FLORIDA
(State
of or Other Jurisdiction of
Incorporation
or Organization)
|
20-1167761
(IRS
Employer I.D. No.)
|
Page
|
||
PART
I.
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
Consolidated
Financial Statements (unaudited)
|
|
Balance
Sheets as of September 30, 2005 and December 31, 2004
|
3
|
|
Statements
of Operations for the three and six months ended September 30,
2005 and
September 30, 2004
|
4
|
|
Statements
of Cash Flows for the six months ended September 30, 2005 and September
30, 2004
|
5
|
|
Consolidated
Condensed Statements of Shareholders Equity as of September 30,
2005 and
September 30, 2004
|
6
|
|
Notes
to Financial Statements
|
7
|
|
Item
2.
|
Management's
Discussion and Analysis (including cautionary statement)
|
9
|
Item
3.
|
Controls
and Procedures
|
12
|
PART
II.
|
OTHER
INFORMATION
|
|
Item
1.
|
Legal
Proceedings
|
13
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
13
|
Item
3.
|
Defaults
Upon Senior Securities
|
13
|
Item
4.
|
Submission
of Matters to a Vote of Securities Holders
|
14
|
Item
5.
|
Other
Information
|
15
|
Item
6.
|
Exhibits
|
15
|
Signatures
|
16
|
Innovative
Food Holdings, Inc. and Subsidiary
|
|||||
Consolidated
Balance Sheets
|
|||||
(Unaudited)
|
(Audited)
|
||||||
ASSETS
|
September
30, 2005
|
Dec.
31, 2004
|
|||||
Current
Assets
|
|||||||
Cash
|
$
|
41,532
|
$
|
28,011
|
|||
Accounts
receivable
|
302,476
|
325,498
|
|||||
Loans
Receivable
|
150,000
|
-
|
|||||
Inventory
|
4,664
|
4,664
|
|||||
Prepaid
Expenses
|
45,277
|
-
|
|||||
Total
Current Assets
|
543,949
|
358,173
|
|||||
Property
and equipment - at cost, net of
|
|||||||
accumulated
depreciation and amortization
|
62,560
|
119,706
|
|||||
$
|
606,509
|
$
|
477,879
|
||||
LIABILITIES
AND STOCKHOLDERS' DEFICIENCY
|
|||||||
Current
Liabilities
|
|||||||
Accounts
payable
|
$
|
283,508
|
$
|
593,765
|
|||
Accrued
taxes and expenses
|
268,732
|
40,026
|
|||||
Notes
and loans payable
|
15,000
|
46,521
|
|||||
Convertible
notes payable-current maturities
|
610,000
|
515,000
|
|||||
Total
Current Liabilities
|
1,177,240
|
1,195,312
|
|||||
Convertible
notes payable
|
613,000
|
113,000
|
|||||
Loans
payable stockholders
|
7,448
|
19,000
|
|||||
Stockholders'
Deficiency
|
|||||||
Common
stock authorized 500,000,000 shares;
|
|||||||
94,942,037
issued and outstanding at September 30, 2005
|
9,494
|
7,299
|
|||||
Preferred
stock authorized 10,000,000
|
-
|
-
|
|||||
Additional
paid-in capital
|
1,903,708
|
1,830,578
|
|||||
Accumulated
deficit
|
(3,104,381
|
)
|
(2,687,310
|
)
|
|||
(1,191,179
|
)
|
(849,433
|
)
|
||||
$
|
606,509
|
$
|
477,879
|
||||
See
notes to the consolidated financial statements.
|
|||||
Consolidated
Statements of Operations
|
|||||||||
(Unaudited)
|
For
the 3 Months
|
For
the 9 Months
|
||||||||||||
Ended
September 30
|
Ended
September 30
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Revenues
|
|||||||||||||
Sales
|
$
|
1,271,006
|
$
|
1,121,117
|
$
|
3,656,653
|
$
|
3,067,585
|
|||||
Other
income
|
32,923
|
50,367
|
143,466
|
169,869
|
|||||||||
1,303,929
|
1,171,484
|
3,800,119
|
3,237,454
|
||||||||||
Costs
and expenses
|
|||||||||||||
Cost
of goods sold
|
1,002,958
|
918,392
|
2,964,413
|
2,742,653
|
|||||||||
Selling
expenses
|
224,369
|
155,961
|
618,330
|
689,646
|
|||||||||
General
and administrative expenses
|
221,090
|
369,414
|
576,582
|
930,985
|
|||||||||
1,448,417
|
1,443,767
|
4,159,325
|
4,363,284
|
||||||||||
Loss
before other expense and
|
|||||||||||||
income
tax expense
|
(144,488
|
)
|
(272,283
|
)
|
(359,206
|
)
|
(1,125,830
|
)
|
|||||
Other
expense:
|
|||||||||||||
Interest
expense
|
(22,206
|
)
|
(16,113
|
)
|
(57,864
|
)
|
(33,374
|
)
|
|||||
Loss
before income tax expense
|
(166,694
|
)
|
(288,396
|
)
|
(417,070
|
)
|
(1,159,204
|
)
|
|||||
Income
tax expense
|
-
|
(242
|
)
|
-
|
(242
|
)
|
|||||||
NET
LOSS
|
$
|
(166,694
|
)
|
$
|
(288,638
|
)
|
$
|
(417,070
|
)
|
$
|
(1,159,446
|
)
|
|
NET
LOSS PER SHARE - BASIC AND DILUTED
|
$
|
(0.0019
|
)
|
$
|
(0.0059
|
)
|
$
|
(0.0047
|
)
|
$
|
(0.0238
|
)
|
|
See
notes to the consolidated financial
statements.
|
Innovative
Food Holdings, Inc. and Subsidiary
|
||||||
Consolidated
Statements of Cash Flows
|
||||||
(Unaudited)
|
For
the Nine Months
|
|||||||
Ended
September 30,
|
|||||||
2005
|
2004
|
||||||
Cash
flows from operating activities
|
|||||||
Net
loss
|
$
|
(417,070
|
)
|
$
|
(1,159,446
|
)
|
|
Adjustments
to reconcile net loss to net cash
|
|||||||
used
in operating activities
|
|||||||
Depreciation
|
36,373
|
15,001
|
|||||
Stock
issued during merger
|
-
|
150,015
|
|||||
Stock
issued to acquire subsidiary
|
-
|
244,158
|
|||||
Stock
issued for services
|
8,325
|
165,000
|
|||||
Changes
in assets and liabilities
|
|||||||
Accounts
receivable
|
23,022
|
116,876
|
|||||
Inventory
|
-
|
-
|
|||||
Prepaid
Expenses
|
(45,277
|
)
|
|||||
Accounts
payable
|
(310,259
|
)
|
260,258
|
||||
Accrued
taxes and expenses
|
228,706
|
29,274
|
|||||
Notes
and loans payable
|
(43,074
|
)
|
1,375
|
||||
Net
cash used in operating activities
|
(579,252
|
)
|
(411,241
|
)
|
|||
Cash
flows from investing activities
|
|||||||
Acquisition
of property and equipment
|
(10,022
|
)
|
(116,285
|
)
|
|||
Proceeds
from sale of property
|
30,795
|
||||||
Loan
receivable
|
(150,000
|
)
|
|||||
Net
cash used in investing activities
|
(129,227
|
)
|
(116,285
|
)
|
|||
Cash
flows from financing activities
|
|||||||
Proceeds
from issuance of long-term-debt
|
662,000
|
589,366
|
|||||
Payment
of loans from stockholders
|
-
|
(81,548
|
)
|
||||
Net
cash provided by financing activities
|
662,000
|
507,818
|
|||||
NET
INCREASE IN CASH AND CASH
|
|||||||
EQUIVALENTS
|
13,521
|
(19,708
|
)
|
||||
Cash
and cash equivalents at beginning of period
|
28,011
|
44,131
|
|||||
Cash
and cash equivalents at end of period
|
$
|
41,533
|
$
|
24,423
|
|||
Supplemental
cash flow disclosures:
|
|||||||
Interest
paid
|
$
|
-
|
$
|
-
|
|||
Income
taxes paid
|
$
|
-
|
$
|
-
|
|||
Item
not affecting cash:
|
|||||||
During
the nine months ended September 30, 2005, $67,000 of debentures
were
exchanged for newly issued shares of common stock
|
|||||||
See
notes to the consolidated financial
statements.
|
Innovative
Food Holdings, Inc. and Subsidiary
|
|||||||||||||||
Consolidated
Condensed Statement of Shareholders
Equity
|
Total
|
||||||||||||||||
Common
Stock
|
Additional
Paid
|
Accumulated
|
Shareholders
|
|||||||||||||
Shares
|
Amount
|
In
Capital
|
Deficit
|
Equity
|
||||||||||||
Balance
- December 31, 2004 (Audited)
|
72,992,037
|
$
|
7,299
|
$
|
1,830,578
|
$
|
(2,687,310
|
)
|
$
|
(849,433
|
)
|
|||||
Issuance
of stock for services
|
5,750,000
|
575
|
5,050
|
5,625
|
||||||||||||
Net
loss
|
(108,568
|
)
|
(108,568
|
)
|
||||||||||||
Balance
- March 31, 2005 (Unaudited)
|
78,742,037
|
7,874
|
1,835,628
|
(2,795,878
|
)
|
(952,376
|
)
|
|||||||||
Issuance
of stock for services
|
2,800,000
|
280
|
2,420
|
2,700
|
||||||||||||
Net
loss
|
(141,809
|
)
|
(141,809
|
)
|
||||||||||||
Balance
- June 30, 2005 (Unaudited)
|
81,542,037
|
8,154
|
1,838,048
|
(2,937,687
|
)
|
(1,091,485
|
)
|
|||||||||
Conversion
of debentures to common stock
|
13,400,000
|
1,340
|
65,660
|
67,000
|
||||||||||||
Net
loss
|
(166,694
|
)
|
(166,694
|
)
|
||||||||||||
Balance-September
30, 2005 (Unaudited)
|
94,942,037
|
$
|
9,494
|
$
|
1,903,708
|
$
|
(3,104,381
|
)
|
$
|
(1,191,179
|
)
|
For
the Nine Months Ended
|
|||||||
September
30,
|
|||||||
Numerator:
|
2005
|
2004
|
|||||
|
|||||||
Net
Loss
|
$
|
(417,070
|
)
|
$
|
(1,159,446
|
)
|
|
Denominator:
|
|||||||
Weighted-average
common shares outstanding
|
87,950,733
|
48,631,711
|
|||||
Dilutive
effect of:
|
|||||||
Stock
options and warrants
|
|||||||
Weighted-average
common shares outstanding, assuming dilution
|
500,000,000
|
174,231,711
|
|||||
Basic
and Diluted Per Share Information:
|
|||||||
Net
loss per share - basic and diluted
|
$
|
(0.0047
|
)
|
$
|
(0.0238
|
)
|
|
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||
2005
|
2004
|
2005
|
2004
|
||||||||||
Net
Revenue
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
|||||
Cost
of Goods Sold
|
77
|
%
|
78
|
%
|
78
|
%
|
85
|
%
|
|||||
Gross
Margin
|
23
|
%
|
22
|
%
|
22
|
%
|
15
|
%
|
|||||
Selling,
general and administrative expenses
|
34
|
%
|
45
|
%
|
31
|
%
|
50
|
%
|
|||||
Interest
expense
|
2
|
%
|
1
|
%
|
2
|
%
|
1
|
%
|
|||||
Net
Loss
|
(13
|
%)
|
(25
|
%)
|
(11
|
%)
|
(36
|
%)
|
|||||
For
|
Against
|
Abstentions
|
49,490,182
|
-11-
|
30
|
For
|
Against
|
Abstentions
|
49,490,182
|
-11-
|
39
|
Nominees for Directors | For | Against | Withheld |
Michael Ferrone | 49,490,170 | n/a | 28 |
Joe DiMaggio, Jr | 46,040,015 | n/a | 3,450,029 |
Joel Gold | 49,490,172 | n/a | 29 |
For
|
Against
|
Abstentions
|
49,490,217
|
-8-
|
7
|
SIGNATURE
|
TITLE
|
DATE
|
Jonathan
D. Steckler
/s/
Jonathan D. Steckler
|
President
|
November
22, 2005
|
Carol
Houston
/s/
Carol Houston
|
Principal
Financial Officer
|
November
22, 2005
|