                                                      Agreement

2003*          PNG Trading Co. Ltd.            February 2003                250,000   Issued in lieu of funds
                                                                                      received

               Hightech International          March 2003                 2,120,000   Settlement of Debt

               Private Placement at            September 2003             3,573,924   Private Placement to
               $0.14 per unit; warrants                                               raise capital
               at $0.20

               Michel Grise                    December 2003                357,143   Private Placement to
                                                                                      raise capital


                                       67


      In February 2005, the Company issued 800,000 shares of our common stock at
a deemed price of $0.05 per share to Janet Carpenter. These shares were given to
Ms.  Carpenter  in  consideration  of her  providing  the  guarantee  and pledge
required for our loan agreement with Cornell Capital.

      In June 2005, we completed the sale of 1,000,000 units at a price of $0.02
per unit for proceeds of $20,000 to one investor. Each unit was comprised of one
share of our common stock and one share  purchase  warrant.  Each share purchase
warrant entitles the holder to purchase one share of our common stock at a price
of $0.02 per share for a one year period following closing. A total of 1,000,000
shares and 1,000,000  share purchase  warrants were issued.  The purchaser is an
"accredited investor",  as defined by Rule 501 of Regulation D of the Securities
Act.  The  sale  was  completed  pursuant  to Rule  506 of  Regulation  D of the
Securities  Act. All securities  issued were endorsed with a restrictive  legend
confirming that the securities cannot be resold without  registration  under the
Securities Act or an applicable exemption from the registration  requirements of
the Securities Act.

      With respect to the sale of unregistered  securities referenced above, all
transactions  were exempt  from  registration  pursuant  to Section  4(2) of the
Securities Act of 1933 (the "1933 Act"), and Regulation D promulgated  under the
1933 Act. In each instance,  the purchaser had access to sufficient  information
regarding EYI so as to make an informed investment decision.  More specifically,
EYI had a reasonable  basis to believe that each  purchaser  was an  "accredited
investor"  as  defined in  Regulation  D of the 1933 Act and  otherwise  had the
requisite sophistication to make an investment in EYI's common stock.

-------------------

*     Current management of EYI Industries has limited  information with respect
      to the issuances of  unregistered  securities  prior to the Share Exchange
      transaction  consummated  on  December  31,  2003  between our company and
      certain shareholders of Essentially Yours Industries, Inc.

                                       68


                            DESCRIPTION OF SECURITIES

Common Stock

      Our Articles of  Incorporation  authorize  the  issuance of  1,000,000,000
shares  of  common  stock,  $0.001  par value  per  share.  As of June 1,  2006,
260,273,921  shares of common stock were issued and  outstanding.  The following
description is a summary of the capital stock of EYI Industries and contains the
material terms of the capital stock.  Additional information can be found in EYI
Industries' Articles of Incorporation and Bylaws.

      Each  holder  of our  common  stock is  entitled  to one vote per share of
common  stock  standing  in such  holder's  name on our  records on each  matter
submitted to a vote of our  stockholders,  except as otherwise  required by law.
Holders of our common  stock do not have  cumulative  voting  rights so that the
holders of more than 50% of the  combined  shares of our common stock voting for
the election of directors may elect all of the directors if they choose to do so
and, in that event, the holders of the remaining shares of our common stock will
not be able to elect any  members  to our  board of  directors.  Holders  of our
common stock are entitled to equal dividends and distributions, per share, when,
as and if  declared  by our board of  directors  from funds  legally  available.
Holders of our common stock do not have  preemptive  rights to subscribe for any
of our  securities  nor  are  any  shares  of our  common  stock  redeemable  or
convertible into any of our other securities. If we liquidate,  dissolve or wind
up our  business  or  affairs,  our  assets  will be divided  up  pro-rata  on a
share-for-share  basis among the holders of our common stock after creditors and
preferred shareholders, if any, are paid.

Preferred Stock

      Our Articles of Incorporation  authorize the issuance of 10,000,000 shares
of preferred  stock,  $0.001 par value per share,  the designation and rights of
which are to be  determined  by our Board of  Directors.  As of June 1, 2006, no
shares of preferred stock were issued and outstanding.

      Our Board of Directors has authority,  without action by the shareholders,
to issue all or any portion of the  authorized but unissued  preferred  stock in
one or more  series  and to  determine  the  voting  rights,  preferences  as to
dividends and liquidation,  conversion  rights, and other rights of such series.
We consider it desirable to have preferred stock available to provide  increased
flexibility in structuring  possible  future  acquisitions  and financing and in
meeting corporate needs which may arise. If opportunities  arise that would make
desirable  the issuance of preferred  stock through  either  public  offering or
private  placements,  the  provisions  for  preferred  stock in our  Articles of
Incorporation  would avoid the  possible  delay and  expense of a  shareholder's
meeting, except as may be required by law or regulatory authorities. Issuance of
the preferred stock could result, however, in a series of securities outstanding
that will have certain  preferences  with respect to dividends  and  liquidation
over the common stock which would result in dilution of the income per share and
net book value of the common stock. Issuance of additional common stock pursuant
to any  conversion  right  which may be  attached  to the terms of any series of
preferred  stock may also result in dilution of the net income per share and the
net book  value of the  common  stock.  The  specific  terms  of any  series  of
preferred stock will depend primarily on market conditions,  terms of a proposed
acquisition  or financing,  and other factors  existing at the time of issuance.
Therefore,  it is not  possible  at this  time to  determine  in what  respect a
particular series of preferred stock will be superior to our common stock or any
other series of preferred  stock which we may issue.  Our Board of Directors may
issue additional  preferred stock in future financing,  but has no current plans
to do so at this time.

      The  issuance of  preferred  stock could have the effect of making it more
difficult  for a third  party to acquire a majority  of our  outstanding  voting
stock.  We  intend  to  furnish  holders  of our  common  stock  annual  reports
containing  audited  financial  statements and to make public quarterly  reports
containing unaudited financial information.

                                       69


Convertible Debentures

      Summary Of Warrants Outstanding



                      Issued
 Period Issued       Warrants    Purchase Price    Aggregate Value   Details of Issuance
 -------------       ---------   --------------    ---------------   -------------------
                                                         
4th Quarter 2003     3,668,413       $      -         $        -     Balance of Safe ID warrants

1st Quarter 2004       857,143       $   0.20         $  171,429     Private Placement $0.14 per unit; warrants
                                                                     exercise price is $0.30

                       609,312       $   0.30         $  182,794     Private Placement $0.21 per unit; warrants
                                                                     exercise price is $0.30

                       916,667       $   0.24                        Balance of reverse acq/share exchange not
                                                                     properly determined December 31, 2003(expired)

2nd Quarter 2004     5,476,190       $   0.21         $1,150,000     Pursuant to an Agreement with Eyewonder dated May
                                                                     4, 2004

                       566,833       $   0.30         $  170,050     Private Placement $0.21 per unit; warrants
                                                                     exercise price is $0.30

                        26,129       $   0.31         $    8,100     Pursuant to an agreement dated May 25, 2004 with
                                                                     Source Capital Group, Inc.

2nd Quarter 2005     1,000,000       $   0.02         $   20,000     Private Placement $0.02 per unit, warrant
                    ----------    ------------     --------------    exercise price is $0.02

Total               13,120,687                        $1,702,372
                    ==========                     ==============



      Summary Of The Grant Of Options



                       Number of      Exercise       Options
    Date of Grant       Options      Price (US)     Exercised      Vesting Period               Capacity of Grant
    -------------      ---------     ----------     ---------      --------------               -----------------
                                                                               
March 30, 2004         3,200,000        $0.165      3,200,000    March 30, 2004               Consultant

                       1,000,000        $0.165      1,000,000    March 30,2004                Employee

April 5, 2004          1,439,000         $0.20        300,000    50% August 5, 2004 and 50%   Canadian Consultants and
                                                                 August 5, 2005               Employees

April 5, 2004          2,990,000         $0.20         36,360    Fully vested upon issuance   Senior Management and
                                                                                              Executives

April 30, 2004         6,400,000         $0.19              0    Fully vested upon issuance   Consultants (Executive
                                                                                              Officers)

April 30, 2004         2,910,000         $0.19              0    50% October 1, 2004 and      US Consultants providing
                                                                 50% October 1, 2005          services in various to EYI


                                       70




                       Number of      Exercise       Options
    Date of Grant       Options      Price (US)     Exercised      Vesting Period               Capacity of Grant
    -------------      ---------     ----------     ---------      --------------               -----------------
                                                                               
April 30, 2004         2,000,000         $0.19              0    Vesting on October 1, 2004   Consultant working with
                                                                                              EYI with respect to
                                                                                              products in Latin
                                                                                              Countries

June 1, 1004             100,000         $0.22              0    Vesting on August 1, 2004    Consultant working with
                                                                                              EYI in assisting in the
                                                                                              development and marketing
                                                                                              of new EYI products

July 2, 2004             100,000         $0.26              0    50% October 4, 2004 and      Consultants providing
                                                                 50% October 4, 2005          assistance to EYI Senior
                                                                                              Management

September 30, 2004     2,650,000         $0.11        400,250    Vesting on September 30,     Senior
                                                                 2004                         Management/Consultants

October 13, 2004         500,000         $0.08        250,000    Vesting October 13, 2004     Consultant

November 1,2004          250,000         $0.20              0    50% February 1 2005 and      Consultant
                                                                 50% February 1 2006

December 27, 2004      7,450,000         $0.08        100,000    100% December 31, 2004       Senior
                                                                                              Management/Consultants
                                                                                              and Employees

February 9, 2005       6,000,000         $0.06      3,000,000    100% February 9, 2005        Senior Management

March 10, 2005           250,000         $0.04        250,000    100% March 10, 2005          Consultant

May 30, 2005             500,000         $0.03              0    100% May 30, 2005            Senior Management

June 1, 2005             500,000         $0.10              0    50% October 1, 2005 and      Consultant
                                                                 50% August 1, 2006

November 29, 2005        140,000         $0.02              0    50% May 29, 2006 and 50%     Employees
                                                                 November 29, 2006


***   In addition  under an  Agreement  dated May 4, 2004,  EYI  Industries  has
      agreed to issue options to purchase  1,100,000 shares of common stock at a
      price of $0.22 per share to certain individuals designated by Eyewonder.

Transfer Agent

      The transfer  agent for our common stock is  Corporate  Stock  Transfer of
Denver, Colorado and its telephone number is (303) 282-4800.

Disclosure Of SEC Position On Indemnification For Securities Act Liabilities

      Our  Articles of  Incorporation,  as well as our  By-Laws  provide for the
indemnification of directors,  officers, employees and agents of the corporation
to the fullest extent provided by the corporate laws of the State of Nevada,  as
well as is  described in the Articles of  Incorporation  and the By-Laws.  These
sections  generally provide that the Company may indemnify any person who was or
is a party to any threatened,  pending or completed  action,  suit or proceeding
whether civil, criminal, administrative or investigative except for an action by
or in right of the  corporation by reason of the fact that he or she is or was a
director,  officer,  employee  or  agent  of  the  corporation.   Generally,  no
indemnification may be made where the person has been determined to be negligent
or guilty of misconduct in the performance of his or her duties to the Company.

                                       71


      Insofar as  indemnification  for liabilities  arising under the Securities
Act may be  permitted  to  directors,  officers  or  controlling  persons of EYI
Industries,  pursuant to the foregoing  provisions,  or otherwise,  we have been
advised that, in the opinion of the  Securities  and Exchange  Commission,  such
indemnification  is against  public policy as expressed in the Securities Act of
1933, and is, therefore, unenforceable.

Anti-Takeover Effects Of Provisions Of The Articles Of Incorporation  Authorized
And Unissued Stock

      The authorized but unissued  shares of our common and preferred  stock are
available  for  future  issuance  without  our  shareholders'  approval.   These
additional shares may be utilized for a variety of corporate  purposes including
but not  limited  to  future  public  or direct  offerings  to raise  additional
capital, corporate acquisitions and employee incentive plans.

                                       72


                                     EXPERTS

      The financial  statements of EYI Industries  incorporated herein have been
so  incorporated  in reliance upon the report of  independent  certified  public
accountants,  Williams and Webster,  P.S., given upon their authority as experts
in auditing and  accounting.  The  accountants  are not subject to the liability
provisions of Section 11 of the  Securities  Act of 1933 for their report on the
unaudited interim financial information because that report is not a "report" or
a "part" of the Registration  Statement prepared or certified by the accountants
within the meaning of Section 7 and 11 of the 1933 Act.

                                  LEGAL MATTERS

      The validity of the shares of common stock  offered  hereby will be passed
upon for us Burton Bartlett & Glogovac of Reno, Nevada.

                              AVAILABLE INFORMATION

      We have filed with the Securities  and Exchange  Commission a registration
statement on Form SB-2 under the  Securities  Act with respect to the securities
offered  by  this  prospectus.  This  prospectus,  which  forms  a  part  of the
registration  statement,  does not contain all the  information set forth in the
registration  statement,  as  permitted  by the  rules  and  regulations  of the
Commission.  For  further  information  with  respect  to us and the  securities
offered by this  prospectus,  reference is made to the  registration  statement.
Statements  contained in this  prospectus  as to the contents of any contract or
other  document that we have filed as an exhibit to the  registration  statement
are  qualified  in their  entirety by  reference  to the to the  exhibits  for a
complete statement of their terms and conditions. The registration statement and
other  information may be read and copied at the  Commission's  Public Reference
Room at 100 F Street,  N.E.,  Washington,  D.C.  20549.  The  public  may obtain
information  on the  operation  of the  Public  Reference  Room by  calling  the
Commission  at   1-800-SEC-0330.   The  Commission   maintains  a  web  site  at
http://www.sec.gov that contains reports, proxy and information statements,  and
other  information   regarding  issuers  that  file   electronically   with  the
Commission.

                                       73


                          INDEX TO FINANCIAL STATEMENTS

FINANCIAL STATEMENTS FOR MARCH 31, 2006
---------------------------------------

Consolidated Balance Sheets as of March 31, 2006 (unaudited)
  and December 31, 2005 (unaudited)                                          F-1

Consolidated Statement of Operations for the three months ended
  March 31, 2006 (unaudited) and March 31, 2005 (unaudited)                  F-2

Consolidated Statement of Stockholders' Equity (Deficit) from
  June 21, 2002 through March 31, 2006 (unaudited)                     F-3 - F-4

Consolidated Statements of Cash Flows for the three months ended
  March 31, 2006 (unaudited) and March 31, 2005 (unaudited)                  F-5

Notes to Financial Statements                                         F-6 - F-12

FINANCIAL STATEMENTS FOR DECEMBER 31, 2005
------------------------------------------

Report of Independent Registration Public Accounting Firm                   F-13

Consolidated Balance Sheets as of December 31, 2005                         F-14

Consolidated Statements of Operations                                F-15 - F-16

Consolidated Statement of Stockholders' Equity Deficit for the
  period from Inception to December 31, 2005                         F-17 - F-22

Consolidated Statement of Cash Flows For the period from
  Inception to December 31, 2005                                     F-23 - F-24

Notes to Financial Statements                                        F-25 - F-39

                                      F-i


                              EYI INDUSTRIES, INC.
                           CONSOLIDATED BALANCE SHEETS



                                                         March 31,      December 31,
                                                            2006            2005
                                                        (Unaudited)
                                                        ------------    ------------
                                                                  
ASSETS
  CURRENT ASSETS
    Cash                                                $    190,837    $     25,639
    Accounts receivable, net of allowance                     94,119          48,783
    Prepaid expenses                                          18,485          12,387
    Inventory                                                279,225         295,248
                                                        ------------    ------------
      TOTAL CURRENT ASSETS                                   582,666         382,057
                                                        ------------    ------------

  OTHER ASSETS
    Property, plant and equipment, net                        63,720          49,671
    Deposits                                                  62,336          67,603
                                                        ------------    ------------
      TOTAL OTHER ASSETS                                     126,056         117,274
                                                        ------------    ------------

  INTANGIBLE ASSETS                                           14,487          15,044
                                                        ------------    ------------
      TOTAL ASSETS                                      $    723,209    $    514,375
                                                        ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

  CURRENT LIABILITIES
    Accounts payable and accrued liabilities            $  1,427,120    $  1,929,049
    Accounts payable - related parties                       643,622         328,038
    Notes payable - related party                             90,000          90,000
                                                        ------------    ------------
      TOTAL CURRENT LIABILITIES                            2,160,742       2,347,087
                                                        ------------    ------------

    Net liabilities from discontinued operations             375,344         375,344

    MINORITY INTEREST IN SUBSIDIARY                          244,636         262,057
                                                        ------------    ------------

  STOCKHOLDERS' EQUITY (DEFICIT)
    Preferred stock, $0.001 par value; 10,000,000
      shares authorized, no shares
      issued and outstanding                                      --              --
    Common stock, $0.001 par value; 1,000,000,000
      shares authorized,  260,273,922 and 217,600,875
      shares issued and outstanding, respectively            260,273         217,600
    Additional paid-in capital                             7,397,617       6,155,518
    Stock options and warrants                             2,702,734       2,698,984
    Subscription receivable                                 (195,000)       (195,000)
    Accumulated deficit                                  (12,223,137)    (11,347,215)
                                                        ------------    ------------
      TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                (2,057,513)     (2,470,113)
                                                        ------------    ------------

      TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY (DEFICIT)                                  $    723,209    $    514,375
                                                        ============    ============


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

                                      F-1


                              EYI INDUSTRIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                 Three Months      Three Months
                                                     Ended             Ended
                                                 March 31, 2006   March 31, 2005
                                                  (Unaudited)       (Unaudited)
                                                 ------------      ------------

REVENUE, NET OF RETURNS AND ALLOWANCES           $  1,108,759      $  1,313,768
COST OF GOODS SOLD                                    287,952           251,148
                                                 ------------      ------------
    GROSS PROFIT BEFORE COMMISSION EXPENSE            820,807         1,062,620

COMMISSION EXPENSE                                    385,443           471,605
                                                 ------------      ------------

GROSS PROFIT AFTER COST OF GOODS SOLD AND
  COMMISSION EXPENSE                                  435,364           591,015
                                                 ------------      ------------

OPERATING EXPENSES
  Consulting fees                                     259,736           237,962
  Legal and professional fees                          74,482            69,125
  Customer service                                     40,416            86,534
  Finance and administration                          499,973           208,080
  Sales and marketing                                  78,624             3,718
  Telecommunications                                   30,660           119,162
  Wages and benefits                                  277,571           406,627
  Warehouse expense                                    62,898           105,900
                                                 ------------      ------------
    TOTAL OPERATING EXPENSES                        1,324,360         1,237,108
                                                 ------------      ------------

LOSS FROM OPERATIONS                                 (888,996)         (646,093)
                                                 ------------      ------------

OTHER INCOME (EXPENSES)
  Interest and other income                            (8,565)            3,149
  Interest expense                                       (450)          (20,136)
  Foreign currency gain (discount)                      4,669          (136,296)
                                                 ------------      ------------
    TOTAL OTHER INCOME (EXPENSES)                      (4,346)         (153,283)
                                                 ------------      ------------

NET LOSS BEFORE TAXES                                (893,342)         (799,376)

PROVISION FOR INCOME TAXES                                 --                --
                                                 ------------      ------------

NET LOSS BEFORE ALLOCATION TO MINORITY INTEREST      (893,342)         (799,376)

ALLOCATION OF LOSS TO MINORITY INTEREST                17,420            15,588
                                                 ------------      ------------

NET LOSS                                         $   (875,922)     $   (783,788)
                                                 ============      ============
BASIC AND DILUTED
  NET LOSS  PER COMMON SHARE                     $        nil      $        nil
                                                 ============      ============

WEIGHTED AVERAGE NUMBER OF
  COMMON STOCK SHARES OUTSTANDING
  FOR BASIC AND DILUTED CALCULATION               250,936,751       164,653,292
                                                 ============      ============

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

                                      F-2


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



                                     Common Stock
                              -------------------------   Additional
                               Number of                    Paid-in    Subscription    Option/       Retained
                                Shares        Amount        Capital     Receivable     Warrants      Earnings       Total
                              ----------------------------------------------------------------------------------------------
                                                                                           
Balance December 31, 2004     162,753,292  $    162,753  $  3,048,606 $    (15,000) $  2,563,044  $ (7,085,205) $ (1,325,802)

Stock issued at $0.06 per
  Share for promissory note
  for exercise of options       3,000,000         3,000       177,000     (180,000)           --            --            --

Vested stock options issued
  for consulting at an
  average price of $0.07
  per share                            --            --            --           --        35,250            --        35,250

Vested stock options issued
  for employee compensation
  at an average price of
  $0.07 per share                      --            --            --           --       133,750            --       133,750

Stock issued to employee
  for financing guaranty &
  pledge valued at $0.05
  per share                       800,000           800        39,200           --            --            --        40,000

Consultant-options exercised      250,000           250        14,750           --        (5,000)           --        10,000

Gladys Sargeant 506
  Subscription Agreement        1,000,000         1,000         4,000           --        15,000            --        20,000

Vested stock option issued
  for consulting at an
  average price of $0.03
  per share                            --            --            --           --        62,250            --        62,250

Cancelled stock options
  issued for compensation
  and consulting at an
  average price of $0.08
  per option                           --            --       425,300           --      (425,300)           --            --

Cancelled stock options
  issued for compensation
  at $0.20                             --            --         2,400           --        (2,400)           --            --

Stock issued to TAIB Bank
  to retire $75,000 of
  $300,000 debenture            2,027,027         2,027        72,973           --            --            --        75,000

Stock issued to TAIB Bank
  to retire $170,000 of
  $300,000 debenture plus
  interest of $10,830           4,487,096         4,487       176,343           --            --            --       180,830

Stock issued to TAIB Bank
  to retire $5,000
  debenture plus interest
  of $14,245                      375,146           375        18,870           --            --            --        19,245

Stock issued to Agora as
  part of contract                250,000           250        12,250           --            --            --        12,500

Stock issued to Consultant
  as part of contract             500,000           500        34,500           --            --            --        35,000

Stock issued for exercise
  of options at $0.08 per
  share                           100,000           100         7,900           --            --            --         8,000

Stock issued to Cornell to
  retire  prom note            22,789,581        22,789     1,008,099           --            --            --     1,030,888

Vested stock options issued
  for consulting at an
  average price of $0.20
  per share                            --            --            --           --        33,500            --        33,500


                                      F-3




                                     Common Stock
                              -------------------------   Additional
                               Number of                    Paid-in    Subscription    Option/       Retained
                                Shares        Amount        Capital     Receivable     Warrants      Earnings       Total
                              ----------------------------------------------------------------------------------------------
                                                                                           
Vested stock options issued
  for employee and
  management compensation
  at an average price of
  $0.20 per share                      --            --            --           --        27,840            --        27,840

Stock issued to Cornell in
  exchange for $700,000
  pursuant to SEDA             19,268,733        19,269       680,731           --            --            --       700,000

Cancelled stock options
  issued for compensation              --            --        10,500           --       (10,500)           --            --

Vested stock options for
  consulting at an average
  price of $0.20 per share             --            --            --           --       271,550            --       271,550

Beneficial conversion of
  convertible debt                     --            --       422,096           --            --            --       422,096

Net loss for period ended
  December 31, 2005                    --            --            --           --            --    (4,262,010)   (4,262,010)
                              ----------------------------------------------------------------------------------------------
Balance, December 31, 2005    217,600,875  $    217,600  $  6,155,518 $   (195,000) $  2,698,984  $(11,347,215) $ (2,470,113)

Vested stock options issued
  for consulting at an
  average price of $0.20
  per share                            --            --            --           --         3,750            --         3,750

Stock issued to Cornell in
  exchange for $1,084,565
  pursuant to the SEDA         42,941,686        42,942     1,041,623           --            --            --     1,084,565

Shares returned to treasury      (268,639)         (269)          269           --            --            --            --

Beneficial conversion of
  convertible debt                     --            --       200,207           --            --            --       200,207

Net loss for period ended
  March 31, 2006                       --            --            --           --            --      (875,922)     (875,922)
                              ----------------------------------------------------------------------------------------------
Balance March 31, 2006
  (Unaudited)                 260,273,922  $    260,273  $  7,397,617 $   (195,000) $  2,702,734   (12,223,137) $ (2,057,513)
                              ==============================================================================================


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

                                      F-4


                              EYI INDUSTRIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                                     Three Months Ended
                                                                                March 31, 2006    March 31, 2005
                                                                                  (Unaudited)       (Unaudited)
                                                                                --------------    --------------
                                                                                            
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES
  Net loss                                                                      $     (875,922)   $     (783,788)
  Loss allocated to minority interest                                                   17,420            15,588
                                                                                      (893,342)         (799,376)

  Adjustments to reconcile net loss to net cash used by operating activities:
    Depreciation and amortization                                                        4,648            16,949
    Stock and warrants issued for employee compensation and consulting                   3,750           169,000
    Stock issued for deferred financing costs                                               --            40,000
    Discount recognized on convertible debt                                                 --            38,162
    Beneficial conversion of convertible debt                                          200,207                --
    Decrease (increase) in:
      Related party receivables                                                             --             4,996
      Accounts receivable                                                              (45,336)          (16,634)
      Prepaid expenses                                                                  (6,098)           33,123
      Inventory                                                                         16,023            44,570
      Deposits                                                                           5,266            24,361
    Increase (decrease) in:
      Accounts payable and accrued liabilities                                        (501,929)          180,138
      Accounts payable - related parties                                               315,584           101,327
      Customer deposits                                                                     --             6,165
                                                                                --------------    --------------
        Net cash used by operating activities                                         (901,226)         (157,219)

CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES
  Decrease (increase) in restricted cash                                                    --              (122)
  Decrease (increase) in property, plant, and equipment                                (18,140)          (11,551)
                                                                                --------------    --------------
    Net cash provided by investing activities                                          (18,140)          (11,673)

CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES
  Net change in bank indebtedness                                                           --           (58,676)
  Proceeds from Cornell SEDA                                                         1,084,565                --
  Proceeds from Cornell Promissory Note                                                     --           200,000
                                                                                --------------    --------------
    Net cash provided by financing activities                                        1,084,565           141,324
                                                                                --------------    --------------

    Net increase in cash and cash equivalents                                          165,198           (27,568)

CASH - Beginning of Year                                                                25,639            33,018
                                                                                --------------    --------------

CASH - End of Period                                                            $      190,837    $        5,450
                                                                                ==============    ==============

SUPPLEMENTAL CASH FLOW DISCLOSURES:
  Interest  expense paid                                                        $          450    $       20,136
  Income taxes paid                                                             $           --    $           --

NON-CASH INVESTING AND FINANCING TRANSACTIONS:
  Beneficial conversion of convertible debt                                     $      200,207    $           --
  Stock options vested for employee compensation and consulting                 $        3,750    $      169,000
  Stock issued for financing guaranty & pledge                                  $           --    $       40,000
  Discount recognized on convertible debt                                       $           --    $       38,162


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

                                      F-5


                              EYI INDUSTRIES, INC.
              CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2006

NOTE 1 - DESCRIPTION OF BUSINESS

Essentially Yours Industries,  Inc. (hereinafter "EYI") was incorporated on June
21, 2002 in the State of Nevada.  The main business  activities  of  Essentially
Yours  Industries,  Inc. were acquired  through a merger with the former entity,
Burrard Capital,  Inc., and other entities concerning EYI's  reorganization.  On
December 31, 2003, EYI entered into a share exchange agreement of its stock with
Safe ID Corporation  ("Safe ID"). This  transaction was accounted for as a share
exchange  and  recapitalization.  As a result of this  transaction,  Safe ID has
changed its name to EYI  Industries,  Inc. ("the  Company") and is acting as the
parent holding company for the operating subsidiaries.

The  principal  business of the Company is the  marketing of health and wellness
care  products.  The  Company  sells  its  products  primarily  through  network
marketing  distributors,  which in turn sell the products to the end  customers.
The Company  also sells  product  directly and through  affiliates.  The Company
maintains its principal business office in Burnaby, British Columbia.  Effective
for the period  ended  December  31,  2003,  the  Company  elected to change its
year-end from June 30 to December 31.

The Company has six wholly  owned  subsidiaries.  The first  subsidiary  is Halo
Distribution LLC (hereinafter  "Halo"),  which was organized on January 15, 1999
in the State of Kentucky.  Halo was the  distribution  center for the  Company's
product,  in addition to other products,  until April 30, 2005 at which time the
Company made the decision to discontinue its  operations.  Halo was dissolved on
November 1, 2005. The second  subsidiary is RGM  International  Inc.,  which was
incorporated on July 3, 1997, in the State of Nevada.  RGM International Inc. is
a  dormant  investment  company  which  owns  one  percent  of Halo.  The  third
subsidiary is  Essentially  Yours  Industries  (Canada) Inc.  (hereinafter  "EYI
Canada"), which was incorporated on September 13, 2002 under the Canada Business
Corporations  Act. EYI Canada  markets health and wellness care products for use
in Canada.  The fourth  subsidiary is 642706 B.C.  Ltd.,  doing  business as EYI
Management,  which was organized on February 22, 2002 in the province of British
Columbia,  Canada.  EYI Management  provides  accounting,  customer  service and
marketing  services  to  the  consolidated   entity.  The  fifth  subsidiary  is
Essentially  Yours  Industries  (Hong  Kong)  Limited  ("EYI  HK").  EYI  HK was
organized  on August 23, 2005 in Hong Kong.  EYI HK markets  health and wellness
care  products  for  use in  Hong  Kong  and  China.  The  sixth  subsidiary  is
Essentially Yours Industries  (International) Limited ("EYI INTL"). EYI INTL was
organized  on December 6, 2005 to  facilitate  our  expansion  throughout  other
Southeast Asian countries.

In addition, the Company owns approximately 98% of Essentially Yours Industries,
Inc.  ("EYII"),  incorporated  on June 21,  2002 in the  State of  Nevada.  EYII
markets  health and wellness care products for use in USA. The Company also owns
51% of World Wide Buyers' Club Inc. ("WWBC"),  a Nevada  corporation,  which was
organized by a joint venture agreement effective May 6, 2004.

Basis of Presentation

The  accompanying   interim  condensed  financial  statements  are  prepared  in
accordance  with rules set forth in Regulation SB of the Securities and Exchange
Commission.  As said, these  statements do not include all disclosures  required
under generally  accepted  principles and should be read in conjunction with the
audited  financial  statements  for the year ended  December  31,  2005.  In the
opinion  of  management,  all  required  adjustments  which  consist  of  normal
re-occurring accruals have been made to the financial statements.

The preparation of financial  statements in accordance  with generally  accepted
accounting  principles requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities,  disclosure of contingent assets
and  liabilities  known to exist as of the  date the  financial  statements  are
published,  and the  reported  amounts  of  revenues  and  expenses  during  the
reporting period.  Uncertainties  with respect to such estimates and assumptions
are  inherent  in  the  preparation  of  the  Company's  financial   statements.
Accordingly,  it is possible  that the actual  results  could  differ from these
estimates  and  assumptions  that could have a material  effect on the  reported
amounts of the Company's financial position and results of operations.

                                      F-6


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

This summary of  significant  accounting  policies of EYI  Industries,  Inc., is
presented to assist in understanding  the Company's  financial  statements.  The
financial statements and notes are representations of the Company's  management,
which is  responsible  for their  integrity and  objectivity.  These  accounting
policies  conform to  accounting  principles  generally  accepted  in the United
States of America,  and have been consistently applied in the preparation of the
financial statements.

Inventory

The Company  records  inventories  at the lower of cost or market on a first-in,
first-out basis. Our product  inventory is reviewed each month and also when the
re-order of the product is  necessary.  On a monthly  basis,  our  inventory  is
reviewed based on the expiration of our existing  inventory.  Product that has a
shelf-life of less than 60 days is written off or discounted.

A re-order  review consists of an evaluation of our current monthly sales volume
of  the  product,   cost  of  product,   shelf-life  of  the  product,  and  the
manufacturers  minimum  purchase  requirement  which all  determine  the overall
potential  profitability or loss of re-ordering.  If the re-order of the product
has an assessed  loss,  then the  recommendation  to management is to remove the
product from the product line.

Revenue Recognition

The  Company  is in the  business  of  selling  nutritional  products  in  three
categories:  dietary supplements,  personal care products,  and water filtration
systems.  Sales of personal care products and water filtration systems represent
less than 5% of the overall revenue and therefore are not classified  separately
in the financial  statements.  The Company recognized revenue from product sales
when the products are shipped and title passes to the  customer.  Administrative
fees charged to the  Independent  Business  Associates are included in the gross
sales and  amounted to $39,990 and $41,096 for the three  months ended March 31,
2006 and March 31, 2005 respectively.

Stock Options and Warrants Granted to Employees and Non-Employees

Statement  of  Financial   Accounting   Standards  No.  123R,   "Accounting  for
Stock-Based  Compensation" ("SFAS No. 123R"),  defines a fair value-based method
of accounting  for stock options and other equity  instruments.  The Company has
adopted this method,  which measures  compensation  costs based on the estimated
fair value of the award and recognizes that cost over the service period.

Going Concern

As shown in the  accompanying  financial  statements,  the Company had  negative
working capital of approximately  $1,578,000 and an accumulated deficit at March
31, 2006. The Company also has limited cash resources and a history of recurring
losses.  These factors raise  substantial  doubt about the Company's  ability to
continue  as a going  concern.  The  financial  statements  do not  include  any
adjustments  relating  to the  recoverability  and  classification  of  recorded
assets, or the amounts and classification of liabilities that might be necessary
in the event the Company cannot continue in existence.

Management has established plans designed to increase the sales of the Company's
products, and decrease debt. The Company plans on continuing to reduce expenses,
and  with  small  gains in any  combination  of  network  sales,  direct  sales,
international  sales, and warehouse sales,  believe that they will eventually be
able to reverse  the  present  deficit.  Management  intends to seek  additional
capital from new equity  securities  offerings that will provide funds needed to
increase liquidity,  fund internal growth and fully implement its business plan.
Management  plans  include  negotiations  to  convert  significant  portions  of
existing debt into equity.

The  timing  and  amount  of  capital  requirements  will  depend on a number of
factors,  including  demand for products and  services and the  availability  of
opportunities  for  international   expansion  through  affiliations  and  other
business relationships.

NOTE 3 - ACCOUNTS RECEIVABLE AND CREDIT RISK

Accounts receivable at March 31, 2006 and December 31, 2005 consist primarily of
amounts due from direct retail clients of EYI.

                                      F-7


NOTE 4 - PROPERTY AND EQUIPMENT

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

NOTE 5 - INTANGIBLE ASSETS

Intangible assets consist of rights, title, and interest in and to the contracts
with the Company's  independent business  associates,  as well as the rights and
licenses to trademarks  and formula for the Company's  primary  products.  These
rights and licenses were obtained from the Company's former parent,  pursuant to
a transfer agreement, as well as from the Company's primary shareholder.

Trademarks and Formulas

Costs relating to the purchase of trademarks and formulas were  capitalized  and
amortized  using the  straight-line  method  over ten  years,  representing  the
estimated life of the assets.

NOTE 6 - CAPITAL STOCK

Preferred Stock

The Company is authorized to issue  10,000,000  shares of preferred stock with a
par value of $0.001.  As of March 31, 2006 and December 31, 2005 the Company has
not issued any preferred stock.

Common Stock

The Company is authorized  to issue  1,000,000,000  shares of common stock.  All
shares have equal voting rights, are non-assessable and have one vote per share.
Voting rights are not cumulative and, therefore, the holders of more than 50% of
the common stock could,  if they choose to do so, elect all of the  directors of
the Company.

Between January 1, 2006 and March 31, 2006, the Company issued 42,941,686 shares
to Cornell Capital in exchange for $1,084,565.

On February 6, 2006 the Jay Sargeant  Trust was dissolved and the related shares
were  disbursed  to the  beneficiaries.  In  connection  with this  transaction,
268,639 common shares were returned to treasury.

NOTE 7 - COMMON STOCK OPTIONS AND WARRANTS

Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation" (hereinafter "SFAS No. 123"), defines a fair value-based method of
accounting  for stock  options  and other  equity  instruments.  The Company has
adopted this method,  which measures  compensation  costs based on the estimated
fair value of the award and recognizes that cost over the service period.

In  accordance  with SFAS No. 123, the fair value of stock  options and warrants
granted are estimated  using the  Black-Scholes  Option Price  Calculation.  The
following  assumptions were made to value the stock options and warrants for the
period ended  December 31, 2005:  estimated  risk-free  interest  rate of 4%; no
dividends to be paid; estimated volatility of 144% and term of two years.

Stock Options

During the period ending  December 31, 2004,  the  Company's  board of directors
approved  the Stock  Compensation  Program to allow up to  25,000,000  shares of
stock to be issued  under the  program.  This plan  enables the Company to grant
stock options to directors,  officers, employees and eligible consultants of the
Company. There was no Company stock option plan in effect prior to 2004.

During the period ended March 31,  2006,  the Company  recognized  an expense to
consulting of $3,750 for all vested options.

Following  is a summary  of the  status of the stock  options  during  the three
months:

                                      F-8


                                                                      Weighted
                                                                       Average
                                                         Number       Exercise
                                                       of Shares       Price
                                                     ------------   ------------
Outstanding at December 31, 2005                       16,252,390   $       0.14
  Granted                                                      --             --
  Exercised                                                    --             --
  Forfeited                                                    --             --
                                                     ------------   ------------
Options outstanding at March 31, 2006                  16,252,390   $       0.14
                                                     ============   ============
Options exercisable at March 31, 2006                  15,862,390   $       0.15
                                                     ============   ============
Weighted average fair value of options granted                      $         --
                                                                    ============

Summarized  information about stock options outstanding and exercisable at March
31, 2006 is as follows:

                                Options Outstanding
                    --------------------------------------------
                                     Weighted       Weighted
Exercise                               Ave.           Ave.
Price                  Number        Remaining      Exercise
Range                 of Shares        Life           Price
------------------- -------------- -------------- --------------
$0.02 - $0.26           16,252,390           0.61       $   0.14

                                Options Exercisable
                    --------------------------------------------
                                     Weighted       Weighted
Exercise                               Ave.           Ave.
Price                  Number        Remaining      Exercise
Range                 of Shares        Life           Price
------------------- -------------- -------------- --------------
$0.03 - $0.26           15,862,390           0.59       $   0.15

Summarized  information about unvested but granted stock options  outstanding at
December 31, 2005 is as follows:

                        Unvested Granted Options Outstanding
                    --------------------------------------------
                                     Weighted       Weighted
Exercise                               Ave.           Ave.
Price                  Number        Remaining      Exercise
Range                 of Shares        Life           Price
------------------- -------------- -------------- --------------
$0.02 - $0.10              390,000           1.35       $   0.07

                                     Weighted        Average
                      Number of       Average        Exercise
                      Warrants     Remaining Life     Price
                    -------------- -------------- --------------
Outstanding and         11,516,621           3.50       $   0.21
exercisable

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Purchase Agreement

On June 30, 2002, the Company entered into a distribution and license  agreement
with a  company  in  which  one  of the  Company's  directors  has an  ownership
interest.  The agreement gives the Company the exclusive  right to market,  sell
and  distribute  certain  products for a five-year  renewable  term.  Management
estimates that 87% of the Company's sales volume results from products  supplied
under this licensing agreement.

                                      F-9


Pursuant to the agreement,  the Company is required to purchase a minimum amount
of $6,035,000 of product in each of the remaining years.

In  the  event  that  the  Company  is  unable  to  meet  the  minimum  purchase
requirements of the licensing  agreement or the terms requiring it to pay 15% of
the difference  between the minimum purchase amount referred to above and actual
purchases  for that year in which there is a  shortfall,  then the  licensor has
various remedies available to it including renegotiating the agreement, removing
exclusivity rights, or terminating the agreement.

As of the date of these financial statements, the purchase requirements have not
been made.  The period for which the  Licensor  could  request  payment  per the
penalty  clause  has  expired  for the year and  therefore  we have not made any
accrual to the Financial Statements. As well, we continue to purchase Nutri Diem
products.

Lease Payments

The Company has operating lease  commitments for its premises,  office equipment
and an automobile. The minimum annual lease commitments are as follows:

                                                                        Minimum
Year ended December 31,                                                  Amount
--------------------------------------------------------------------------------
2006                                                                   $ 218,469
2007                                                                     163,285
2008                                                                     141,841
2009                                                                     147,013
2010 and thereafter                                                      309,544

Regulatory Risks and Claims

The  Company's  products  are subject to  regulation  by a number of federal and
state  entities,  as well as those of foreign  countries in which the  Company's
products are sold. These regulatory  entities may prohibit or restrict the sale,
distribution,  or  advertising  of the Company's  products for legal,  health or
safety related reasons.  In addition to the potential risk of adverse regulatory
actions,  the  Company  is subject to the risk of  potential  product  liability
claims.

Standby Equity Distribution Agreement

On May 13, 2005 the Company entered into a Standby Equity Distribution Agreement
with Cornell Capital Partners,  LP ("Cornell") pursuant to which we entered into
the following agreements:  a Registration Rights Agreement, an Escrow Agreement,
and a Placement Agent Agreement. Pursuant to the terms of the new Standby Equity
Distribution Agreement,  we may, at our discretion,  periodically issue and sell
shares of our common  stock for a total  purchase  price of $10  million.  If we
request advances under the Standby Equity Distribution  Agreement,  Cornell will
purchase  shares of our  common  stock  for 98% of the  lowest  volume  weighted
average price on the  Over-the-Counter  Bulletin Board or other principal market
on which our common  stock is traded for the 5 days  immediately  following  the
advance  notice  date.  Cornell  will  retain 5% of each  advance  under the new
Standby Equity Distribution  Agreement. We may not request advances in excess of
a total  of $10  million.  Pursuant  to the  terms  of our  Registration  Rights
Agreement and the Standby Equity  Agreement with Cornell,  we agreed to register
and qualify,  among other things, the additional shares due to Cornell under the
Standby Equity Agreement under a registration statement filed with the SEC.

Other Matters

The Company's  predecessor  organization,  Essentially  Yours  Industries  Corp.
("EYIC"),  a British  Columbia  corporation,  has  outstanding  claims  from the
Internal Revenue Service for penalties and interest of approximately $2,000,000.
Furthermore,  one or more states may have claims  against  EYIC for unpaid state
income taxes.  Management  believes that these claims are limited solely to EYIC
and that any  prospective  unpaid tax claims  against the Company are remote and
unable to be estimated.

                                      F-10


NOTE 9 - DISCONTINUED OPERATIONS

During the period ended  December 31, 2005,  the Company  elected to discontinue
the operations of Halo  Distribution LLC (hereinafter  "Halo"),  a subsidiary of
the  Company.   The  Company's   balance  sheet  reports  net  liabilities  from
discontinued operations of $375,344 as at March 31, 2006 and December 31, 2005.

In June 2002,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards,  No. 146, "Accounting for Costs Associated with
Exit or  Disposal  Activities"  (hereinafter  "SFAS  No.  146").  SFAS  No.  146
addresses  significant  issues  regarding  the  recognition,   measurement,  and
reporting  of costs  associated  with exit and  disposal  activities,  including
restructuring  activities.  SFAS No. 146 also  addresses  recognition of certain
costs related to  terminating a contract that is not a capital  lease,  costs to
consolidate facilities or relocate employees,  and termination benefits provided
to employees  that are  involuntarily  terminated  under the terms of a one-time
benefit  arrangement that is not an ongoing benefit arrangement or an individual
deferred-compensation  contract. SFAS No. 146 was issued in June 2002, effective
December 31, 2002.  The Company's  financial  position and results of operations
have not been affected by adopting SFAS No. 146.

NOTE 10 - RELATED PARTY NOTE PAYABLE

The Company issued two promissory notes for a total of $90,000 in December 2003.
The notes are unsecured, non-interest bearing and are payable upon demand.

NOTE 11 - CONCENTRATIONS

Bank Accounts

The Company maintains its cash accounts in one commercial bank. During the year,
the Company may maintain  balances in excess of the federally insured amounts in
the  accounts  that are  maintained  in the  United  States.  The  Company  also
maintains funds in commercial  banks in Vancouver,  British  Columbia,  in which
funds in U.S.  dollars  are not  insured or in Hong Kong where none of the funds
are  insured.  At March 31, 2006 and  December  31, 2005, a total of $59,016 and
$56,088 respectively, was not insured.

Economic Dependence

During the year,  the Company  purchased  approximately  90% of its products for
resale from one  company,  Nutri-Diem  Inc.,  which is the sole  supplier of the
Company's  flagship  product  Calorad.  Pursuant  to a purchase  agreement,  the
Company is subject to minimum purchases per annum. (See Note 8.)

NOTE 12 - RELATED PARTY TRANSACTIONS

On  May  27,  2002,  Mr.  Jay  Sargeant,  a  shareholder  of  Essentially  Yours
Industries,  Corp.  ("EYI  Corp.")  agreed to  acquire  all of the shares of the
Essentially Yours Industries,  Inc. ("EYII"), along with the transfer agreement,
license agreement,  and agency appointment  agreement,  in settlement of amounts
owed to him. As part of this  transaction,  EYI Corp.  agreed to provide to EYII
the services outlined in a management agreement.

The Company  acquired,  through  agreements with Essentially  Yours  Industries,
Corp. ("EYI Corp"), the rights, title, and interest in and to the contracts with
the Company's Independent Business Associates as well as the rights and licenses
to trademarks and formula for the Company's primary products.

Accounts payable to related parties  represents amounts due to the President and
Chief  Executive  Officer  and to the  Chief  Operations  Officer  for  services
preformed  during the last year,  as well as to other  related  parties  and the
company with which they have a signed management  agreement.  These payables are
non-interest bearing and non-collateralized.

The Company  purchases  approximately  90% of its  products  for resale from one
company, Nutri-Diem Inc., which is owned in part by a director of the Company.

                                      F-11


NOTE 13 - SUBSEQUENT EVENTS

On  April 3,  2006 we  signed  a  Termination  Agreement  with  Cornell  Capital
Partners,  L.P for the purpose of terminating  our Standby  Equity  Distribution
Agreement,  Registration  Rights Agreement and Escrow Agreement all of which are
dated as of May 13, 2005.

On April 24, 2006 the Company entered into a Securities  Purchase Agreement with
the  Cornell,  TAIB Bank,  and Certain  Wealth  (collectively  the  "Buyers" and
together with the Company,  the "Parties").  Pursuant to the Securities Purchase
Agreement,  the Company shall sell to the Buyers,  and the Buyers shall purchase
from the Company,  convertible  debentures in the aggregate  principal amount of
Four Million Five Hundred Thousand Dollars ($4,500,000),  plus accrued interest,
which are  convertible  into shares of the  Company's  common  stock,  par value
$0.001 per, at the Buyers discretion.  Of this aggregate amount, (a) One Million
Five Hundred Thousand Dollars ($1,500,000) was funded on April 28, 2006, (b) One
Million  Five  Hundred  Thousand  Dollars  ($1,500,000)  shall be funded two (2)
business  days  prior  to  the  date  a  registration  statement  ("Registration
Statement") is filed with the U.S.  Securities and Exchange  Commission  ("SEC")
and (c) One Million Five Hundred Thousand Dollars  ($1,500,000)  shall be funded
two (2)  business  days prior to the date that such  Registration  Statement  is
declared effective by the SEC.

The Debentures  mature on April 24, 2009,  accrue  interest at an annual rate of
ten percent (10%) and shall be convertible  into shares of the Company's  common
stock at the option of the holder, in whole or in part at any time and from time
to time, at a conversion price equal to (a) $0.06 or (b) eighty percent (80%) of
the lowest Volume  Weighted  Average Price of the Company's  common stock during
the five (5) trading days immediately preceding the date of conversion as quoted
by Bloomberg, LP.

The Company also executed a registration  rights agreement pursuant to which the
Company agreed to provide  certain  registration  rights to the  Investors.  The
Parties have also executed a Security  Agreement,  pursuant to which the Company
has agreed to provide to the Buyers, a security  interest in Pledged  Collateral
to secure  the  Company's  obligations  under  the  Debentures,  the  Securities
Purchase Agreement,  the Investor Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions, the Security Agreement, or any other obligations of
the Company to the Buyer.

On April 24, 2006 the Company issued to Cornell  pursuant to the above mentioned
debentures,  seventeen (17) warrants to purchase up to an aggregate  124,062,678
shares of the Company's common stock at $0.02 and $0.40 per share.  Each Warrant
has "piggy  back"  registration  rights and shall expire five (5) years from the
date of issuance, on or about April 24, 2011.

                                      F-12


Board of Directors
EYI Industries, Inc.
Burnaby, British Columbia, Canada

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have audited the accompanying  consolidated  balance sheet of EYI Industries,
Inc. as of December 31, 2005 and December 31, 2004 and the related  consolidated
statements of operations,  stockholders'  deficit and cash flows for the periods
then ended.  These consolidated  financial  statements are the responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audit  provides  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of EYI Industries, Inc.
as of  December  31,  2005,  and  December  31,  2004  and  the  results  of its
operations,  stockholders' equity and its cash flows for the years then ended in
conformity with accounting principles generally accepted in the United States of
America.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
consolidated  financial statements,  the Company has recorded significant losses
from operations, ahs insufficient revenues to support operational cash flows and
has a working capital deficit which together raise  substantial  doubt about its
ability to continue as a going concern an  accumulated  deficit,  and a negative
working  capital  position.  These  factors  raise  substantial  doubt about the
Company's ability to continue as a going concern.  Management's plans in regards
to these  matters  are  described  in Note 2. The  financial  statements  do not
include any adjustments that might result from the outcome of this uncertainty.

/s/ Williams & Webster
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
March 31, 2006

                                      F-13


                              EYI INDUSTRIES, INC.
                           CONSOLIDATED BALANCE SHEETS



                                                        December 31,    December 31,
                                                            2005            2004
                                                        ------------    ------------
                                                                  
ASSETS

  CURRENT ASSETS
    Cash                                                $     25,639    $         --
    Restricted cash                                               --         100,248
    Accounts receivable, net of allowance                     48,783          36,061
    Related party receivables                                     --              --
    Prepaid expenses                                          12,387         852,764
    Inventory                                                295,248         239,641
                                                        ------------    ------------
      TOTAL CURRENT ASSETS                                   382,057       1,228,714
                                                        ------------    ------------

  OTHER ASSETS
    Property, plant and equipment, net                        49,671          32,596
    Deposits                                                  67,603           2,236
                                                        ------------    ------------
      TOTAL OTHER ASSETS                                     117,274          34,832
                                                        ------------    ------------

  INTANGIBLE ASSETS                                           15,044          16,561
                                                        ------------    ------------

      TOTAL ASSETS                                      $    514,375    $  1,280,107
                                                        ============    ============

LIABILITIES AND STOCKHOLDERS' DEFICIT

  CURRENT LIABILITIES
    Bank indebtedness                                   $         --    $     72,456
    Accounts payable and accrued liabilities               1,929,049       1,141,001
    Accounts payable - related parties                       328,038         159,455
    Interest payable, convertible debt                            --          10,616
    Convertible debt - related party, net of discount             --         379,724
    Customer deposits                                             --              --
    Notes payable - related party                             90,000          90,000
                                                        ------------    ------------
      TOTAL CURRENT LIABILITIES                            2,347,087       1,853,252
                                                        ------------    ------------

  Net liabilities from discontinued operations               375,344         405,838

  MINORITY INTEREST IN SUBSIDIARY                            262,057         346,819
                                                        ------------    ------------

  STOCKHOLDERS' DEFICIT
    Preferred stock, $0.001 par value; 10,000,000
      shares authorized, no shares issued
      and outstanding                                             --              --
    Common stock, $0.001 par value; 1,000,000,000
      shares authorized,  217,600,875 and 162,753,292
      shares issued and outstanding, respectively            217,600         162,753
    Additional paid-in capital                             6,155,518       3,048,606
    Stock options and warrants                             2,698,984       2,563,043
    Subscription receivable                                 (195,000)        (15,000)
    Accumulated deficit                                  (11,347,215)     (7,085,205)
                                                        ------------    ------------

      TOTAL STOCKHOLDERS' DEFICIT                         (2,470,113)     (1,325,802)
                                                        ------------    ------------

      TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT       $    514,375    $  1,280,107
                                                        ============    ============


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

                                      F-14


                              EYI INDUSTRIES, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                  Year Ended       Year Ended
                                                 December 31,     December 31,
                                                     2005             2004
                                                 -------------    -------------
REVENUE, net of returns and allowances           $   4,980,408    $   6,085,831

COST OF GOODS SOLD                                   1,165,976        1,252,118
                                                 -------------    -------------

GROSS PROFIT BEFORE COMMISSION EXPENSE               3,814,432        4,833,713

COMMISSION EXPENSE                                   1,930,925        2,486,970
                                                 -------------    -------------

GROSS PROFIT AFTER COST OF GOODS SOLD AND
  COMMISSION EXPENSE                                 1,883,507        2,346,743
                                                 -------------    -------------

OPERATING EXPENSES
  Consulting fees                                    1,250,278        1,438,362
  Legal and professional fees                          306,948          321,713
  Customer service                                     198,500          393,244
  Finance and administration                         1,378,118        2,101,842
  Sales and marketing                                   15,741          154,638
  Telecommunications                                   946,331          492,847
  Wages and benefits                                 1,282,438        1,152,728
  Warehouse expense                                    171,724          231,268
                                                 -------------    -------------
    TOTAL OPERATING EXPENSES                         5,550,077        6,286,642
                                                 -------------    -------------

LOSS FROM OPERATIONS                                (3,666,570)      (3,939,899)
                                                 -------------    -------------

OTHER INCOME (EXPENSES)
  Interest and other income                              3,978           16,847
  Interest expense                                    (179,717)        (308,572)
  Foreign currency gain (discount)                    (124,096)          20,379
                                                 -------------    -------------
    TOTAL OTHER INCOME (EXPENSES)                     (299,835)        (271,346)
                                                 -------------    -------------

NET LOSS BEFORE TAXES                               (3,966,405)      (4,211,245)

PROVISION FOR INCOME TAXES                                  --               --
                                                 -------------    -------------

NET LOSS BEFORE ALLOCATION TO MINORITY INTEREST     (3,966,405)      (4,211,245)

ALLOCATION OF LOSS TO MINORITY INTEREST                 84,762           88,755

LOSS FROM DISCONTINUED OPERATIONS                     (380,368)        (340,305)
                                                 -------------    -------------

NET LOSS                                         $  (4,262,011)   $  (4,462,795)
                                                 =============    =============

BASIC AND DILUTED
  NET LOSS  PER COMMON SHARE                     $       (0.02)   $       (0.03)
                                                 =============    =============

                                      F-15


                                                  Year Ended       Year Ended
                                                 December 31,     December 31,
                                                     2005             2004
                                                 -------------    -------------
WEIGHTED AVERAGE NUMBER OF
  COMMON STOCK SHARES OUTSTANDING
  FOR BASIC AND DILUTED CALCULATION                200,846,048      157,060,345
                                                 =============    =============

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

                                      F-16


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



                                                       Common Stock
                                               ---------------------------   Additional
                                                Number of                      Paid-in       Discount on     Subscription
                                                  Shares         Amount        Capital       Common Stock     Receivable
                                               ------------   ------------   ------------    ------------    ------------
                                                                                              
Balance, December 31, 2003                      148,180,670        148,181        827,972         (53,598)             --

Common stock issued at$0.20 including
  warrants less expenses of$28,715                1,466,455          1,466        146,930              --              --

Stock issued at$0.165 per share for cashless
  exercise of options in form of foregone
  debt                                            3,200,000          3,200        524,800              --              --

Stock issued for exercise of options at$0.20
  per share in lieu of payment of legal fees        300,000            300         59,700              --              --

Stock issued at$0.165 per share for cash and
  promissory note for exercise of options         1,000,000          1,000        164,000              --         (15,000)

Common stock issued at$0.21 including
  warrants                                        5,476,190          5,476        487,381              --              --

Common stock issued at$0.21 including
  warrants less expenses of$3,231                   566,833            567         36,369              --              --

Stock issued for exercise of options at$0.22
  per share in lieu of consulting fees               50,000             50         10,950              --              --

Stock issued for deferred offering costs          1,300,000          1,300        388,700              --              --

Adjustment to subsidiaries stock held by
  minority interest                                 176,534            177         33,126              --              --

Stock issued at$0.28 per share for
  consulting                                        350,000            350         97,650              --              --

Vested stock options issued for consulting
  at an average price of$0.18 per share                  --             --             --              --              --

Vested stock options issued for consulting
  at an average price of$0.18 per share                  --             --             --              --              --

Stock issued at$0.165 per share for cash and
  promissory note for exercise of options            36,360             36          7,236              --              --

Stock issued for exercise of options at$0.08
  per share in lieu of consulting fees              200,000            200         15,800              --              --

Stock issued for exercise of options at$0.08
  per share in lieu of consulting fees              250,000            250         19,750              --              --

Stock issued for exercise of options at$0.11
  per share by the CEO                              200,250            200         31,840              --              --

Cancellation of discount on common stock                 --             --        (53,598)         53,598              --

Beneficial conversion of convertible debt                --             --        250,000              --              --

Vested stock options issued for compensation
  and consulting at an average price of$0.12
  per option                                             --             --             --              --              --

Cancelled stock options issued for
  compensation and consulting at an average
  price of$0.19 per option                               --             --             --              --              --

Net loss for period ended
  December 31, 2004                                      --             --             --              --              --
                                               ------------   ------------   ------------    ------------    ------------
Balance, December 31, 2004                      162,753,292   $    162,753   $  3,048,606    $         --    $    (15,000)


                                      F-17




                                                       Common Stock
                                               ---------------------------   Additional
                                                Number of                      Paid-in       Discount on     Subscription
                                                  Shares         Amount        Capital       Common Stock     Receivable
                                               ------------   ------------   ------------    ------------    ------------
                                                                                              
Stock issued at$0.06 per share for
  promissory note for exercise of options         3,000,000          3,000        177,000              --        (180,000)

Vested stock options issued for consulting
  at an average price of$0.07 per share                  --             --             --              --              --

Vested stock options issued for employee
  management compensation at an average
  price of$0.07 per share                                --             --             --              --              --

Stock issued to employee for financing
  guaranty & pledge valued at$0.05 per share        800,000            800         39,200              --              --

Nazlin - options exercised                          250,000            250         14,750              --          (5,000)

Gladys Sargeant 506 Subscription Agreement        1,000,000           1000          4,000              --              --

Vested stock options issued for consulting
  at an average price of$0.03 per share                  --             --             --              --              --

Cancelled stock options issued for
  compensation and consulting at an average
  price of$0.08 per option                               --             --        425,300              --              --

Cancelled stock options issued for
  compensation at$0.20                                   --             --          2,400              --              --

Stock issued to TAIB Bank to retire$75,000
  of the$300,000 debenture                        2,027,027          2,027         72,973              --              --

Stock issued to TAIB Bank to retire$170,000
  of$300,000 debenture plus interest$10,830       4,487,096          4,487        176,343              --              --

Stock issued to TAIB Bank to retire$5,000
  debenture plus interest of 14,245                 375,146            375          18870              --              --

Stock issued to Agora as part of contract           250,000            250          12250              --              --

Stock issued to Lakhani as part of contract         500,000            500          34500              --              --

Stock issued for exercise of options at$0.08
  per share                                         100,000            100           7900              --              --

Stock issued to Cornell to retire
  promissory note                                22,789,581         22,789      1,008,099              --              --

Vested stock options issued for consulting
  at an average price of$0.20 per share                  --             --             --              --              --

Vested stock options Issued for employee and             --             --             --              --              --
  management compensation at an average
  price of$0.20 per share

Stock issued to Cornell in exchange for
  $700,000 pursuant to SEDA                      19,268,733         19,269        680,731              --              --

Cancelled stock options issued for
  compensation                                           --             --         10,500              --              --


                                      F-18




                                                       Common Stock
                                               ---------------------------   Additional
                                                Number of                      Paid-in       Discount on     Subscription
                                                  Shares         Amount        Capital       Common Stock     Receivable
                                               ------------   ------------   ------------    ------------    ------------
                                                                                              
Vested stock options issued for compensation
  And consulting at an average price of$0.20             --             --             --              --              --

Beneficial conversion of convertible debt                --             --        422,096              --              --

Net loss for period ended
  December 31, 2005                                      --             --             --              --              --
                                               ------------   ------------   ------------    ------------    ------------

Balance, December 31, 2005                      217,600,875   $    217,600   $  6,155,518    $         --    $   (195,000)
                                               ------------   ------------   ------------    ------------    ------------


                                      F-19




                                                                             Option/        Retained
                                                                            Warrants        Earnings          Total
                                                                          ------------    ------------    ------------
                                                                                           
Balance, December 31, 2003                                                $    128,385    $ (2,622,410)   $ (1,571,470)

Common stock issued at $0.20 including warrants less expenses
  of $28,715                                                                    70,844              --         219,240

Stock issued at $0.165 per share for cashless exercise of options in
  form of foregone debt                                                             --              --         528,000

Stock issued for exercise of options at $0.20 per share in lieu of
  payment of legal fees                                                             --              --          60,000

Stock issued at $0.165 per share for cash and promissory note for
  exercise of options                                                               --              --         150,000

Common stock issued at $0.21 including warrants                                657,143              --       1,150,000

Common stock issued at $0.21 including warrants less expenses of $3,231         78,869              --         115,805

Stock issued for exercise of options at $0.22 per share in lieu of
  consulting fees                                                                   --              --          11,000

Stock issued for deferred offering costs                                            --              --         390,000

Adjustment to subsidiaries stock held by minority interest                          --              --          33,303

Stock issued at $0.28 per share for consulting                                      --              --          98,000

Vested stock options issued for consulting at an average price of
  $0.18 per share                                                              128,250              --         128,250

Vested stock options issued for consulting at an average price of
  $0.18 per share                                                            1,078,277              --       1,078,277

Stock issued at $0.165 per share for cash and promissory note for
  exercise of options                                                               --              --           7,272

Stock issued for exercise of options at $0.08 per share in lieu of
  consulting fees                                                                   --              --          16,000

Stock issued for exercise of options at $0.08 per share in lieu of
  consulting fees                                                                   --              --          20,000

Stock issued for exercise of options at $0.11 per share by the CEO             (10,013)             --          22,028

Cancellation of discount on common stock                                            --              --              --

Beneficial conversion of convertible debt                                           --              --         250,000

Vested stock options issued for compensation and consulting at an
  average price of $0.12 per option                                          1,087,900              --       1,087,900


                                      F-20




                                                                             Option/        Retained
                                                                            Warrants        Earnings          Total
                                                                          ------------    ------------    ------------
                                                                                                 
Cancelled stock options issued for compensation and consulting at an
  average price of $0.19 per option                                           (656,612)             --        (656,612)

Net loss for period ended December 31, 2004                                         --      (4,462,795)     (4,462,795)
                                                                          ------------    ------------    ------------

Balance, December 31, 2004                                                $  2,563,044    $ (7,085,205)   $ (1,325,802)

Stock issued at $0.06 per share for promissory note for exercise of
  options                                                                           --              --              --

Vested stock options issued for consulting at an average price of
  $0.07 per share                                                               35,250              --          35,250

Vested stock options issued for employee management compensation at an
  average price of $0.07 per share                                             133,750              --         133,750

Stock issued to employee for financing guaranty & pledge valued at
  $0.05 per share                                                                   --              --          40,000

Nazlin - options exercised                                                          --          10,000

Gladys Sargeant 506 Subscription Agreement                                      15,000              --          20,000

Vested stock options issued for consulting at an average price of
  $0.03 per share                                                               62,250              --          62,250

Cancelled stock options issued for compensation and consulting at an
  average price of $0.08 per option                                           (425,300)             --              --

Cancelled stock options issued for compensation at $0.20                        (2,400)             --              --

Stock issued to TAIB Bank to retire $75,000 of the $300,000 debenture               --              --          75,000

Stock issued to TAIB Bank to retire $170,000 of $300,000 debenture
  plus interest $10,830                                                             --              --         180,830

Stock issued to TAIB Bank to retire $5,000 debenture plus interest
  of 14,245                                                                         --              --          19,245

Stock issued to Agora as part of contract                                           --              --          12,500

Stock issued to Lakhani as part of contract                                         --              --          35,000

Stock issued for exercise of options at $0.08 per share                             --              --           8,000

Stock issued to Cornell to retire promissory note                                   --              --       1,030,888

Vested stock options issued for consulting at an average price of
  $0.20 per share                                                               33,500              --          33,500

Vested stock options Issued for employee and management compensation
  at an average price of $0.20 per share                                        27,840              --          27,840

Stock issued to Cornell in exchange for $700,000 pursuant to SEDA                   --              --         700,000


                                      F-21




                                                                             Option/        Retained
                                                                            Warrants        Earnings          Total
                                                                          ------------    ------------    ------------
                                                                                                 
Cancelled stock options issued for compensation                                (10,500)             --              --

Vested stock options issued for compensation And consulting at an
  average price of $0.20                                                       271,550              --         271,550

Beneficial conversion of convertible debt                                           --              --         422,096

Net loss for period ended December 31, 2005                                         --      (4,262,010)     (4,262,010)
                                                                          ------------    ------------    ------------

Balance, December 31, 2005                                                $  2,698,984    $(11,347,215)   $ (2,470,113)
                                                                          ============    ============    ============


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

                                      F-22


                              EYI INDUSTRIES, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                                                 Year Ended      Year Ended
                                                                                December 31,    December 31,
                                                                                    2005            2004
                                                                                ------------    ------------
                                                                                          
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES
  Net loss                                                                      $ (4,262,010)   $ (4,462,795)
  Loss allocated to minority interest                                                 84,762          88,755
                                                                                ------------    ------------
                                                                                  (4,346,772)     (4,551,550)
                                                                                ------------    ------------

  Adjustments to reconcile net loss to net cash used by operating activities:
    Depreciation and amortization                                                     52,645          87,054
    Stock and warrants issued for employee compensation and consulting               547,800       1,735,814
    Stock issued for deferred financing costs                                             --         390,000
    Stock issued for options exercised in lieu of debt                                    --          11,500
    Stock issued for options exercised in lieu of consulting and legal fees           57,500         207,000
    Stock issued for interest on convertible debt                                     44,570              --
    Stock issued for financing guaranty & pledge                                      40,000              --
    Discount recognized on convertible debt                                          120,276              --
    Beneficial conversion of convertible debt                                        422,096         250,000
    Decrease (increase) in:
      Related party receivables                                                           --             469
      Accounts receivable                                                            (12,722)          6,517
      Prepaid expenses                                                               840,377         221,430
      Inventory                                                                      (55,607)         14,726
      Deposits                                                                       (65,367)        (24,361)
    Increase (decrease) in:
      Accounts payable and accrued liabilities                                       788,048         392,043
      Accounts payable - related parties                                             168,583         450,808
      Interest payable, convertible debt                                             (10,616)             --
      Customer deposits                                                                   --          (6,250)
      Liabilities in excess of assets on discontinued operations                     (30,494)             --
                                                                                ------------    ------------
        Net cash used by operating activities                                     (1,428,183)       (826,300)
                                                                                ------------    ------------

CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES
  Decrease (increase) in restricted cash                                             100,248         123,434
  Decrease (increase) in property, plant, and equipment                              (39,797)           (711)
  Purchase of trademarks                                                                (674)             --
                                                                                ------------    ------------
        Net cash provided by investing activities                                     59,778         122,723
                                                                                ------------    ------------

CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES
  Net change in bank indebtedness                                                    (72,456)       (187,521)
  Issuance of stock, net of private placement costs & warrants                        16,500         492,316
  Repayment of convertible debt                                                     (250,000)             --
  Proceeds from Cornell SEDA                                                         700,000              --
  Proceeds from Cornell Prom Note                                                  1,000,000              --
                                                                                ------------    ------------
        Net proceeds from convertible debt                                                --         379,725
                                                                                ------------    ------------

        Net cash provided by financing activities                                  1,394,044         684,520
                                                                                ------------    ------------

        Net increase in cash and cash equivalents                                     25,639         (19,057)
                                                                                ------------    ------------

CASH - Beginning of Year                                                                  --          52,075
                                                                                ------------    ------------


                                      F-23




                                                                                 Year Ended      Year Ended
                                                                                December 31,    December 31,
                                                                                    2005            2004
                                                                                ------------    ------------
                                                                                          
CASH - End of Period                                                            $     25,639    $     33,018
                                                                                ============    ============

SUPPLEMENTAL CASH FLOW DISCLOSURES:
  Interest expense paid                                                         $    179,717    $     47,956
  Income taxes paid                                                             $         --    $         --

NON-CASH INVESTING AND FINANCING TRANSACTIONS:
  Stock and warrants issued for employee compensation and consulting            $         --    $  1,735,814
  Stock issued for options exercised in lieu of debt                            $         --    $    646,028
  Stock issued for options exercised in lieu of consulting and legal fees       $         --    $    207,000
  Stock and warrants issued for prepaid expenses                                $         --    $  1,150,000
  Stock issued for financing fees                                               $         --    $    390,000
  Beneficial conversion of convertible debt                                          422,096    $    250,000
  Stock options vested for consulting and compensation                          $    547,800    $         --
  Stock issued for options exercised in lieu of debt                            $     11,500    $         --
  Stock issued for options exercised in lieu of legal fees                      $     10,000    $         --
  Stock issued for options exercised in lieu of consulting and legal fees       $     57,500    $         --
  Stock issued to retire part of prom note                                      $    175,000    $         --
  Stock issued for redemption of convertible debenture                          $    250,000    $         --
  Stock issued for interest  on convertible debenture                           $     44,570    $         --
  Stock and warrants issued through 506 Private Placement                       $     20,000    $         --
  Stock issued for financing guaranty & pledge                                  $     40,000    $         --
  Discount recognized on convertible debt                                       $    120,276    $         --


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

                                      F-24


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - DESCRIPTION OF BUSINESS

Essentially Yours Industries,  Inc. (hereinafter "EYI") was incorporated on June
21, 2002 in the State of Nevada.  The main business  activities  of  Essentially
Yours  Industries,  Inc. were acquired  through a merger with the former entity,
Burrard Capital,  Inc., and other entities concerning EYI's  reorganization.  On
December 31, 2003, EYI entered into a share exchange agreement of its stock with
Safe ID Corporation  ("Safe ID"). This  transaction was accounted for as a share
exchange  and  recapitalization.  As a result of this  transaction,  Safe ID has
changed its name to EYI  Industries,  Inc. ("the  Company") and is acting as the
parent holding company for the operating subsidiaries.

The  principal  business of the Company is the  marketing of health and wellness
care  products.  The  Company  sells  its  products  primarily  through  network
marketing  distributors,  which in turn, sell the products to the end customers.
The Company  also sells  product  directly and through  affiliates.  The Company
maintains its principal business office in Burnaby, British Columbia.  Effective
for the period  ended  December  31,  2003,  the  Company  elected to change its
year-end from June 30 to December 31.

The Company has six wholly  owned  subsidiaries.  The first  subsidiary  is Halo
Distribution LLC (hereinafter "Halo"),  which was organized on January 15, 1999,
in the State of Kentucky.  Halo was the  distribution  center for the  Company's
product in  addition  to other  products  until April 30, 2005 at which time the
Company made the decision to discontinue it's operations.  The second subsidiary
is RGM International  Inc., which was incorporated on July 3, 1997, in the State
of Nevada. RGM International Inc. is a dormant  investment  company,  which owns
one  percent of Halo.  The third  subsidiary  is  Essentially  Yours  Industries
(Canada) Inc.  (hereinafter  "EYI Canada"),  which was incorporated on September
13, 2002, under the Canada Business  Corporations Act. EYI Canada markets health
and wellness  care products for use in Canada.  The fourth  subsidiary is 642706
B.C. Ltd., doing business as EYI Management, which was organized on February 22,
2002,  in the province of British  Columbia,  Canada.  EYI  Management  provides
accounting,  customer service and marketing services to the consolidated entity.
The fifth  subsidiary is Essentially  Yours Industries (Hong Kong) Limited ("EYI
HK").  EYI HK was  organized  on August 23,  2005 in Hong  Kong.  EYI HK markets
health and  wellness  care  products  for use in Hong Kong and China.  The sixth
subsidiary is Essentially Yours Industries (International) Limited ("EYI INTL").
EYI  INTL  was  organized  on  December  6,  2005 to  facilitate  our  expansion
throughout other Southeast Asian countries.

In addition, the Company owns approximately 98% of Essentially Yours Industries,
Inc.  ("EYII"),  incorporated  on June 21,  2002 in the  State of  Nevada.  EYII
markets  health and wellness care products for use in USA. The Company also owns
51% of World Wide Buyers' Club Inc. ("WWBC"),  a Nevada  corporation,  which was
organized by a joint venture agreement effective May 6, 2004.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

This summary of  significant  accounting  policies of EYI  Industries,  Inc., is
presented to assist in understanding  the Company's  financial  statements.  The
financial statements and notes are representations of the Company's  management,
which is  responsible  for their  integrity and  objectivity.  These  accounting
policies  conform to  accounting  principles  generally  accepted  in the United
States of America,  and have been consistently applied in the preparation of the
financial statements.

Accounting Method

The  Company's  financial  statements  are prepared  using the accrual  basis of
accounting in accordance with accounting  principles  generally  accepted in the
United States of America.

Accounting Pronouncements - Recent

                                      F-25


In March 2006,  the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 156, "Accounting for Servicing of Financial
Assets--an  amendment of FASB  Statement  No. 140." This  statement  requires an
entity to  recognize  a  servicing  asset or  servicing  liability  each time it
undertakes  an  obligation  to  service a  financial  asset by  entering  into a
servicing  contract  in any of  the  following  situations:  a  transfer  of the
servicer's  financial assets that meets the requirements for sale accounting;  a
transfer of the  servicer's  financial  assets to a  qualifying  special-purpose
entity in a guaranteed  mortgage  securitization in which the transferor retains
all of the resulting securities and classifies them as either available-for-sale
securities  or  trading  securities;  or  an  acquisition  or  assumption  of an
obligation to service a financial asset that does not relate to financial assets
of the servicer or its consolidated affiliates.  The statement also requires all
separately recognized servicing assets and servicing liabilities to be initially
measured at fair value,  if  practicable  and permits an entity to choose either
the  amortization or fair value method for subsequent  measurement of each class
of servicing  assets and  liabilities.  The statement  further  permits,  at its
initial adoption,  a one-time  reclassification of available for sale securities
to trading  securities by entities with  recognized  servicing  rights,  without
calling into question the treatment of other available for sale securities under
Statement 115, provided that the available for sale securities are identified in
some  manner as  offsetting  the  entity's  exposure to changes in fair value of
servicing assets or servicing liabilities that a servicer elects to subsequently
measure at fair value and requires separate presentation of servicing assets and
servicing  liabilities  subsequently  measured at fair value in the statement of
financial  position and additional  disclosures  for all  separately  recognized
servicing  assets and  servicing  liabilities.  This  statement is effective for
fiscal years beginning  after September 15, 2006, with early adoption  permitted
as of the beginning of an entity's fiscal year. Management believes the adoption
of this  statement will have no impact on the Company's  financial  condition or
results of operations.

In February 2006, the Financial  Accounting  Standards Board issued Statement of
Financial Accounting Standards No. 155, "Accounting for Certain Hybrid Financial
Instruments,  an Amendment of FASB Standards No. 133 and 140" (hereinafter "SFAS
No. 155").  This statement  established  the accounting for certain  derivatives
embedded in other  instruments.  It  simplifies  accounting  for certain  hybrid
financial  instruments  by permitting  fair value  remeasurement  for any hybrid
instrument  that contains an embedded  derivative  that otherwise  would require
bifurcation  under  SFAS No. 133 as well as  eliminating  a  restriction  on the
passive derivative instruments that a qualifying  special-purpose entity ("SPE")
may  hold  under  SFAS No.  140.  This  statement  allows  a  public  entity  to
irrevocably elect to initially and subsequently measure a hybrid instrument that
would be required to be separated  into a host  contract and  derivative  in its
entirety at fair value (with  changes in fair value  recognized  in earnings) so
long as that  instrument is not designated as a hedging  instrument  pursuant to
the statement.  SFAS No. 140 previously prohibited a qualifying  special-purpose
entity  from  holding a  derivative  financial  instrument  that  pertains  to a
beneficial  interest other than another derivative  financial  instrument.  This
statement is effective for fiscal years beginning after September 15, 2006, with
early  adoption  permitted  as of the  beginning  of an  entity's  fiscal  year.
Management  believes the adoption of this  statement  will have no impact on the
Company's financial condition or results of operations.

In May 2005,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial   Accounting   Standards  No.  154,   "Accounting  Changes  and  Error
Corrections,"  (hereinafter "SFAS No. 154") which replaces Accounting Principles
Board  Opinion  No.  20,  "Accounting  Changes,"  and  SFAS  No.  3,  "Reporting
Accounting Changes in Interim Financial Statements - An Amendment of APB Opinion
No. 28." SFAS No. 154 provides  guidance on accounting for and reporting changes
in  accounting  principle  and error  corrections.  SFAS No. 154  requires  that
changes in  accounting  principle  be applied  retrospectively  to prior  period
financial  statements and is effective for fiscal years beginning after December
15, 2005. The Company does not expect SFAS No. 154 to have a material  impact on
its consolidated financial position, results of operations, or cash flows.

In March 2005,  the  Financial  Accounting  Standards  Board (FASB)  issued FASB
Interpretation  No. 47 ("FIN 47"),  "Accounting for Conditional Asset Retirement
Obligations."  FIN 47  clarifies  that the term  "conditional  asset  retirement
obligation,"  which as used in SFAS No. 143,  "Accounting  for Asset  Retirement
Obligations,"  refers  to a legal  obligation  to  perform  an asset  retirement
activity in which the timing and (or) method of settlement are  conditional on a
future event that may or may not be within the control of the entity. The entity
must record a liability for a "conditional"  asset retirement  obligation if the
fair value of the obligation can be reasonably estimated.  FIN 47 also clarifies
when an entity would have sufficient information to reasonably estimate the fair
value of an asset retirement  obligation.  FIN 47 is effective no later than the
end of fiscal years ending after December 15, 2005.

In December 2004, the Financial  Accounting  Standards Board issued Statement of
Financial Accounting Standards No. 153. This statement addresses the measurement
of  exchanges  of  nonmonetary  assets.  The  guidance  in APB  Opinion  No. 29,
"Accounting  for  Nonmonetary  Transactions,"  is  based on the  principle  that
exchanges of  nonmonetary  assets should be measured  based on the fair value of
the assets exchanged.  The guidance in that opinion,  however,  included certain
exceptions to that principle.  This statement amends Opinion 29 to eliminate the
exception for nonmonetary exchanges of similar productive assets and replaces it
with a general  exception for exchanges of  nonmonetary  assets that do not have
commercial  substance.  A nonmonetary  exchange has commercial  substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange. This statement is effective for financial statements for fiscal
years  beginning after June 15, 2005.  Management  believes the adoption of this
statement will have no impact on the financial statements of the Company.

                                      F-26


In December 2004, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards  No. 152,  which amends FASB  statement No. 66,
"Accounting for Sales of Real Estate," to reference the financial accounting and
reporting guidance for real estate time-sharing transactions that is provided in
AICPA Statement of Position (SOP) 04-2, "Accounting for Real Estate Time-Sharing
Transactions." This statement also amends FASB Statement No. 67, "Accounting for
Costs and Initial Rental  Operations of Real Estate Projects," to state that the
guidance  for (a)  incidental  operations  and (b) costs  incurred  to sell real
estate  projects does not apply to real estate  time-sharing  transactions.  The
accounting  for those  operations  and costs is subject to the  guidance  in SOP
04-2.  This  statement is effective  for financial  statements  for fiscal years
beginning  after  June  15,  2005.  Management  believes  the  adoption  of this
statement will have no impact on the financial statements of the Company.

In December 2004, the Financial  Accounting Standards Board issued a revision to
Statement of Financial  Accounting  Standards  No. 123R,  "Accounting  for Stock
Based Compensation" (hereinafter "SFAS No. 123R"). This statement supersedes APB
Opinion No. 25,  "Accounting  for Stock  Issued to  Employees,"  and its related
implementation guidance. This statement establishes standards for the accounting
for transactions in which an entity  exchanges its equity  instruments for goods
or  services.  It  also  addresses   transactions  in  which  an  entity  incurs
liabilities  in exchange for goods or services  that are based on the fair value
of the  entity's  equity  instruments  or that may be settled by the issuance of
those equity  instruments.  This statement  focuses  primarily on accounting for
transactions in which an entity obtains employee services in share-based payment
transactions.  This statement does not change the accounting  guidance for share
based  payment  transactions  with  parties  other than  employees  provided  in
Statement of Financial  Accounting Standards No. 123. The Company has previously
adopted  SFAS No. 123 and the fair value of  accounting  for stock  options  and
other equity instruments. The Company has determined that there was no impact to
its financial statements from the adoption of this new statement.

In November 2004, the Financial  Accounting  Standards Board issued Statement of
Financial  Accounting  Standards No. 151, "Inventory Costs-- an amendment of ARB
No. 43, Chapter 4". This statement amends the guidance in ARB No. 43, Chapter 4,
"Inventory  Pricing," to clarify the  accounting  for  abnormal  amounts of idle
facility  expense,  freight,  handling costs,  and wasted  material  (spoilage).
Paragraph  5 of ARB 43,  Chapter  4,  previously  stated  that ". . . under some
circumstances,  items such as idle facility expense,  excessive spoilage, double
freight,  and  rehandling  costs may be so abnormal as to require  treatment  as
current  period  charges.  . . ." This  statement  requires  that those items be
recognized  as  current-period  charges  regardless  of  whether  they  meet the
criterion of "so abnormal." In addition, this statement requires that allocation
of fixed production  overheads to the costs of conversion be based on the normal
capacity of the production facilities. This statement is effective for inventory
costs incurred  during fiscal years  beginning  after June 15, 2005.  Management
does not believe the adoption of this statement will have any immediate material
impact on the Company.

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

In  January  2003,  the  Financial   Accounting   Standards  Board  issued  FASB
Interpretation  No.  46  "Consolidation  of  Variable  Interest   Entities,   an
Interpretation  of ARB No. 51"  (hereinafter  "FIN 46"). FIN 46 requires certain
variable interest entities to be consolidated by the primary  beneficiary of the
entity if the equity investors in the entity do not have the  characteristics of
a controlling  financial  interest or do not have sufficient  equity at risk for
the entity to finance its activities without additional  subordinated  financial
support from other  parties.  FIN 46 is effective for all new variable  interest
entities  created or acquired  after January 31, 2003.  The provisions of FIN 46
must be applied for the first interim or annual period  beginning after June 15,
2003.  The Company does not have any entities  that  require  disclosure  or new
consolidation as a result of adopting the provisions of FIN 46.

Accounts Receivable and Bad Debts

The Company estimates bad debts utilizing the allowance method,  based upon past
experience and current market  conditions.  The Company recorded an allowance to
cover  accounts  receivable  balances  over 60 days of $26,346  and  $16,321 for
December 31, 2005 and December 31, 2004 respectively.

                                      F-27


Advertising Expenses

Advertising  expenses  consist  primarily  of  costs  incurred  in  the  design,
development,  and printing of Company  literature and marketing  materials.  The
Company  expenses  all  advertising  expenditures  as  incurred.  The  Company's
advertising  expenses were $39,208 and $118,937 for the year ended  December 31,
2005 and December 31, 2004 respectively.

Cash and Cash Equivalents

For purposes of the  statement of cash flows,  the Company  considers all highly
liquid  investments and short-term debt instruments with original  maturities of
three months or less to be cash equivalents.

Restricted Cash

Restricted cash includes  deposits held in a reserve account in the amount of $0
and  $100,248 at December  31, 2005 and  December  31, 2004  respectively.  Such
deposits are required by the bank as protection  against  unfunded  charge backs
and returns of credit card transactions. Effective June 9, 2005, the bank deemed
that this deposit is no longer necessary and released the funds to the Company.

Compensated Absences

Employees of the Company are entitled to paid vacation, and sick days, depending
on job classification, length of service, and other factors. The Company accrued
vacation  pay in the amounts of $61,686  and  $60,186 at  December  31, 2005 and
December 31, 2004 respectively.

Cost of Sales

Cost of sales  consists  of the  purchase  price of products  sold,  inbound and
outbound shipping charges,  packaging supplies and costs associated with service
revenues and marketplace business.

Derivative Instruments

The  Financial   Accounting   Standards  Board  issued  Statement  of  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities"   (hereinafter  "SFAS  No.  133"),  as  amended  by  SFAS  No.  137,
"Accounting for Derivative  Instruments and Hedging Activities - Deferral of the
Effective  Date of FASB No.  133",  and SFAS No.  138,  "Accounting  for Certain
Derivative  Instruments  and  Certain  Hedging  Activities",  and SFAS No.  149,
"Amendment of Statement 133 on Derivative  Instruments and Hedging  Activities".
These  statements  establish  accounting and reporting  standards for derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts, and for hedging activities. They require that an entity recognize all
derivatives  as either  assets or  liabilities  in the balance sheet and measure
those instruments at fair value.

If certain conditions are met, a derivative may be specifically  designated as a
hedge, the objective of which is to match the timing of gain or loss recognition
on the hedging  derivative  with the  recognition of (i) the changes in the fair
value of the hedged asset or liability that are  attributable to the hedged risk
or  (ii)  the  earnings  effect  of the  hedged  forecasted  transaction.  For a
derivative  not  designated  as a  hedging  instrument,  the  gain  or  loss  is
recognized in income in the period of change.

At December  31, 2005 and  December  31, 2004 the Company has not engaged in any
transactions  that  would  be  considered  derivative   instruments  or  hedging
activities.

Earnings Per Share

The Company has adopted  Statement of Financial  Accounting  Standards  No. 128,
which  provides for  calculation  of "basic" and  "diluted"  earnings per share.
Basic  earnings  per share  includes no dilution and is computed by dividing net
income (loss)  available to common  shareholders by the weighted  average common
shares  outstanding  for the  period.  Diluted  earnings  per share  reflect the
potential  dilution of securities  that could share in the earnings of an entity
similar to fully  diluted  earnings per share.  Basic and diluted loss per share
were  the  same  at the  reporting  dates,  as  inclusion  of the  common  stock
equivalents would be anti-dilutive.

                                      F-28


Estimates

The process of preparing  financial  statements  in conformity  with  accounting
principles  generally  accepted in the United States of America requires the use
of estimates and  assumptions  regarding  certain types of assets,  liabilities,
revenues,   and  expenses.   Such  estimates   primarily   relate  to  unsettled
transactions and events as of the date of the financial statements. Accordingly,
upon settlement, actual results may differ from estimated amounts.

Fair Value of Financial Instruments

The  Company's  financial  instruments  as defined  by  Statement  of  Financial
Accounting  Standards  No.  107,  "Disclosures  about  Fair  Value of  Financial
Instruments," include cash, trade accounts receivable,  and accounts payable and
accrued expenses.  All instruments are accounted for on a historical cost basis,
which,  due to the short maturity of these financial  instruments,  approximates
fair value at December 31, 2005 and December 31, 2004.

Foreign Currency Translation and Other Comprehensive Income

The Company has adopted  Financial  Accounting  Standard No. 52. Monetary assets
and  liabilities  denominated in foreign  currencies are translated  into United
States  dollars at rates of exchange in effect at the balance sheet date.  Gains
or losses are included in income for the year. Non-monetary assets,  liabilities
and items  recorded in income arising from  transactions  denominated in foreign
currencies  are  translated  at rates of  exchange  in effect at the date of the
transaction.

As the Company's  functional  currency is the U.S.  dollar,  and all translation
gains and  losses are  transactional,  the  Company  has no assets  with  values
recorded in Canadian dollars or Hong Kong dollars and there is no recognition of
other comprehensive income in the financial statements.

Foreign Currency Valuation and Risk Exposure

While the Company's  functional  currency is the U.S. dollar and the majority of
its operations are in the United States,  the Company  maintains its main office
in Burnaby,  British Columbia.  The Company also maintains an office in Kowloon,
Hong Kong.  The assets and  liabilities  relating to both the  Canadian and Hong
Kong  operations  are  exposed  to  exchange  rate   fluctuations.   Assets  and
liabilities of the Company's foreign operations are translated into U.S. dollars
at the year-end  exchange rates,  and revenue and expenses are translated at the
average exchange rate during the period.  Realized gains and losses from foreign
currency transactions are reflected in the results of operations.

Impaired Asset Policy

In March 1995,  the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting Standard No. 121, "Accounting for Impairment of Long-lived
Assets." In complying  with this  standard,  the Company  reviews its long-lived
assets  quarterly to determine  if any events or changes in  circumstances  have
transpired  which  indicate  that the  carrying  value of its  assets may not be
recoverable.  The Company  determines  impairment by comparing the  undiscounted
future cash flows  estimated to be  generated by its assets to their  respective
carrying amounts.

The Company does not believe any adjustments are needed to the carrying value of
its assets at December 31, 2005 or December 31, 2004.

Income Taxes

The Company  accounts  for income  taxes under the  provisions  of  Statement of
Financial   Accounting   Standards  No.  109,   "Accounting  for  Income  Taxes"
(hereinafter  "SFAS No.  109").  This  statement  requires  the  recognition  of
deferred tax liabilities  and assets for the future  consequences of events that
have been recognized in the Company's  consolidated  financial  statement or tax
returns.  Measurement of the deferred items is based on enacted tax laws. In the
event the future  consequences of differences  between financial reporting bases
and tax bases of the Company's assets and liabilities  results in a deferred tax
asset,  SFAS No. 109 requires an evaluation of the  probability of being able to
realize the future  benefits  indicated by such an asset. A valuation  allowance
related to a deferred tax asset is recorded when it is more likely than not that
some portion or all of the  deferred  tax asset will not be realized.  (See Note
10.)

                                      F-29


Inventories

The Company  records  inventories  at the lower of cost or market on a first-in,
first-out basis.

Long-lived Assets

In  accordance  with  Statement  of  Financial  Accounting  Standards  No.  144,
"Accounting for the Impairment or Disposal of Long-Lived Assets".  This standard
establishes a single accounting model for long-lived assets to be disposed of by
sale,  including  discontinued  operations,  and requires that these  long-lived
assets be measured  at the lower of  carrying  amount or fair value less cost to
sell,  whether  reported in continuing  operations or  discontinued  operations.
Accordingly,  the Company reviews the carrying  amount of long-lived  assets for
impairment where events or changes in  circumstances  indicate that the carrying
amount may not be recoverable. The determination of any impairment would include
a comparison of estimated  future cash flows  anticipated to be generated during
the remaining  life of the assets to the net carrying  value of the assets.  For
the years ended December 31, 2005 and,  December 31, 2004, no  impairments  have
been identified

Property and Equipment

Property  and  equipment  are  stated  at cost.  Depreciation  of  property  and
equipment is calculated using the straight-line method over the estimated useful
lives of the assets, which range from three to seven years. (See Note 4.)

Principles of Consolidation

The consolidated  financial  statements  include the accounts of the Company and
its wholly owned subsidiaries.  All significant  transactions and balances among
the  companies  included  in the  consolidated  financial  statements  have been
eliminated.

Revenue Recognition

The  Company  is  in  the  business  of  selling  nutritional  products  in  two
categories:  dietary  supplements and personal care products.  Sales of personal
care products  represent  less than 5% of the overall  revenue and therefore are
not classified  separately in the financial  statements.  The Company recognized
revenue  from  product  sales when the  products are shipped and title passes to
customer. Administrative fees charged to the Independent Business Associates are
included in the gross sales and  amounted  $128,967  and  $190,340  for the year
ended December 31, 2005 and December 31, 2004 respectively.

Segment Information

The  Company  adopted  Statement  of  Financial  Accounting  Standards  No. 131,
"Disclosures   about  Segments  of  an  Enterprise  and  Related   Information,"
(hereafter  "SFAS No. 131") which supersedes SFAS No. 14,  "Financial  Reporting
for  Segments  of a  Business  Enterprise,"  replacing  the  "industry  segment"
approach with the "management"  approach. The management approach designates the
internal  organization that is used by management for making operating decisions
and assessing performance as the source of the Company's reportable segments.

SFAS No. 131 also requires  disclosures about products and services,  geographic
areas and major  customers.  The  adoption  of SFAS No.  131 did not  affect the
Company's results of operations or financial position. (See Note 14.)

Stock Options and Warrants Granted to Employees and Non-Employees

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation"  ("SFAS No. 123"), defines a fair value-based method of accounting
for stock  options and other  equity  instruments.  The Company has adopted this
method,  which measures  compensation costs based on the estimated fair value of
the award and recognizes that cost over the service period.

Going Concern

As shown in the  accompanying  financial  statements,  the Company had  negative
working capital of approximately  $1,965,000 and an accumulated deficit incurred
through  December 31, 2005.  The Company also has limited cash  resources  and a
history of recurring  losses.  These factors raise  substantial  doubt about the
Company's  ability to continue as a going concern.  The financial  statements do
not include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts and  classification of liabilities that might be
necessary in the event the Company cannot continue in existence.

                                      F-30


Management has established plans designed to increase the sales of the Company's
products, and decrease debt. The Company plans on continuing to reduce expenses,
and  with  small  gains in any  combination  of  network  sales,  direct  sales,
international  sales, and warehouse sales,  believe that they will eventually be
able to reverse  the  present  deficit.  Management  intends to seek  additional
capital from new equity  securities  offerings that will provide funds needed to
increase liquidity,  fund internal growth and fully implement its business plan.
Management  plans  include  negotiations  to  convert  significant  portions  of
existing debt into equity.

The  timing  and  amount  of  capital  requirements  will  depend on a number of
factors,  including  demand for products and  services and the  availability  of
opportunities  for  international   expansion  through  affiliations  and  other
business relationships.

NOTE 3 - ACCOUNTS RECEIVABLE AND CREDIT RISK

Accounts receivable at December 31, 2005 and December 31, 2004 consist primarily
of amounts due from direct retail clients of EYI.

NOTE 4 - PROPERTY AND EQUIPMENT

Capital  assets are  recorded  at cost.  Depreciation  is  calculated  using the
straight  line method over three to seven years.  The  following is a summary of
property,  equipment  and  accumulated  depreciation  at  December  31, 2005 and
December 31, 2004.



                                                December 31, 2005             December 31, 2004
                                           ---------------------------   ---------------------------
                                                           Accumulated                   Accumulated
                                               Cost       Depreciation       Cost       Depreciation
                                           ------------   ------------   ------------   ------------
                                                                            
Warehouse equipment                        $          0   $          0   $    223,927   $    207,525
Furniture and fixtures                            1,569            371         18,698         18,083
Computer Equipment & Software                   105,447         83,068        115,392         83,995
Office equipment                                 14,859            901          3,510          3,410
Leasehold improvements                           13,544          1,409         32,523         20,696
                                           ------------   ------------   ------------   ------------
Total                                           135,420   $     85,749        394,050   $    333,714
                                                          ============                  ============

Less: accumulated depreciation                   85,749                      333,714
                                           ------------                 ------------

Total property, plant and equipment, net   $     49,671                 $     60,336
                                           ============                 ============


Depreciation  expense for the periods  ended  December 31, 2005 and December 31,
2004 was $52,645, and $56,154 respectively.

NOTE 5 - CONVERTIBLE LOANS PAYABLE

On June 22,  2004,  the  Company  issued to Cornell  Capital  Partners,  LP a 5%
secured convertible debenture in the principal amount of $250,000 with a term of
two years,  and interest at 5%. The debenture was convertible into the Company's
common stock at a price per share equal to the lessor of (a) 120% of the closing
bid price by the second  anniversary  date of issuance or (b) 100% of the lowest
daily  volume  weighted  average  price  for the 30 days  immediately  prior  to
conversion.  On June 24,  2004,  the Company  received  the  $250,000  loan less
related  expenses of  approximately  $65,000  which was allocated as discount on
debt. The  convertible  securities were guaranteed by the assets of the Company.
Under the  agreement,  the Company was required to keep  available  common stock
duly authorized for issuance in satisfaction of the convertible.  The conversion
amount will be the face amount of the  convertible  plus interest at the rate of
5% per annum from the closing date of June 24, 2004 to the  conversion  date. On
August 3, 2005, the Company  retired the debenture plus a 20% premium of $50,000
by using the cash proceeds of a promissory  note between the Company and Cornell
Capital signed on August 2, 2005.

                                      F-31


On September  24,  2004,  the Company  issued to Cornell  Capital  Partners,  LP
("Cornell")  a 5%  secured  convertible  debenture  in the  principal  amount of
$250,000  with a term  of two  years,  and  interest  at 5%.  The  debenture  is
convertible  into the  Company's  common stock at a price per share equal to the
lessor of (a) 120% of the  closing bid price by the second  anniversary  date of
issuance or (b) 100% of the lowest daily volume  weighted  average price for the
30 days  immediately  prior to  conversion.  On September 27, 2004,  the Company
re-assigned  $245,000 of this debenture to Taib Bank, E.C. and reassigned $5,000
of  the  debenture  B to an  individual.  Under  the  debenture  agreement,  the
Company's failure to issue unrestricted, freely tradable common stock to Cornell
or Taib Bank or the individual upon conversion after the registration  statement
filed  pursuant  to this  transaction  has  been  declared  effective  would  be
considered an event of default,  thereby  entitling  Cornell to accelerate  full
repayment of the convertible  securities then outstanding.  Under the agreement,
the Company was required to maintain  available common stock duly authorized for
issuance in satisfaction of the convertible.  One September 24, 2004 the Company
received the $250,000 loan less related expenses of approximately  $55,000.  The
convertible  securities were guaranteed by the assets of the Company.  Under the
agreement,  the  Company  was  required  to keep  available  common  stock  duly
authorized  for issuance in  satisfaction  of the  convertible.  The  conversion
amount was the face amount of the  convertible  plus  interest at the rate of 5%
per annum from the closing date of  September,  2004 to the  conversion  date On
August 15, 2005, the Company retired $75,000 of the Taib Bank, E.C. debenture by
converting  2,027,027  common shares.  On August 16, 2005,  the Company  retired
$170,000 of the Taib Bank, E.C. debenture plus $10,830 in interest by converting
4,487,096  common shares.  On September 12, 2005, the Company  retired $5,000 of
the remaining  debenture  plus $14,245 in interest by converting  375,146 common
shares valued at $0.0513.

The convertible debentures contained a beneficial conversion feature computed at
its intrinsic value that was the difference between the conversion price and the
fair value on the  debenture  issuance  date of the common  stock into which the
debt was convertible, multiplied by the number of shares into which the debt was
convertible at the commitment date. Since the beneficial  conversion feature was
to be  settled by  issuing  equity,  the  amount  attributed  to the  beneficial
conversion  feature,  or  $250,000,  was  recorded as an interest  expense and a
component of stockholders' equity on the balance sheet date.

Standby Equity Distribution Agreement

In June, 2004, the Company entered into a standby equity distribution  agreement
with Cornell  Capital  Partners,  LP  ("Cornell").  Pursuant to this  agreement,
Cornell  agreed to purchase up to  $10,000,000  of the  Company's  common  stock
through  a  placement   agent  over  a  two-year   period  after  the  effective
registration of the shares. In addition,  the Company issued 1,300,000 shares of
its common stock to Cornell and the  placement  agent upon the  inception of the
standby equity  distribution  agreement.  The $390,000 value of these shares was
recognized as a period  expense due to the fact that the  1,300,000  shares have
been deemed to be fully earned as of the date of the agreement.

During the year ended December 31, 2005, the Company  issued  40,874,047  common
shares to  Cornell  Capital  in  exchange  for  $1,700,000.  These  transactions
resulted in a beneficial conversion feature computed at its intrinsic value that
was the  difference  between  the  conversion  price  and the fair  value on the
issuance  date of the common  stock.  The amount  attributed  to the  beneficial
conversion  feature,  or  $422,096,  was  recorded as a financing  expense and a
component of stockholders' equity on the balance sheet.

NOTE 6 - INTANGIBLE ASSETS

Intangible assets consist of rights, title, and interest in and to the contracts
with the  Company's  independent  business  associates as well as the rights and
licenses to trademarks  and formula for the Company's  primary  products.  These
rights and licenses were obtained from the Company's former parent pursuant to a
transfer agreement, as well as from the Company's primary shareholder.

Trademarks  and  Formulas  Costs  relating  to the  purchase of  trademarks  and
formulas were capitalized and amortized using the straight-line  method over ten
years, representing the estimated life of the assets.

The  following  is a summary of the  intangible  assets at December 31, 2005 and
December 31, 2004:

                                                    Accumulated
                                        Cost       Amortization         Net
                                    ------------   ------------    ------------
Balance, December 31, 2004          $     21,601   $     (5,040)   $     16,561
Activity in last twelve months               674         (2,193)         (1,519)
                                    ------------   ------------    ------------
Balance, December 31, 2005          $     22,275   $     (7,233)   $     15,042
                                    ============   ============    ============

                                      F-32


NOTE 7 - BANK INDEBTEDNESS

Bank indebtedness consists of checks written in excess of funds on deposit.

NOTE 8 - CAPITAL STOCK

Preferred Stock

The Company is authorized to issue  10,000,000  shares of preferred stock with a
par value of $0.001.  As of December  31, 2005 and  December 31, the Company has
not issued any preferred stock.

Common Stock

The Company is authorized  to issue  1,000,000,000  shares of common stock.  All
shares have equal voting rights, are non-assessable and have one vote per share.
Voting rights are not cumulative and, therefore, the holders of more than 50% of
the common stock could,  if they choose to do so, elect all of the  directors of
the Company.

On  February  10,  2005,  we  entered  into a  loan  agreement  with  one of our
employees,  pursuant  to  which  we  loaned  her  $180,000  for the  purpose  of
exercising  3,000,000  incentive  stock  options  issued  to her under our stock
compensation  program.  The loan is payable on demand and accrues  interest at a
rate of 4% per annum.  The loan was secured by a promissory note dated effective
February 10, 2005 and deemed to be a subscription receivable. On August 10, 2005
the  promissory  note was  re-assigned  to  Winslow  Drive in  exchange  for the
3,000,000 shares (See Note 10)

On February 14, 2005 the Company  entered into a bonus share  agreement with one
of our employees and issued 800,000 shares of our common stock at a deemed price
of $0.05 per share.  These shares were given in consideration  for providing the
guarantee and pledge  necessary  for the Cornell loan.  (See Note 10) The shares
are to be issued pursuant to Regulation S of the Securities Act.

On April 5,  2005,  250,000  options  were  exercised  at $0.04 per share at the
aggregate  exercise  price of  $10,000.  The  options  were  paid in the form of
forgone  debt owed to the legal firm by the  Company.  The Company  computed the
number of options issued in this transaction  based on the estimated fair market
value of the Company's common stock on the date of issuance.

On June 9, 2005, the Company sold, under a private placement offering, 1,000,000
shares  of  common  stock at $0.02  per  share for a total of $8,500 in cash and
$11,500 in the form of forgone debt owed to a consultant and related  party.  In
addition, 3,000,000 warrants were also granted in conjunction with this offering
at a price of $0.02. (See Note 9.)

On July 28, 2005,  the Company  issued  250,000  common shares to AGORA Investor
Relations  Corp pursuant the terms of it's agreement with the Company dated July
28, 2005.

On August 15, 2005, the Company issued  2,027,027  common shares to TAIB Bank to
retire $75,000 of the $300,000 debenture.

On August 16, 2005, the Company issued  4,487,096  common shares to TAIB Bank to
retire $170,000 of the $300,000 debenture plus interest of $10,830.

On September 1, 2005, the Company  issued 500,000 shares of restricted  stock as
an initial signing bonus to M. Ali Lakhani Personal Law Corporation  pursuant to
the terms of his contract with the Company dated September 1, 2005.

On September 12, 2005,  the Company issued 375,146 common shares to TAIB Bank to
retire a $5,000 debenture plus interest of $14,245.

On September 26, 2005 an employee of the Company exercised 100,000 stock options
at $0.08 per share for an the aggregate exercise price of $8,000.

During the quarter ended December 31, 2005, the Company issued 22,789,581 common
shares to Cornell Capital to retire the Promissory Note dated August 1, 2005.

                                      F-33


During the quarter ended December 31, 2005, the Company issued 19,268,733 common
shares to Cornell Capital in exchange for $700,000  pursuant to the terms of the
Standby Equity Distribution Agreement.

NOTE 9 - COMMON STOCK OPTIONS AND WARRANTS

Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation" (hereinafter "SFAS No. 123"), defines a fair value-based method of
accounting  for stock  options  and other  equity  instruments.  The Company has
adopted this method,  which measures  compensation  costs based on the estimated
fair value of the award and recognizes that cost over the service period.

In  accordance  with SFAS No. 123, the fair value of stock  options and warrants
granted are estimated  using the  Black-Scholes  Option Price  Calculation.  The
following  assumptions were made to value the stock options and warrants for the
period ended  December 31, 2005:  estimated  risk-free  interest  rate of 4%; no
dividends to be paid; estimated volatility of 144%, and term of two years.

Warrants

During the quarter ended June 30, 2005, the Company sold 1,000,000 common shares
through a private  placement.  In addition,  the purchaser of the shares receive
warrants  to purchase  three  additional  shares of common  stock for each share
purchased, exercisable at $0.02 per share for a period of two years.

Stock Options

During the period ending  December 31, 2004,  the  Company's  board of directors
approved  the Stock  Compensation  Program to allow up to  25,000,000  shares of
stock to be issued  under the  program.  This plan  enables the Company to grant
stock options to directors,  officers, employees and eligible consultants of the
Company. There was no Company stock option plan in effect prior to 2004.

During the period ended December 31, 2005, the Company  granted stock options to
purchase  a  total  of  7,390,000  shares  of  common  stock  to its  employees,
directors,  and  consultants.  The options  were granted from $0.02 to $0.10 per
share. The Company  recognized an expense to services and consulting of $564,140
during the period ending December 31, 2005 for all vested options.

Following  is a summary  of the  status of the stock  options  during the twelve
months:

                                                                      Weighted
                                                                       Average
                                                       Number         Exercise
                                                      of Shares        Price
                                                    ------------    ------------
Outstanding at December 31, 2004                      19,747,390    $       0.14
  Granted                                              7,390,000            0.13
  Exercised                                           (3,350,000)           0.12
  Forfeited                                           (7,535,000)           0.08
                                                    ------------    ------------

Options outstanding at December 31, 2005              16,252,390    $       0.14
                                                    ============    ============
Options exercisable at December 31, 2005              15,617,390    $       0.14
                                                    ============    ============
Weighted average fair value of options granted                      $       0.13
                                                                    ============

Summarized  information  about stock  options  outstanding  and  exercisable  at
December 31, 2005 is as follows:

                                      F-34


                    Options Outstanding
-------------------------------------------------------------
  Exercise                      Weighted Ave.   Weighted Ave.
    Price          Number         Remaining        Exercise
    Range         of Shares         Life            Price
-------------   -------------   -------------   -------------
$0.02 - $0.26      16,252,390            2.23           $0.14

                     Options Exercisable
-------------------------------------------------------------
  Exercise                      Weighted Ave.   Weighted Ave.
    Price          Number         Remaining        Exercise
    Range         of Shares         Life            Price
-------------   -------------   -------------   -------------
$0.03 - $0.26      15,617,390            1.00           $0.14

Summarized  information  about  unvested  granted stock options  outstanding  at
December 31, 2005 is as follows:

            Unvested Granted Options Outstanding
-------------------------------------------------------------
  Exercise                      Weighted Ave.   Weighted Ave.
    Price          Number         Remaining        Exercise
    Range         of Shares         Life            Price
-------------   -------------   -------------   -------------
$0.02 - $0.20         515,000            1.41           $0.10

                                                      Weighted
                                     Number of        Average
                                      Warrants     Remaining Life  Average Price
                                   -------------   -------------   -------------
Outstanding and  exercisable          11,516,621            3.50           $0.21

NOTE 10 - INCOME TAXES

The  significant  components  of the deferred tax asset at December 31, 2005 and
December 31, 2004 were as follows:

                                                     December 31,   December 31,
                                                         2005          2004
                                                     ------------   ------------
Net operating loss carry forward                     $ 11,628,000   $  7,082,200
                                                     ============   ============
Deferred tax asset:                                  $  3,954,000   $  2,408,000
Less valuation allowance for tax asset                 -3,954,000     -2,408,000
                                                     ------------   ------------
Net deferred tax asset                               $         --   $         --
                                                     ============   ============

At December 31, 2005 and December 31, 2004,  the Company has net operating  loss
carry forwards of approximately  $11,628,000 and $7,082,200 respectively,  which
expire in the years 2023 through 2025. The change in the allowance  account from
December 31, 2004 to December 31, 2005 was $1,546,000.

The Company's  subsidiaries in Canada are required to file income tax returns in
British  Columbia,  Canada.  The losses from  operations  are  allocated to both
United States and Canadian operations.

Utilization of the net operating  losses is contingent upon the company's filing
of federal  income tax  returns,  currently  in  arrears.  See Note 6  regarding
Company's liability for state income tax reporting.

                                      F-35


NOTE 11 - COMMITMENTS AND CONTINGENCIES

Purchase Agreement On June 30, 2002, the Company entered into a distribution and
license agreement with a company in which one of the Company's  directors has an
ownership  interest.  The  agreement  gives the Company the  exclusive  right to
market,  sell and distribute  certain  products for a five-year  renewable term.
Management  estimates  that  87% of the  Company's  sales  volume  results  from
products supplied under this licensing agreement.

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

From June 1, 2004 to May 31, 2005          $3,964,000

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

In  the  event  that  the  Company  is  unable  to  meet  the  minimum  purchase
requirements of the licensing  agreement or the terms requiring it to pay 15% of
the difference  between the minimum purchase amount referred to above and actual
purchases  for that year in which there is a  shortfall,  then the  licensor has
various remedies available to it including renegotiating the agreement, removing
exclusivity rights, or terminating the agreement.

As of the date of these financial statements, the purchase requirements have not
been made.  The period  for which the  License  could  request  payment  per the
penalty  clause  has  expired  for the year and  therefore  we have not made any
accrual to the financial statements.  As well we continue to purchase Nutri Diem
products.

Lease Payments

The Company has operating lease  commitments for its premises,  office equipment
and an automobile. The minimum annual lease commitments are as follows:

Year ended December 31,               Minimum Amount
-----------------------               --------------
2006                                        $218,469
2007                                         163,285
2009                                         141,841
2009                                         147,013
2010 and thereafter                          309,544

Management Agreement

EYI Corp. has agreed to perform various services and  administrative  assistance
to the Company on a month to month basis  commencing April 1, 2004. The services
and  duties  to be  provided  and  performed  by EYI  Corp.  for  EYII  shall be
determined  and agreed  upon by the  parties,  from time to time,  as  required,
provided however,  it is understood and agreed that such services will primarily
consist of assisting EYII in the sales and marketing business.

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

Regulatory Risks and Claims

The  Company's  products  are subject to  regulation  by a number of federal and
state  entities,  as well as those of foreign  countries in which the  Company's
products are sold. These regulatory  entities may prohibit or restrict the sale,
distribution,  or  advertising  of the Company's  products for legal,  health or
safety, related reasons. In addition to the potential risk of adverse regulatory
actions,  the  Company  is subject to the risk of  potential  product  liability
claims.

                                      F-36


Promissory Note

On August 1, 2005,  the Company  entered  into a  promissory  note with  Cornell
Capital  Partners,  LP for  the  principal  sum of one  Million  (U.S.)  dollars
($1,000,000) and payable in thirteen weekly installments beginning September 23,
2005 and ending on December  16, 2005.  Interest on this note is twelve  percent
(12%) per annum.  The Company  agreed to repay this loan by issuing common stock
pursuant to the terms of the Standby Equity Distribution Agreement (Note 5).

Secured Promissory Note

On  February  24,  2005 the Company  received a loan of  $200,000  from  Cornell
secured by a secured  promissory note. Under the terms of the secured promissory
note,  the loan is payable by April 24, 2005 and  accrues  interest at a rate of
12% per annum.  In connection with the issuance of the secured note, the Company
agreed to: (i) pay Cornell a fee of  $20,000;  and (ii) pay  Yorkville  Advisors
Management  LLC a  structuring  fee in the amount of $2,500.  As a condition  to
Cornell's  entry into the Secured Note on February 24, 2005, an employee of EYI,
Janet Carpenter, entered into a guaranty agreement with Cornell and a pledge and
escrow  agreement with Cornell and David Gonzalez.  Pursuant to the terms of the
guaranty agreement and the pledge and escrow agreement, Ms. Carpenter agreed to:
(i) personally  guarantee the payment and  performance  obligations of EYI under
the Secured Note; and (ii) pledge to Cornell 3,000,000 shares of EYI held by her
to secure the obligations of EYI under the Secured Note. In consideration of Ms.
Carpenter  providing the  guarantee and pledge,  EYI entered into a bonus shares
agreement  dated  February  14,  2005 with Ms.  Carpenter,  pursuant to which we
agreed to issue to Ms. Carpenter  800,000 shares of our common stock at a deemed
price of $0.05 per share. The shares are to be issued to Ms. Carpenter  pursuant
to Regulation S of the  Securities  Act.  (See Note 8.) On August 3, 2005,  this
promissory note was fully retired.

Standby Equity Distribution Agreement

On  June  22,  2004,  the  Company  entered  into  a  two-year   standby  equity
distribution agreement with Cornell Capital Partners LP ("Cornell"). Pursuant to
this agreement,  Cornell will purchase up to 10,000,000  shares of the Company's
common stock through a placement  agent.  The Company issued 1,300,000 shares of
its common stock to Cornell and the  placement  agent upon the inception of this
agreement. The $390,000 value of these shares was based on the fair market value
of the shares on the date of the contract and is recognized as a period  expense
due to the fact that the 1,300,000 shares have been deemed to be fully earned as
of the date of the agreement. (See Note 8.)

On May 13, 2005 the Company entered into a Standby Equity Distribution Agreement
with Cornell Capital Partners,  LP ("Cornell") pursuant to which we entered into
the following agreements:  a Registration Rights Agreement, an Escrow Agreement,
and a Placement Agent Agreement. Pursuant to the terms of the new Standby Equity
Distribution Agreement,  we may, at our discretion,  periodically issue and sell
shares of our common  stock for a total  purchase  price of $10  million.  If we
request advances under the Standby Equity Distribution  Agreement,  Cornell will
purchase  shares of our  common  stock  for 98% of the  lowest  volume  weighted
average price on the  Over-the-Counter  Bulletin Board or other principal market
on which our common  stock is traded for the 5 days  immediately  following  the
advance  notice  date.  Cornell  will  retain 5% of each  advance  under the new
Standby Equity Distribution  Agreement. We may not request advances in excess of
a total  of $10  million.  Pursuant  to the  terms  of our  Registration  Rights
Agreement and the Standby Equity  Agreement with Cornell,  we agreed to register
and qualify,  among other things, the additional shares due to Cornell under the
Standby Equity  Agreement under a registration  statement filed with the SEC. We
signed a Termination  Agreement on May 13, 2005,  for the purpose of terminating
our Standby Equity  Distribution  Agreement,  Registration  Rights Agreement and
Escrow Agreement  previously entered into with Cornell on June 22, 2004.On April
4, 2005 we entered  into a  redemption  agreement  with TAIB Bank E.C.  ("TAIB")
pursuant  to which TAIB  agreed to acquire by  assignment  a two year 5% secured
convertible  debenture issued to Cornell Capital Partners,  L.P.  ("Cornell") in
the amount of $245,000, and a two year 5% convertible debenture in the amount of
$5,000 held by Kent Chou, in  consideration  of which we agreed not to modify or
renegotiate the terms of our Standby Equity Distribution Agreement ("SEDA") with
Cornell, and to use any proceeds obtained by EYI under the SEDA to make payments
on the debentures. The debentures were assigned to TAIB on April 4, 2005.

Reseller Agreement

On May 11,  2005 the Company  entered  into a reseller  agreement  with Metals &
Arsenic Removal Technology, Inc ("MARTI") for a term of five (5) years, pursuant
to which MARTI appointed EYII as the exclusive  distributor of certain specially
formulated  MARTI  products on a  consignment  basis and provide  EYII with 1000
units of inventory for sale to its  customers,  proceeds of which are subject to
fee payments to MARTI as set out in the schedules accompanying the agreement.

                                      F-37


Service Agreement

On  April  22,  2005  Essentially  Yours  Industries,  Inc.,  our  wholly  owned
subsidiary ("EYII") entered into a fulfillment  services agreement with Source 1
Fulfillment  ("Source One") to warehouse and ship our products.  Pursuant to the
terms of the  agreement,  Source  One  agreed to  provide  certain  storage  and
fulfillment  services  to EYII at the  rates  set  out in the  schedules  to the
agreement.  Source One also  agreed to pay a referral  commission  of 10% of all
handling  fees for any client EYII brings to Source One. The  agreement is for a
term of one year and automatically  renews each year unless terminated by either
party in accordance  with the terms of the agreement.  Subsequently in May, 2005
Company  ceased   warehousing  and   distributing   our  products  through  Halo
Distribution LLC ("Halo"), our wholly owned subsidiary.

On September 1, 2005,  EYI entered into an agreement for legal  services with M.
Ali  Lakhani  Personal  Corporation  (the  "Contractor")  to provide EYI and its
subsidiaries  with  certain  legal  services in exchange for a monthly fee of US
$8,000 and a one time issuance of 500,000  restricted  share of our common stock
to the contractor. The contract is on a month-to-month basis.

Investor Relations Agreement

On July 28, 2005, the Company entered into an investor relations  agreement with
Agora Investor Relations Corp ("AGORA").  Pursuant to the terms of the agreement
AGORA  agreed to provide  certain  services  including  marketing,  branding and
investor  communications  services,  in consideration of which we agreed to: (i)
pay AGORA a fee of $2,500 per month commencing August 1, 2005; and (ii) issue to
AGORA  warrants to be registered by us to purchase  350,000 shares of our common
stock  exercisable at a price of $0.06 per share and vesting over a twelve month
period.  The agreement is for an initial term of August 1, 2005 to July 31, 2006
and is renewable at EYI's option for an  additional  term of 12 months under the
same terms and  conditions.  This  agreement  was  amended on October 5, 2005 at
which time the  warrant  provision  was  replaced  with the  issuance of 250,000
restricted  shares  of our  common  stock.  The  issuance  of these  shares  are
reflected in the accompanying financial statements.

Escrow Fund

On  August  1,  2005,   pursuant  to  references  made  to  the  standby  equity
distribution agreement dated June 22, 2004, and the Promissory Note dated August
1,  2005,  the  Company   allocated   fifty-one  million  two  hundred  thousand
(51,200,000) shares of the Company's common stock into escrow.

Other Matters

The Company's  predecessor  organization,  Essentially  Yours  Industries  Corp.
("EYIC"),  a British  Columbia  corporation,  has  outstanding  claims  from the
Internal Revenue Service for penalties and interest of approximately $2,000,000.

Furthermore,  one or more states may have claims  against  EYIC for unpaid state
income taxes.  Management  believes that these claims are limited solely to EYIC
and that any  prospective  unpaid tax claims  against the Company are remote and
unable to be estimated.

NOTE 12 - DISCONTINUED OPERATIONS

During the period ended  December 31, 2005,  the Company  elected to discontinue
the operations of Halo  Distribution LLC (hereinafter  "Halo"),  a subsidiary of
the Company and  recorded  costs  associated  from  discontinued  operations  of
$380,368 for the period  ended  December  31,  2005.  In  addition,  the Company
reclassified  the  December  31,  2004  balance  sheet to  reflect  $405,838  of
liabilities   from  the   discontinued   subsidiary   and  recorded  costs  from
discontinued operations of $340,305 for the period ended December 31, 2004.

The assets and liabilities disposed of from discontinued  operations at December
31, 2005 were as follows:

Total Assets                                                        $         --

Accounts payable                                                    $     79,049
Accrued liabilities                                                      275,368
Accounts payable - related party                                         105,000
                                                                    ------------
Liabilities in excess of assets                                     $    380,368
                                                                    ============

                                      F-38


In June 2002,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards,  No. 146, "Accounting for Costs Associated with
Exit or  Disposal  Activities"  (hereinafter  "SFAS  No.  146").  SFAS  No.  146
addresses  significant  issues  regarding  the  recognition,   measurement,  and
reporting  of costs  associated  with exit and  disposal  activities,  including
restructuring  activities.  SFAS No. 146 also  addresses  recognition of certain
costs related to  terminating a contract that is not a capital  lease,  costs to
consolidate facilities or relocate employees,  and termination benefits provided
to employees  that are  involuntarily  terminated  under the terms of a one-time
benefit  arrangement that is not an ongoing benefit arrangement or an individual
deferred-compensation  contract. SFAS No. 146 was issued in June 2002, effective
December 31, 2002.  The Company's  financial  position and results of operations
have not been affected by adopting SFAS No. 146.

NOTE 13 - RELATED PARTY NOTE PAYABLE

The Company issued two promissory notes for a total of $90,000 in December 2003.
The notes are unsecured, non-interest bearing and are payable upon demand.

NOTE 14 - CONCENTRATIONS

Bank Accounts

The Company  maintains its cash  accounts in two  commercial  banks.  During the
year,  the Company may  maintain  balances  in excess of the  federally  insured
amounts in the accounts that are  maintained in the United  States.  The Company
also maintains  funds in commercial  banks in Vancouver,  British  Columbia,  in
which funds in U.S. dollars are not insured.  At December 31, 2005, December 31,
2004 a total of $248 and $140 respectively, was not insured.

Economic Dependence

During the year,  the Company  purchased  approximately  90% of its products for
resale from one  company,  Nutri-Diem  Inc.,  which is the sole  supplier of the
Company's  flagship  product  Calorad.  Pursuant  to a purchase  agreement,  the
Company is subject to minimum purchases per annum. (See Note 11.)

NOTE 15 - STATE OR FEDERAL TAX LIABILITY

For the years  ended  December  31,  2005 and 2004,  the  Company  estimated  it
California corporate tax liability to be $23,813 and $22,897,  respectively. The
Company has not filed a return with the State of  California  for several  years
and  because  of that  the  Company  has  been  suspended  from  operating  as a
corporation in California.  In order to revive its authorized corporation status
in  California,  the Company  must file all  delinquent  tax returns and pay all
related California corporate income taxes, penalties and interest.

In the year ended December 31, 2005, the Company's state tax liability increased
by $708.

NOTE 16 - SUBSEQUENT EVENTS

Between  January 17, 2006 and March 23,  2006,  the  Company  issued  42,941,686
shares to Cornell Capital in exchange for $1,084,564.51.

                                      F-39


                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

      EYI  Industries'  bylaws,  as  amended  provide  that we have the power to
indemnify any officer or director  against  damages if such person acted in good
faith and in a manner the person reasonably believed to be in the best interests
of our  Company.  No  indemnification  may be made (i) if a person  is  adjudged
liable  unless  a  Court  determines  that  such  person  is  entitled  to  such
indemnification,  (ii) with respect to amounts paid in settlement  without court
approval  or (iii)  expenses  incurred in  defending  any action  without  court
approval.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

      The following table sets forth estimated  expenses expected to be incurred
in  connection  with the  issuance  and  distribution  of the  securities  being
registered. All expenses will be paid by EYI Industries.

Securities and Exchange Commission Registration Fee                   $    2,375
Printing and Engraving Expenses                                       $    5,000
Accounting Fees and Expenses                                          $   20,000
Legal Fees and Expenses                                               $   50,000
Miscellaneous                                                         $    7,625
                                                                      ----------
TOTAL                                                                 $   85,000
                                                                      ==========

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES


      On April 24, 2006 we entered a Securities  Purchase Agreement with Cornell
Capital Partners,  Taib Bank, B.S.C. and Certain Wealth,  Ltd. pursuant to which
we entered  into the  following  agreements:  an  Investor  Registration  Rights
Agreement,  Irrevocable  Transfer Agent  Instructions and a Security  Agreement.
Pursuant to the terms of the Share Purchase  Agreement,  we may sell convertible
debentures to these entities in the principal  amount of $4,500,000 plus accrued
interest which are  convertible  into shares of our common stock. Of this amount
$1,500,000 has been,  $1,500,000 must be paid two (2) business days prior to the
date a  registration  statement  is  filed  with  the  Securities  and  Exchange
Commission and $1,500,000  shall be paid two (2) business days prior to the date
that such  registration  statement is declared  effective by the  Securities and
Exchange Commission.  We received proceeds of $1,305,000 (net of fees associated
with the issuance of the convertible debentures) on April 27, 2006 in connection
with the issuance of  $1,500,000  of  convertible  debentures  in the  following
principal amounts: $750,000 to Cornell Capital Partners,  $416,667 to Taib Bank,
B.S.C.,  and  $333,333  to Certain  Wealth,  Ltd.  pursuant  to the terms of the
Securities  Purchase  Agreement.  On June 8, 2006,  we received  net proceeds of
$1,350,000,  associated  with the  issuance  of the  second  tranche  of secured
convertible  debentures in the  principal  amount of $1,500,000 in the following
principal  amounts:  $750,000 to Cornell Capital,  $416,667 to Taib Bank, B.S.C.
and $333,333 to Certain  Wealth,  Ltd. On June 20, 2006, we receive net proceeds
of  $1,350,000,  associated  with the  issuance of the third  tranche of secured
convertible  debentures in the principal amount of $1,500,000,  in the following
amounts:  $750,000 to Cornell Capital Partners,  $416,667 to TAIB Bank,  B.S.C.,
and $333,333 to Certain  Wealth,  Ltd. Each of the  convertible  debentures  was
issued  pursuant to section 4(2) and Rule 506 of Regulation D of the  Securities
Act.


      Pursuant  to the  terms  of the  Securities  Purchase  Agreement  and  the
issuance of our convertible  debentures,  on April 24, 2006 we issued to Cornell
Capital  Partners  seventeen  (17)  warrants  to  purchase  up to  an  aggregate
124,062,678  shares of our common  stock at the  discretion  of Cornell  Capital
Partners each for good and valuable consideration.  Pursuant to the terms of the
warrants,  Cornell  Capital  Partners  is  entitled  to  purchase  from us:  (1)
10,416,650  shares of our common stock at $0.02 per share, (2) 13,888,866 shares
of our common  stock at $0.03 per  share,  (3)  10,416,650  shares of our common
stock at $0.04 per share,  (4) 8,333,320 shares of our common stock at $0.05 per
share,  (5)  6,944,433  shares  of our  common  stock at $0.06  per  share,  (6)
5,952,371 shares of our common stock at $0.07 per share,  (7) 11,250,000  shares
of our common  stock at $0.08 per  share,  (8)  10,000,000  shares of our common
stock at $0.09 per share, (9) 19,000,000 shares of our common stock at $0.10 per
share,  (10)  8,181,818  shares of our  common  stock at $0.11 per  share,  (11)
7,500,000  shares of our common stock at $0.12 per share,  (12) 3,333,333 shares
of our common  stock at $0.15 per  share,  (13)  2,500,000  shares of our common
stock at $0.20 per share, (14) 2,000,000 shares of our common stock at $0.25 per
share,  (15)  1,666,666  shares of our  common  stock at $0.30 per  share,  (16)
1,428,571  shares of our  common  stock at $0.35  per  share and (17)  1,250,000
shares of our common stock at $0.40 per share upon surrender of the warrants (or
as subsequently  adjusted  pursuant to the terms of each warrant) . Each warrant
has "piggy  back"  registration  rights and shall expire five (5) years from the
date of issuance, on or about April 24, 2011.

                                      II-1


      On October 10, 2005, we issued 500,000  shares of restricted  common stock
to  our  legal  consultant  pursuant  to a  contract  for  legal  services.  All
securities  were endorsed with a restrictive  legend pursuant to Regulation S of
the  Securities  Act of 1933  confirming  that the  securities  cannot be resold
without  registration  under the Securities Act or an applicable  exemption from
the registration requirements of the Securities Act.

      On October 10, 2005, we also issued  250,000  shares of restricted  common
stock to Agora  pursuant to our investor  relations  agreement  with Agora.  All
securities  were endorsed with a restrictive  legend pursuant to Regulation S of
the  Securities  Act of 1933  confirming  that the  securities  cannot be resold
without  registration  under the Securities Act or an applicable  exemption from
the registration requirements of the Securities Act.

      On June 9, 2005, we issued  1,000,000 shares of common stock and 3,000,000
warrants for the purchase of shares of our common stock at an exercise  price of
$0.02 per share to one investor.  The shares were purchased from us in a private
placement  transaction  pursuant to Rule 506 of  Regulation D of the  Securities
Act. All securities were endorsed with a restrictive  legend confirming that the
securities cannot be resold without  registration under the Securities act or an
applicable exemption from the registration requirements of the Securities Act.

      On January 1, 2004 the Company entered into an agreement with a consultant
to provide  services in exchange for 250,000 common shares at  $0.28.During  the
quarter ended March 31, 2004 we issued  100,000  shares of our common stock at a
price of $0.26 per share to a  consultant  in respect  of fees owed for  certain
consulting services provided to us by the consultant. All securities issued were
endorsed with a restrictive  legend  confirming  that the  securities  cannot be
resold without  registration under the Securities Act or an applicable exemption
from the  registration  requirements  of the  Securities  Act.  The issuance was
completed  pursuant to Section 4(2) of the  Securities Act on the basis that the
consultant was a sophisticated investor.

      During the  quarter  ended June 30,  2004 we issued  50,000  shares of our
common  stock at a price of $0.22 per share to a  consultant  in respect of fees
owed for  certain  consulting  services  provided to us by the  consultant.  All
securities  issued were endorsed with a restrictive  legend  confirming that the
securities cannot be resold without  registration under the Securities Act or an
applicable  exemption from the registration  requirements of the Securities Act.
The issuance was completed pursuant to Section 4(2) of the Securities Act on the
basis that the consultant was a sophisticated investor.

      During the quarter  ended June 30, 2004,  we issued  5,476,190  units at a
price of $0.21 per unit to  Eyewonder  in  respect of  certain  amounts  owed to
Eyewonder under our Letter Agreement with Eyewonder.  Each unit was comprised of
one share of our common stock and one share purchase warrant entitling Eyewonder
to  purchase  one share of our common  stock at an  exercise  price of $0.30 per
share for a period expiring May 4, 2009. The issuance was completed  pursuant to
Section  4(2)  of  the  Securities  Act  on  the  basis  that  Eyewonder  was  a
sophisticated investor.

      As of June 7, 2004,  we completed  the sale of 136,548 units at a price of
$0.21  per unit for  proceeds  of  $28,675  to seven  investors.  Each  unit was
comprised of one share of our common stock and one share purchase warrant.  Each
share purchase  warrant  entitles the holder to purchase one share of our common
stock at a price of $0.30 per share for the three year period following closing.
A total of 136,548 shares and 136,548 share purchase  warrants were issued.  The
purchasers consisted of seven "accredited investors",  as defined by Rule 501 of
Regulation D of the Securities  Act. The sales were  completed  pursuant to Rule
506 of Regulation D of the Securities  Act. All securities  issued were endorsed
with a  restrictive  legend  confirming  that the  securities  cannot  be resold
without  registration  under the Securities Act or an applicable  exemption from
the registration requirements of the Securities Act.

                                      II-2


      On  June  22,  2004,  we  entered  into a  secured  convertible  debenture
transaction  with Cornell Capital  Partners in the principal amount of $500,000.
The sale of these Secured  Convertible  Debentures is complete.  EYI  Industries
received $250,000 from the issuance of the first Secured  Convertible  Debenture
on June 22, 2004,  and we received  $250,000 five  business  days  following the
filing of the  accompanying  registration  statement.  The  Secured  Convertible
Debentures are  convertible at the holder's  option any time up to maturity at a
conversion  price equal to the lower of (i) 120% of the closing bid price of the
common  stock as of the date of  issuance,  or (ii)  80% of the  average  of the
lowest daily volume weighted average price of our common stock for the 5 trading
days  immediately  preceding the  conversion  date.  At maturity,  the remaining
unpaid  principal and accrued  interest  under the  debentures  shall be, at our
option,  either paid or  converted  into shares of common  stock at a conversion
price  equal to the lower of (i) 120% of the  closing  bid  price of the  common
stock as of the date of issuance or (ii) 80% of the lowest  closing bid price of
the common stock for the lowest  trading days of the 5 trading days  immediately
preceding the conversion date. The Secured  Convertible  Debenture is secured by
all of  EYI  Industries'  assets.  The  Secured  Convertible  Debentures  accrue
interest  at a rate of 5% per year and have a term of 3 years.  In the event the
Secured Convertible  Debentures are redeemed,  then EYI Industries will issue to
the holders a warrant to purchase  50,000 shares for every $100,000  redeemed at
an  exercise  price of 120% of the closing  bid price as of June 22,  2004.  The
holders  purchased the Secured  Convertible  Debentures from EYI Industries in a
private  placement on June 22, 2004. On September 24, 2004, we issued the second
secured  convertible  debenture in the  principal  amount of $250,000 to Cornell
Capital  Partners on the same terms and  conditions  as the secured  convertible
debenture  described  above.  EYI  Industries  is  registering  in this offering
8,352,823 shares of common stock underlying the Secured Convertible  Debentures.
On April 4,  2005,  Cornell  Capital  Partners  assigned  all of its  rights and
interests in the secured convertible debentures to Taib Bank E.C. All investment
decisions of Taib Bank E.C. are made by Larry Chaleff, its Managing Director. In
addition,  on April 4, 2005, EYI  Industries  and Taib Bank E.C.  entered into a
Redemption  Agreement,  whereby EYI Industries  agreed to first use any proceeds
received by EYI Industries under the Equity Distribution  Agreement with Cornell
Capital  Partners to redeem any remaining  principal and accrued  interest under
the assigned Secured Convertible Debentures.

      In February 2005, the Company issued 800,000 shares of our common stock at
a deemed price of $0.05 per share to Janet Carpenter. These shares were given to
Ms.  Carpenter  in  consideration  of her  providing  the  guarantee  and pledge
required for our loan agreement with Cornell Capital.



                                                          Share of Common
Year    Name of Holder                  Date              Stock Sold          Reason Shares Issued
----    --------------                  ----              ----------          --------------------
                                                                  
2005    Janet Carpenter                 February 2005         800,000         Shares in lieu of guarantee and
                                                                              pledge
                                                                              Shares issued in connection with
        AGORA Investor Relations Corp.  July 2005             250,000         investor relations agreement

        M. Ali Lakhani Personal Law                                           Shares issued as signing bonus
        Corporation                     September 2005        500,000         for agreement for legal services

2004    Private Placement at            January 2004          857,143         Private Placement
        $0.14 per unit: warrants                                              raise capital
        at $0.20

        Rajesh Raniga Inc.              January 2004          250,000         Consulting Fees

        Private Placement at            March 2004            609,312         Private Placement
        $0.21 per unit; warrants                                              raise capital
        at $0.30

        Equis Capital Corp.             March 2004            100,000         Consulting Fees

        Eyewonder Inc.                  May 2004            5,476,190         Service Fees

        Michael Hatrak                  May 2004               50,000         Consulting Fees

        Private Placement at            June 2004             566,833         Private Placement to
        $0.21 per unit; warrants                                              raise capital
        at $0.30

        Cornell Capital Partners, LP    June 2004           1,266,589         Commitment fee
                                                                              pursuant to Standby
                                                                              Equity Distribution Agreement

        Newbridge Securities            June 2004              33,411         Placement Agent fee
        Corporation                                                           in connection with
                                                                              Standby Equity Distribution
                                                                              Agreement

2003*   PNG Trading Co. Ltd.            February 2003         250,000         Issued in lieu of funds
                                                                              received


                                      II-3




                                                          Share of Common
Year    Name of Holder                  Date              Stock Sold          Reason Shares Issued
----    --------------                  ----              ----------          --------------------
                                                                  
        Hightech International          March 2003          2,120,000         Settlement of Debt

        Private Placement at            September 2003      3,573,924         Private Placement to
        $0.14 per unit; warrants                                              raise capital
        at $0.20

        Michel Grise                    December 2003         357,143         Private Placement to
                                                                              raise capital


      With respect to the sale of unregistered  securities referenced above, all
transactions  were exempt  from  registration  pursuant  to Section  4(2) of the
Securities Act of 1933 (the "1933 Act"), and Regulation D promulgated  under the
1933 Act. In each instance,  the purchaser had access to sufficient  information
regarding EYI so as to make an informed investment decision.  More specifically,
EYI had a reasonable  basis to believe that each  purchaser  was an  "accredited
investor"  as  defined in  Regulation  D of the 1933 Act and  otherwise  had the
requisite sophistication to make an investment in EYI's common stock.

-------------------

*     Current management of EYI Industries has limited  information with respect
      to the issuances of  unregistered  securities  prior to the Share Exchange
      transaction  consummated  on  December  31,  2003  between our company and
      certain shareholders of Essentially Yours Industries, Inc.

ITEM 27. INDEX TO EXHIBITS



Exhibit Number    Description of Exhibit
--------------    ----------------------
               
3.1               Articles of Incorporation.(1)

3.2               Certificate of Amendment to Articles of Incorporation dated December 29, 2003.(11)

3.3               Certificate of Amendment to Articles of Incorporation dated December 31, 2003.(11)

3.4               Bylaws.(1)

3.5               Amended Bylaws. (12)

3.6               Certificate of Amendment to Articles of Incorporation dated March 30, 2006(23)

5.1               Opinion re: legality (26)

10.1              Consulting Agreement, dated as of November 5, 2002, between Essentially Yours Industries, Inc., a Nevada
                  corporation, and Flaming Gorge, Inc.(1)

10.2              Consulting Agreement, dated as of November 5, 2002, between Essentially Yours Industries, Inc., a Nevada
                  corporation, and O'Neill Enterprises, Inc.(1)

10.3              Registration Rights Agreement, dated December 31, 2003, by and among Safe ID Corporation, A Nevada
                  corporation, and certain shareholders of EYI Industries, Inc., A Nevada corporation.(5)

10.4              Stock Compensation Program(4)

10.5              Consulting Agreement dated December 27, 2003 between Rajesh Raniga Inc. and Safe ID Corporation.(6)

10.6              Consulting Agreement dated January 1, 2004 between EYI Industries, Inc. and O'Neill Enterprises Inc.(6)

10.7              Consulting Agreement dated January 1, 2004 between EYI Industries, Inc. and Flaming Gorge, Inc. (6)

10.8              Addendum to the Distribution and License Agreement between Essentially Yours Industries, Inc. and
                  Nutri-Diem Inc. dated April 30, 2004.(6)


                                      II-4




Exhibit Number    Description of Exhibit
--------------    ----------------------
               
10.9              Letter Agreement dated May 4, 2004 between Eye Wonder, Inc. and EYI Industries, Inc.(6)

10.10             Standby Equity Distribution Agreement, dated June 22, 2004 by and between EYI Industries, Inc. and
                  Cornell Capital Partners, LP(6)

10.11             Registration Rights Agreement, dated June 22, 2004 by and between EYI Industries, Inc. and Cornell
                  Capital Partners, LP(6)

10.12             Escrow Agreement, dated June 22, 2004 by and between EYI Industries, Inc. and Cornell Capital Partners,
                  LP(6)

10.13             Placement Agent Agreement, dated June 22, 2004 by and between EYI Industries, Inc. and Cornell Capital
                  Partners, LP(6)

10.14             Compensation Debenture, dated June 22, 2004(7)

10.15             Securities Purchase Agreement, dated June 22, 2004 by and between EYI Industries, Inc. and Cornell
                  Capital Partners, LP(6)

10.16             Investor Registration Rights Agreement, dated June 22, 2004 by and between EYI Industries, Inc. and
                  Cornell Capital Partners, LP(6)

10.17             Security Agreement, dated June 22, 2004 by and between EYI Industries, Inc. and Cornell Capital
                  Partners, LP(6)

10.18             Irrevocable Transfer Agent Instructions, dated June 22, 2004, by and among EYI Industries, Inc., Cornell
                  Capital Partners, LP and Corporate Stock Transfer(6)

10.19             Escrow Agreement, dated June 22, 2004 by and among EYI Industries, Inc., Cornell Capital Partners, L.P.
                  and Butler Gonzalez, LLP(6)

10.20             Form of Secured Convertible Debenture(6)

10.21             Form of Warrant(7)

10.22             Letter Agreement dated May 25, 2004 between EYI Industries, Inc. and Source Capital Group, Inc.(8)

10.23             Lease Agreement dated May 1, 2003 among 468058 B.C. Ltd., 642706 B.C. Ltd., Essentially Yours Industries
                  Corp., and Essentially Yours Industries, Inc.(8)

10.24             5% Secured Convertible Debenture dated September 24, 2004 between EYI Industries, Inc. and Cornell
                  Capital Partners, LP(8)

10.25             5% Secured Convertible Debenture dated September 27, 2004 between EYI Industries, Inc. and Kent Chou(8)

10.26             5% Secured Convertible Debenture dated September 27, 2004 between EYI Industries, Inc. Taib Bank, E.C.(8)

10.27             Assignment Agreement dated September 27, 2004 between Cornell Capital Partners, LP and Taib Bank, E.C.
                  (8)

10.28             Assignment Agreement dated September 27, 2004  between Cornell Capital Partners, LP and Kent Chou(8)

10.29             Joint Venture Agreement dated May 28, 2004 between EYI Industries, Inc.,  World Wide Buyer's Club Inc.
                  and Supra Group, Inc.(9)

10.30             Indenture of Lease Agreement dated January 3, 2005 between Golden Plaza Company Ltd., 681563 B.C. Ltd.,
                  and 642706 B.C. Ltd.(10)

10.31             Consulting Services Agreement dated March 5, 2004 between EYI Industries, Inc. and EQUIS Capital
                  Corp.(13)

10.32             Letter dated May 25, 2004 between Source Capital Group, Inc. and EYI Industries, Inc.(14)

10.33             Loan Agreement between Janet Carpenter and EYI Industries, Inc.,  dated February 10, 2005(15)

10.34             Promissory Note dated February 10, 2005 between Janet Carpenter and EYI Industries(15)

10.35             Bonus Share Agreement between Janet Carpenter and EYI Industries, Inc. dated February 14, 2005(15)

10.36             Pledge and Escrow Agreement dated February 24, 2005 between Janet Carpenter, Cornell Capital Partners,
                  LP and David Gonzalez.(15)

10.37             Guaranty Agreement dated February 24, 2005 between Janet Carpenter, Cornell Capital Partners, LP(15)


                                      II-5




Exhibit Number    Description of Exhibit
--------------    ----------------------
               
10.37             Secured Promissory Note dated February 24, 2005 between EYI Industries, Inc. and Cornell Capital
                  Partners, LP(15)

10.39             Agreement dated April 22, 2005 between Essentially Yours Industries Inc. and Source 1 Fulfillment(17)

10.40             Reseller Agreement dated May 11, 2005 between Essentially Yours Industries Inc. and Metals & Arsenic
                  Removal Technology, Inc.(16)

10.41             Termination Agreement dated May 13, 2005 between EYI Industries Inc. and Cornell Capital Partners, LP(17)

10.42             Standby Equity Distribution Agreement dated May 13, 2005 between EYI Industries Inc. and Cornell Capital
                  Partners, LP(17)

10.43             Registration Rights Agreement dated May 13, 2005 between EYI Industries Inc. and Cornell Capital
                  Partners, LP(17)

10.44             Escrow Agreement dated May 13, 2005 between EYI Industries Inc. and Cornell Capital Partners, LP(17)

10.45             Placement Agent Agreement dated May 13, 2005 between EYI Industries Inc. and Cornell Capital Partners,
                  LP(17)

10.46             Consulting Agreement dated June 1, 2005 between EYI Industries, Inc. and Eliza Fung(18)

10.47             Addendum to the Reseller Agreement dated June 1, 2005 between Essentially Yours Industries Inc. and
                  Metals & Arsenic Removal Technology, Inc.(18)

10.48             Non-Circumvention and Non-Disclosure Agreement dated July 14, 2005 between Essentially Yours Industries
                  Inc. and Metals & Arsenic Removal Technology, Inc.(18)

10.49             Promissory Note dated August 1, 2005 between EYI Industries Inc. and Cornell capital Partners, LP(18)

10.50             Investor Relations Agreement dated July 28, 2005 between EYI Industries, Inc. and Agora Investor
                  Relations Corp.(18)

10.51             China Agency Agreement entered into with Guanghzhou Zhongdian Enterprises (Group) Co. Ltd.  and China
                  Electronics Import and Export South China Corporation. Dated September 15, 2005(19)

10.52             Logistics Management Agreement dated September 1, 2005 between Essentially Yours Industries (Hong Kong)
                  Limited and All In One Global Logistics Ltd.(20)

10.53             Contract for Legal Services dated September 1, 2005 between EYI Industries Inc. and M. Ali Lakhani Law
                  Corporation(21)

10.54             Amended Investor Relations Agreement dated October 5, 2005 between EYI Industries, Inc. and Agora
                  Investor Relations Corp.(22)

10.55             Settlement Agreement dated December 21, 2005 between EYI Industries, Inc., Halo Distribution, LLC and
                  Business Centers, LLC.(23)

10.56             Global Consulting Group Agreement dated January 19, 2006 entered into with Global Consulting Group Inc.
                  and EYI Industries Inc.(23)

10.57             Consulting Agreement dated January 27, 2006 entered into with Lou Prescott and Essentially Yours
                  Industries, Inc.(23)

10.58             Termination Agreement dated April 3, 2006 between EYI Industries Inc. and Cornell Capital Partners,
                  LP(25)

10.59             Letter of Intent dated April 6, 2006 between Essentially Yours Industries (International) Limited and
                  Rommel Panganiban and Raul Batista(25)

10.60             Securities  Purchase Agreement, dated as of April 24, 2006, by and between EYI Industries, Inc. and the
                  Buyers listed therein(24)

10.61             Registration  Rights Agreement, dated as of April 24, 2006, by and between EYI Industries, Inc. and the
                  Buyers listed therein(24)

10.62             $750,000 Secured  Convertible  Debenture No. CCP-1, dated as of April 24, 2006, issued to Cornell Capital
                  Partners, LP(24)

10.63             $333,333  Secured  Convertible  Debenture  CW-1, dated as of April 24, 2006, issued to Cornell  Capital
                  Partners, LP(24)


                                      II-6




Exhibit Number    Description of Exhibit
--------------    ----------------------
               
10.64             $416,667 Secured Convertible Debenture  TAIB-1, dated as of April 24, 2006, issued to Cornell Capital
                  Partners, LP(24)

10.65             Security Agreement, dated as of April 24, 2006, issued to Cornell Capital Partners, LP(24)

10.66             Warrant No. CCP-001, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.67             Warrant No. CCP-002, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.68             Warrant No. CCP-003, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.69             Warrant No. CCP-004, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.70             Warrant No. CCP-005, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.71             Warrant No. CCP-006, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.72             Warrant No. CCP-007, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.73             Warrant, No. CCP-008, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.74             Warrant No. CCP-009, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.75             Warrant No. CCP-010, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.76             Warrant No. CCP-011, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.77             Warrant No. CCP-012, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.78             Warrant No. CCP-013, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.79             Warrant No. CCP-014, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.80             Warrant No. CCP-015, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.81             Warrant No. CCP-016, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.82             Warrant No. CCP-017, dated April 24, 2006, issued by the Company to Cornell Capital Partners, LP(24)

10.83             Irrevocable Transfer Agent Instructions, dated April 24, 2006, by and among the Company, the Buyers
                  listed therein and Corporate Stock Transfer, Inc.(24)

10.84             Consulting Agreement dated May 1, 2006 between Essentially Yours Industries (Hong Kong) Limited and Siu
                  Chung (Freeda) Chan(25)

14.1              Code of Ethics(5)

21.1              List of Subsidiaries(23)


23.1              Consent of Williams & Webster, P.S.(26)



(1)   Filed as an exhibit to the registration  statement on Form 10-SB/A of Safe
      ID Corporation, filed with the SEC on September 21, 2000.

(2)   Filed  as an  exhibit  to the  registration  statement  on  Form  SB-2  of
      Essentially  Yours  Industries,  Inc.,  filed with the SEC on November 12,
      2002.

(3)   Filed as an exhibit to our Current  Report on Form 8-K, filed with the SEC
      on January 8, 2004.

(4)   Filed as an exhibit to our Registration  Statement on Form S-8, filed with
      the SEC on March 30, 2004.

                                      II-7


(5)   Filed as an exhibit to our annual report on Form 10-KSB for the year ended
      December 31, 2003, filed with the SEC on April 14, 2004.

(6)   Filed as an exhibit to our quarterly  report on Form 10-QSB for the period
      ended March 31, 2004, filed with the SEC on May 24, 2004.

(7)   Filed as an exhibit to our registration statement on Form SB-2, filed with
      the SEC on September 17, 2004.

(8)   Filed as an exhibit to our quarterly  report on Form 10-QSB for the period
      ended September 30, 2004, filed with the SEC on November 22, 2004.

(9)   Filed as an exhibit to our Amendment No. 1 to our  registration  statement
      on Form SB-2 on December 23, 2004.

(10)  Filed as an exhibit to our Current  Report on Form 8-K, filed with the SEC
      on January 12, 2005.

(11)  Filed as an exhibit to our quarterly  report on Form 10-QSB for the period
      ended September 30, 2004, filed with the SEC on November 22, 2004.

(12)  Filed as an exhibit to our Current  Report on Form 8-K, filed with the SEC
      on March 10, 2005.

(13)  Filed as an  exhibit  to our  quarterly  report on Form  10-QSB/A  for the
      period ended March 31, 2004, filed with the SEC on December 15, 2004.

(14)  Filed as an  exhibit  to our  quarterly  report on Form  10-QSB/A  for the
      period ended June 30, 2004, filed with the SEC on December 15, 2004.

(15)  Filed as an  exhibit to our  annual  report on Form  10-KSB for the period
      ended December 31, 2004, filed with the SEC on April 18, 2005.

(16)  Filed as an exhibit to our Current  Report on Form 8-K, filed with the SEC
      on May 17, 2005.

(17)  Filed as an exhibit to our Quarterly  Report on Form 10-QSB for the period
      ended March 31, 2005, filed with the SEC on May 23, 2005.

(18)  Filed as an exhibit to our Quarterly  Report on Form 10-QSB for the period
      ended June 30, 2005, filed with the SEC on August 19, 2005

(19)  Filed as an exhibit to our Current  Report on Form 8-K, filed with the SEC
      on September 27, 2005

(20)  Filed as an exhibit to our quarterly  report on Form 10-QSB for the period
      ended September 30, 2005, filed with the SEC on November 21, 2005

(21)  Filed as an exhibit to our quarterly  report on Form 10-QSB for the period
      ended September 30, 2005, filed with the SEC on November 21, 2005

(22)  Filed as an exhibit to our quarterly  report on Form 10-QSB for the period
      ended September 30, 2005, filed with the SEC on November 21, 2005

(23)  Filed as an  exhibit to our  annual  report on Form  10-KSB for the period
      ended December 31, 2005, filed with the SEC on March 31, 2006

(24)  Filed as an exhibit to our Current  Report on Form 8-K, filed with the SEC
      on April 28, 2006

(25)  Filed as an exhibit to our Quarterly  Report on Form 10-QSB for the period
      ended March 31,  2006,  filed with the SEC on May 16,  2006 (26)  Provided
      herewith.


(26)  Provided herewith


                                      II-8


Item 28. Undertakings

      The undersigned registrant hereby undertakes:

      (1) To file, during any period in which it offers or sells  securities,  a
post-effective amendment to this registration statement to:

      (i)  Include  any  prospectus  required  by  Sections  10(a)  (3)  of  the
Securities Act of 1933 (the "ACT");

      (ii)  Reflect  in the  prospectus  any facts or events  arising  after the
effective date of the Registration  Statement (or the most recent post-effective
amendment  thereof)  which,  individually  or  in  the  aggregate,  represent  a
fundamental  change in the information set forth in the Registration  Statement.
Notwithstanding the foregoing,  any increase or decrease in volume of securities
offered (if the total dollar value of  securities  offered would not exceed that
which  was  registered)  and any  deviation  from  the  low or  high  end of the
estimated  maximum  offering  range may be reflected  in the form of  prospectus
filed with the  Commission  pursuant  to Rule 424(b) if, in the  aggregate,  the
changes in volume  and price  represent  no more than 20  percent  change in the
maximum  aggregate  offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement;

      (iii) Include any additional or changed  material  information on the plan
of distribution;

      (2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the bona fide offering thereof.

      (3) To remove from registration by means of a post-effective amendment any
of the  securities  that remain  unsold at the end of the  offering.  Insofar as
indemnification  for  liabilities  arising  under  the Act may be  permitted  to
directors,  officers  and  controlling  persons  of the  small  business  issuer
pursuant to the foregoing  provisions,  or otherwise,  the small business issuer
has been advised that in the opinion of the Securities  and Exchange  Commission
such  indemnification  is against  public policy as expressed in the Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such  liabilities  (other  than the  payment  by the  small  business  issuer of
expenses  incurred or paid by a director,  officer or controlling  person of the
small  business  issuer  in the  successful  defense  of  any  action,  suit  or
proceeding)  is  asserted by such  director,  officer or  controlling  person in
connection with the securities being registered, the small business issuer will,
unless in the opinion of its counsel the matter has been settled by  controlling
precedent,  submit to a court of appropriate  jurisdiction  the question whether
such  indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.

                                      II-9


                                   SIGNATURES


      In accordance  with the  requirements  of the  Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of  the   requirements  for  filing  on  this  Form  SB-2  and  authorized  this
registration  statement  to be  signed  on our  behalf  by the  undersigned,  in
Burnaby, British Columbia, Canada June 20, 2006.


                                    EYI INDUSTRIES INC.

                                    By:      /s/ Jay Sargeant
                                             ----------------
                                    Name:    Jay Sargeant
                                    Title:   President, Chief Executive Officer,
                                             Principal Executive Officer and
                                             Director

                                    By:      /s/ Rajesh Raniga
                                             -----------------
                                    Name:    Rajesh Raniga
                                    Title:   Chief Financial Officer and
                                             Principal Accounting Officer

      KNOW ALL MEN BY THESE PRESENTS,  that each person whose signature  appears
below constitutes and appoints Jay Sargeant his true and lawful attorney-in-fact
and agent,  with full power of substitution  and revocation,  for him and in his
name, place and stead, in any and all capacities (until revoked in writing),  to
sign  any and  all  amendments  (including  post-effective  amendments)  to this
Registration Statement and to file the same with all exhibits thereto, and other
documents in connection therewith,  with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done as fully
for all intents and purposes as he might or could do in person, hereby ratifying
and confirming  all that said  attorney-in-fact  and agent,  or is substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

      Pursuant  to  the  requirements  of  the  Securities  Act  of  1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates stated.

SIGNATURE           TITLE                                          DATE
---------           -----                                          ----


/s/ Jay Sargeant    President, Chief Executive Officer,           June 20, 2006
----------------
Jay Sargeant        Principal Executive Officer and Director

/s/ Dori O'Neill    Executive Vice President, Chief Operations    June 20, 2006
----------------
Dori O' Neill       Officer, Treasurer, Secretary and Director


/s/ Rajesh Raniga   Chief Financial Officer and                   June 20, 2006
-----------------
Rajesh Raniga       Principal Accounting Officer


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