UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 1
to
FORM
10-K
| [X] |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013 |
| |
|
| [ ] |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO
_________ |
Commission
file number: 000-52158
SMOKY
MARKET FOODS, INC.
(Exact
name of registrant as specified in its charter)
| Nevada |
|
20-4748589 |
(State
or other jurisdiction
of
incorporation or organization) |
|
(IRS
Employer
Identification
No.) |
1511
E. 2nd St.
Webster
City, IA 50595
(Address
of principal executive offices, including zip code)
Registrant’s
telephone number, including area code: (515) 724-7976
Securities
registered pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act: Common Shares, par value $.001
Indicate
by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
YES
[ ] NO [X]
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
YES
[ ] NO [X]
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
YES
[ ] NO [X]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
YES
[ ] NO [X]
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act (Check one):
| |
[ ]
Large Accelerated filer |
[ ]
Accelerated filer |
| |
|
|
| |
[
] Non-accelerated filer
(Do
not check if a smaller reporting company) |
[X] Smaller reporting
company |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): YES [ ] NO [X]
The
aggregate market value of approximately 129,070,650 shares held by nonaffiliates of the registrant on June 30, 2014, based upon
the average bid and asked price of the common shares on the OTC Bulletin Board of $0.02 per share on June 30, 2014, was approximately
$2,581,413. Common Shares held by each officer and director and by each other person who may be deemed to be an affiliate of the
registrant have been excluded.
As
of November 15, 2014, the registrant had 191,233,345 common shares outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
Explanatory
Note
This
Amendment No. 1 on Form 10-K is being added solely to add the Company’s Financial Statements beginning on page F-1 to this
Report and to submit Exhibit 101 to the Form 10-K in accordance with Rule 405 of Regulation S-T. Exhibit 101 consists of the Interactive
Data Files relating to our Form 10-K for the year ended December 31, 2013. No other changes have been made since the original
Form 10-K was filed on November 18, 2014.
Item
8. Financial Statements.
Our
financial statements and associated notes are set forth following the signature page beginning on Page F-1.
Item
15. Exhibits and Financial Statement Schedules.
Exhibit
No. |
|
Exhibit |
|
Incorporated
by Reference/Filed
Herewith |
| 3.1 |
|
Amended
and Restated Articles of Incorporation
|
|
Incorporated
by reference to Amendment No. 3 to Registration Statement on Form SB-2 filed on August 24, 2007, File No. 333-143008
|
| 3.2 |
|
Bylaws
|
|
Incorporated
by reference to Amendment No. 3 to Registration Statement on Form SB-2 filed on August 24, 2007, File No. 333-143008
|
| 4.1 |
|
Form
of Common Stock Certificate
|
|
Incorporated
by reference to Amendment No. 3 to Registration Statement on Form SB-2 filed on August 24, 2007, File No. 333-143008
|
| 4.2 |
|
Series
2008A Warrant dated September 8, 2008 |
|
Incorporated
by reference to the Current Report on 8-K filed on September 10, 2008, File No. 000-52158
|
| 4.3 |
|
Series
2009B Warrant dated May 29, 2009 |
|
Incorporated
by reference to the Current Report on 8-K filed on June 4, 2009, File No. 000-52158
|
| 4.4 |
|
Series
2009C Warrant dated October 30, 2009 |
|
Incorporated
by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158
|
| 4.5 |
|
Warrant
dated March 5, 2010 |
|
Incorporated
by reference to the Current Report on 8-K filed on March 19, 2010, File No. 000-52158
|
| 4.6 |
|
Series
2011C Warrant dated August 25, 2011 |
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed on September 1, 2011, File No. 000-52158
|
| 10.1 |
|
2006
Stock Incentive Plan |
|
Incorporated
by reference to Registration Statement on Form 10-SB filed on February 16, 2007, File No. 000-52158
|
| 10.2 |
|
Form
of NonStatutory Stock Option Agreement |
|
Incorporated
by reference to Registration Statement on Form 10-SB filed on February 16, 2007, File No. 000-52158
|
Exhibit
No. |
|
Exhibit |
|
Incorporated
by Reference/Filed
Herewith |
| 10.3 |
|
Employment
Agreement dated May 10, 2007 with Edward C. Feintech
|
|
Incorporated
by reference to the Quarterly Report on Form 10-Q filed on May 14, 2007, File No. 000-52158 |
| |
|
|
|
|
| 10.4 |
|
Consulting
Agreement dated May 1, 2008 with International Monetary
|
|
Incorporated
by reference to the Current Report on 8-K filed on May 8, 2008, File No. 000-52158
|
| 10.5 |
|
Promissory
Note dated September 8, 2008 |
|
Incorporated
by reference to the Current Report on 8-K filed on September 10, 2008, File No. 000-52158
|
| 10.6 |
|
Note
and Share Purchase Agreement dated January 27, 2009 with 70 Limited LLC |
|
Incorporated
by reference to the Current Report on 8-K filed on February 2, 2009, File No. 000-52158
|
| 10.7 |
|
Note,
Share and Warrant Purchase Agreement dated May 28, 2009 with 70 Limited LLC and The Jimma Lee Beam Revocable Trust |
|
Incorporated
by reference to the Current Report on 8-K filed on June 4, 2009, File No. 000-52158
|
| 10.8 |
|
Promissory
Note dated May 29, 2009 |
|
Incorporated
by reference to the Current Report on 8-K filed on June 4, 2009, File No. 000-52158
|
| 10.9 |
|
License
Termination and Asset Transfer Agreement dated June 30, 2009 with Smoky Systems, LLC |
|
Incorporated
by reference to the Current Report on 8-K filed on July 7, 2009, File No. 000-52158
|
| 10.10 |
|
Option
Agreement dated October 30, 2009 with Mary Ann’s Specialty Foods, Inc. |
|
Incorporated
by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158
|
| 10.11 |
|
Second
Amended and Restated Processing Agreement dated October 30, 2009 with Mary Ann’s Specialty Foods, Inc. |
|
Incorporated
by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158
|
| 10.12 |
|
Consulting
Agreement dated October 30, 2009 with William Korleski |
|
Incorporated
by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158
|
| 10.13 |
|
Note
and Warrant Purchase Agreement dated March 5, 2010 with 70 Limited LLC |
|
Incorporated
by reference to the Current Report on 8-K filed on March 29, 2010, File No. 000-52158
|
Exhibit
No. |
|
Exhibit |
|
Incorporated
by Reference/Filed
Herewith |
| 10.14 |
|
Secured
Promissory Note dated March 5, 2010 |
|
Incorporated
by reference to the Current Report on 8-K filed on March 29, 2010, File No. 000-52158
|
| 10.15 |
|
Security
Agreement dated March 5, 2010 |
|
Incorporated
by reference to the Current Report on 8-K filed on March 29, 2010, File No. 000-52158
|
| 10.16 |
|
Executive
Consulting Agreement dated March 25, 2010 with Harvey Hoffenberg
|
|
Incorporated
by reference to the Annual Report on Form 10-K filed on April 15, 2010
|
| 10.17 |
|
Purchase
and Lease Agreement dated July 25, 2011 with SMKY Asset Fund, LLC |
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed on September 1, 2011, File No. 000-52158
|
| 10.18 |
|
Business
Development and License Agreement |
|
Incorporated
by reference to the Current Report on 8-K filed on July 18, 2014, File No. 000-52158
|
| 23.1 |
|
Consent
of Independent Registered Public
Accountants
|
|
Incorporated
by reference to the Company’s Annual Report on Form 10-K filed on November 18, 2014, File No. 000-52158
|
| 24 |
|
Power
of Attorney |
|
Included
on the signature page hereof
|
| 31.1 |
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
|
Filed
herewith |
| 31.2 |
|
Rule
13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
|
Filed
herewith |
| 32.1 |
|
Section
1350 Certification of Chief Executive Officer
|
|
Incorporated
by reference to the Company's Annual Report on Form 10-K filed on November 18, 2014, File No. 000-52158 |
| |
|
|
|
|
| 32.2 |
|
Section
1350 Certification of Chief Financial Officer |
|
Incorporated
by reference to the Company's Annual Report on Form 10-K filed on November 18, 2014, File No. 000-52158 |
| |
|
|
|
|
| 101.INS |
|
XBRL
Instance Document |
|
Filed
herewith |
| |
|
|
|
|
| 101.SCH |
|
XBRL
Taxonomy Extension Schema |
|
Filed herewith |
| |
|
|
|
|
| 101.CAL |
|
XBRL
Taxonomy Extension Calculation Linkbase |
|
Filed herewith |
| |
|
|
|
|
| 101.DEF |
|
XBRL
Taxonomy Extension Definition Linkbase |
|
Filed herewith |
| |
|
|
|
|
| 101.LAB |
|
XBRL
Taxonomy Extension Label Linkbase |
|
Filed herewith |
| |
|
|
|
|
| 101.PRE |
|
XBRL
Taxonomy Presentation Linkbase |
|
Filed herewith |
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-K
to be signed on its behalf by the undersigned, thereunto duly authorized.
| |
SMOKY
MARKET FOODS, INC. |
| |
|
|
| |
By: |
/s/ Eddie Feintech |
| |
|
Eddie
Feintech |
| |
|
Chief
Executive Officer |
| |
|
|
| |
Date:
November 28, 2014 |
POWER
OF ATTORNEY AND ADDITIONAL SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of
the registrant and in the capacities and on the dates indicated. Each person, whose signature to this Form 10-K/A appears below,
hereby constitutes and appoints Eddie Feintech as his true and lawful attorney-in-fact and agent, with full power of substitution,
to sign on his behalf individually and in the capacity stated below and to perform any acts necessary to be done in order to file
all amendments and post-effective amendments to this Form 10-K, and any and all instruments or documents filed as part of or in
connection with this Form 10-K or the amendments thereto and each of the undersigned does hereby ratify and confirm all that said
attorney-in-fact and agent, or his substitutes, shall do or cause to be done by virtue hereof.
| Signature |
|
Title |
|
Date |
| |
|
|
|
|
| /s/ Edward C. Feintech |
|
Chief Executive Officer, President and Chairman |
|
November 28, 2014 |
| Edward C. Feintech |
|
(Principal Executive Officer) |
|
|
| |
|
|
|
|
| /s/ Shane Campbell |
|
Director, Chief Financial Officer |
|
November 28, 2014 |
| Shane Campbell |
|
(Principal Financial and Accounting Officer) |
|
|
| |
|
|
|
|
| /s/ Scott L. Bargfrede |
|
Director |
|
November 28, 2014 |
| Scott L. Bargfrede |
|
|
|
|
SMOKY
MARKET FOODS, INC.
Financial
Statements
December
31, 2013 and 2012
SMOKY
MARKET FOODS, INC.
C
O N T E N T S
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
October
30, 2014
To
the Board of Directors and
Stockholders’
of Smoky Market Foods, Inc.
Webster
City, IL 50595
We
have audited the accompanying balance sheets of Smoky Market Foods, Inc. (the “Company”) as of December 31, 2012 and
2013, and the related statements of operation, stockholders’ equity (deficit), and cash flows for the years then ended,
and the related notes to the financial statements. These financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public 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. The Company is not required to have, nor were we engage to perform, an audit of its internal control over financial
reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, 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 financial statements referred to above present fairly, in all material respects, the financial position of Smoky
Market Foods, Inc. as of December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the two
years then ended in conformity with U.S. generally accepted accounting principles.
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 10 to the financial statements, the Company has had minimal revenues, had negative working capital at December 31, 2013
and 2012, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit.
Those conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans concerning
these matters are also discussed in Note 10. The financial statements do not include any adjustments that might result from the
outcome of this uncertainty. Our opinion is not modified with respect to that matter.
HUCKFELDT
& SMITH, P.L.C.
Bettendorf,
Iowa
SMOKY
MARKET FOODS, INC.
BALANCE
SHEETS
FOR
THE YEARS ENDED DECEMBER 31, 2013 AND 2012
| | |
December 31, 2013 | | |
December 31, 2012 | |
| ASSETS | |
| | | |
| | |
| | |
| | | |
| | |
| CURRENT ASSETS: | |
| | | |
| | |
| Cash | |
$ | 1,128 | | |
$ | 380 | |
| Total Current Assets | |
| 1,128 | | |
| 380 | |
| | |
| | | |
| | |
| TOTAL ASSETS | |
$ | 1,128 | | |
$ | 380 | |
| | |
| | | |
| | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |
| | | |
| | |
| | |
| | | |
| | |
| LIABILITIES | |
| | | |
| | |
| | |
| | | |
| | |
| Current Liabilities: | |
| | | |
| | |
| Accounts Payable | |
$ | 538,677 | | |
$ | 530,843 | |
| Accounts Payable - Related Parties | |
| 186,638 | | |
| 175,038 | |
| Accrued Payroll Costs | |
| 975,309 | | |
| 791,309 | |
| Short Term Advances | |
| 108,805 | | |
| 97,850 | |
| Derivative Liability | |
| 201,270 | | |
| 484,973 | |
| Convertible Debt, Including Accrued Interest, Less Amortized Discount | |
| 68,695 | | |
| 86,214 | |
| Total Current Liabilities | |
| 2,079,394 | | |
| 2,166,227 | |
| | |
| | | |
| | |
| Long-Term Liabilities: | |
| | | |
| | |
| Convertible Debt to a Related Party, Less Amortized Discount | |
| 209,512 | | |
| 200,448 | |
| Promissory Notes Payable to a Related Party, Including Accrued Interest, Less Amortized Discount | |
| 3,076,731 | | |
| 2,764,463 | |
| Total Long-Term Liabilities | |
| 3,286,243 | | |
| 2,964,911 | |
| | |
| | | |
| | |
| Total Liabilities | |
| 5,365,637 | | |
| 5,131,138 | |
| | |
| | | |
| | |
| STOCKHOLDERS’ EQUITY (DEFICIT) | |
| | | |
| | |
| Preferred Stock, Par Value $.001, 10,000,000 Shares Authorized; no Shares Issued and Outstanding | |
| 0 | | |
| 0 | |
| Common Stock, Par Value $.001, 200,000,000 Shares Authorized: Issued and Outstanding 157,849,844 and 122,189,236 at December 31, 2013 and 2012, Respectively | |
| 157,850 | | |
| 122,189 | |
| Deferred Stock-Based Compensation | |
| 0 | | |
| (1,915 | ) |
| Other Paid-in Capital | |
| 8,226,309 | | |
| 8,201,001 | |
| Accumulated Deficit | |
| (13,748,668 | ) | |
| (13,452,033 | ) |
| Total Stockholders’ Equity (Deficit) | |
| (5,364,509 | ) | |
| (5,130,758 | ) |
| | |
| | | |
| | |
| TOTAL LIABILITIES AND STOCKHOLDER’ EQUITY (DEFICIT) | |
$ | 1,128 | | |
$ | 380 | |
The accompanying
notes are an integral part of these financial statements.
SMOKY
MARKET FOODS, INC.
STATEMENTS
OF OPERATIONS
FOR
THE YEARS ENDED DECEMBER 31, 2013 AND 2012
| | |
December 31, 2013 | | |
December 31, 2012 | |
| | |
| | |
| |
| SALES | |
| | | |
| | |
| Wholesale | |
$ | 3,071 | | |
$ | 16,908 | |
| Internet | |
| 151 | | |
| 1,111 | |
| Total Sales | |
| 3,222 | | |
| 18,019 | |
| | |
| | | |
| | |
| COST OF SALES | |
| | | |
| | |
| Wholesale and Internet | |
| 0 | | |
| 17,459 | |
| Total Cost of Sales | |
| 0 | | |
| 17,459 | |
| | |
| | | |
| | |
| GROSS PROFIT | |
| 3,222 | | |
| 560 | |
| | |
| | | |
| | |
| General and Administrative Expenses | |
| | | |
| | |
| Salaries, Wages and Benefits | |
| 184,000 | | |
| 250,487 | |
| Depreciation and Amortization | |
| 92,023 | | |
| 170,074 | |
| Professional Fees | |
| 12,033 | | |
| 143,468 | |
| Marketing | |
| 2,585 | | |
| 17,314 | |
| Rent | |
| 5,131 | | |
| 8,342 | |
| Stock Based Compensation | |
| | | |
| | |
| Financing | |
| 803 | | |
| 66,508 | |
| Salaries, Wages and Benefits-Related Parties | |
| 3,080 | | |
| 26,657 | |
| Professional | |
| 0 | | |
| 9,259 | |
| Other | |
| 17,551 | | |
| 79,692 | |
| Total General and Administrative Expenses | |
| 317,206 | | |
| 771,801 | |
| | |
| | | |
| | |
| Operating Loss | |
| (313,984 | ) | |
| (771,241 | ) |
| | |
| | | |
| | |
| Other Income (Expense) | |
| | | |
| | |
| Other Income (Loss) | |
| 0 | | |
| (2,488 | ) |
| Gain on Derivatives | |
| 283,703 | | |
| 1,157,832 | |
| Interest Expense to Related Parties | |
| (256,890 | ) | |
| (256,890 | ) |
| Interest Expense to Non-related Parties | |
| (9,464 | ) | |
| (9,459 | ) |
| | |
| | | |
| | |
| Other Expense-Net | |
| 17,349 | | |
| 888,995 | |
| | |
| | | |
| | |
| Net Income/(Loss) | |
$ | (296,635 | ) | |
$ | 117,754 | |
| | |
| | | |
| | |
| Profit (Loss) Per Share: | |
| | | |
| | |
| Basic and Diluted | |
$ | (0.002 | ) | |
$ | 0.001 | |
| | |
| | | |
| | |
| Weighted Average Number of Shares | |
| 151,906,336 | | |
| 110,355,539 | |
The accompanying
notes are an integral part of these financial statements.
SMOKY
MARKET FOODS, INC.
Statement
of Stockholders’ Equity (Deficit)
FOR
THE YEARS ENDED DECEMBER 31, 2013 AND 2012
| | |
| | |
| | |
Deferred | | |
Other | | |
| | |
| |
| | |
Common Stock | | |
Stock-Based | | |
Paid In | | |
Accumulated | | |
Total | |
| | |
Shares | | |
Amount | | |
Compensation | | |
Capital | | |
Deficit | | |
(Deficit) | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Balance, January 1, 2012 | |
| 104,213,527 | | |
$ | 104,214 | | |
$ | (28,571 | ) | |
$ | 7,335,079 | | |
$ | (13,569,787 | ) | |
$ | (6,159,065 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Common Stock Issued for: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Cash | |
| 1,038,350 | | |
| 1,038 | | |
| 0 | | |
| 34,061 | | |
| 0 | | |
| 35,099 | |
| Settlement of Accounts Payable Balances | |
| 280,084 | | |
| 280 | | |
| 0 | | |
| 18,112 | | |
| 0 | | |
| 18,392 | |
| Conversion of Debt to Common Stock | |
| 16,657,315 | | |
| 16,657 | | |
| 0 | | |
| 136,759 | | |
| 0 | | |
| 153,416 | |
| Convertible Debt Financing | |
| 0 | | |
| 0 | | |
| 0 | | |
| 113,136 | | |
| 0 | | |
| 113,136 | |
| Warrants Issued for Financing and Professional Fees | |
| 0 | | |
| 0 | | |
| 0 | | |
| 75,068 | | |
| 0 | | |
| 75,068 | |
| Amortization of Stock-Based Compensation | |
| 0 | | |
| 0 | | |
| 26,656 | | |
| 488,786 | | |
| 0 | | |
| 515,442 | |
| Net Income for the Year Ended December 31, 2012 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 117,754 | | |
| 117,754 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance, December 31, 2012 | |
| 122,189,276 | | |
| 122,189 | | |
| (1,915 | ) | |
| 8,201,001 | | |
| (13,452,033 | ) | |
| (5,130,758 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Common Stock Issued for: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Settlement of Accounts Payable Balances | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Conversion of Debt to Common Stock | |
| 35,660,568 | | |
| 35,661 | | |
| 0 | | |
| 23,339 | | |
| 0 | | |
| 59,000 | |
| Warrants Issued for Financing and Professional Services | |
| 0 | | |
| 0 | | |
| 0 | | |
| 1,969 | | |
| 0 | | |
| 1,969 | |
| Amortization of Stock-Based Compensation | |
| 0 | | |
| 0 | | |
| 1,915 | | |
| 0 | | |
| 0 | | |
| 1,915 | |
| Net Loss for the Year Ended December 31, 2013 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| (296,635 | ) | |
| (296,635 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance, December 31, 2013 | |
| 157,849,844 | | |
$ | 157,850 | | |
$ | 0 | | |
$ | 8,226,309 | | |
$ | (13,748,668 | ) | |
$ | (5,364,509 | ) |
The accompanying
notes are an integral part of these financial statements.
SMOKY
MARKET FOODS, INC.
STATEMENTS
OF CASH FLOWS
FOR
THE YEARS ENDED DECEMBER 31, 2013 AND 2012
| | |
December 31, 2013 | | |
December 31, 2012 | |
| Cash Flows From Operating Activities | |
| | | |
| | |
| Net Income/(Loss) | |
$ | (296,635 | ) | |
$ | 117,754 | |
| (Gain)/Loss on Derivatives | |
| (283,703 | ) | |
| (1,157,832 | ) |
| Loss on Abandonment of Equipment | |
| 0 | | |
| 2,488 | |
| Stock-Based Financing and Compensation Costs | |
| 3,884 | | |
| 101,723 | |
| Depreciation and Amortization | |
| 92,023 | | |
| 170,074 | |
| Current Year Interest Capitalized as Debt | |
| 265,790 | | |
| 265,172 | |
| Adjustments to Reconcile Net Income/(Loss) To Cash Used in Operating Activities: | |
| | | |
| | |
| Decrease in Inventory | |
| 0 | | |
| 16,816 | |
| Increase in Accounts Payable | |
| 19,434 | | |
| 54,002 | |
| Increase in Due to Employees | |
| 184,000 | | |
| 188,820 | |
| | |
| | | |
| | |
| NET CASH USED BY OPERATING ACTIVITIES | |
$ | (15,207 | ) | |
$ | (240,983 | ) |
| | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
| Proceeds From Issuance of Convertible Debt | |
$ | 0 | | |
$ | 185,500 | |
| Proceeds From Issuance of Convertible Debt to a Related Party | |
| 5,000 | | |
| 0 | |
| Proceeds From Issuance of Common Stock | |
| 0 | | |
| 35,099 | |
| Proceeds From (Payments on) Short Term Advances-Net | |
| 10,955 | | |
| 3,150 | |
| | |
| | | |
| | |
| NET CASH PROVIDED BY FINANCING ACTIVITIES: | |
$ | 15,955 | | |
$ | 223,749 | |
| | |
| | | |
| | |
| NET INCREASE (DECREASE) IN CASH | |
$ | 748 | | |
$ | (17,234 | ) |
| | |
| | | |
| | |
| Cash, Beginning of Period | |
$ | 380 | | |
$ | 17,614 | |
| | |
| | | |
| | |
| Cash, End of Period | |
$ | 1,128 | | |
$ | 380 | |
The interest
disclosed in the cash flow from operating activities section above was interest accrued but unpaid on promissory notes as more
fully disclosed in the notes to the financial statements. The accrued but unpaid interest is added to the principal balance of
the promissory notes. This non-cash expense is added back in the cash flows from operating activities section above in order to
arrive at cash flows from operating activities.
The accompanying
notes are an integral part of these financial statements.
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Smoky
Market Foods, Inc., (the “Company”) was incorporated on April 18, 2006 under the laws of the State of Nevada.
The
Company engages in the manufacture and sale of smoked meat products using a proprietary cooking technology which enables preservative-free
production. Sales and distribution are presently accommodated through retail (internet) and wholesale distribution strategies
intended to exploit the Smoky Market brand. The Company also intends to create a chain of franchised restaurants which also utilize
the branded Smoky Market products.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates. On an ongoing basis, management reviews those estimates, including those
related to allowances for loss contingencies for litigation, income taxes, and projection of future cash flows used to assess
the recoverability of long-lived assets.
Cash
and Cash Equivalents
For
purposes of balance sheet classification and the statements of cash flows, the Company considers all highly liquid investments
purchased with an original maturity of three months of less to be cash equivalents.
Accounts
Receivable
Management
monitors the liquidity and creditworthiness of accounts receivable due from customers on an ongoing basis, considering industry
and economic conditions and other factors. These factors form the basis for calculating and recording an allowance for doubtful
accounts, which is an estimate of future credit losses. The Company writes off individual accounts receivable against the bad
debt allowance when the Company determines a balance is uncollectible. Management has determined that the bad debt allowance is
appropriately established at $0 and $0, as of December 31, 2013 and December 31, 2012 respectively.
Inventory
Inventory
consists of Smoky Market Food items and branded packaging. It is valued at the lower of cost or market using the average cost
method. The Company had no inventory as of December 31, 2013 or 2012.
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
Property
and Equipment
Property
and equipment are stated at cost and are being depreciated using the straight-line method over the assets’ estimated economic
lives, which range from 3 to 25 years. Leasehold Improvements are capitalized and amortized over the remaining term of the leased
facilities.
The
Company had no property and equipment or depreciation expense as of and for the years ended December 31, 2013 and 2012.
Advances
As
of December 31, 2013 and December 31, 2012, the Company was indebted to several individuals for non-interest bearing, unsecured
advances in the amounts of $108,850, and $97,850 respectively. Management intends to repay the advances upon the realization of
additional debt/equity financing, when available. Accordingly the advances have been classified as current obligations. Alternatively,
some of these advances may be converted to common stock by mutual agreement.
Financial
Instruments
Fair
value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as
of December 31, 2013 and 2012. The respective carrying value of certain on-balance-sheet financial instruments approximated their
fair values. These financial instruments include cash and accounts payable. Fair values are assumed to approximate carrying values
for these financial instruments because they are short term in nature, or are receivable or payable on demand, and their carrying
amounts approximate fair value.
Impairment
of Long-Lived Asset
The
Company periodically reviews the carrying amount of property and equipment and is identifiable intangible assets to determine
whether current events or circumstances warrant adjustments to such carrying amounts. If an impairment adjustment is deemed necessary,
such loss is measured by the amount that the carrying value of such assets exceeds their fair value. Considerable management judgment
is necessary to estimate the fair value of assets; accordingly, actual results could vary significantly from such estimates.
Revenue
Recognition
Sales
are recognized upon shipment of product.
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
Shipping
and Handling (Internet Sales)
Shipping
and handling charged to customers can vary depending on pricing strategies; market conditions, etc., and is not necessarily based
on the recovery of cost. Accordingly, shipping and handling charges are recorded as a component of sales while the corresponding
shipping and handling costs are reflected as a component of cost of goods sold.
Advertising
Costs
All
advertising costs are charged to expense as incurred or the first time the advertising takes place, unless it is direct-response
advertising that results in probable future economic benefits. Advertising expenses were $0 and $159 for the years ended December
31, 2013 and 2012, respectively.
Segment
Information
Certain
information is disclosed based on the way management organizes financial information for making operating decisions and assessing
performance. The Company currently operates in one business segment and will evaluate additional segment disclosure requirements
if it expands operations.
Net
(Loss) Per Common Share
Basic
earnings (loss) per common share calculations are determined by dividing net income (loss) by the weighted average number of common
shares outstanding during the period. Diluted earnings (loss) per common share calculations are determined by dividing net income
(loss) by the weighted average number of common shares, outstanding stock options, and the equivalent number of common shares
that would have been outstanding had the convertible debt holders converted their debt instruments to common stock. All potential
dilutive securities have been excluded from the computation, as their effect is anti-dilutive.
Stock-Based
Compensation
The
Company has issued its common shares as compensation to directors, officers, and non-employees (“recipients”). The
Company measures the amount of stock-based compensation based on the fair value of the equity instrument issued or the services
or goods provided as of the earlier of (1) the date at which an agreement is reached with the recipient as to the number of shares
to be issued for performance, or (2) the date at which the recipient’s performance is complete.
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):
Stock-Based
Compensation (Continued)
Occasionally,
the Company sells shares below market value to raise cash to fund operations. The discounts from market are treated as compensation
for officers and directors. For non-officers and directors, the discounts are netted against proceeds as a “cost of issue.”
Income
Taxes
Deferred
tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets
and liabilities using the enacted marginal tax rate applicable when the related asset of liability is expected to be realized
or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available
evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a
valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future
changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.
Deferred
income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and
tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of
assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset
or liability are classified as current or non-current depending on the periods in which the temporary differences are expected
to reverse.
Uncertainty
in income taxes is recognized in the Company’s financial statements. Specifically, the accounting policy determines (a)
a consistent recognition threshold and (b) a measurement attribute for the financial statement recognition and measurement of
a tax position taken or expected to be taken in a tax return, and provides related guidance on derecognition, classification,
interest and penalties, accounting interim periods, disclosure and transition. To the extent interest and penalties would be assessed
by taxing authorities on any underpayment of income taxes, such amounts would be accrued and classified as a component of income
tax expenses on the consolidated statement of operations. The Company has evaluated the presence of any such tax uncertainties
and determined that they do not have a material impact on the financial statements.
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
2 – GOING CONCERN
The
accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United
States of America, which contemplates continuation of the Company as a going concern. Management believes that there is substantial
doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern
is contingent upon its ability to commence profitable operations and/or obtain additional debt and/or capital financing. Management
is attempting to obtain additional financing with various parties, but the eventual success of such efforts cannot be assured.
The Company has experienced $13,748,668 in losses since inception. The Company has had minimal revenue generating operations since
inception. The financial statements do not include any adjustment to reflect the possible future effects on the recoverability
and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the
Company to continue as a going concern.
NOTE
3 – NOTE PAYABLE:
The
Company is obligated under a promissory note payable to an LLC. The note accrues interest at a 10% annual rate until repaid on
or before its maturity date of August 18, 2020.
The
net promissory note obligation was as follows as of December 31:
| | |
2013 | | |
2012 | |
| | |
| | |
| |
| Face Amount of Note | |
$ | 2,568,900 | | |
$ | 2,568,900 | |
| Accrued Interest | |
| 867,783 | | |
| 610,893 | |
| Less Unamortized Loan Discount | |
| (359,952 | ) | |
| (415,330 | ) |
| | |
$ | 3,076,731 | | |
$ | 2,764,463 | |
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
4 – CONVERTIBLE DEBT – RELATED PARTY:
The
Company entered into a Purchase and Lease Agreement in June 2011 with SMKY Asset Fund LLC (the “Lender,” a related
party) relating to the Company’s smoker-oven system. The substance of the transaction more closely resembles a convertible
debt instrument and for that reason the Company has recorded this transaction as a convertible debt borrowing. Pursuant to the
agreement, the Company received $240,000 to date under this agreement, with a maximum borrowing of $500,000.
In
addition, Smoky Market Foods, Inc. was required to issue warrants to the Lender to purchase a share of common stock for each $1.00
in debt provided. The warrants have an exercise price of $0.50 per share, a five-year term and include net exercise provisions.
The warrants were valued using the Black-Scholes method assuming a risk-free annual rate of return of 0.02%, volatility of 317%,
an exercise price of $0.50 and a current stock price of $0.24. The resulting value is reflected in the financial statements as
a discount on the convertible debt and is being amortized over the ten-year life of the debt. Payments due on the debt are equal
to the lesser of (a) $0.20 per pound of product produced using the smoker-oven, or (b) the amount necessary to generate a 30%
return on the sum of the purchase price and $5,000.
The
agreement was a 10-year term, provided that the Company must repay the debt at any time after July 25, 2014 that the market price
for the Company’s common stock has exceeded $0.50 for thirty trading days. The repurchase price is a number of shares of
common stock with a fair market value equal to 20 times the sum of (a) the purchase price, plus (b) $5,000. The conversion feature
of the note was valued based on the same criteria as the warrant described above, and resulted in a calculation of $2,063,114.
Since the conversion is contingent, the conversion feature was not recognized in the calculation of the debt discount.
The
debt was as follows at December 31:
| | |
2013 | | |
2012 | |
| | |
| | |
| |
| Face Amount of Debt | |
$ | 240,000 | | |
$ | 235,000 | |
| Less Unamortized Loan Discount | |
| (30,488 | ) | |
| (34,552 | ) |
| | |
$ | 209,512 | | |
$ | 200,448 | |
As
discussed above, the Lender is considered a related party. Related party expenses relative to this loan was as follows for the
years ended December 31:
| | |
2013 | | |
2012 | |
| | |
| | | |
| | |
| Amortization of Loan Discount | |
$ | 4,064 | | |
$ | 4,065 | |
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
5 – CONVERTIBLE DEBT – UNRELATED PARTY:
The Company entered into a series of convertible debt arrangements with an unrelated financier (“Financier”). The promissory notes carry interest of an 8% annual rate and are due nine months from the transaction date. The notes have a conversion option which allows the Financier to convert the principal and accrued interest into common shares based on the average of the lowest three closing prices of the Company’s stock over the prior ten to fifteen days. That price is then discounted by 42% to arrive at the conversion price. The Company has the right to repurchase the notes during the first 180 days at a price which includes accrued interest plus the original principal amount multiplied by 150%.
The
Company has calculated and recorded “Beneficial Conversion Options” on the notes, and reflects them as loan discounts
which are amortized over the life of the notes. The calculations of the discounts are based on the difference between the note
balance and the value of the common stock conversion. The conversion is calculated based on the three lowest closing prices during
the ten to fifteen days preceding the loan transaction, discounted by 42%.
The
outstanding combined debt was as follows as of December 31:
| | |
2013 | | |
2012 | |
| | |
| | |
| |
| Face Amount of Debt | |
$ | 57,800 | | |
$ | 115,500 | |
| Accrued Interest | |
| 10,895 | | |
| 3,295 | |
| Less Unamortized Loan Discount | |
| 0 | | |
| (32,581 | ) |
| | |
$ | 68,695 | | |
$ | 86,214 | |
NOTE
6 – CAPITAL STOCK:
Common
Stock
On
April 18, 2006, the state of Nevada authorized the Company to issue a maximum of 200,000,000 shares of the Company’s common
stock. The assigned par value was $0.001. On the same day, the Company issued 40,000,000 common shares to Smoky Systems, LLC,
a Nevada LLC and related party, in exchange for certain assets.
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
6 – CAPITAL STOCK (Continued):
Preferred
Stock
In
June 2006, the State of Nevada authorized the Company to issue a maximum of 10,000,000 shares of the Company’s preferred
stock with a $0.001 par value. Shares of Preferred Stock may be issued from time to time in one or more series as may from time
to time be determined by the Board of Directors. Each series shall be distinctly designated. All shares of any one series of the
Preferred Stock shall be alike in every particular, except that there may be different dates from which dividends thereon, if
any, shall be cumulative, if made cumulative. The powers, preferences and relative, participating, optional and other rights of
each such series, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other
series at any time outstanding. No preferred shares have been issued as of December 31, 2011.
Stock
Transactions:
The
Company has engaged in numerous transactions whereby shares of common stock (description above) were issued in exchange for cash
and/or services. The Statement of Stockholders’ Equity provides a summary of such transactions.
NOTE
7 – RELATED PARTY TRANSACTIONS:
As
of December 31, 2013 and 2012, the Company owed $186,638 and $175,038 to related parties, respectively, relating to professional
services. Such debt was reflected as related party trade payables on the balance sheets, bears no interest and has no formal repayment
terms.
NOTE
8 – COMMITMENTS AND CONTINGENCIES:
Operating
Lease commitment
The
Company has defaulted on a long-term operating lease of real property previously used as a restaurant operation in Los Gatos,
California. All amounts due under the lease have been recognized as a liability and included in accounts payable. The liability
is reflected at $187,307 as of both December 31, 2013 and 2012.
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE 8 – COMMITMENTS AND CONTINGENCIES (Continued):
Employment
Contracts
Chief
Executive Officer
Effective
May 1, 2007, the Company entered into a three-year employment contract with the Chief Executive Officer (“CEO”). Terms
of the agreement included annual compensation of$175,000, a potential 80% bonus, a stock award of 1,500,000 common shares, 425,000
options to purchase common stock at $0.10 per share, and an additional contingent 1,000,000 shares assuming that certain operating
performance metrics are achieved. The employment contract expired and has not yet been renewed as of the date of these financial
statements. The CEO and the Company have continued the same compensation structure subsequent to the expiration of the employment
contract.
Real
Estate Option and Consulting Agreement
The Company entered into an agreement with Mary Anne’s Specialty Foods, Inc. (“Supplier”) in October 2009. Under the terms of the agreement, the Company issued the Supplier 1,500,000 warrants to purchase the Company’s common stock at a $0.15 exercise price, expiring in five years, in exchange for certain real property rights to purchase and build production facilities located on property presently owned by the Supplier. The transaction was valued at $75,000 using the Black-Scholes Method. The Company also issued 1,000,000 common shares to the Supplier in exchange for a three-year real estate related consulting contract that the Company may require in subsequent years in order to build a new facility described above. The transaction was valued at $50,000, and based on the $0.05 per share fair value of the Company’s common shares on the date of the agreement. The values of the assets were considered impaired by Management and written off as an impairment loss at December 31, 2010.
Dispute
with Contractor
Smoky
Market Foods, Inc. previously retained the services of an independent financial consultant (the “Contractor”). The
Contractor was terminated in 2009 and Company Management believes that a settlement was agreed to between the parties. The Contractor
now disputes the agreement, claiming additional amounts are owed. The Company plans to contest the Contractor’s claim, but
has recognized and recorded a liability in these financial statements equal to the full amount claimed by the Contractor. The
amount in dispute was $206,220 as of December 31, 2013 and 2012.
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
9 – COMMON STOCK OPTIONS AND WARRANTS:
Common
Stock Option Plan
The
Company has reserved 6,500,000 common shares for the exercise of stock options to be issued pursuant to the 2006 Stock Option
Plan. Information relating to options issued under this plan is as follows:
| | |
| | |
| | |
Weighted | |
| | |
Options and | | |
| | |
Average | |
| | |
Stock Awards | | |
| | |
Option | |
| | |
Available | | |
Number of | | |
Exercise | |
| | |
for Grant | | |
Shares | | |
Price | |
| Outstanding as of January 1, 2012 | |
| 742,500 | | |
| 5,757,500 | | |
$ | 0.10 | |
| Shares Reserved | |
| 0 | | |
| 0 | | |
| 0.00 | |
| Options Granted | |
| 0 | | |
| 0 | | |
| 0.00 | |
| Stock Awards Granted | |
| 0 | | |
| 0 | | |
| n/a | |
| Options Exercised | |
| 0 | | |
| 0 | | |
| 0.00 | |
| Options Canceled | |
| 0 | | |
| 0 | | |
| 0.00 | |
| | |
| | | |
| | | |
| | |
| Outstanding as of December 31, 2012 | |
| 742,500 | | |
| 5,757,500 | | |
$ | 0.10 | |
| Shares Reserved | |
| 0 | | |
| 0 | | |
| 0.00 | |
| Options Granted | |
| 0 | | |
| 0 | | |
| 0.00 | |
| Stock Awards Granted | |
| 0 | | |
| 0 | | |
| n/a | |
| Options Exercised | |
| 0 | | |
| 0 | | |
| 0.00 | |
| Options Canceled | |
| 1,462,500 | | |
| (1,462,500 | ) | |
| 0.10 | |
| Outstanding as of December 31, 2013 | |
| 2,205,000 | | |
| 4,295,000 | | |
$ | 0.10 | |
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
9 – COMMON STOCK OPTIONS AND WARRANTS (Continued):
Common
Stock Option Plan (Continued)
The
following table summarizes information about stock options outstanding and exercisable at December 31, 2013:
| Stock Options Outstanding | |
| | | |
Weighted- | | |
| |
| | | |
Average | | |
Weighted- | |
| Number of | | |
Remaining | | |
Average | |
| Options | | |
Contractual | | |
Exercise | |
| Outstanding | | |
Life in Years | | |
Price | |
| | 425,000 | | |
| 41.00 | | |
$ | 0.10 | |
| Stock Options Exercisable | |
| | | |
Weighted- | | |
| |
| | | |
Average | | |
Weighted- | |
| Number of | | |
Remaining | | |
Average | |
| Options | | |
Contractual | | |
Exercise | |
| Exercisable | | |
Life in Years | | |
Price | |
| | 425,000 | | |
| 0.41 | | |
$ | 0.10 | |
The
assumptions used in computing fair value of options are as follows:
| Expected stock price volatility | |
| 186.0 | % |
| Risk-free interest rate | |
| 4.7 | % |
| Expected term (years) | |
| 7.00 | |
| Weighted-average fair value of stock options granted | |
$ | 0.099 | |
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
9 – COMMON STOCK OPTIONS AND WARRANTS (Continued):
Common
Stock Warrants
The
following is a summary of the status of all the Company’s stock warrants as of December 31, 2013:
| | |
| | |
Weighted | |
| | |
Number | | |
Average | |
| | |
of | | |
Exercise | |
| | |
Warrants | | |
Price | |
| Outstanding, January 1, 2012 | |
| 9,702,500 | | |
$ | 0.06 | |
| Granted | |
| 9,246,834 | | |
| 0.13 | |
| Exercised | |
| 0 | | |
| | |
| Cancelled | |
| 0 | | |
| | |
| | |
| | | |
| | |
| Outstanding, December 31, 2012 | |
| 18,949,334 | | |
| 0.10 | |
| Granted | |
| 4,405,000 | | |
| 0.08 | |
| Exercised | |
| 0 | | |
| | |
| Cancelled | |
| 0 | | |
| | |
| Outstanding, December 31, 2013 | |
| 23,354,334 | | |
$ | 0.10 | |
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
9 – COMMON STOCK OPTIONS AND WARRANTS (Continued):
Common
Stock Warrants (Continued)
The
following table summarizes information about stock warrants outstanding and exercisable at December 31, 2013:
| Stock Warrants Outstanding | |
| | | |
Weighted- | | |
| |
| | | |
Average | | |
| |
| Number of | | |
Remaining | | |
| |
| Warrants | | |
Contractual | | |
| |
| Outstanding | | |
Life in Years | | |
Exercise Price | |
| | 215,000 | | |
| 2.68 | | |
$ | 0.50 | |
| | 1,771,834 | | |
| 2.34 | | |
$ | 0.25 | |
| | 5,515,000 | | |
| 0.44 | | |
$ | 0.15 | |
| 12,752,500 | | |
| 3.38 | | |
$ | 0.05 | |
| | 20,254,334 | | |
| | | |
| | |
| Stock Warrants Exercisable | |
| | | |
Weighted- | | |
| |
| | | |
Average | | |
| |
| Number of | | |
Remaining | | |
| |
| Warrants | | |
Contractual | | |
| |
| Exercisable | | |
Life in Years | | |
Exercise Price | |
| | 215,000 | | |
| 2.68 | | |
$ | 0.50 | |
| | 1,771,834 | | |
| 2.34 | | |
$ | 0.25 | |
| | 5,515,000 | | |
| 0.44 | | |
$ | 0.15 | |
| | 12,752,500 | | |
| 3.38 | | |
$ | 0.05 | |
| | 20,254,334 | | |
| | | |
| | |
Warrants
were valued and recorded pursuant to the Black-Scholes Method, using risk-free average rates of return of less than 1%, stock
price volatility over 300%, and a weighted average expected term of 3.5 years.
SMOKY
MARKET FOODS, INC.
Notes
to Financial Statements
December
31, 2013 and 2012
NOTE
10 – SUBSEQUENT EVENTS
Management
has evaluated the period subsequent to December 31, 2013 up to and including the date of the issuance of the financial statements
for material subsequent events to disclose, and has determined that no such subsequent events exist.
Exhibit
31.1
CERTIFICATION
I,
Edward C. Feintech, certify that:
| |
1. |
I
have reviewed this annual report on Form 10-K/A of Smoky Market Foods, Inc. for the year ended December 31, 2013; |
| |
|
|
| |
2. |
Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report; |
| |
|
|
| |
3. |
Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report; |
| |
|
|
| |
4. |
The
registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
| |
5. |
The
registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions): |
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
| Date:
November 28, 2014 |
/s/
Edward C. Feintech |
| |
Edward
C. Feintech, Chief Executive Officer |
Exhibit
31.2
CERTIFICATION
I,
Shane A. Campbell, certify that:
| |
1. |
I
have reviewed this annual report on Form 10-K/A of Smoky Market Foods, Inc. for the year ended December 31, 2013; |
| |
|
|
| |
2. |
Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect
to the period covered by this report; |
| |
|
|
| |
3. |
Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this report; |
| |
|
|
| |
4. |
The
registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
| |
5. |
The
registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions): |
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
| Date:
November 28, 2014 |
/s/
Shane A. Campbell |
| |
Shane
A. Campbell |
| |
Chief
Financial Officer |