FLORIDA
|
20-116776
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
3845 Beck Blvd., Suite 805 Naples,
Florida
|
34114
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
Large
accelerated filer o
|
Accelerated
filer o
|
|
Non-accelerated
filer o
(Do
not check if a smaller reporting company)
|
Smaller
reporting company x
|
PART
I
|
PAGE
|
|
Item
1.
|
4
|
|
Item
2.
|
10
|
|
Item
3.
|
11
|
|
Item
4.
|
11 | |
PART
II
|
||
Item
5.
|
12
|
|
Item
6.
|
15
|
|
Item
7.
|
15
|
|
Item
8.
|
25
|
|
Item
9.
|
63
|
|
Item
9A.
|
63
|
|
Item
9B.
|
64
|
|
PART
III
|
||
Item
10.
|
65
|
|
Item
11.
|
68
|
|
Item
12.
|
71
|
|
Item
13.
|
73
|
|
Item
14.
|
73
|
|
Item
15.
|
74
|
|
77
|
●
|
Seafood - Alaskan
wild king salmon, Hawaiian sashimi-grade ahi tuna, Gulf of Mexico day-boat
snapper, Chesapeake Bay soft shell crabs, New England live lobsters,
Japanese hamachi
|
●
|
Meat & Game -
Prime rib of American kurobuta pork, dry-aged buffalo tenderloin, domestic
lamb, Cervena venison, elk
tenderloin
|
●
|
Produce - White
asparagus, baby carrot tri-color mix, Oregon wild ramps, heirloom
tomatoes
|
●
|
Poultry - Grade A
foie gras, Hudson Valley quail, free range and organic chicken, airline
breast of pheasant
|
●
|
Specialty -
Truffle oils, fennel pollen, prosciutto di Parma, wild boar
sausage
|
●
|
Mushrooms -
Fresh morels, Trumpet Royale, porcini powder, wild golden
chanterelles
|
●
|
Cheese - Maytag
blue, buffalo mozzarella, Spanish manchego, Italian gorgonzola
dolce
|
●
|
Flavor
profile and eating qualities
|
●
|
Recipe
and usage ideas
|
●
|
Origin,
seasonality, and availability
|
●
|
Cross
utilization ideas and complementary uses of
products
|
●
|
that
a broker or dealer approve a person's account for transactions in penny
stocks; and
|
|
●
|
the
broker or dealer receives from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
|
●
|
obtain
financial information and investment experience objectives of the person;
and
|
|
●
|
make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
|
●
|
sets
forth the basis on which the broker or dealer made the suitability
determination; and
|
|
●
|
that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
|
Fiscal
Year Ending December 31, 2009
|
HIGH
|
LOW
|
||||||
First
Quarter
|
$ | 0.005 | $ | 0.001 | ||||
Second
Quarter
|
0.008 | 0.001 | ||||||
Third
Quarter
|
0.008 | 0.002 | ||||||
Fourth
Quarter
|
0.006 | 0.001 |
Fiscal
Year Ending December 31, 2008
|
HIGH
|
LOW
|
||||||
First
Quarter
|
$ | 0.008 | $ | 0.003 | ||||
Second
Quarter
|
0.008 | .003 | ||||||
Third
Quarter
|
0.008 | 0.003 | ||||||
Fourth
Quarter
|
0.0025 | 0.001 |
Number
of
|
||||||||||||
Number
of
|
securities
|
|||||||||||
securities
to be
|
remaining
available
|
|||||||||||
issued
upon
|
Weighted-average
|
for
future issuance
|
||||||||||
exercise
of
|
exercise
price of
|
under
equity
|
||||||||||
outstanding
|
outstanding
|
compensation
plans
|
||||||||||
options,
warrants
|
options,
warrants,
|
(excluduing
securites
|
||||||||||
Plan
Category
|
and
rights
|
and
rights
|
reflected
in column (a))
|
|||||||||
Equity
compensation
|
||||||||||||
plans
approved by
|
||||||||||||
security
holders
|
None
|
N/A | N/A | |||||||||
Equity
compensation
|
||||||||||||
plans
not approved
|
||||||||||||
by
security holders
|
||||||||||||
Stock
options
|
16,000,000 |
(A)
|
||||||||||
Stock
options
|
20,000,000 | $ | 0.005 | N/A | ||||||||
Stock
options
|
17,000,000 | $ | 0.007 | N/A | ||||||||
Total
|
53,000,000 | N/A | N/A |
●
|
Our
ability to raise capital necessary to sustain our anticipated operations
and implement our business plan,
|
●
|
Our
ability to implement our business
plan,
|
●
|
Our
ability to generate sufficient cash to pay our lenders and other
creditors,
|
●
|
Our
ability to employ and retain qualified management and
employees,
|
●
|
Our
dependence on the efforts and abilities of our current employees and
executive officers,
|
●
|
Changes in
government regulations that are applicable to our current or
anticipated business,
|
●
|
Changes
in the demand for our services,
|
●
|
The
degree and nature of our
competition,
|
●
|
The
lack of diversification of our business plan,
|
●
|
The
general volatility of the capital markets and the establishment of a
market for our shares, and
|
●
|
Disruption
in the economic and financial conditions primarily from the impact of past
terrorist attacks in the United States, threats of future attacks, police
and military activities overseas and other disruptive worldwide political
and economic events and weather
conditions.
|
December
31,
|
||||||||
2009
|
2008
|
|||||||
Number
of warrants outstanding
|
273,200,000
|
273,200,000
|
||||||
Value
at December 31
|
$
|
631,853
|
$
|
1,388,287
|
||||
Number
of warrants issued during the year
|
-
|
84,200,000
|
||||||
Value
of warrants issued during the year
|
$
|
-
|
$
|
374,557
|
||||
Revaluation
gain (loss) during the year
|
$
|
756,434
|
|
$
|
(582,541
|
) | ||
Black-Scholes
model variables:
|
||||||||
Volatility
|
302.87%
- 386.12
|
%
|
203.6%
- 332.7
|
%
|
||||
Dividends
|
$
|
0
|
$
|
0
|
||||
Risk-free
interest rates
|
0.20%
- 0.43
|
%
|
0.27%
- 2.41
|
%
|
||||
Term
(years)
|
0.15
- 5.00
|
1.15-5.00
|
December
31,
|
||||||||
2009
|
2008
|
|||||||
Number
of conversion options outstanding
|
346,248,800
|
285,000,000
|
||||||
Value
at December 31
|
$
|
1,384,992
|
$
|
1,150,000
|
||||
Number
of options issued during the year
|
68,448,800
|
69,400,000
|
||||||
Value
of options issued during the year
|
$
|
336,844
|
$
|
364,079
|
||||
Number
of options exercised or underlying
|
||||||||
notes
paid during the year
|
7,200,000
|
1,600,000
|
||||||
Value
of options exercised or underlying
|
||||||||
notes
paid during the year
|
$
|
18,360
|
$
|
8,800
|
||||
Revaluation
gain (loss) during the year
|
$
|
83,492
|
|
$
|
(182,583
|
)
|
||
Black-Scholes
model variables:
|
||||||||
Volatility
|
302.87%
to 393.23
|
%
|
193.7%
to332.7
|
%
|
||||
Dividends
|
0
|
0
|
||||||
Risk-free
interest rates
|
0.20%
- 0.43
|
%
|
0.27%
-2.41
|
%
|
||||
Term
(years)
|
1.00
- 10.00
|
1.00
– 10.00
|
December
31,
|
||||||||
2009
|
2008
|
|||||||
Number
of options outstanding
|
37,000,000
|
35,500,000
|
||||||
Value
at December 31
|
$
|
144,627
|
$
|
174,692
|
||||
Number
of options issued during the year
|
2,000,000
|
-
|
||||||
Value
of options issued during the year
|
$
|
7,993
|
-
|
|||||
Number
of options recognized during the year
|
||||||||
pursuant
to SFAS 123(R)
|
2,000,000
|
20,100,000
|
||||||
Value
of options recognized during the year
|
||||||||
pursuant
to SFAS 123(R)
|
$
|
7,993
|
$
|
99,960
|
||||
Revaluation
gain (loss) during the year
|
$
|
(38,058
|
)
|
$
|
(27,119
|
) | ||
Black-Scholes
model variables:
|
||||||||
Volatility
|
302.87%
to 386.12%
|
203.7%
to 332.7%
|
||||||
Dividends
|
0
|
0
|
||||||
Risk-free
interest rates
|
0.20%
- 0.43
|
%
|
0.27%
- 2.41
|
%
|
||||
Term
(years)
|
0.15
- 5.00
|
0.37-5.00
|
Options
|
Weighted
Average Exercise Price
|
|||||||
Outstanding
as December 31,2008
|
35,500,000 | $ | 0.013 | |||||
Non-vested
at December 31, 2008
|
100,000 | $ | 0.500 | |||||
Exercisable
at December 31, 2008
|
35,400,000 | $ | 0.012 | |||||
Issued
|
18,000,000 | $ | (a) | |||||
Exercised
|
- | - | ||||||
Forfeited
or expired
|
(500,000 | ) | 0.50 | |||||
Outstanding
at December 31, 2009
|
53,000,000 | $ | (b) | |||||
Non-vested
at December 31, 2009
|
18,000,000 | $ | (a) | |||||
Exercisable
at December 31, 2009
|
37,000,000 | $ | 0.006 |
Innovative
Food Holdings, Inc. and Subsidiaries
|
||||||||
Consolidated
Balance Sheets
|
||||||||
December
31,
|
||||||||
2009
|
2008
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$
|
144,765
|
$
|
160,545
|
||||
Accounts
receivable, net
|
339,206
|
239,566
|
||||||
Loan
receivable, current portion net
|
143,050
|
60,000
|
||||||
Inventory
|
19,075
|
- | ||||||
Other
current assets
|
6,120
|
9,000
|
||||||
Total
current assets
|
652,216
|
469,111
|
||||||
Loan
receivable, net
|
-
|
93,000
|
||||||
Property
and equipment, net
|
33,698
|
52,620
|
||||||
$
|
685,914
|
$
|
614,731
|
|||||
LIABILITIES
AND STOCKHOLDERS' DEFICIENCY
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued liabilities
|
$
|
695,361
|
$
|
832,613
|
||||
Accrued
liabilities- related parties
|
160,845
|
126,671
|
||||||
Accrued
interest, net
of discount
|
576,933
|
437,269
|
||||||
Accrued
interest - related parties, net of discount
|
170,144
|
173,471
|
||||||
Notes
payable, current portion, net of discount
|
918,907
|
938,364
|
||||||
Notes
payable - related parties, current portion, net of
discount
|
345,500
|
261,002
|
||||||
Warrant
liability
|
631,853
|
1,388,287
|
||||||
Option
liability
|
144,627
|
174,692
|
||||||
Conversion
option liability
|
1,384,992
|
1,150,000
|
||||||
Penalty
for late registration of shares
|
-
|
551,400
|
||||||
Total
current liabilities
|
5,029,162
|
6,033,769
|
||||||
Note
payable
|
27,718
|
10,723
|
||||||
5,056,880
|
6,044,492
|
|||||||
Stockholders'
deficiency
|
||||||||
Common
stock, $0.0001 par value; 500,000,000 shares authorized;
|
||||||||
194,638,638
and 183,577,038 shares issued, and 184,638,638 and
|
||||||||
173,358,038
shares outstanding at December 31, 2009 and 2008,
respectively
|
19,464
|
18,358
|
||||||
Additional
paid-in capital
|
2,197,413
|
1,985,335
|
||||||
Accumulated
deficit
|
(6,587,843
|
)
|
(7,433,454
|
)
|
||||
Total
stockholders' deficiency
|
(4,370,966
|
)
|
(5,429,761
|
)
|
||||
$
|
685,914
|
$
|
614,731
|
Innovative
Food Holdings, Inc. and Subsidiaries
|
||||||||
Consolidated
Statements of Operations
|
||||||||
Year
Ended December 31,
|
||||||||
2009
|
2008
|
|||||||
Revenue
|
$
|
7,591,639
|
$
|
6,969,730
|
||||
Cost
of goods sold
|
5,844,096
|
5,628,101
|
||||||
Gross
margin
|
1,747,543
|
1,341,629
|
||||||
Selling,
general and Administrative expenses
|
1,551,584
|
1,879,239
|
||||||
Operating
income (loss)
|
195,959
|
(537,610
|
)
|
|||||
Other
(income) expense:
|
||||||||
Impairment
of notes receivable
|
-
|
142,124
|
||||||
Interest
expense, net
|
412,930
|
372,175
|
||||||
(Gain)
loss on extinguishments of debt
|
(222,656
|
)
|
168,620
|
|||||
Loss
on revaluation of penalty shares
|
-
|
220,564
|
||||||
Fair
value of warrants issued in excess of discount on
notes
|
-
|
99,960
|
||||||
(Gain)
loss from change in fair value of warrant liability
|
(756,434
|
)
|
582,541
|
|||||
Fair
value of conversion options issued
|
-
|
114,945
|
||||||
(Gain)
loss from change in fair value of conversion option
liability
|
(83,492
|
)
|
182,583
|
|||||
(649,652
|
)
|
1,883,512
|
||||||
Income
( Loss) before income tax expense
|
845,611
|
(2,421,122
|
)
|
|||||
Income
tax expense
|
-
|
-
|
||||||
Net
income (loss)
|
$
|
845,611
|
$
|
(2,421,122
|
)
|
|||
Net
income (loss) per share - basic
|
$
|
0.004
|
$
|
(0.013
|
)
|
|||
Net
income (loss) per share- diluted
|
$
|
0.002
|
$
|
(0.013
|
)
|
|||
Weighted
average shares outstanding - basic
|
191,032,491
|
182,011,728
|
||||||
Weighted
average shares outstanding- diluted
|
688,840,451
|
182,011,728
|
Innovative
Food Holdings, Inc. and Subsidiaries
|
||||||||
Consolidated
Statements of Cash Flows
|
||||||||
Year
Ended December 31,
|
||||||||
2009
|
2008
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income (loss)
|
$
|
845,611
|
$
|
(2,421,122
|
)
|
|||
Adjustments
to reconcile net income (loss) to net
|
||||||||
cash
provided by (used in) operating activities:
|
||||||||
Depreciation
and amortization
|
32,392
|
39,332
|
||||||
Non-cash
compensation
|
15,450
|
-
|
||||||
(Gain) loss on extinguishments of debt
|
(222,656
|
)
|
168,620
|
|||||
Fair
value of warrants issued
|
-
|
99,960
|
||||||
Fair
value of stock options issued
|
7,993
|
138,312
|
||||||
Fair
value of conversion options issued
|
-
|
114,945
|
||||||
Amortization
of discount on notes payable
|
118,001
|
78,137
|
||||||
Amortization
of discount on accrued interest
|
125,501
|
135,360
|
||||||
Impairment
of investment in notes receivable
|
-
|
142,124
|
||||||
Allowance
for bad debt
|
-
|
5,877
|
||||||
Change in fair value of warrant liability
|
(756,434
|
)
|
582,541
|
|||||
Change
in fair value of option liability
|
(38,058
|
)
|
(5,717
|
)
|
||||
Change in fair value of conversion option liability
|
(83,492
|
)
|
182,583
|
|||||
Revaluation of penalty for late registration of shares
|
-
|
220,564
|
||||||
Changes
in assets and liabilities:
|
||||||||
Accounts
receivable
|
(99,640
|
)
|
(2,295
|
)
|
||||
Prepaid
expenses and other current assets
|
(16,195
|
)
|
(1,970
|
)
|
||||
Accounts
payable and accrued expenses- related party
|
32,847
|
84,495
|
||||||
Accounts
payable and accrued expenses
|
47,785
|
325,184
|
||||||
Net
cash (used in) provided by operating activities
|
9,105
|
(113,070
|
)
|
|||||
Cash
flows from investing activities:
|
||||||||
Principal
payments received on loan
|
9,950
|
12,000
|
||||||
Acquisition
of property and equipment
|
(13,470
|
)
|
(8,129
|
)
|
||||
Net
cash (used in) provided by investing activities
|
(3,520
|
)
|
3,871
|
|||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from issuance of debt
|
-
|
200,000
|
||||||
Principal
payments on debt
|
(21,365
|
)
|
(4,866
|
)
|
||||
Net
cash (used in) provided by financing activities
|
(21,365
|
)
|
195,134
|
|||||
Net
(decrease) increase in cash and cash
equivalents
|
(15,780
|
)
|
85,935
|
|||||
Cash
and cash equivalents at beginning of year
|
160,545
|
74,610
|
||||||
Cash
and cash equivalents at end of year
|
$
|
144,765
|
$
|
160,545
|
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$
|
1,326
|
$
|
1,926
|
||||
Taxes
|
$
|
-
|
$
|
-
|
||||
Other
items not affecting cash:
|
||||||||
Revaluation
of conversion option liability
|
$
|
(83,492
|
)
|
$
|
297,528
|
|||
Revaluation
of warrant liability
|
$
|
(756,434
|
)
|
$
|
682,501
|
|||
Revaluation
of option liability
|
$
|
(38,058
|
)
|
$
|
5,717
|
|
||
Common
stock issued for consulting contract
|
$
|
12,500
|
$
|
-
|
||||
Common
stock issued to employees as bonus
|
$
|
1,200
|
$
|
-
|
||||
Common
stock issued for conversion of notes payable and accrued
interest
|
$
|
21,058
|
$
|
-
|
Innovative
Food Holdings, Inc. and Subsidiaries
|
|
Consolidated
Statements of Changes in Stockholders' Deficiency
|
|
For
the two years ended December 31, 2009
|
Common
Stock
|
||||||||||||||||||||
Amount
|
Par
Value
|
Additional
Paid-In
Capital
|
Accumulated
Deficit
|
Total
|
||||||||||||||||
Balance
at December 31, 2007 (Restated)
|
181,787,638
|
$
|
18,179
|
$
|
1,832,407
|
$
|
(5,012,332
|
)
|
$
|
(3,161,746
|
)
|
|||||||||
Common
stock issued for the conversion of notes payable and accrued
interest
|
1,789,400
|
179
|
8,768
|
-
|
8,947
|
|||||||||||||||
Reclassification
of conversion option liability
|
-
|
-
|
8,800
|
-
|
8,800
|
|||||||||||||||
Discount
due to Beneficial conversion feature on interest accrued on convertible
notes payable
|
-
|
-
|
135,360
|
-
|
135,360
|
|||||||||||||||
Loss
for the year ended December 31, 2008
|
-
|
-
|
-
|
(2,421,122
|
)
|
(2,421,122
|
)
|
|||||||||||||
Balance
as of December 31, 2008
|
183,577,038
|
$
|
18,358
|
$
|
1,985,335
|
$
|
(7,433,454
|
)
|
$
|
(5,429,761
|
)
|
|||||||||
Common
stock issued pursuant to consulting agreement
|
6,250,000
|
625
|
15,625
|
-
|
16,250
|
|||||||||||||||
Common
stock issued to employees
|
600,000
|
60
|
1,140
|
-
|
1,200
|
|||||||||||||||
Common
stock issued for conversion of note payable
|
4,211,600
|
421
|
20,637
|
-
|
21,058
|
|||||||||||||||
Discount
due to beneficial conversion feature of interest accrued on convertible
notes payable
|
-
|
-
|
156,316
|
-
|
156,316
|
|||||||||||||||
Reclassification
from conversion options liability to equity
|
-
|
-
|
18,360
|
-
|
18,360
|
|||||||||||||||
Income
for the year ended December 31, 2009
|
-
|
-
|
-
|
845,611
|
845,611
|
|||||||||||||||
Balance
as of December 31, 2009
|
194,638,638
|
19,464
|
2,197,413
|
(6,587,843
|
)
|
(4,370,966
|
)
|
Income
(Numerator)
|
Shares
(Denominator)
|
Per-Share
Amount
|
||||||||||
Basic
earnings per share
|
$ | 845,611 | 191,032,491 | $ | 0.004 | |||||||
Effect
of Dilutive Securities
|
||||||||||||
Conversion
of notes and interest into common stock:
|
||||||||||||
Additional
shares
|
492,807,960 | |||||||||||
Decrease
in interest expense due to conversion
|
402,950 | |||||||||||
Remove
gain on revaluation of conversion option liability
|
(83,492 | ) | ||||||||||
Shares
accrued, not yet issued
|
5,000,000 | |||||||||||
Diluted
earnings per share
|
$ | 1,165,069 | 688,840,451 | $ | 0.002 |
December
31,
|
||||||||
2009
|
2008
|
|||||||
Option
expense
|
$ | 7,993 | $ | 138,313 | ||||
(Gain)
loss on revaluation of options
|
(38,058 | ) | 5,717 |
Options
|
Weighted
Average Exercise Price
|
|||||||
Outstanding
as December 31,2008
|
35,500,000
|
$
|
0.013
|
|||||
Non-vested
at December 31, 2008
|
100,000
|
$
|
0.500
|
|||||
Exercisable
at December 31, 2008
|
35,400,000
|
$
|
0.012
|
|||||
Issued
|
18,000,000
|
$
|
(a)
|
|||||
Exercised
|
-
|
-
|
||||||
Forfeited
or expired
|
(500,000
|
)
|
0.50
|
|||||
Outstanding
at December 31, 2009
|
53,000,000
|
$
|
(b)
|
|||||
Non-vested
at December 31, 2009
|
18,000,000
|
$
|
(a)
|
|||||
Exercisable
at December 31, 2009
|
37,000,000
|
$
|
0.006
|
December
31,
2009
|
December
31,
2008
|
|||||||
Accounts
receivable from customers
|
$
|
342,780
|
$
|
255,443
|
||||
Allowance
for doubtful accounts
|
(3,574
|
)
|
(15,877
|
)
|
||||
Accounts
receivable, net
|
$
|
339,206
|
$
|
239,566
|
December
31,
2009
|
December
31,
2008
|
|||||||
Computer
hardware and software
|
$
|
305,794
|
$
|
292,608
|
||||
Furniture
and fixtures
|
67,298
|
67,298
|
||||||
373,092
|
359,906
|
|||||||
Less
accumulated depreciation and amortization
|
(339,394
|
)
|
(307,286
|
)
|
||||
Total
|
$
|
33,698
|
$
|
52,620
|
December
31,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
Trade
payables
|
$ | 689,075 | $ | 824,172 | ||||
Accrued
payroll and commissions
|
6,286 | 8,441 | ||||||
$ | 695,361 | $ | 832,613 |
Gross
|
Discount
|
Net
|
||||||||||
Non-related
parties
|
$ | 611,416 | $ | 34,483 | $ | 576,933 | ||||||
Related
parties
|
170,144 | - | 170,144 | |||||||||
Total
|
$ | 781,560 | $ | 34,483 | $ | 747,077 |
|
Gross
|
Discount
|
Net
|
|||||||||
Non-related
parties
|
$ | 441,013 | $ | 3,744 | $ | 437,269 | ||||||
Related
parties
|
173,471 | - | 173,471 | |||||||||
Total
|
$ | 614,484 | $ | 3,744 | $ | 610,740 |
December
31, 2009
|
December
31, 2008
|
|||||||
Convertible
note payable in the original amount of $350,000 to Alpha Capital
Aktiengesselschaft (“Alpha Capital”), dated February 25, 2005. This note
consists of $100,000 outstanding under a previous note payable which was
cancelled on February 25, 2005, and $250,000 of new borrowings. We did not
meet certain of our obligations under the loan documents relating to this
issuance. These lapses include not reserving the requisite
number of treasury shares, selling subsequent securities without offering
a right of first refusal, not complying with reporting obligations, not
having our common shares quoted on the OTC:BB and not timely registering
certain securities. This note entered technical default
status on May 16, 2005. The note originally
carried interest at the rate of 8% per annum, and was due
in full on February 24, 2007. Upon default, the note’s interest
rate increased to 15% per annum, and the note became immediately due. The
note is convertible into common stock of the Company at a conversion price
of $0.005 per share. A beneficial conversion feature in the amount of
$250,000 was recorded as a discount to the note, and was amortized to
interest expense during the twelve months ended December 31, 2005. Accrued
interest is convertible into common stock of the Company at a
conversion price of $0.005 per share . Interest in the amount of
$33,552and $51,889 was accrued on this note during the twelve months
ended December 31, 2009 and 2008, respectively. During
the twelve months ended December 31, 2006 the note holder converted $5,000
into shares of common stock. During the twelve months ended December 31,
2006 the holder of the note converted $27,865 of accrued interest into
common stock. In April 2009, the noteholder agreed to
waive the default interest rate of 15%, and the note resumed accruing
interest at the rate of 8% per annum. Also in April 2009, the
noteholder agreed to extend the maturity date of this note until January
1, 2010.
|
$ | 345,000 | $ | 345,000 | ||||
Convertible
note payable in the original amount of $100,000 to Joel Gold, a board
member and related party, dated October 12, 2004. The note bears interest
at the rate of 8% per annum, has no provisions for a default or past due
rate and was due in full on October 12, 2006. The note is convertible by
the holder into common stock of the Company at a conversion price of
$0.005 per share . A beneficial conversion feature in the
amount of $100,000 was recorded as a discount to the note, and was
amortized to interest expense during the twelve months ended December 31,
2004 and 2005. Accrued interest is convertible by the holder into common
stock of the Company at maturity of the note at a price of $0.005 per
share. Interest in the amount of $1,999 and $2,005 was accrued
on this note during the twelve months ended December 31, 2009, and 2008,
respectively. During the twelve months ended December 31, 2006,
$75,000 of the principal amount was converted into common stock. This
note is past due at December 31,
2009 and 2008.
|
25,000 | 25,000 |
Convertible
note in the amount of $85,000 originally payable to Briolette Investments,
Ltd, dated March 11, 2004. The note bears interest at the rate of 8% per
annum, has no provisions for a default or past due rate and was due in
full on March 11, 2006. The note is convertible into common stock of the
Company at a conversion of $0.005 per share. A beneficial conversion
feature in the amount of $85,000 was recorded as a discount to
the note, and was amortized to interest expense during the twelve months
ended December 31, 2004, 2005, and 2006. On December 21, 2006, this note
was transferred to Whalehaven Capital. Accrued interest is convertible by
the holder into common stock of the Company at a price of $0.005 per
share. Interest in the amount of $3,039 and $3,064 was
accrued on this note during the twelve months ended December 31, 2009 and
2008, respectively. During the twelve months ended December 31, 2005, the
note holder converted $44,000 of the note payable into common
stock. During the twelve months ended December 31,
2006, the Company made a $3,000 cash payment on the principal amount of
the note. During the year ended December 31, 2009,the
noteholder agreed to extend the maturity date until February 15,
2010.
|
38,000
|
38,000
|
Convertible note payable in the
amount of $80,000 to Brown Door, Inc., a related party, dated March 11,
2004. The note bears interest at the rate of 8% per annum, has no
provisions for a default or past due rate and was due in full on March 11,
2006. The note is convertible into common stock of the Company at a
conversion of $0.005 per share. A beneficial conversion feature in the
amount of $80,000 was recorded as a discount to the note, and was
amortized to interest expense during the twelve months ended December 31,
2004, 2005, and 2006. Accrued interest is convertible by the holder into
common stock of the Company at maturity of the note at a price of $0.005
per share. Interest in the amount of $6,403 and $6,420 was accrued
on this note during the twelve months ended December 31, 2009 and
2008, respectively. This note is past due at December 31, 2009 and
2008.
|
80,000
|
80,000
|
Convertible
note payable in the amount of $50,000 to Whalehaven Capital Fund, Ltd.
(“Whalehaven Capital”) dated February 25, 2005. We did not meet certain of
our obligations under the loan documents relating to this
issuance. These lapses include not reserving the requisites
numbers of treasury shares, selling subsequent securities without offering
a right of first refusal, not complying with reporting obligations, not
having our common shares quoted on the OTC:BB and not timely registering
certain securities. This note is in technical default as of May
16, 2005. The note originally carried interest at the rate
of 8% per annum, and was due in full on February 24, 2007. Upon default,
the note’s interest rate increased to 15% per annum, and the note became
due immediately. The note is convertible into common stock of the Company
at a conversion of $0.005 per share. A beneficial conversion
feature in the amount of $50,000 was recorded as a discount to the note,
and was amortized to interest expense when the note entered default status
in May, 2005. Accrued interest is convertible into common stock
of the Company at a price of $0.005 per share. Interest in the
amount of $3,892 and $6,019 was accrued on this note during the
twelve months ended December 31, 2009 and 2008,
respectively. During the twelve months ended December 31, 2006,
$10,000 of principal and $589 of accrued interest was converted into
common stock. In April 2009, the noteholder agreed to
waive the default interest rate of 15%, and the note resumed accruing
interest at the rate of 8% per annum. During the year ended
December 31, 2009, the noteholder agreed to extend the maturity date until
February 15, 2010.
|
40,000
|
40,000
|
Convertible note payable in the
amount of $50,000 to Oppenheimer & Co., / Custodian for Joel Gold IRA,
a related party, dated March 14, 2004. The note bears interest at the rate
of 8% per annum, has no provisions for a default or past due rate and was
due in full on October 12, 2006. The note is convertible into common stock
of the Company at a conversion of $0.005 per share. A beneficial
conversion feature in the amount of $50,000 was recorded as a discount to
the note, and was amortized to interest expense during the twelve months
ended December 31, 2004, 2005, and 2006. Accrued interest is
convertible into common stock of the Company at a price of $0.005 per
share. Interest in the amount of $4,003 and $4,014 was accrued on
this note during the twelve months ended December 31, 2009 and 2008,
respectively. This note is past due at December 31, 2009 and
2008.
|
50,000
|
50,000
|
||||||
Convertible
note payable in the original amount of $30,000 to Huo Hua dated May 9,
2005. The note bears interest at the rate of 8% per annum, has no
provisions for a default or past due rate and was due in full on October
12, 2006. The note is convertible into common stock of the
Company at a conversion of $0.005 per share . A beneficial
conversion feature in the amount of $30,000 was recorded as a discount to
the note, and was amortized to interest expense during the twelve months
ended December 31, 2005 and 2006. Accrued interest is convertible into
common stock of the Company at a price of $0.005 per
share. Interest in the amount of $1,603 and $1,607
was accrued on this note during the twelve months ended December 31,
2009 and 2008, respectively. During the twelve months ended December 31,
2006, the note holder converted $10,000 of principal into common
stock. This note is past due at December 31, 2009 and
2008.
|
20,000
|
20,000
|
Convertible
note payable in the amount of $25,000 to Joel Gold, a board member and
related party, dated January 25, 2005. The note bears interest at the rate
of 8% per annum, has no provisions for a default or past due rate and was
due in full on January 25, 2007. The note is convertible into
common stock of the Company at a conversion of $0.025 per share. A
beneficial conversion feature in the amount of $25,000 was recorded as a
discount to the note, and was amortized to interest expense during the
twelve months ended December 31, 2005, 2006, and 2007. Accrued interest is
convertible into common stock of the Company at a price of $0.025 per
share. Interest in the amount of $1,999 and $2,005 was accrued on this
note during the twelve months ended December 31, 2009 and 2008,
respectively. This note is past due at December 31, 2008 and
2009.
|
25,000
|
25,000
|
||||||
Convertible
note payable in the amount of $25,000 to The Jay & Kathleen Morren
Trust dated January 25, 2005. The note bears interest at the rate of
6% per annum, has no provisions for a default or past due rate and was due
in full on January 25, 2007. The note is convertible into
common stock of the Company at a conversion of $0.005 per share . A
beneficial conversion feature in the amount of $25,000 was recorded as a
discount to the note, and was amortized to interest expense during the
twelve months ended December 31, 2005, 2006, and 2007. Accrued interest is
convertible into common stock of the Company at a price of $0.005 per
share. Interest in the amount of $1,496 and was $1,500 accrued on this
note during the twelve months ended December 31, 2009 and 2008,
respectively. This note is past due at December 31, 2009
and 2008.
|
25,000
|
25,000
|
Convertible
note payable in the amount of $10,000 to Lauren M. Ferrone, a relative of
a board member and related party, dated October 12, 2004. The note bears
interest at the rate of 8% per annum, has no provisions for a default or
past due rate and was originally due in full on October 12, 2005. On
February 25, 2005, an amendment to the convertible notes was signed which
extended the term, which resulted in a new maturity date of October 12,
2006. The note is convertible into common stock of the Company at a
conversion of $0.01 per share . A beneficial conversion feature in the
amount of $10,000 was recorded as a discount to the note, and was
amortized to interest expense during the twelve months ended December 31,
2004, 2005, and 2006. Accrued interest is convertible into common stock of
the Company at a price of $0.01 per share. Interest in the amount of $801
and $804 was accrued on this note during the twelve months ended
December 31, 2009 and 2008, respectively. This note is past due
at December 31, 2009 and 2008.
|
10,000
|
10,000
|
||||||
Convertible
note payable in the amount of $10,000 to Richard D. Ferrone, a relative of
a board member and related party, dated October 12, 2004. The note bears
interest at the rate of 8% per annum, has no provisions for a default or
past due rate and was originally due in full on October 12, 2005. On
February 25, 2005, an amendment to the convertible notes was signed which
extended the term, which resulted in a new maturity date of October 12,
2006. The note is convertible into common stock of the Company at a
conversion of $0.01 per share . A beneficial conversion feature in the
amount of $10,000 was recorded as a discount to the note, and was
amortized to interest expense during the twelve months ended December 31,
2004, 2005, and 2006. Accrued interest is convertible into common stock of
the Company at a price of $0.01 per share. Interest in the amount of $801
and $804 was accrued on this note during the twelve months ended
December 31, 2009 and 2008, respectively. This note is past due
at December 31, 2009 and 2008.
|
10,000
|
10,000
|
Convertible
note payable in the amount of $10,000 to Christian D. Ferrone, a relative
of a board member and related party, dated October 12, 2004. The note
bears interest at the rate of 8% per annum, has no provisions for a
default or past due rate and was originally due in full on October 12,
2005. On February 25, 2005, an amendment to the convertible notes was
signed which extended the term, which resulted in a new maturity date of
October 12, 2006. The note is convertible into common stock of the
Company at a conversion of $0.01 per share . A beneficial conversion
feature in the amount of $10,000 was recorded as a discount to the note,
and was amortized to interest expense during the twelve months ended
December 31, 2004, 2005, and 2006. Accrued interest is convertible into
common stock of the Company at a price of $0.01 per share. Interest in the
amount of $801 and $804 was accrued on this note during the twelve
months ended December 31, 2009 and 2008, respectively. This note is
past due at December 31, 2009 and 2008.
|
10,000
|
10,000
|
||||||
Convertible
note payable in the amount of $10,000 to Andrew I. Ferrone, a relative of
a board member and related party, dated October 12, 2004. The note bears
interest at the rate of 8% per annum, has no provisions for a default or
past due rate and was originally due in full on October 12, 2005. On
February 25, 2005, an amendment to the convertible notes was signed which
extended the term, which resulted in a new maturity date of October 12,
2006. The note is convertible into common stock of the Company at a
conversion of $0.01 per share. A beneficial conversion feature in the
amount of $10,000 was recorded as a discount to the note, and was
amortized to interest expense during the twelve months ended December 31,
2004, 2005, and 2006. Accrued interest is convertible into common stock of
the Company at a price of $0.01 per share. Interest in the amount of $801
and $804 was accrued on this note during the twelve months ended
December 31, 2009 and 2008, respectively. This note is past due
at December 31, 2009 and 2008.
|
10,000
|
10,000
|
Convertible note payable in the
amount of $8,000 to Adrian Neilan dated March 11, 2004. The note bears
interest at the rate of 8% per annum, has no provisions for a default or
past due rate and is due in full on October 12, 2006. The note is
convertible into common stock of the Company at a conversion of
$0.005 per share. A beneficial conversion feature in the amount of $8,000
was recorded as a discount to the note, and was amortized to interest
expense during the twelve months ended December 31, 2004, 2005, and 2006.
Accrued interest is convertible into common stock of the Company at a
price of $0.005 per share. Interest in the amount of $639 and $641 was
accrued on this note during the twelve months ended December 31, 2009, and
2008, respectively. This note is past due at
December 31, 2009 and 2008.
|
8,000
|
8,000
|
||||||
Convertible
note payable in the amount of $5,000 to Matthias Mueller dated March 11,
2004. The note bears interest at the rate of 8% per annum, has no
provisions for a default or past due rate and was due in full on October
12, 2006. The note is convertible into common stock of the Company at
a conversion of $0.005 per share. A beneficial conversion feature in the
amount of $5,000 was recorded as a discount to the note, and was amortized
to interest expense during the twelve months ended December 31, 2004,
2005, and 2006. Accrued interest is convertible into common stock of the
Company at a price of $0.005 per share. Interest in the amount of
$401 and $402 was accrued on this note during the twelve months ended
December 31, 2009 and 2009, respectively. This note is past due at
December 31, 2009 and 2008.
|
5,000
|
5,000
|
Convertible
note payable in the amount of $120,000 to Alpha Capital dated August 25,
2005. We did not meet certain of our obligations under the loan documents
relating to this issuance. These lapses include not reserving
the requisite number of treasury shares, selling subsequent securities
without offering a right of first refusal, not complying with reporting
obligations, not having our common shares quoted on the OTC:BB and not
timely registering certain securities. This note is in
technical default as of November 13, 2005. The note originally
carried interest at the rate of 8% per annum, and was due in full on
August 25, 2007. Upon default, the note’s interest rate increased to 15%
per annum and the note became immediately due. The note is convertible
into common stock of the Company at a conversion of $0.005 per share
. A beneficial conversion feature in the amount of $120,000 was recorded
as a discount to the note, and was amortized to interest expense when the
note entered default status in November 2005. Accrued interest is
convertible into common stock of the Company at a price of $0.005 per
share. Interest in the amount of $11,670 and $18,049 was accrued on
this note during the twelve months ended December 31, 2009 and 2008,
respectively. In April 2009, the noteholder agreed to waive the
default interest rate of 15%, and the note resumed accruing interest at
the rate of 8% per annum. Also in April 2009, the noteholder
agreed to extend the maturity date of this note until January 1,
2010.
|
120,000
|
120,000
|
Convertible
note payable in the amount of $30,000 to Whalehaven Capital dated August
25, 2005. We did not meet certain of our obligations under the
loan documents relating to this issuance. These lapses include
not reserving the requisite number of treasury shares, selling subsequent
securities without offering a right of first refusal, not complying with
reporting obligations, not having our common shares quoted on the OTC:BB
and not timely registering certain securities. This note was in
technical default as of November 13, 2005. The note originally
carried interest at the rate of 8% per annum, and was due in full on
August 25, 2007. Upon default, the note’s interest rate increased to 15%
per annum and the note became immediately due. The note is convertible
into common stock of the Company at a conversion of $0.005 per share.
A beneficial conversion feature in the amount of $30,000 was recorded as a
discount to the note, and was amortized to interest expense when the note
entered default status in November 2005. Accrued interest is convertible
into common stock of the Company at a price of $0.005 per share. Interest
in the amount of $4,870 and $4,512 was accrued on this note during
the twelve months ended December 31, 2009 and 2009,
respectively. In April 2009, the noteholder agreed to waive the
default interest rate of 15%, and the note resumed accruing interest at
the rate of 8% per annum. During the year ended December
31, 2009, the noteholder agreed to extend the maturity date until February
15, 2010.
|
30,000
|
30,000
|
||||||
Convertible
note payable in the original amount of $25,000 to Asher Brand, dated
August 25, 2005. We did not meet certain of our obligations under the loan
documents relating to this issuance. These lapses include not
reserving the requisite number of treasury shares, selling subsequent
securities without offering a right of first refusal, not complying with
reporting obligations, not having our common shares quoted on the OTC:BB
and not timely registering certain securities. This note was in
technical default as of November 13, 2005. The note originally
carried interest at the rate of 8% per annum, and was due in full on
August 25, 2007. Upon default, the note’s interest rate increased to 15%
per annum and the note became immediately due The note is convertible into
common stock of the Company at a conversion of $0.005 per share. A
beneficial conversion feature in the amount of $25,000 was recorded as a
discount to the note, and was amortized to interest expense when the note
entered default status in November, 2005. Accrued interest is convertible
into common stock of the Company at a price of $0.005 per share.
Interest in the amount of $1,858 and $3,382 was accrued on this
note during the twelve months ended December 31, 2009 and 2008,
respectively. During the twelve months ended December 31, 2006, the
holder of the note converted $2,000 of principal and $3,667 of accrued
interest into common stock, and during the twelve months ended December
31, 2008, the holder of the note converted an additional $3,000 of
principal into common stock. During the year ended December 31, 2009,
the noteholder converted $2,000 of principal and $1,058 of accrued intret
into common stock. In April 2009, the noteholder agreed to waive the
default interest rate of 15%, and the note resumed accruing interest at
the rate of 8% per annum. Also in April 2009, the noteholder
agreed to extend the maturity date of this note until January 1,
2010.
|
18,000
|
23,000
|
Convertible
note payable in the original amount of $25,000 to Momona Capital, dated
August 25, 2005. We did not meet certain of our obligations under the loan
documents relating to this issuance. These lapses include not
reserving the requisite number of treasury shares, selling subsequent
securities without offering a right of first refusal, not complying with
reporting obligations, not having our common shares quoted on the OTC:BB
and not timely registering certain securities. This note was in
technical default at November 13, 2005. The note originally
carried interest at the rate of 8% per annum, and was due in full on
August 25, 2007. Upon default, the note’s interest rate increased to 15%
per annum and the note became immediately due The note is convertible into
common stock of the Company at a conversion of $0.005 per share . A
beneficial conversion feature in the amount of $25,000 was recorded as a
discount to the note, and was amortized to interest expense when the note
entered default status in November 2005. Accrued interest is convertible
into common stock of the Company at a price of $0.005 per share. Interest
in the amount of $3,747 and $3,355 was accrued on this note during the
twelve months ended December 31, 2009 and 2008, respectively. During the
twelve months ended December 31, 2006, the holder of the note converted
$2,000 of principal and $3,667 of accrued interest into common stock, and
during the twelve months need December 31, 2008, the holder of the note
converted an additional $5,000 principal into common stock. In April 2009,
the noteholder agreed to waive the default interest rate of 15%, and the
note resumed accruing interest at the rate of 8% per
annum. Also in April 2009, the noteholder agreed to extend the
maturity date of this note until January 1, 2010.
|
18,000
|
18,000< |