FLORIDA | 20-116776 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
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 1A. | 7 | |
Item 1B. | Unresolved Staff Comments | N/A |
Item 2. | ||
Item 3. | ||
Item 4. | N/A | |
PART II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | N/A |
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
PART III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
PART IV | ||
Item 15. | ||
● | 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 |
· | failure of the acquired businesses to achieve expected results; | |
· | diversion of management’s attention and resources to acquisitions; | |
· | failure to retain key customers or personnel of the acquired businesses; | |
· | disappointing quality or functionality of acquired equipment and people: and | |
· | risks associated with unanticipated events, liabilities or contingencies. |
● | 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. |
● | ||
● | that the broker or dealer received a signed, written agreement from the investor prior to the transaction. |
Fiscal Year Ending December 31, 2014 | HIGH | LOW | ||||||
First Quarter | $ | 1.80 | $ | 1.13 | ||||
Second Quarter | 1.75 | 1.20 | ||||||
Third Quarter | 1.69 | 1.16 | ||||||
Fourth Quarter | 1.75 | 1.20 |
Fiscal Year Ending December 31, 2013 | HIGH | LOW | HIGH | LOW | ||||||||||||
First Quarter | $ | 0.450 | $ | 0.210 | $ | 0.45 | $ | 0.21 | ||||||||
Second Quarter | 0.480 | 0.300 | 0.48 | 0.30 | ||||||||||||
Third Quarter | 1.090 | 0.360 | 1.09 | 0.36 | ||||||||||||
Fourth Quarter | 1.750 | 1.020 | 1.75 | 1.020 |
Fiscal Year Ending December 31, 2012 | HIGH | LOW | ||||||
First Quarter | $ | 0.390 | $ | 0.230 | ||||
Second Quarter | 0.705 | 0.250 | ||||||
Third Quarter | 0.640 | 0.200 | ||||||
Fourth Quarter | 0.448 | 0.246 |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants, and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities 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 | 1,240,000 | $ | 0.350 | N/A | ||||||||
Stock options | 132,500 | $ | 0.380 | N/A | ||||||||
Stock options | 275,000 | $ | 0.400 | N/A | ||||||||
Stock options | 132,500 | $ | 0.450 | N/A | ||||||||
Stock options | 132,500 | $ | 0.474 | N/A | ||||||||
Stock options | 132,500 | $ | 0.480 | N/A | ||||||||
Stock options | 225,000 | $ | 0.570 | N/A | ||||||||
Stock options | 310,000 | 1.600 | N/A | |||||||||
Total | 2,580,000 | $ | 0.544 | N/A |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants, and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||
Equity compensation plans approved by security holders | 3,245,000 | $ | 0.822 | 96,755,000 | ||||||||
Equity compensation plans not approved by shareholders | 8,550,000 | $ | 1.000 | 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 dependence on one major customer, |
● | 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 environmental weather conditions. |
December 31, | ||||||||
2013 | 2012 | |||||||
Number of warrants outstanding | 5,819,129 | 6,964,000 | ||||||
Value at December 31 | N/A | $ | - | |||||
Number of warrants issued during the period | - | 1,500,000 | ||||||
Value of warrants issued during the year | N/A | $ | 572,765 | |||||
Revaluation (gain) loss during the period | N/A | $ | 172,785 | |||||
Black-Scholes model variables: | ||||||||
Volatility | N/A | 112.43% - 214.36 | % | |||||
Dividends | N/A | $ | 0 | |||||
Risk-free interest rates | N/A | 0.11% - 1.18 | % | |||||
Term (years) | N/A | 0.01-8.00 |
December 31, | ||||||||
2014 | 2013 | |||||||
Number of warrants outstanding | 4,798,469 | 5,819,129 | ||||||
Value at December 31 | N/A | N/A | ||||||
Number of warrants issued during the period | - | - | ||||||
Value of warrants issued during the year | N/A | N/A | ||||||
Revaluation (gain) loss during the period | N/A | N/A | ||||||
Number of warrants exercised during the period | 1,020,660 | - | ||||||
Value of warrants exercised during the period | N/A | N/A | ||||||
Number of warrants cancelled or expired during the period | - | - | ||||||
Value of warrants cancelled or expired during the period | N/A | N/A | ||||||
Black-Scholes model variables: | ||||||||
Volatility | N/A | N/A | ||||||
Dividends | N/A | N/A | ||||||
Risk-free interest rates | N/A | N/A | ||||||
Term (years) | N/A | N/A |
December 31, | December 31, | |||||||||||||||
2013 | 2012 | 2014 | 2013 | |||||||||||||
Number of conversion options outstanding | 3,594,592 | 5,368,195 | 3,162,130 | 3,594,592 | ||||||||||||
Value at December 31 | $ | N/A | $ | - | $ | N/A | $ | N/A | ||||||||
Number of options issued during the year | - | 1,200,000 | ||||||||||||||
Value of options issued during the year | $ | - | $ | 263,664 | ||||||||||||
Number of conversion options issued during the year | 129,870 | - | ||||||||||||||
Value of conversion options issued during the year | $ | - | $ | - | ||||||||||||
Number of options exercised or underlying notes paid during the year | 1,773,603 | 3,419,284 | 562,332 | 1,773,603 | ||||||||||||
Value of options exercised or underlying notes paid during the year | N/A | $ | 81,921 | |||||||||||||
Value of options exercised during the year | $ | N/A | $ | N/A | ||||||||||||
Revaluation loss (gain) during the period | N/A | $ | 281,024 | N/A | N/A | |||||||||||
Black-Scholes model variables: | N/A | N/A | N/A | |||||||||||||
Volatility | N/A | 112.43% to 214.36 | % | N/A | N/A | |||||||||||
Dividends | N/A | 0 | N/A | N/A | ||||||||||||
Risk-free interest rates | N/A | 0.11 to 1.18 | % | N/A | N/A | |||||||||||
Term (years) | N/A | 1.1 to 10.00 | N/A | N/A |
December 31, | ||||||||
2013 | 2012 | |||||||
Number of options outstanding | 2,580,000 | 2,070,000 | ||||||
Value at December 31 | $ | - | $ | - | ||||
Number of options issued during the year | 910,000 | 1,100,000 | ||||||
Value of options issued during the year | $ | - | - | |||||
Number of options recognized during the year pursuant to SFAS 123(R) | 910,000 | 1,100,000 | ||||||
Value of options recognized during the year pursuant to SFAS 123(R) | $ | 178,183 | $ | 186,299 | ||||
Revaluation (gain) during the period | N/A | $ | 63,309 | |||||
Black-Scholes model variables: | ||||||||
Volatility | 186.46% to 189.28 | % | 112.43% to 214.36 | % | ||||
Dividends | 0 | 0 | ||||||
Risk-free interest rates | 0.04% - 0.37 | % | 0.11 to 1.18 | % | ||||
Term (years) | 0.45 - 4.00 | 0.26-5.00 |
December 31, | ||||||||
2014 | 2013 | |||||||
Number of options outstanding | 3,245,000 | 2,580,000 | ||||||
Value at December 31 | N/A | N/A | ||||||
Number of options issued during the year | 705,000 | 910,000 | ||||||
Value of options issued during the year | $ | 393,737 | - | |||||
Number of options recognized during the year pursuant to SFAS 123(R) | 0 | 910,000 | ||||||
Number of options exercised or expired during the year | 40,000 | |||||||
Value of options recognized during the year pursuant to SFAS 123(R) | $ | 308,782 | $ | 178,183 | ||||
Revaluation (gain) during the period | N/A | $ | N/A | |||||
Black-Scholes model variables: | ||||||||
Volatility | 89.42% to 189.71 | % | 186.46% to 189.28 | % | ||||
Dividends | 0 | 0 | ||||||
Risk-free interest rates | 0.37% - 0.42 | % | 0.11 to 1.18 | % | ||||
Term (years) | 2.00 - 4.00 | 0.26 - 5.00 |
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 3,112,526 | $ | 2,073,605 | ||||
Accounts receivable net | 1,242,970 | 771,205 | ||||||
Inventory | 1,195,327 | 839,979 | ||||||
Other current assets | 625,495 | 11,316 | ||||||
Due from related parties | 461,130 | - | ||||||
Total current assets | 6,637,448 | 3,696,105 | ||||||
Property and equipment, net | 1,922,044 | 954,068 | ||||||
Investment | 204,000 | - | ||||||
Intangible assets, net | 23,610,549 | 887,442 | ||||||
Total assets | $ | 32,374,041 | $ | 5,537,615 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 4,096,700 | $ | 1,285,149 | ||||
Deferred revenue | 4,792,609 | - | ||||||
Accrued liabilities - related parties | 1,137,692 | 523,110 | ||||||
Accrued interest | 603,034 | 671,481 | ||||||
Accrued interest - related parties | 78,945 | 48,708 | ||||||
Revolving credit facilities | 360,871 | - | ||||||
Notes payable, current portion, net of discount | 714,811 | 1,150,253 | ||||||
Notes payable - related parties, current portion | 110,500 | 110,500 | ||||||
Deferred tax liability | 1,069,200 | - | ||||||
Contingent liabilities | 572,500 | 80,881 | ||||||
Total current liabilities | 13,536,862 | 3,870,082 | ||||||
Note payable - long term portion, net of discount | 1,251,745 | 727,328 | ||||||
Notes payable - related parties, long term portion | 2,199,970 | - | ||||||
Total liabilities | 16,988,577 | 4,597,410 | ||||||
Stockholders' equity | ||||||||
Common stock, $0.0001 par value; 500,000,000 shares authorized; 21,393,989 and 7,732,456 shares issued and 20,693,326 and 7,117,743 shares outstanding at December 31, 2014 and December 31, 2013, respectively | 2,140 | 774 | ||||||
Additional paid-in capital | 25,937,734 | 7,702,893 | ||||||
Treasury stock, 486,254 and 400,304 shares outstanding at December 31, 2014 and December 31, 2013, respectively | (160,099 | ) | (100,099 | ) | ||||
Accumulated deficit | (10,395,495 | ) | (6,663,363 | ) | ||||
Total Innovative Food Holdings, Inc. stockholders' equity | 15,384,280 | 940,205 | ||||||
Noncontrolling interest in variable interest entity | 1,184 | - | ||||||
Total stockholder's equity | 15,385,464 | 940,205 | ||||||
Total liabilities and stockholders' equity | $ | 32,374,041 | $ | 5,537,615 |
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 2,073,605 | $ | 1,347,029 | ||||
Accounts receivable net | 771,205 | 959,805 | ||||||
Inventory | 839,979 | 517,631 | ||||||
Other current assets | 11,316 | 13,753 | ||||||
Total current assets | 3,696,105 | 2,838,218 | ||||||
Property and equipment, net | 954,068 | 145,632 | ||||||
Intangible assets, net | 887,442 | 1,071,322 | ||||||
Total assets | $ | 5,537,615 | $ | 4,055,172 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 1,285,149 | $ | 1,376,772 | ||||
Accrued liabilities - related parties | 523,110 | 342,880 | ||||||
Accrued interest, current portion | 671,481 | - | ||||||
Accrued interest - related parties | 48,708 | 39,866 | ||||||
Notes payable, current portion, net of discount | 1,150,253 | 11,543 | ||||||
Notes payable - related parties, current portion | 110,500 | 110,500 | ||||||
Contingent purchase price liability | 80,881 | 48,070 | ||||||
Total current liabilities | 3,870,082 | 1,929,631 | ||||||
Accrued interest - net, long term portion | - | 719,187 | ||||||
Note payable - long term portion | 727,328 | 185,068 | ||||||
Total liabilities | 4,597,410 | 2,833,886 | ||||||
Stockholder's equity | ||||||||
Common stock, $0.0001 par value; 500,000,000 shares authorized; 7,732,456 and 6,023,801 shares issued and 7,117,743 and 5,809,088 shares outstanding at December 31, 2013 and December 31, 2012, respectively | 774 | 602 | ||||||
Additional paid-in capital | 7,702,893 | 6,329,553 | ||||||
Common stock subscribed | - | 68,336 | ||||||
Treasury stock, 400,304 and 304 shares outstanding | (100,099 | ) | (99 | ) | ||||
Accumulated deficit | (6,663,363 | ) | (5,177,106 | ) | ||||
Total stockholder's equity | 940,205 | 1,221,286 | ||||||
Total liabilities and stockholders' equity | $ | 5,537,615 | $ | 4,055,172 |
For the Year | For the Year | |||||||
Ended | Ended | |||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Revenue | $ | 30,800,858 | $ | 22,511,929 | ||||
Cost of goods sold | 22,691,387 | 15,862,746 | ||||||
Gross margin | 8,109,471 | 6,649,183 | ||||||
Selling, general and administrative expenses | 11,025,083 | 5,683,364 | ||||||
Total operating expenses | 11,025,083 | 5,683,364 | ||||||
Operating (loss) income | (2,915,612 | ) | 965,819 | |||||
Other (income) expense: | ||||||||
Interest expense, net | 824,070 | 2,452,076 | ||||||
Other (income) | (8,734 | ) | - | |||||
Total other (income) expense | 815,336 | 2,452,076 | ||||||
Net loss before taxes | (3,730,948 | ) | (1,486,257 | ) | ||||
Income tax expense | - | - | ||||||
Net loss | $ | (3,730,948 | ) | $ | (1,486,257 | ) | ||
Less net income attributable to noncontrolling interest in variable interest entities | 1,184 | - | ||||||
Net loss attributable to Innovative Food Holdings, Inc. | $ | (3,732,132 | ) | $ | (1,486,257 | ) | ||
Net loss per share - basic | $ | (0.32 | ) | $ | (0.23 | ) | ||
Net loss per share - diluted | $ | (0.32 | ) | $ | (0.23 | ) | ||
Weighted average shares outstanding - basic | 11,421,690 | 6,500,506 | ||||||
Weighted average shares outstanding - diluted | 11,421,690 | 6,500,506 |
For the Year | For the Year | |||||||
Ended | Ended | |||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Revenue | $ | 23,502,740 | $ | 18,610,487 | ||||
Cost of goods sold | 16,853,557 | 13,793,550 | ||||||
Gross margin | 6,649,183 | 4,816,937 | ||||||
Selling, general and administrative expenses | 5,683,364 | 4,230,227 | ||||||
Total operating expenses | 5,683,364 | 4,230,227 | ||||||
Operating income | 965,819 | 586,710 | ||||||
Other (income) expense: | ||||||||
Interest expense | 2,452,076 | 1,057,308 | ||||||
(Gain) from the extinguishment of debt | (3,797,001 | ) | ||||||
Cost of warrant extension | - | 842,100 | ||||||
(Gain) loss from change in fair value of warrant liability | - | 172,785 | ||||||
(Gain) loss from change in fair value of conversion option liability | - | 281,024 | ||||||
Total other (income) expense | 2,452,076 | (1,443,784 | ) | |||||
Income (Loss) before income taxes | (1,486,257 | ) | 2,030,494 | |||||
Income tax expense | - | - | ||||||
Net income (loss) | $ | (1,486,257 | ) | $ | 2,030,494 | |||
Net income (loss) per share - basic | $ | (0.23 | ) | $ | 0.36 | |||
Net income (loss) per share - diluted | $ | (0.23 | ) | $ | 0.25 | |||
Weighted average shares outstanding - basic | 6,500,506 | 5,698,434 | ||||||
Weighted average shares outstanding - diluted | 6,500,506 | 12,530,222 |
For the | For the | |||||||
Year Ended | Year Ended | |||||||
December 31, | December 31, | |||||||
2013 | 2012 | |||||||
Cash flows from operating activities: | ||||||||
Net (loss) income | $ | (1,486,257 | ) | $ | 2,030,494 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Increase in allowance for bad debts | 38,264 | - | ||||||
Depreciation and amortization | 262,882 | 126,855 | ||||||
Non-cash compensation | 309,013 | 348,120 | ||||||
Amortization of discount on notes payable | 2,322,909 | 838,339 | ||||||
Amortization of discount on accrued interest | - | 87,520 | ||||||
Interest capitalized on note payable | 13,551 | |||||||
Value of shares issued in settlement | - | 7,302 | ||||||
Gain on the extinguishment of debt and accrued interest | (3,797,001 | ) | ||||||
Value of extension of term of warrants | - | 842,100 | ||||||
Change in fair value of warrant liability | - | 172,785 | ||||||
Change in fair value of option liability | - | 63,609 | ||||||
Change in fair value of conversion option liability | - | 281,024 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable, net | 150,336 | (3,864 | ) | |||||
Inventory and other current assets, net | (319,911 | ) | (188,967 | ) | ||||
Accounts payable and accrued expenses - related party | 58,242 | 134,670 | ||||||
Accounts payable and accrued expenses | 19,403 | (149,663 | ) | |||||
Net cash provided by operating activities | 1,354,881 | 806,874 | ||||||
Cash flows from investing activities: | ||||||||
Payment to acquire Artisan Specialty Foods, net | 0 | (1,176,605 | ) | |||||
Purchase of treasury stock | (100,000 | ) | 0 | |||||
Acquisition of property and equipment | (341,438 | ) | (40,748 | ) | ||||
Net cash used in investing activities | (441,438 | ) | (1,217,353 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of notes payable | 0 | 1,080,000 | ||||||
Proceeds from bank loan | 324,676 | |||||||
Principal payments on debt | (511,543 | ) | (164,956 | ) | ||||
Principal payments on notes payable - related parties | - | (20,000 | ) | |||||
Net cash (used in) provided by financing activities | (186,867 | ) | 895,044 | |||||
Increase in cash and cash equivalents | 726,576 | 484,565 | ||||||
Cash and cash equivalents at beginning of period | 1,347,029 | 862,464 | ||||||
Cash and cash equivalents at end of period | $ | 2,073,605 | $ | 1,347,029 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 48,278 | $ | 35,327 | ||||
Taxes | $ | - | $ | - | ||||
Issuance of 279,310 shares of common stock (post reverse-split) previously subscribed | $ | 75,665 | $ | - | ||||
Mortgage for purchase of land and building | $ | 546,000 | $ | - | ||||
Commitment to issue shares charged to common stock subscribed | $ | - | $ | 7,302 | ||||
Common stock and options issued in connection with Haley acquisition | $ | - | $ | 62,145 | ||||
Issuance of shares previously subscribed | $ | 7,302 | $ | - | ||||
Conversion of notes payable and accrued interest to common stock | $ | 293,426 | $ | - | ||||
Issuance of common stock for cashless conversion of warrants | $ | 26 | $ | - | ||||
Payoff of note payable from proceeds of bank term loan | $ | 675,324 | $ | - |
For the Year | For the Year | |||||||
Ended | Ended | |||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (3,730,948 | ) | $ | (1,486,257 | ) | ||
Gain on disposition of property and equipment | (8,734 | ) | - | |||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Increase in allowance for bad debts | 15,687 | 38,264 | ||||||
Depreciation and amortization | 630,086 | 262,882 | ||||||
Non-cash compensation | 1,212,891 | 309,013 | ||||||
Amortization of discount on notes payable | 707,698 | 2,322,909 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable, net | (485,112 | ) | 150,336 | |||||
Deferred revenue | 2,080,609 | - | ||||||
Inventory and other current assets, net | (347,278 | ) | (319,911 | ) | ||||
Accounts payable and accrued expenses - related party | 715,654 | 58,242 | ||||||
Accounts payable and accrued expenses | 131,378 | 19,403 | ||||||
Due from related party | 1,496 | - | ||||||
Contingent liability | 16,619 | - | ||||||
Net cash provided by operating activities | 940,046 | 1,354,881 | ||||||
Cash flows from investing activities: | ||||||||
Investments in food related companies | (204,000 | ) | - | |||||
Acquisition of Organic Food Brokers | (100,000 | ) | - | |||||
Cash received in acquisition of The Fresh Diet | 277,885 | - | ||||||
Cash received in sale of property and equipment | 44,481 | - | ||||||
Acquisition of property and equipment | (4,519 | ) | (341,438 | ) | ||||
Net cash provided by (used in) investing activities | 13,847 | (341,438 | ) | |||||
Cash flows from financing activities: | ||||||||
Common stock sold for cash | 1,585,000 | - | ||||||
Common stock sold for exercise of options and warrants | 357,000 | - | ||||||
Purchase of treasury stock for cash | (60,000 | ) | (100,000 | ) | ||||
Borrowings on revolving credit facilities | 585,543 | - | ||||||
Payments made on revolving credit facilities | (1,446,072 | ) | - | |||||
Proceeds from bank loan | - | 324,676 | ||||||
Principal payments on debt | (816,522 | ) | (511,543 | ) | ||||
Principal payments capital leases | (119,921 | ) | - | |||||
Net cash provided by (used in) financing activities | 85,028 | (286,867 | ) | |||||
Increase in cash and cash equivalents | 1,038,921 | 726,576 | ||||||
Cash and cash equivalents at beginning of period | 2,073,605 | 1,347,029 | ||||||
Cash and cash equivalents at end of period | $ | 3,112,526 | $ | 2,073,605 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the period for: | ||||||||
Interest | $ | 52,319 | $ | 48,278 | ||||
Taxes | $ | - | $ | - | ||||
Issuance of 846,263 shares of common stock for conversion of notes payable and accrued interest | $ | 211,567 | $ | - | ||||
Issuance of shares previously subscribed | $ | 7,302 | ||||||
Mortgage and purchase of land and building | $ | - | $ | 546,000 | ||||
Conversion of notes payable and accrued interest to common stock | $ | 293,426 | ||||||
Issuance of common stock for cashless conversion of warrants | $ | 26 | ||||||
Payoff of common stock from proceeds of bank term loan | $ | 675,324 | ||||||
Issuance of 10,000,000 shares of common stock for acquisition of The Fresh Diet | $ | 14,000,000 | $ | - | ||||
Discount on notes payable due to extension of term | $ | 732,565 | $ | - | ||||
Additions to vehicles under capital lease | $ | 85,464 | $ | - | ||||
Issuance of 175,000 shares of common stock to officers, previously accrued | $ | 65,835 | $ | - | ||||
Issuance of 16,202 shares of common stock under cashless exercise of warrants | $ | - | $ | - | ||||
Increase in acquisition intangible assets due to deferred tax liability | $ | 1,069,200 | $ | - |
Common Stock | Common stock | Treasury stock | Accum | |||||||||||||||||||||||||||||
Amount | Value | APIC | Subscribed | Amount | Value | Deficit | Total | |||||||||||||||||||||||||
Balance as of December 31, 2011 | 5,873,844 | $ | 587 | $ | 3,774,287 | $ | 61,034 | 304 | $ | (99 | ) | $ | (7,207,600 | ) | $ | (3,371,791 | ) | |||||||||||||||
Shares issued for settlement of claim | - | - | - | 7,302 | - | - | - | 7,302 | ||||||||||||||||||||||||
Shares related to Haley acquisition | 150,000 | 15 | 37,485 | - | - | - | - | 37,500 | ||||||||||||||||||||||||
Stock options related to Haley acquisition | - | - | 24,645 | - | - | - | - | 24,645 | ||||||||||||||||||||||||
Stock options issued to directors for services | - | - | 161,821 | - | - | - | - | 161,821 | ||||||||||||||||||||||||
Discount on notes payable | - | - | 1,750,226 | - | - | - | - | 1,750,226 | ||||||||||||||||||||||||
Rounding due to reverse stock split | (43 | ) | - | - | - | - | - | - | - | |||||||||||||||||||||||
Discount to notes payable due to beneficial conversion feature of accrued interest | - | - | 87,376 | - | - | - | - | 87,376 | ||||||||||||||||||||||||
Reclassification of notes payable conversion option liability to equity | - | - | 81,921 | - | - | - | - | 81,921 | ||||||||||||||||||||||||
Reclassification of value of stock options from liability to equity | - | - | 411,792 | - | - | - | - | 411,792 | ||||||||||||||||||||||||
Income for the year ended December 31, 2012 | - | - | - | - | - | - | 2,030,494 | 2,030,494 | ||||||||||||||||||||||||
Balance as of December 31, 2012 | 6,023,801 | 602 | 6,329,553 | 68,336 | 304 | (99 | ) | (5,177,106 | ) | 1,221,286 | ||||||||||||||||||||||
Common stock issued for conversion of notes payable and accrued interest | 1,173,712 | 118 | 293,308 | - | - | - | - | 293,426 | ||||||||||||||||||||||||
Common stock issued, previously subscribed | 279,310 | 28 | 75,637 | (68,336 | ) | - | - | - | 7,329 | |||||||||||||||||||||||
Cashless exercise of warrants | 255,633 | 26 | (26 | ) | - | - | - | - | - | |||||||||||||||||||||||
Common stock repurchased | - | - | - | - | 400,000 | (100,000 | ) | - | (100,000 | ) | ||||||||||||||||||||||
Fair value of stock options and vested options issued to management | - | - | 178,183 | - | - | - | - | 178,183 | ||||||||||||||||||||||||
Discount on notes payable | - | - | 826,238 | - | - | - | - | 826,238 | ||||||||||||||||||||||||
Loss for the year ended December 31, 2013 | - | - | - | - | - | - | (1,486,257 | ) | (1,486,257 | ) | ||||||||||||||||||||||
Balance as of December 31, 2013 | 7,732,456 | $ | 774 | $ | 7,702,893 | $ | - | 400,304 | $ | (100,099 | ) | $ | (6,663,363 | ) | $ | 940,205 |
Common Stock | Common stock | Treasury stock | Accumulated | Noncontrolling | ||||||||||||||||||||||||||||||||
Amount | Value | APIC | Subscribed | Amount | Value | Deficit | Interest | Total | ||||||||||||||||||||||||||||
Balance as of December 31, 2012 | 6,023,801 | 602 | 6,329,553 | 68,336 | 304 | (99 | ) | (5,177,106 | ) | 1,221,286 | ||||||||||||||||||||||||||
Common stock issued for conversion of notes payable and accrued interest | 1,173,712 | 118 | 293,308 | - | - | - | - | 293,426 | ||||||||||||||||||||||||||||
Common stock issued, previously subscribed | 279,310 | 28 | 75,637 | (68,336 | ) | - | - | - | 7,329 | |||||||||||||||||||||||||||
Cashless exercise of warrants | 255,633 | 26 | (26 | ) | - | - | - | - | - | |||||||||||||||||||||||||||
Common stock repurchased | - | - | - | - | 400,000 | (100,000 | ) | - | (100,000 | ) | ||||||||||||||||||||||||||
Fair value of stock options and vested options issued to management | - | - | 178,183 | - | - | - | - | 178,183 | ||||||||||||||||||||||||||||
Discount on notes payable | - | - | 826,238 | - | - | - | - | 826,238 | ||||||||||||||||||||||||||||
Loss for the year ended December 31, 2013 | - | - | - | - | - | - | (1,486,257 | ) | (1,486,257 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2013 | 7,732,456 | 774 | 7,702,893 | - | 400,304 | (100,099 | ) | (6,663,363 | ) | 940,205 | ||||||||||||||||||||||||||
Common stock issued for conversion of notes payable and accrued interest | 846,263 | 84 | 211,483 | - | - | - | - | - | 211,567 | |||||||||||||||||||||||||||
Common stock issued for the cashless exercise of warrants | 16,203 | 2 | (2 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||
Fair value of vested stock options issued to management | - | - | 265,995 | - | - | - | - | - | 265,995 | |||||||||||||||||||||||||||
Common stock repurchased | - | - | - | - | 85,950 | (60,000 | ) | - | - | (60,000 | ) | |||||||||||||||||||||||||
Discount on notes payable | - | - | 732,565 | - | - | - | - | - | 732,565 | |||||||||||||||||||||||||||
Common stock issued to officers, previously accrued | 175,000 | 17 | 65,818 | - | - | - | - | - | 65,835 | |||||||||||||||||||||||||||
Common stock issued to service provider | 17,248 | 2 | 17,591 | - | - | - | - | - | 17,593 | |||||||||||||||||||||||||||
Common stock sold for cash | 1,585,000 | 159 | 1,584,841 | - | - | - | - | - | 1,585,000 | |||||||||||||||||||||||||||
Options issued in acquisition of Organic Food Brokers | - | - | 71,349 | - | - | - | - | - | 71,349 | |||||||||||||||||||||||||||
Shares issued in acquisition of The Fresh Diet | 6,889,937 | 689 | 9,645,223 | - | - | - | - | - | 9,645,912 | |||||||||||||||||||||||||||
Shares held for issuance in acquisition of The Fresh Diet | 3,110,063 | 311 | 4,353,777 | - | - | - | - | - | 4,354,088 | |||||||||||||||||||||||||||
Shares issued for exercise of warrants | 1,001,819 | 100 | 349,900 | - | - | - | - | - | 350,000 | |||||||||||||||||||||||||||
Fair value of stock options issued to a service provider | - | - | 42,787 | - | - | - | - | - | 42,787 | |||||||||||||||||||||||||||
Stock issued for exercise of options | 20,000 | 2 | 6,998 | - | - | - | - | - | 7,000 | |||||||||||||||||||||||||||
Value of RSU's recognized during the period | - | - | 886,516 | - | - | - | - | - | 886,516 | |||||||||||||||||||||||||||
Loss for the twelve months ended December 31, 2014 | - | - | - | - | - | - | (3,732,132 | ) | 1,184 | (3,730,948 | ) | |||||||||||||||||||||||||
Balance at December 31, 2014 | 21,393,989 | 2,140 | 25,937,734 | - | 486,254 | (160,099 | ) | (10,395,495 | ) | 1,184 | 15,385,464 |
Computer Equipment | 3 years |
Warehouse Equipment | 5 years |
Office Furniture and Fixtures | 5 years |
Vehicles | 5 years |
Income (Numerator) | Shares (Denominator) | Per-Share Amount | ||||||||||
Basic earnings per share | $ | 2,030,494 | 5,698,434 | $ | 0.36 | |||||||
Effect of Dilutive Securities | ||||||||||||
Conversion of notes and interest into common stock: | ||||||||||||
Additional shares | 4,293,924 | |||||||||||
Decrease in interest expense due to conversion | 130,007 | |||||||||||
Remove loss on revaluation of conversion option liability | 281,026 | |||||||||||
Exercise of in-the-money warrants: | ||||||||||||
Additional shares | 2,194,000 | |||||||||||
Remove loss on revaluation of warrant liability | 663,238 | |||||||||||
Shares accrued, not yet issued | 343,864 | |||||||||||
Diluted earnings per share | $ | 3,104,765 | 12,530,222 | $ | 0.25 |
December 31, | ||||||||
2014 | 2013 | |||||||
Option expense | $ | 308,782 | $ | 178,183 |
December 31, | ||||||||
2013 | 2012 | |||||||
Option expense | $ | 178,183 | $ | 348,120 | ||||
(Gain) loss on revaluation of options | $ | - | $ | 63,311 |
December 31, | ||||||||
2014 | 2013 | |||||||
RSUs expense | $ | 886,516 | $ | - |
Common Stock - 10,000,000 shares | $ | 14,000,000 | ||
Total purchase price | $ | 14,000,000 | ||
Tangible assets acquired | $ | 2,567,223 | ||
Liabilities assumed | 11,035,724 | |||
Net tangible assets | (8,468,501 | ) | ||
Customer relationships | 2,700,000 | |||
Trade names | 1,800,000 | |||
Goodwill | 17,968,501 | |||
Total purchase price | $ | 14,000,000 |
Closing cash payment | $ | 1,200,000 | ||
Contingent purchase price | 131,000 | |||
Total purchase price | $ | 1,331,000 | ||
Tangible assets acquired | $ | 918,515 | ||
Liabilities assumed * | (614,515 | ) | ||
Net tangible assets | 304,000 | |||
Trade name | 217,000 | |||
Non-compete agreement | 244,000 | |||
Customer relationships | 415,000 | |||
Goodwill | 151,000 | |||
Total purchase price | $ | 1,331,000 |
Twelve months ended December 31, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 44,409,414 | $ | 48,530,096 | ||||
Net loss attributable to Innovative Food Holdings, Inc. | (2,649,813 | ) | (2,973,805 | ) | ||||
Basic net income (loss) per common share | $ | (0.125 | ) | $ | (0.150 | ) | ||
Diluted net income (loss) per common share | $ | (0.125 | ) | $ | (0.150 | ) | ||
Weighted average shares - basic | 21,117,743 | 19,809,088 | ||||||
Weighted average shares - diluted | 21,117,743 | 19,809,088 |
December 31, 2012 | ||||
Total revenues | $ | 20,284,899 | ||
Net income | 2,219,314 | |||
Basic net income (loss) per common share | $ | 0.389 | ||
Diluted net income (loss) per common share | $ | 0.208 | ||
Weighted average shares – basic | 5,698,434 | |||
Weighted average shares – diluted | 10,650,222 |
2013 | 2012 | 2014 | 2013 | |||||||||||||
Accounts receivable from customers | $ | 827,945 | $ | 965,352 | $ | 1,272,470 | $ | 827,945 | ||||||||
Allowance for doubtful accounts | (56,740 | ) | (5,547 | ) | (29,500 | ) | (56,740 | ) | ||||||||
Accounts receivable, net | $ | 771,205 | $ | 959,805 | $ | 1,242,970 | $ | 771,205 |
2013 | 2012 | |||||||
Finished goods inventory | $ | 839,979 | $ | 517,631 |
2014 | 2013 | |||||||
Specialty food products | $ | 1,034,786 | $ | 839,979 | ||||
Operating materials and supplies | 160,541 | 0 | ||||||
Total | $ | 1,195,327 | $ | 839,979 |
December 31, 2013 | December 31, 2012 | |||||||
Land | $ | 177,383 | $ | - | ||||
Building | 619,955 | - | ||||||
Computer and Office Equipment | 462,508 | 382,300 | ||||||
Warehouse Equipment | 7,733 | 7,733 | ||||||
Furniture and Fixtures | 162,128 | 152,236 | ||||||
Vehicles | 33,239 | 33,239 | ||||||
Total before accumulated depreciation | 1,462,946 | 575,508 | ||||||
Less: accumulated depreciation | (508,878 | ) | (429,876 | ) | ||||
Total | $ | 954,068 | $ | 145,632 |
December 31, 2014 | December 31, 2013 | |||||||
Land | $ | 177,383 | $ | 177,383 | ||||
Building | 619,955 | 619,955 | ||||||
Computer and Office Equipment | 502,277 | 462,508 | ||||||
Warehouse Equipment | 7,733 | 7,733 | ||||||
Furniture and Fixtures | 373,360 | 162,128 | ||||||
Kitchen equipment | 429,850 | - | ||||||
Vehicles | 503,309 | 33,239 | ||||||
Total before accumulated depreciation | 2,613,867 | 1,462,946 | ||||||
Less: accumulated depreciation | (691,823 | ) | (508,878 | ) | ||||
Total | $ | 1,922,044 | $ | 954,068 |
December 31, 2014 | ||||||||||||
Accumulated | ||||||||||||
Gross | Amortization | Net | ||||||||||
Trade Name | $ | 2,121,271 | $ | - | $ | 2,121,271 | ||||||
Non-Compete Agreement | 244,000 | (152,500 | ) | 91,500 | ||||||||
Customer Relationships | 3,830,994 | (552,717 | ) | 3,278,277 | ||||||||
Goodwill | 18,119,501 | - | 18,119,501 | |||||||||
Total | $ | 25,315,766 | $ | (705,217 | ) | $ | 23,610,549 |
December 31, 2013 | ||||||||||||
Accumulated | ||||||||||||
Gross | Amortization | Net | ||||||||||
Trade Name | $ | 217,000 | $ | - | $ | 217,000 | ||||||
Non-Compete Agreement | 244,000 | (91,500 | ) | 152,500 | ||||||||
Customer Relationships | 534,645 | (167,703 | ) | 366,942 | ||||||||
Goodwill | 151,000 | - | 151,000 | |||||||||
$ | 1,146,645 | $ | (259,203 | ) | $ | 887,442 |
December 31, 2013 | ||||||||||||
Accumulated | ||||||||||||
Gross | Amortization | Net | ||||||||||
Trade Name | $ | 217,000 | $ | - | $ | 217,000 | ||||||
Non-Compete Agreement | 244,000 | (91,500 | ) | 152,500 | ||||||||
Customer Relationships | 534,645 | (167,703 | ) | 366,942 | ||||||||
Goodwill | 151,000 | - | 151,000 | |||||||||
Total | $ | 1,146,645 | $ | (259,203 | ) | $ | 887,442 |
December 31, 2012 | ||||||||||||
Accumulated | ||||||||||||
Gross | Amortization | Net | ||||||||||
Trade Name | $ | 217,000 | $ | - | $ | 217,000 | ||||||
Non-Compete Agreement | 244,000 | (30,500 | ) | 213,500 | ||||||||
Customer Relationships | 534,645 | (44,823 | ) | 489,822 | ||||||||
Goodwill | 151,000 | - | 151,000 | |||||||||
$ | 1,146,645 | $ | (75,323 | ) | $ | 1,071,322 |
2014 | $ | 183,884 | ||||||
2015 | 167,264 | $ | 839,828 | |||||
2016 | 126,794 | 772,770 | ||||||
2017 | 41,500 | 700,770 | ||||||
2018 and thereafter | - | |||||||
2018 | 659,270 | |||||||
2019 and thereafter | 397,139 | |||||||
Total | $ | 519,442 | $ | 3,369,777 |
2013 | 2012 | |||||||
Trade payables | $ | 1,252,746 | $ | 1,325,490 | ||||
Accrued payroll and commissions | 32,403 | 51,282 | ||||||
Total | $ | 1,285,149 | $ | 1,376,772 |
2014 | 2013 | |||||||
Trade payables | $ | 3,853,374 | $ | 1,252,746 | ||||
Accrued payroll and commissions | 243,326 | 32,403 | ||||||
Total | $ | 4,096,700 | $ | 1,285,149 |
December 31, 2014 | December 31, 2013 | |||||||
Business loan of $500,000 from a credit card merchant, with a loan fee of 0.5% and repayment rate of 100% of the sum of charge volume during the loan period, maturing no later than April 19, 2015, renewable annually unless terminated, and secured by the assets of The Fresh Diet. During the period from the date of The Fresh Diet acquisition (August 15, 2014) through December 31, 2014, net payments of principal in the amount of $294,298 on this loan. | $ | 125,159 | $ | - | ||||
Business loan of $1,000,000 from a credit card merchant, with a loan fee of 20% and repayment rate of 12% of the sum of charge volume until all amounts have been paid, and guaranteed by certain shareholders of the Company who were former shareholder of FD. During the period from the date of The Fresh Diet acquisition (August 15, 2014) through December 31, 2014, net payments of principal in the amount of $566,231 were made on this loan. | 235,712 | - | ||||||
Total | $ | 360,871 | $ | - |
December 31, 2013 | December 31, 2012 | |||||||
Secured Convertible note payable to Alpha Capital Anstalt (f/k/a/ Alpha Capital Aktiengesselschaft) (“Alpha Capital”), originally dated February 25, 2005 and due May 15, 2014. The note contains a cross default provision, and is secured by a majority of the Company’s assets. This note bears interest at the rate of 5% per annum. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement (as defined below). During the twelve months ended December 31, 2013, principal and accrued interest in the amounts of $124,000 and $89,641, respectively, were converted into 496,000 and 358,565 shares of common stock, respectively. | $ | 139,500 | $ | 263,500 | ||||
Convertible note payable to Alpha Capital due May 15, 2014. This note bears interest at the rate of 5% per annum. This note is unsecured. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 21,478 | 21,478 | ||||||
Convertible note payable to Osher Capital Partners LLC due May 15, 2014. This note bears interest at the rate of 5% per annum. This note is unsecured. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 9,638 | 9,638 | ||||||
Convertible note payable to Assameka Capital Inc. due May 15, 2014. This note bears interest at the rate of 5% per annum. This note is unsecured. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 6,884 | 6,884 | ||||||
Convertible note payable to Alpha Capital due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 22,609 | 22,609 |
December 31, 2014 | December 31, 2013 | |||||||
Secured mortgage note payable for the acquisition of land and building in Bonita Springs, Florida in the amount of $546,000. Principal payments of $4,550 and interest at the rate of Libor plus 3% are due monthly. The balance of the principal amount will be due March 2018. During the twelve months ended December 31, 2014, the Company made payments of principal and interest in the amounts of $54,600 and $15,444, respectively. | $ | 445,900 | $ | 500,500 | ||||
Term loan from Fifth Third Bank in the original amount of $1,000,000; $660,439 of this amount was used to pay a note payable; $339,561 was used for working capital. This loan is secured by first priority perfected security interest in all personal property of the Company, bears interest at the rate of Libor plus 4.75%, with principal monthly principal payments of $55,556 plus accrued interest. The note is due May 26, 2015. During the twelve months ended December 31, 2014, the Company made payments of principal and interest in the amounts of $666,667 and $32,376, respectively. | 277,778 | 944,444 |
A total of 18 convertible notes payable (the “Convertible Notes Payable”). Certain of the Convertible Notes Payable contain cross default provisions, and are secured by subordinated interest in a majority of the Company’s assets. The Convertible Notes Payable bear interest at the rate of 1.9% per annum; principal and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share; however, the interest may be paid in cash by the Company and certain limited amounts of principle may also be prepaid in cash. During the twelve months ended December 31, 2014 principal in the amount of $120,583 was converted to 482,332 shares of common stock, and accrued interest in the amount of $10,357 was converted to 41,428 shares of common stock. Also during the twelve months ended December 31, 2014, principal and interest in the amounts of $20,000 and $52,319, respectively, was paid in cash. Effective May 13, 2014, the due date of these notes was extended from May 15, 2014 to December 31, 2015. Effective March 31, 2015, the notes were extended to January 1, 2016. A discount to the notes in the aggregate amount of $732,565 was recorded to recognize the value of the beneficial conversion feature embedded in the extension of the term of the notes. During the twelve months ended December 31, 2014, $335,887 of this discount was charged to operations; in addition, the amount of $371,811 representing a previous discount to these notes was also charge to operations during the period. | 647,565 | 788,148 | ||||||
Secured vehicle leases payable at an effective interest rate of 9.96% for purchase of truck, payable in monthly installments (including principal and interest) of $614 through January 2015. During the twelve months ended December 31, 2014, the Company made payments in the aggregate amount of $7,368 on this lease, consisting of $6,928 of principal and $440 of interest. | 609 | 7,537 |
December 31, 2013 | December 31, 2012 | |||||||
Convertible note payable to Osher Capital Partners LLC due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | $ | 10,145 | $ | 10,145 | ||||
Convertible note payable to Assameka Capital Inc. due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement . | 7,246 | 7,246 | ||||||
Convertible note payable to Huo Hua due May 15, 2014. This note bears interest at the rate of 5% per annum. This note is unsecured. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share and the 2013 Notes Payable Extension Agreement. | 20,000 | 20,000 | ||||||
Convertible secured note payable to Alpha Capital due May 15, 2014. This note bears interest at the rate of 5% per annum, This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 100,000 | 100,000 | ||||||
Convertible secured note payable to Alpha Capital due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 15,287 | 15,287 | ||||||
Convertible secured note payable to Osher Capital Partners LLC due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 6,860 | 6,860 | ||||||
Convertible secured note payable to Assameka Capital, Inc. due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 4,900 | 4,900 | ||||||
Convertible secured note payable to Asher Brand due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. During the twelve months ended December 31, 2013, principal and accrued interest in the amounts of $5,000 and $7,471, respectively, were converted into 20,000 and 29,884 shares of common stock, respectively. | - | 5,000 |
December 31, 2014 | December 31, 2013 | |||||||
Twenty-nine convertible notes payable in the amount of $4,500 each to Sam Klepfish, the Company’s CEO and a related party, dated the first of the month beginning on November 1, 2006, issued pursuant to the Company’s then employment agreement with Mr. Klepfish, which provided that the amount of $4,500 in salary is accrued each month to a note payable. These notes are unsecured and may not be prepaid without Mr. Klepfish’s consent. These notes bear interest at the rate of 8% per annum and have no due date. As of July 1, 2014, the notes bear an interest rate of 1.9% and as of November 17, 2014 the interest rate was reduced to 0%. These notes and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. During the twelve months ended December 31, 2014, Mr. Klepfish gifted three notes to an unrelated third parties. During the twelve months ended December 31, 2014, the Company accrued interest in the amount of $5,189 on these notes. | $ | 110,500 | $ | 110,500 | ||||
Promissory note in the amount of $200,000 bearing interest at the rate of 1% per annum. Principal in the amount of $100,000 is due June 30, 2015; principal in the amount of $100,000 is due June 30, 2016. The note is convertible into shares of the Company’s common stock at the conversion price of $1.54 per share. During the twelve months ended December 31, 2014, the Company accrued interest in the amount of $1,000 on this note. | 200,000 | - | ||||||
Four notes payable to shareholders in the aggregate amount of $1,500,000. These notes are unsecured, currently bear no interest, and mature on August 15, 2017. In the event the notes are not paid when due, amounts not paid under the notes shall bear interest at a rate of 21% per annum until paid in full. | 1,500,000 | - | ||||||
Two notes payable to shareholders in the aggregate amount of $699,970. These notes are unsecured, and bear interest at the rate of 4% per annum. These notes are due on August 17, 2017. In the event the notes are not paid when due, amounts not paid under the notes shall bear interest at a rate of 21% per annum until paid in full. During the twelve months ended December 31, 2014, the Company accrued interest in the amount of $10,695 accrued on these notes. | 699,970 | - | ||||||
Note payable in monthly installments, including interest at the rate of 2% over prime (5.25% as of December 31, 2014), due October 1, 2019, and secured by all assets of The Fresh Diet, the life insurance policies maintained on two of the shareholders of the Company, and personally guaranteed by these shareholders. During the twelve months ended December 31, 2014, principal payments in the aggregate amount of $5,493 were made on this note, and interest expense in the amount of $2,256 was recorded. | 123,926 | - | ||||||
The Company has a $75,000 line of credit which bears monthly interest at the variable interest rate of 2% over prime rate. The line of credit is overdue. The line of credit is secured by all corporate assets and by a condominium owned by one of the former shareholders of FD. During the twelve months ended December 31, 2014, interest in the amount of $1,334 was recorded on this line of credit. | 75,000 | - | ||||||
Note payable in monthly installments, including interest at the rate of 1.75% over prime adjusted quarterly (5% as of December 31, 2014), due on December 20, 2017, and secured by all assets of The Fresh Diet and personally guaranteed by the spouse of one of its officers. During the twelve months ended December 31, 2014, principal payments in the aggregate amount of $23,558 were made on this note, and interest expense in the amount of $5,616 was recorded. | 316,337 | - |
Note payable issued for acquisition of Diet at Your Doorstep's customer lists due on May 1, 2015, and with quarterly payments in the form of 10% of revenue attributed to sales to customers who transition to The Fresh Diet's meal plans. Total payments capped at $40,000. During the twelve months ended December 31, 2014, payments in the amount of $159 were made on this loan. | 17,935 | - | ||||||
Unsecured note payable for purchase of website domain bearing 0% interest rate and due on November 20, 2017, with monthly payments of $1,065. During the twelve months ended December 31, 2014, principal payments in the amount of $4,260 were made on this loan. | 28,745 | - | ||||||
Capital lease obligations under a master lease agreement for vehicles payable in monthly installments, including interest rate ranging from 2.32% to at 7.5%, due on various dates through December 1, 2015, and collateralized by the vehicles. During the twelve months ended December 31, 2014, new vehicles were added to the master lease in the aggregate amount of $85,464, and vehicles were turned in to the lessor with a balance under the lease of $24,565. During the twelve months ended December 31, 2014, principal payments in the aggregate amount of $54,018 were made on these capital leases, and interest expense in the amount of $6,023 was recorded. | 226,397 | - |
December 31, 2013 | December 31, 2012 | |||||||
Convertible secured note payable to Lane Ventures due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. During the twelve months ended December 31, 2013, principal and accrued interest in the amounts of $6,000 and $4,383, respectively, were converted into 24,000 and 17,533 shares of common stock, respectively. | $ | - | $ | 6,000 | ||||
Convertible secured note payable Alpha Capital due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 120,000 | 120,000 | ||||||
Convertible secured note payable Alpha Capital due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 16,957 | 16,957 | ||||||
Convertible secured note payable to Osher Capital Partners LLC due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 7,609 | 7,609 | ||||||
Convertible secured note payable to Assameka Capital, Inc. due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 5,435 | 5,435 | ||||||
Twenty-nine convertible notes payable in the amount of $4,500 each to Sam Klepfish, the Company’s CEO and a related party, dated the first of the month beginning on November 1, 2006, issued pursuant to the Company’s then employment agreement with Mr. Klepfish, which provided that the amount of $4,500 in salary is accrued each month to a note payable. These notes are unsecured. These notes bear interest at the rate of 8% per annum and have no due date. These notes and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. | 110,500 | 110,500 | ||||||
Convertible secured note payable to Alpha Capital due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 10,000 | 10,000 | ||||||
Convertible secured note payable to Alpha Capital due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 230,000 | 230,000 |
December 31, 2014 | December 31, 2013 | |||||||
Capital lease obligation for equipment payable in monthly installments, including interest at the rate of 20.35%, due on November 9, 2014, and collateralized by the equipment. During the twelve months ended December 31, 2014, principal payments in the aggregate amount of $12,438 were made on this lease, and interest expense in the amount of $747 was recorded. | $ | - | $ | - | ||||
Secured vehicle lease payable at an effective interest rate of 8.26% for purchase of truck payable in monthly installments (including principal and interest) of $519 through June 2015. During the twelve months ended December 31, 2014, the Company made payments in the aggregate amount of $6,232 on this lease, consisting of $5,721 of principal and $510 of interest. | 3,042 | 8,764 | ||||||
Total | $ | 4,673,704 | $ | 2,359,893 | ||||
Less: Discount | (396,678 | ) | (371,812 | ) | ||||
Net | $ | 4,277,026 | $ | 1,988,081 |
December 31, 2013 | December 31, 2012 | |||||||
Convertible secured note payable to Alpha Capital, due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | $ | 21,478 | $ | 21,478 | ||||
Convertible secured note payable to Osher Capital Partners LLC due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. | 9,638 | 9,638 | ||||||
Convertible secured note payable to Assameka Capital, Inc. due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. During the twelve months ended December 31, 2013, principal and interest in the amounts of $4,400 and $3,600, respectively, were converted into 17,600 and 14,400 shares of common stock, respectively. | 2,484 | 6,884 | ||||||
Convertible secured note payable to Momona Capital due May 15, 2014. This note contains a cross default provision. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. This note bears interest at the rate of 5% per annum. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. During the twelve months ended December 31, 2013, principal and accrued interest in the amounts of $25,310 and $9,652, respectively, were converted into 101,240 and 38,608 shares of common stock, respectively. | - | 25,310 | ||||||
Convertible secured note payable to Lane Ventures due May 15, 2014. This note bears interest at the rate of 5% per annum. This note contains a cross-default provision, and is secured by a majority of the Company’s assets. The note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. This note was included in the 2012 Notes Payable Extension Agreement and the 2013 Notes Payable Extension Agreement. During the twelve months ended December 31, 2013, principal and accrued interest in the amounts of $10,124 and $3,847, respectively, were converted into 40,496 and 15,388 shares of common stock, respectively. | - | 10,124 | ||||||
Secured convertible promissory note payable for the acquisition of Artisan Specialty Foods, Inc. to Alpha Capital, dated May 11, 2012 in the face amount of $1,200,000 at a purchase price of $1,080,000. The note carries simple interest at an annual rate of 4.5% and is due in full by April 2015. The note is convertible into the registrant's common stock at a fixed conversion price of $1.00 per share. Principal and interest in the aggregate amount of $39,163 are payable on a monthly basis beginning in September 2012. The note allows for prepayments at any time. The note also includes cross-default provisions; is secured by all of the registrant's and its subsidiaries' assets; and is guaranteed by each of the Company’s subsidiaries. Interest expense in the amount of $31,472 and $30,921 and was accrued on this note during the years ended December 31, 2013 and 2012, respectively. During the twelve months ended December 31, 2013, the Company paid this note in full and also paid interest in the amount of $31,472. | - | 1,074,267 | ||||||
Secured vehicle lease payable at an effective interest rate of 9.96% for purchase of truck, payable in monthly installments (including principal and interest) of $614 through January 2015. During the twelve months ended December 31, 2013, the Company made payments in the aggregate amount of $7,368 on this note, consisting of $6,274 of principal and $1,094 of interest. | 7,537 | 13,811 |
December 31, 2013 | December 31, 2012 | |||||||
Secured vehicle lease payable at an effective interest rate of 8.26% for purchase of truck, payable in monthly installments (including principal and interest) of $519 through June 2015. During the twelve months ended December 31, 2013, the Company made payments in the aggregate amount of $6,232 on this note, consisting of $5,269 of principal and $962 of interest. | $ | 8,764 | �� | $ | 14,033 | |||
Term loan from Fifth Third Bank in the original amount of $1,000,000; $660,439 of this amount was used to pay a note payable; $339,561 was used for working capital. This loan is secured by first priority perfected security interest in all personal property of the Company. bears interest at the rate of Libor plus 4.75%, with monthly payments in the amount of $55,556, with a maturity date of May 26, 2015. During the year ended December 31, 2013, the Company made payments of principal and interest in the amounts of $55,556 and $2,639, respectively | 944,444 | - | ||||||
Secured mortgage note payable from Fifth Third Bank for the acquisition of land and building in Bonita Springs, Florida in the amount of $546,000. Principal payments of $4,550 and interest at the rate of Libor plus 3% are due monthly. The balance of the principal amount will be due March 2018. During the twelve months ended December 31, 2013, the Company made payments in the aggregate amount of $59,667 on this note, consisting of $45,500 of principal and $14,167 of interest. | $ | 500,500 | - | |||||
Total | $ | 2,359,893 | $ | 2,175,593 | ||||
Less: Discount | (371,812 | ) | (1,868,482 | ) | ||||
Net | $ | 1,988,081 | $ | 307,111 |
For the Year Ended December 31, | ||||||||
2013 | 2012 | |||||||
Discount on Notes Payable amortized to interest expense: | $ | 2,322,909 | $ | 838,339 |
For the Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Discount on Notes Payable amortized to interest expense: | $ | 707,698 | $ | 2,322,909 |
2014 | $ | 1,632,564 | ||||||
2015 | 336,029 | $ | 1,593,934 | |||||
2016 | 54,600 | 336,559 | ||||||
2017 | 54,600 | 2,395,126 | ||||||
2018 | 54,600 | 95,064 | ||||||
2019 | 80,121 | |||||||
Thereafter | 227,500 | 172,900 | ||||||
Total | $ | 2,359,893 | $ | 4,673,704 |
December 31, | ||||||||||||
2013 | 2012 | |||||||||||
Number of conversion options outstanding | 3,594,592 | 5,368,195 | ||||||||||
Value at December 31 | $ | N/A | $ | N/A | ||||||||
Number of conversion options issued during the period | - | 1,200,000 | ||||||||||
Value of conversion options issued during the period | $ | - | $ | 263,664 | ||||||||
Number of conversion options exercised or underlying notes paid during the period | 1,773,603 | 3,419,284 | ||||||||||
Value of conversion options exercised or underlying notes paid during the period | $ | N/A | $ | 81,921 | ||||||||
Revaluation loss (gain) during the period | $ | N/A | $ | 281,024 | ||||||||
Black-Scholes model variables: | ||||||||||||
Volatility | - | 112.4% | to | 214.3 | % | |||||||
Dividends | - | - | ||||||||||
Risk-free interest rates | - | 0.11% | to | 1.18 | % | |||||||
Term (years) | - | 1.1 | to | 10 |
December 31, | ||||||||
2014 | 2013 | |||||||
Number of conversion options outstanding | 5,785,854 | 6,475,348 | ||||||
Value at December 31 | $ | N/A | $ | N/A | ||||
Number of conversion options issued during the period | 446,050 | - | ||||||
Value of conversion options issued during the period | $ | N/A | $ | N/A | ||||
Number of conversion options exercised or underlying notes paid during the period | 1,135,544 | 1,773,603 | ||||||
Value of conversion options exercised or underlying notes paid during the period | $ | N/A | $ | N/A | ||||
Revaluation loss (gain) during the period | $ | N/A | $ | N/A |
2013 | 2012 | 2014 | 2013 | |||||||||||||
Current | $ | - | $ | - | $ | - | $ | - | ||||||||
Deferred | - | - | - | - | ||||||||||||
Total | $ | - | $ | - | $ | - | $ | - |
2013 | 2012 | |||||||
Income (loss) before income taxes | $ | (1,486,257 | ) | $ | 2,030,494 | |||
Statutory tax rate | 39.6 | % | 39.6 | % | ||||
Total tax at statutory rate | (428,220 | ) | 804,075 | |||||
Temporary differences | (40,000 | ) | (16,214 | ) | ||||
Permanent difference – meals and entertainment | 3,000 | 4,000 | ||||||
Permanent differences- non cash compensation, derivatives and discount amortization | 1,054,220 | (568,414 | ) | |||||
Total | 589,000 | 223,447 | ||||||
Changes in valuation allowance | (589,000 | ) | (223,447 | ) | ||||
Income tax expense | $ | - | $ | - |
2014 | 2013 | |||||||
Income (loss) before income taxes | $ | (3,730,948 | ) | $ | (1,486,257 | ) | ||
Statutory tax rate | 39.6 | % | 39.6 | % | ||||
Total tax at statutory rate | (1,477,455 | ) | (428,220 | ) | ||||
Temporary differences | 37,500 | (40,000 | ) | |||||
Permanent difference – meals and entertainment | 13,100 | 3,000 | ||||||
Permanent differences- non cash compensation, derivatives and discount amortization | 880,000 | 1,054,220 | ||||||
Total | (546,855 | ) | 589,000 | |||||
Changes in valuation allowance | 546,855 | (589,000 | ) | |||||
Income tax expense | $ | - | $ | - |
2013 | 2012 | 2014 | 2013 | |||||||||||||
Deferred Tax Assets (Liabilities): | ||||||||||||||||
Net operating loss carryforwards | $ | 529,000 | $ | 1,150,000 | $ | 1,014,000 | $ | 529,000 | ||||||||
Allowance for doubtful accounts | 42,000 | 2,000 | 11,000 | 42,000 | ||||||||||||
Accumulated depreciation | (20,000 | ) | (12,000 | ) | ||||||||||||
Net deferred tax assets | 551,000 | 1,140,000 | ||||||||||||||
Intangible assets | (1,781,000 | ) | ||||||||||||||
Property and equipment | (87,000 | ) | (20,000 | ) | ||||||||||||
Net deferred tax assets (liabilities) | (843,000 | ) | 551,000 | |||||||||||||
Valuation allowance | (551,000 | ) | (1,140,000 | ) | (226,000 | ) | (551,000 | ) | ||||||||
Net deferred tax assets | $ | - | $ | - | ||||||||||||
Net deferred tax assets (liabilities) | $ | (1,069,000 | ) | $ | - |
Weighted | Weighted | Weighted | ||||||||||||||||||||
average | average | average | ||||||||||||||||||||
Range of | Number of | remaining | exercise | exercise | ||||||||||||||||||
exercise | warrants | contractual | price of | Number of | price of | |||||||||||||||||
Prices | Outstanding | life (years) | outstanding Warrants | warrants Exercisable | exercisable Warrants | |||||||||||||||||
$ | 0.010 | 700,000 | 6.38 | $ | 0.010 | 700,000 | $ | 0.010 | ||||||||||||||
$ | 0.250 | 783,623 | 5.24 | $ | 0.250 | 783,623 | $ | 0.250 | ||||||||||||||
$ | 0.550 | 1,507,101 | 1.45 | $ | 0.550 | 1,507,101 | $ | 0.550 | ||||||||||||||
$ | 0.575 | 2,828,405 | 3.09 | $ | 0.575 | 2,828,405 | $ | 0.575 | ||||||||||||||
5,819,129 | 3.35 | $ | 0.457 | 5,819,129 | $ | 0.457 |
Weighted | Weighted | Weighted | ||||||||||||||||||||
average | average | average | ||||||||||||||||||||
Range of | Number of | remaining | exercise | exercise | ||||||||||||||||||
exercise | warrants | contractual | price of | Number of | price of | |||||||||||||||||
Prices | Outstanding | life (years) | outstanding Warrants | warrants Exercisable | exercisable Warrants | |||||||||||||||||
$ | 0.010 | 700,000 | 5.38 | $ | 0.010 | 700,000 | $ | 0.010 | ||||||||||||||
$ | 0.250 | 94,783 | 1.09 | $ | 0.250 | 94,783 | $ | 0.250 | ||||||||||||||
$ | 0.550 | 1,175,281 | 2.09 | $ | 0.550 | 1,175,281 | $ | 0.550 | ||||||||||||||
$ | 0.575 | 2,828,405 | 2.09 | $ | 0.575 | 2,828,405 | $ | 0.575 | ||||||||||||||
4,798,469 | 2.55 | $ | 0.480 | 4,798,469 | $ | 0.480 |
Weighted Average | Weighted Average | |||||||||||||||
Number of Shares | Exercise Price | Number of Shares | Exercise Price | |||||||||||||
Warrants outstanding at December 31, 2011 | 5,536,000 | $ | 0.506 | |||||||||||||
Warrants outstanding at December 31, 2012 | 7,036,000 | $ | 0.409 | |||||||||||||
Granted | 1,500,000 | $ | 0.100 | - | $ | - | ||||||||||
Exercised | - | - | (396,871 | ) | $ | 0.504 | ||||||||||
Cancelled / Expired | - | - | (820,000 | ) | 0.100 | |||||||||||
Warrants outstanding at December 31, 2012 | 7,036,000 | $ | 0.409 | |||||||||||||
Warrants outstanding at December 31, 2013 | 5,819,129 | $ | 0.457 | |||||||||||||
Exercised | (396,871 | ) | $ | 0.504 | (1,020,660 | ) | $ | 0.348 | ||||||||
Cancelled / Expired | (820,000 | ) | $ | 0.100 | - | $ | - | |||||||||
Warrants outstanding at December 31, 2013 | 5,819,129 | $ | 0.457 | |||||||||||||
Warrants outstanding at December 31, 2014 | 4,798,469 | $ | 0.480 |
Weighted | Weighted | Weighted | Weighted | |||||||||||||||||||||||||||||||||||||||||
Weighted | average | average | Weighted | average | average | |||||||||||||||||||||||||||||||||||||||
average | exercise | exercise | average | exercise | exercise | |||||||||||||||||||||||||||||||||||||||
Range of | Range of | Number of | Remaining | price of | Number of | price of | Range of | Number of | Remaining | price of | Number of | price of | ||||||||||||||||||||||||||||||||
exercise | exercise | options | contractual | outstanding | options | exercisable | exercise | options | contractual | outstanding | options | exercisable | ||||||||||||||||||||||||||||||||
Prices | Prices | Outstanding | life (years) | Options | Exercisable | Options | Prices | Outstanding | life (years) | Options | Exercisable | Options | ||||||||||||||||||||||||||||||||
$ | 0.350 | 1,240,000 | 3.59 | $ | 0.350 | 1,240,000 | $ | 0.359 | 0.350 | 1,200,000 | 2.67 | $ | 0.350 | 1,200,000 | $ | 0.350 | ||||||||||||||||||||||||||||
$ | 0.380 | 132,500 | 1.25 | $ | 0.380 | 132,500 | $ | 0.380 | 0.380 | 132,500 | 0.25 | $ | 0.380 | 132,500 | $ | 0.380 | ||||||||||||||||||||||||||||
$ | 0.400 | 275,000 | 3.01 | $ | 0.400 | 25,000 | $ | 0.400 | 0.400 | 275,000 | 2.01 | $ | 0.400 | 125,000 | $ | 0.400 | ||||||||||||||||||||||||||||
$ | 0.450 | 132,500 | 1.50 | $ | 0.450 | 132,500 | $ | 0.450 | 0.450 | 132,500 | 0.50 | $ | 0.450 | 132,500 | $ | 0.450 | ||||||||||||||||||||||||||||
$ | 0.474 | 132,500 | 1.75 | $ | 0.474 | 132,500 | $ | 0.474 | 0.474 | 132,500 | 0.75 | $ | 0.474 | 132,500 | $ | 0.474 | ||||||||||||||||||||||||||||
$ | 0.480 | 132,500 | 2.00 | $ | 0.480 | 132,500 | $ | 0.480 | 0.480 | 132,500 | 1.00 | $ | 0.480 | 132,500 | $ | 0.480 | ||||||||||||||||||||||||||||
$ | 0.570 | 225,000 | 4.01 | $ | 0.570 | - | $ | N/A | 0.570 | 225,000 | 3.01 | $ | 0.570 | 200,000 | $ | 0.570 | ||||||||||||||||||||||||||||
$ | 1.600 | 310,000 | 4.01 | $ | 1.60 | 125,000 | $ | N/A | 1.310 | 75,000 | 3.67 | $ | 1.310 | 12,500 | $ | 1.310 | ||||||||||||||||||||||||||||
2,580,000 | 3.21 | $ | 0.544 | 1,920,000 | $ | 0.459 | ||||||||||||||||||||||||||||||||||||||
$ | 1.440 | 15,000 | 1.84 | $ | 1.440 | 15,000 | $ | 1.440 | ||||||||||||||||||||||||||||||||||||
$ | 1.460 | 100,000 | 3.50 | $ | 1.460 | 100,000 | $ | 1.460 | ||||||||||||||||||||||||||||||||||||
$ | 1.600 | 310,000 | 3.01 | $ | 1.600 | 280.000 | $ | 1.600 | ||||||||||||||||||||||||||||||||||||
$ | 1.900 | 15,000 | 2.84 | $ | 1.900 | 15,000 | $ | 1.900 | ||||||||||||||||||||||||||||||||||||
$ | 2.000 | 500,000 | 2.17 | $ | 2.000 | 500,000 | $ | 2.000 | ||||||||||||||||||||||||||||||||||||
3,245,000 | 1.97 | $ | 0.822 | 2,477,500 | $ | 0.591 |
Options | Weighted Average Exercise Price | |||||||
Outstanding at December 31, 2012 | 2,070,000 | $ | 0.375 | |||||
Issued | 910,000 | $ | 0.807 | |||||
Exercised | - | - | ||||||
Forfeited or expired | (400,000 | ) | 0.350 | |||||
Outstanding as December 31, 2013 | 2,580,000 | $ | 0.544 | |||||
Issued | 705,000 | 1.836 | ||||||
Exercised | (20,000 | ) | 0.350 | |||||
Forfeited or expired | (20,000 | ) | 0.350 | |||||
Outstanding at December 31, 2014 | 3,245,000 | $ | 0.822 |
Options | Weighted Average Exercise Price | |||||||
Outstanding at December 31, 2011 | 970,000 | $ | 0.402 | |||||
Issued | 1,100,000 | $ | 0.350 | |||||
Exercised | - | - | ||||||
Forfeited or expired | - | - | ||||||
Outstanding as December 31, 2012 | 2,070,000 | $ | 0.375 | |||||
Issued | 910,000 | 0.807 | ||||||
Exercised | - | - | ||||||
Forfeited or expired | (400,000 | ) | 0.350 | |||||
Outstanding at December 31, 2013 | 2,580,000 | $ | 0.544 |
2013 | 2012 | 2014 | 2013 | |||||||||||||||||
Exercise price lower than market price | - | - | - | - | ||||||||||||||||
Exercise price equal to market price | - | - | - | - | ||||||||||||||||
Exercise price exceeded market price | $0.40 | to | $1.60 | $0.33 | to | $0.43 | $ | 1.31 to $2.00 | $ | 0.40 to $1.60 |
December 31, | December 31, | |||||||||||||
2013 | 2012 | |||||||||||||
Volatility | 186.46 | % | to | 189.28 | % | 112.43 | % | to | 214.36 | % | ||||
Dividends | $ | 0 | to | 0 | $ | 0 | to | 0 | ||||||
Risk-free interest rates | 0.04 | % | to | 0.37 | % | 0.06 | % | to | 0.17 | % | ||||
Term (years) | 0.45 | to | 4.00 | 0.01 | to | 5.00 |
December 31, 2014 | December 31, 2013 | |||||||
Volatility | 88.72% to 189.71 | % | 186.46% to 189.28 | % | ||||
Dividends | $ | 0 to 0 | $ | 0 to 0 | ||||
Risk-free interest rates | 0.37% to 0.42 | % | 0.04% to 0.37 | % | ||||
Term (years) | 2.00 to 5.00 | 0.45 to 4.00 |
For the twelve months ended: | ||||
December 31, 2014 | $ | 101,673 | ||
December 31, 2015 | 34,003 | |||
Thereafter | - | |||
Total | $ | 135,676 |
For the twelve months ended: | ||||
December 31, 2015 | $ | 644,064 | ||
December 31, 2016 | 267,432 | |||
December 31, 2017 | 124,728 | |||
December 31, 2018 | 117,612 | |||
Thereafter | - | |||
Total | $ | 1,153,836 |
Level 1 - | Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; |
Level 2 - | Inputs other than Level 1 inputs that are either directly or indirectly observable; and |
Level 3- | Unobservable inputs, for which little or no market data exist, therefore requiring an entity to develop its own assumptions. |
Beginning balance as of January 1, 2012 | $ | 1,908,470 | ||
Reclassification to equity | (493,713 | ) | ||
Fair value of common stock equivalents issued | 1,022,726 | |||
Fair value of extension of warrant term | 842,100 | |||
Gain on restructure of notes payable | (3,797,001 | ) | ||
Change in fair value | 517,418 | |||
Ending balance as of December 31, 2012 | $ | - |
Name | Age | Position | ||
Sam Klepfish | Chief Executive Officer and Director | |||
Justin | President and Director | |||
Joel Gold | Director | |||
Solomon Mayer | Director | |||
Hank Cohn | Director |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||
Sam Klepfish | 2013 | $ | 215,828 | $ | 48,000 | (a) | $ | 27,937 | (b) | $ | 69,047 | (c) | $ | - | $ | - | $ | 1,972 | (d) | $ | 362,784 | |||||||||||||
CEO | 2012 | $ | 198,037 | $ | 90,500 | (e) | $ | - | $ | 63,414 | (n) | $ | - | $ | - | $ | 1,004 | (d) | $ | 352,955 | ||||||||||||||
2011 | $ | 165,000 | $ | 34,650 | (f) | $ | - | $ | - | $ | - | $ | - | $ | 14,441 | (d) | $ | 214,091 | ||||||||||||||||
Justin Wiernasz | 2013 | $ | 233,776 | $ | 214,293 | (g) | $ | - | $ | 101,411 | (h) | $ | - | $ | - | $ | 6,838 | (d) | $ | 556,318 | ||||||||||||||
President | 2012 | $ | 188,934 | $ | 90,500 | (e) | $ | - | $ | 31,050 | (i) | $ | - | $ | - | $ | 4,372 | (d) | $ | 314,856 | ||||||||||||||
2011 | $ | 165,000 | $ | 34,650 | (f) | $ | - | $ | $ | - | $ | - | $ | - | $ | 199,650 | ||||||||||||||||||
John McDonald | 2013 | $ | 134,677 | $ | 50,000 | (j) | $ | 15,000 | (k) | $ | 7,725 | (l) | $ | - | $ | - | $ | 4,489 | (d) | $ | 211,891 | |||||||||||||
Chief Information and | 2012 | $ | 119,942 | $ | 25,000 | (m) | $ | - | $ | - | $ | - | $ | - | $ | 4,023 | (d) | $ | 148,965 | |||||||||||||||
Principal Accounting Officer | 2011 | $ | 116,933 | $ | - | $ | - | $ | $ | - | $ | - | $ | - | $ | 116,933 |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)( | Total ($) | |||||||||||||||||||||||||
Sam Klepfish | 2014 | $ | 297,858 | $ | 40,000 | (a) | $ | 97,838 | (b) | $ | - | $ | - | $ | - | $ | 2,112 | (d) | $ | 437,808 | ||||||||||||||
CEO | 2013 | $ | 215,828 | $ | 48,000 | (c) | $ | 27,937 | (e) | $ | 69,047 | (f) | $ | - | $ | - | $ | 1,972 | (d) | $ | 362,784 | |||||||||||||
2012 | $ | 198,037 | $ | 90,500 | (f) | $ | - | $ | 63,414 | (h) | $ | - | $ | - | $ | 1,004 | (d) | $ | 352,955 | |||||||||||||||
Justin Wiernasz | 2014 | $ | 264,400 | $ | 145,000 | (n) | $ | 133,055 | (b) | $ | - | $ | $ | - | $ | 5,827 | (d) | $ | 548,282 | |||||||||||||||
President | 2013 | $ | 233,776 | $ | 214,293 | (i) | $ | - | $ | 101,411 | (j) | $ | - | $ | - | $ | 6,838 | (d) | $ | 556,318 | ||||||||||||||
2012 | $ | 188,934 | $ | 90,500 | (g) | $ | - | $ | 31,050 | (k) | $ | - | $ | - | $ | 4,372 | (d) | $ | 314,856 | |||||||||||||||
John McDonald | 2014 | $ | 153,484 | $ | 50,000 | (c) | $ | - | $ | - | $ | - | $ | - | $ | 7,445 | (d) | $ | 210,938 | |||||||||||||||
Chief Information and | 2013 | $ | 134,677 | $ | 50,000 | (c) | $ | 15,000 | (l) | $ | 7,725 | (m) | $ | - | $ | - | $ | 4,489 | (d) | $ | 211,891 | |||||||||||||
Principal Accounting Officer | 2012 | $ | 119,942 | $ | 25,000 | (c) | $ | - | $ | $ | - | $ | - | $ | 4,023 | (d) | $ | 148,965 |
(a) | Consists of a cash bonus paid during the year for services performed in 2013. Does not include $85,000 in cash bonuses and $175,000 of stock bonuses for services performed in 2014 but not paid during the | |
(b) | Consists of the portion of RSUs which were recognized as a period cost in 2014. | |
(c) | Consists of a cash bonus. | |
(d) | Consists of cash payments for health care benefits. | |
(e) | Consists of a stock grant of 84,658 shares of common stock. | |
Consists of options to purchase 62,500 shares of common stock at a price of $1.60 per share. | ||
Consists of a bonus of $45,250, payable in cash, and $45,250 payable in cash or shares, at the discretion of the | ||
Consists of a cash bonus of $145,000 and 47,385 shares of common stock at a price of $1.462 per share. | ||
Consists of options to purchase 62,500 shares of common stock at a price of $1.60 per share, and options to purchase 100,000 shares of common stock at a price of $0.35 per share. | ||
Consists of a cash portion of $21,140 and 57,135 shares of common stock valued at $0.37 per share. | ||
| ||
Consists of a stock grant of 39,474 shares of common stock. | ||
Consists of options to purchase 25,000 shares of common stock at a price of $0.40 per share. | ||
Consists of a cash bonus | ||
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
Sam Klepfish | 100,000 | - | - | $ | 0.350 | 05/04/17 | - | - | - | |||||||||||||||||||||||||||
Sam Klepfish | 100,000 | - | - | $ | 0.350 | 12/31/17 | - | - | - | |||||||||||||||||||||||||||
Sam Klepfish | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | |||||||||||||||||||||||||||
Sam Klepfish | - | 50,000 | - | $ | 0.400 | 01/01/17 | - | - | - | |||||||||||||||||||||||||||
Sam Klepfish | - | 50,000 | - | $ | 0.400 | 01/01/17 | ||||||||||||||||||||||||||||||
Sam Klepfish | - | 100,000 | - | $ | 0.570 | 01/01/18 | ||||||||||||||||||||||||||||||
Sam Klepfish | - | 62,500 | - | $ | 1.600 | 01/01/18 | ||||||||||||||||||||||||||||||
Justin Wiernasz | 160,000 | (a) | - | - | $ | 0.446 | (b) | - | (c) | - | - | - | - | |||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 0.350 | 05/04/17 | - | - | - | - | ||||||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 0.350 | 12/31/17 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | - | 50,000 | - | $ | 0.400 | 01/01/17 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | - | 50,000 | - | $ | 0.400 | 01/01/17 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | - | 100,000 | - | $ | 0.570 | 01/01/18 | - | - | - | - | ||||||||||||||||||||||||||
Justin Wiernasz | - | 62,500 | - | $ | 1.600 | 01/01/18 | - | - | - | |||||||||||||||||||||||||||
John McDonald | 50,000 | (a) | - | - | $ | (b) | - | (c) | ||||||||||||||||||||||||||||
John McDonald | 25,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | - | ||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.400 | 01/01/17 | - | - | - | - | ||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.400 | 01/01/17 | - | - | - | - | ||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.570 | 01/01/18 | ||||||||||||||||||||||||||||||
John McDonald | - | 30,000 | - | $ | 1.600 | 01/01/18 | ||||||||||||||||||||||||||||||
John McDonald | - | 30,000 | - | $ | 1.600 | 01/01/18 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
Sam Klepfish | 1,450,000 | (a) | $ | 1,957,500 | (b) | |||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | $ | 0.350 | 05/04/17 | ||||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | - | - | $ | 0.350 | 12/31/17 | - | - | - | |||||||||||||||||||||||||||
Sam Klepfish | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | |||||||||||||||||||||||||||
Sam Klepfish | 50,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | |||||||||||||||||||||||||||
Sam Klepfish | - | 50,000 | - | $ | 0.400 | 01/01/17 | ||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | - | - | $ | 0.570 | 01/01/18 | ||||||||||||||||||||||||||||||
Sam Klepfish | 62,500 | - | - | $ | 1.600 | 01/01/18 | ||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | - | - | $ | 2.000 | 02/28/17 | ||||||||||||||||||||||||||||||
Justin Wiernasz | 1,720,000 | (a) | $ | 2,322,000 | (b) | |||||||||||||||||||||||||||||||
Justin Wiernasz | 160,000 | (c) | - | - | $ | 0.446 | (d) | - | (e) | - | - | - | - | |||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 0.350 | 05/04/17 | - | - | - | - | ||||||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 0.350 | 12/31/17 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | 50,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | - | 50,000 | - | $ | 0.400 | 01/01/17 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 0.570 | 01/01/18 | - | - | - | - | ||||||||||||||||||||||||||
Justin Wiernasz | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | |||||||||||||||||||||||||||
John McDonald | 50,000 | (c) | - | - | $ | (d) | - | (e) | ||||||||||||||||||||||||||||
John McDonald | 25,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | - | ||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.400 | 01/01/17 | - | - | - | - | ||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.400 | 01/01/17 | - | - | - | - | ||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.570 | 01/01/18 | ||||||||||||||||||||||||||||||
John McDonald | 30,000 | - | - | $ | 1.600 | 01/01/18 | ||||||||||||||||||||||||||||||
John McDonald | - | 30,000 | - | $ | 1.600 | 01/01/18 |
(a) | All RSU vesting is contingent upon the attainment of performance goals related to sales and contingent on continued employment with the Company. In addition to the performance-based vesting, RSUs vest according to the following schedule: 75,000 on January 1, 2015; 240,000 on July 1, 2015; 150,000 on December 31, 2015; 75,000 on May 1, 2016; 90,000 on July 1, 2016; 300,000 on December 31, 2016; 490,000 on July 1, 2017; and 300,000 contingent solely upon the achievement of performance goals and the continued employment with the Company. |
(b) | Amounts are calculated by multiplying the number of shares shown in the table by $1.35 per share, which is the closing price of common stock on December 31, 2014 (the last trading day of the 2014 fiscal year). |
(c) | Options vest at the rate of 25% each quarter beginning March 31, |
Weighted-average exercise price. |
Option term is 5 years from the date of vesting. |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name and Address of Beneficial Owners | Number of Shares Beneficially Owned | Percent of Class | |||||||
Sam Klepfish | (1) | 1,222,548 | 14.3 | % | |||||
Michael Ferrone | (2) | 1,619,282 | 20.8 | % | |||||
Joel Gold | (3) | 489,054 | 6.3 | % | |||||
Solomon Mayer | (4) | 200,000 | 2.6 | % | |||||
Hank Cohn | (5) | 200,000 | 2.6 | % | |||||
Justin Wiernasz | (6) | 685,000 | 8.5 | % | |||||
Christopher Brown | (7) | 492,200 | 6.6 | % | |||||
Alpha Capital Anstalt | (8) | 404,365 | 5.5 | % | |||||
Ian J. Cassel | (9) | 408,303 | 5.5 | % | |||||
73114 Investments LLC | (10) | 397,111 | 5.4 | % | |||||
All officers and directors as a whole (6 persons) | (11) | 4,786,731 | 44.4 | % |
Name and Address of Beneficial Owners | Number of Shares Beneficially Owned | Percent of Class | |||||||
Sam Klepfish (Officer, Director) | (1) | 2,788,600 | 11.4 | % | |||||
Michael Ferrone | (2) | 1,599,282 | 7.3 | % | |||||
Joel Gold (Director) | (3) | 859,054 | 3.8 | % | |||||
Solomon Mayer (Director) | (4) | 570,000 | 2.6 | % | |||||
Hank Cohn (Director) | (5) | 570,000 | 2.6 | % | |||||
Justin Wiernasz (Officer, Director) | (6) | 2,605,000 | 10.8 | % | |||||
YS Catering | (7) | 4,647,206 | 21.4 | % | |||||
Yorkmont Capital Partners, LP | (8) | 2,073,498 | 9.6 | % | |||||
Alpha Capital Anstalt | (9) | 1,779,776 | 8.2 | % | |||||
All officers and directors as a whole (5 persons) | (10 | 7,392,654 | 25.7 | % |
(1) | Includes 55,000 shares of common stock held by Mr. Klepfish; options to purchase |
(2) | Includes |
(3) | Includes |
(4) | Includes options to purchase |
(5) | Includes options to purchase |
(6) | Includes |
(7) | |
(8) | Consists of |
(9) | Consists of 1,779,776 shares of common stock held by Alpha Capital. Excludes shares underlying warrants and convertible notes which are subject to a 9.99% blocker provision. The address of its principal business is Pradafant 7, Furstentums 9490, Vaduzm Liechtenstein. Information gathered from a Schedule 13G filed with the Securities and Exchange Commission on February 15, 2012. |
(10) | Includes |
|
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||||||||||||||||||||||||||
Sam Klepfish | 1,450,000 | (a) | $ | 1,957,500 | (b) | |||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | $ | 0.350 | 05/04/17 | ||||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | - | - | $ | 0.350 | 12/31/17 | - | - | - | |||||||||||||||||||||||||||
Sam Klepfish | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | |||||||||||||||||||||||||||
Sam Klepfish | 50,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | |||||||||||||||||||||||||||
Sam Klepfish | - | 50,000 | - | $ | 0.400 | 01/01/17 | ||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | - | - | $ | 0.570 | 01/01/18 | ||||||||||||||||||||||||||||||
Sam Klepfish | 62,500 | - | - | $ | 1.600 | 01/01/18 | ||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | - | - | $ | 2.000 | 02/28/17 | ||||||||||||||||||||||||||||||
Justin Wiernasz | 1,720,000 | (a) | $ | 2,322,000 | (b) | |||||||||||||||||||||||||||||||
Justin Wiernasz | 160,000 | (c) | - | - | $ | 0.446 | (d) | - | (e) | - | - | - | - | |||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 0.350 | 05/04/17 | - | - | - | - | ||||||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 0.350 | 12/31/17 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | 50,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | - | 50,000 | - | $ | 0.400 | 01/01/17 | - | - | - | |||||||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 0.570 | 01/01/18 | - | - | - | - | ||||||||||||||||||||||||||
Justin Wiernasz | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | |||||||||||||||||||||||||||
John McDonald | 50,000 | (c) | - | - | $ | (d) | - | (e) | ||||||||||||||||||||||||||||
John McDonald | 25,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | - | ||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.400 | 01/01/17 | - | - | - | - | ||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.400 | 01/01/17 | - | - | - | - | ||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.570 | 01/01/18 | ||||||||||||||||||||||||||||||
John McDonald | 30,000 | - | - | $ | 1.600 | 01/01/18 | ||||||||||||||||||||||||||||||
John McDonald | - | 30,000 | - | $ | 1.600 | 01/01/18 |
(a) | All RSU vesting is contingent upon the attainment of performance goals related to sales and contingent on continued employment with the Company. In addition to the performance-based vesting, RSUs vest according to the following schedule: 75,000 on January 1, 2015; 240,000 on July 1, 2015; 150,000 on December 31, 2015; 75,000 on May 1, 2016; 90,000 on July 1, 2016; 300,000 on December 31, 2016; 490,000 on July 1, 2017; and 300,000 contingent solely upon the achievement of performance goals and the continued employment with the Company. |
(b) | Amounts are calculated by multiplying the number of shares shown in the table by $1.35 per share, which is the closing price of common stock on December 31, 2014 (the last trading day of the 2014 fiscal year). |
(c) | Options vest at the rate of 25% each quarter beginning March 31, 2010. |
(d) | Weighted-average exercise price. |
(e) | Option term is 5 years from the date of vesting. |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (a) | Option Awards ($) (b) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
Joel Gold | $ | 10,000 | $ | 270,000 | $ | 38,283 | $ | - | $ | - | $ | - | $ | 318,283 | ||||||||||||||
Sam Klepfish | $ | - | $ | - | $ | 38,283 | $ | - | $ | - | $ | - | $ | 38,283 | ||||||||||||||
Solomon Mayer | $ | 10,000 | $ | 270,000 | $ | 38,283 | $ | - | $ | - | $ | - | $ | 318,283 | ||||||||||||||
Hank Cohn | $ | 10,000 | $ | 270,000 | $ | 38,283 | $ | - | $ | - | $ | - | $ | 318,283 | ||||||||||||||
Justin Wiernasz | $ | - | $ | 270,000 | $ | 38,283 | $ | - | $ | - | $ | - | $ | 308,283 |
JUSTIN WIERNASZ On November 20, 2012 we entered into an employment agreement with Mr. Wiernasz, the Company’s President, having an effective date of January 1, 2013 and terminating on December 31, 2015 The agreement is for a term of three years, and provides a base compensation in the amount of $226,250 per annum for year one, $248,875 per annum for year two, and $273,763 per annum for year three. The agreement also provides for annual bonuses including bonuses based on increases in EBITDA (as defined in the agreement) of our various subsidiaries; additional bonuses upon the occurrence of certain events such as: listing on specific stock exchanges, spin-offs, investments and stock trading and volume levels. The agreement also provides for stock options with exercise prices ranging from $0.40 - $1.60 and an award of restricted stock, which only vests if certain volume and pricing milestones with respect to our common stock are met. Mr. Wiernasz also has the option of receiving any portion of his salary or bonus in the form of equity. The agreement also contains non-compete and non-solicitation provisions. On August 7, 2014, our board of directors approved the amendment of the Employment Agreement with Mr. Wiernasz effective as of August 13, 2014. The employment agreement was amended as follows: (i) it has been extended by one year to December 31, 2016; (ii) it provides for 10% annual increases of Base Salary commencing in 2014; (iii) all performance based bonuses are eliminated; (iv) stock grants previously issued with vesting based upon performance or stock price are cancelled; (v) a new performance based bonus structure to partially replace the previous structure, based upon meeting certain Cash EBITDA (earnings before interest, taxes, depreciation, and amortization and non-cash compensation charges) targets, the new bonus will have a cash portion and a stock portion and all Base Salary can be paid in cash or in stock at the option of Mr. Wiernasz, and (vi) an award of 75,000 restricted stock units which vest on January 1, 2015 and 75,000 restricted stock units which vest on May 1, 2016. Mr. Wiernasz will have the option, on an annual basis, to take all or part of the cash portion of the bonus, or any part of Base Salary in the form of stock at a valuation based upon the closing stock price on the last trading day of the prior year. The decision on how much, if any, of the bonus to take in stock must be made by May 1 of each year, unless earlier required. The Cash EBITDA target levels do not include the effect of any potential future acquisitions and also do not include certain one time or non-recurring expenses in the calculation of the Cash EBITDA. If a Cash EBITDA target is missed by 3% or less, the bonus for the target so missed shall be reduced by 20% and if it is missed by 3.1% -5%, the bonus for such target shall be reduced by 30%. The employment agreement of Mr. Wiernasz was amended (i) ) in the event of a change of control (as defined below) all equity based compensation (including options and restricted stock units) payable pursuant to such employment agreements, shall immediately vest and/or restrictions thereon shall lapse, and (ii) to provide that in the event of a termination without Cause (as defined in the employment agreement) they shall receive a lump sum payment equal to the greater of (x) the salary payable over the last six months of the term of the agreement, or (y) the Base Salary (as defined in the employment agreement) remaining through the end of the then-current term of the agreement. The definition of change of control shall mean the occurrence of any of the following events: (w) the sale or transfer by the Company for at least $25 million (such consideration consisting of cash, cash equivalents, notes or securities) of more than 50% of its Voting Securities (as defined below) or substantially all of its assets; or (x) the acquisition, other than from the Company or employees of it or any of its subsidiaries, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) (other than an employee benefit plan of the Company) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Voting Securities"); or (y) the approval by the stockholders of the Company of a reorganization, merger, consolidation or recapitalization of the Company (a "Business Combination"), other than a Business Combination in which more than 50% of the combined voting power of the outstanding Voting Securities of the surviving or resulting entity immediately following the Business Combination is held by the persons who, immediately prior to the Business Combination, were the holders of the Voting Securities; or (z) the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, or a sale of all or substantially all of the assets of the Company. Mr. Wiernasz was awarded, as a special bonus, effective November 17, 2014, an aggregate of 1,000,000 restricted stock units (“RSU”) subject to time and performance vesting conditions, with the timing conditions as follows: 150,000 RSUs vest on each of July 1 and December 31, 2015; 300,000 RSUs vest on December 31, 2016 and 400,000 RSUs vest on July 1, 2017, and the performance conditions are as follows: for the RSUs vesting in 2015, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2015, for the RSUs vesting in 2016, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2016 and for the RSUs vesting in 2017, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2017, provided however, that if the performance condition is not met in any year, the RSUs scheduled to vest in such year will still vest if the Corporation, on a consolidated basis, has six months with sales of at least $2,500,000 during the following year. The company's board of directors will modify and increase the performance requirements, with the consent of executive, if warranted and appropriate. Compensation Committee Interlocks and Insider Participation None of our executive officers has served as a director or member of a compensation committee (or other board committee performing equivalent functions) of any other entity, one of whose executive officers served as a director or a member of our Compensation Committee. ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth certain information as of March 10, 2015 with respect to the beneficial ownership of our common stock by (1) each person known by us to own beneficially more than 5% of the outstanding shares of our common stock, (2) each of our directors, (3) each Named Officer, and (4) all our directors and executive officers as a group. Unless otherwise stated, each person listed below uses the Company’s address. Pursuant to SEC rules, includes shares that the person has the right to receive within 60 days from March 10, 2015.
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ITEM 13. Certain Relationships and Related Transactions, and Director Independence We are not currently subject to the requirements of any stock exchange or national securities association with respect to having a majority of “independent directors” although we believe that we meet the standard established by NASDAQ inasmuch as Messrs. Gold, Mayer, and Cohn, are “independent” and only Messrs. Klepfish and Wiernasz, by virtue of being our Executive Officers, are not independent. Mr. Klepfish and Mr. Wiernasz do not participate in board discussions concerning their compensation ITEM 14. Principal Accountant Fees and Services Chief Executive Officer and Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | 49 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joel Gold | 74 | Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Solomon Mayer | 57 | Director | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Hank Cohn | 45 | Director |
Sam Klepfish Mr. Klepfish has been a director since December 1, 2005. From November 2007 to present Mr. Klepfish is the CEO of Innovative Food Holdings and its subsidiaries. From March 2006 to November 2007 Mr. Klepfish was the interim president of the Company and its subsidiary. Since February 2005 Mr. Klepfish was also a Managing Partner at ISG Capital, a merchant bank. From May 2004 through February 2005 Mr. Klepfish served as a Managing Director of Technoprises, Ltd. From January 2001 to May 2004 he was a corporate finance analyst and consultant at Phillips Nizer, a New York law firm. Since January 2001 Mr. Klepfish has been a member of the steering committee of Tri-State Ventures, a New York investment group. From 1998 to December 2000, Mr. Klepfish was an asset manager for several investors in small-cap entities. Joel Gold, Director Mr. Gold is currently an investment Banker at Buckman, Buckman and Reid located in New Jersey, a position he has held since May 2010. Prior there to, from October 2004, he was head of investment banking of Andrew Garrett, Inc. From January 2000 until September 2004, he served as Executive Vice President of Investment Banking of Berry Shino Securities, Inc., an investment banking firm also located in New York City. From January 1999 until December 1999, he was an Executive Vice President of Solid Capital Markets, an investment-banking firm also located in New York City. From September 1997 to January 1999, he served as a Senior Managing Director of Interbank Capital Group, LLC, an investment banking firm also located in New York City. From April 1996 to September 1997, Mr. Gold was an Executive Vice President of LT Lawrence & Co., and from March 1995 to April 1996, a Managing Director of Fechtor Detwiler & Co., Inc., a representative of the underwriters for the Company’s initial public offering. Mr. Gold was a Managing Director of Furman Selz Incorporated from January 1992 until March 1995. From April 1990 until January 1992, Mr. Gold was a Managing Director of Bear Stearns and Co., Inc. (“Bear Stearns”). For approximately 20 years before he became affiliated with Bear Stearns, he held various positions with Drexel Burnham Lambert, Inc. He is currently a director, and serves on the Audit and Compensation Committees, of Geneva Financial Corp., a publicly held specialty, consumer finance company. Solomon Mayer, Director Mr. Mayer has been a director since October 29, 2010. Mr. Solomon Mayer has held various executive level positions, and has successfully overseen several businesses from conceptions to profitability. Mr. Mayer is currently on the board of directors of the following private Companies: Mooney Airplane Corporation, Premier Store Fixtures and Supreme Construction and Development, a real estate development and investment firm. Hank Cohn, Director Mr. Cohn has been a director since October 29, 2010. Hank Cohn is currently CEO of P1 Billing, LLC, a revenue cycle management services provider to ambulatory medical clinics. P1 Billing is a spinoff of PracticeOne Inc., (formerly PracticeXpert, Inc., an OTCBB traded company), an integrated PMS and EMR software and services company for physicians. Mr. Cohn served as President and Chief Executive Officer of PracticeOne from December 2009 until December 2009, at which time he sold the company to Francison Partners, one of the largest, global technology focused, private equity firms in Silicon Valley. Prior to that, Mr. Cohn worked with a number of public companies. A partial list of his past and present board memberships include: Analytical Surveys, Inc., Kaching Kaching, Inc., and International Food and Wine, Inc., currently Evolution Resources Inc. Mr. Cohn also served as the executive vice president of Galaxy Ventures, LLC a closely-held investment fund concentrating in the areas of bond trading and early stage technology investments, where he acted as portfolio manager for investments. Justin Wiernasz, President Mr. Wiernasz has been a director since November 1, 2013. Effective on July 31, 2008, Mr. Justin Wiernasz was promoted to the position of President of Innovative Food Holdings, Inc. Prior thereto he was the Executive Vice President of Marketing and Sales and Chief Marketing Officer of our operating subsidiary, Food Innovations, Inc. since May 2007 and the President of Food Innovations and our Chief Marketing Officer since December 2007. Prior thereto, he was at USF, our largest customer, for 13 years. From 2005 to 2007 he was the Vice President of Sales & Marketing, USF, Boston, and prior thereto, from 2003 to 2005 he was a National Sales Trainer at USF, Charleston SC, from 1996 to 2003 he was the District Sales Manager at USF, Western Massachusetts and from 1993 to 1996 he was Territory Manager, USF, Northampton, Easthampton & Amherst, MA. Prior to that from 1989 to 1993 he was the owner and operator J.J.’s food and spirit, a 110 seat restaurant. Key Employee John McDonald Mr. McDonald, age 53, has been the Chief Information Officer of IVFH since November 2007 and our principal accounting officer since November 2007. From 2004 through 2007, Mr. McDonald worked as a consultant with Softrim Corporation of Estero, Florida where he created custom applications for a variety of different industries and assisted in building interfaces to accounting applications. Since 1999 he has also been President of McDonald Consulting Group, Inc. which provide consulting on accounts receivable, systems and accounting services. Qualification of Directors We believe that all of our directors are qualified for their positions and each brings a benefit to the board. Messrs. Kelpfish and Wiernasz, as our executive officers, are uniquely qualified to bring management’s perspective to the board’s deliberations. Mr. Gold, with his lengthy career working for broker/dealers, brings “Wall Street’s” perspective. Mr. Mayer, with his experience as an executive in start-up companies, brings that knowledge and insight to the board. Mr. Cohn, with his prior history of being an executive and his experience as a director of other companies, brings a well-rounded background and wealth of experience to our board. Committees The Board of Directors does not currently have an Audit Committee, a Compensation Committee, a Nominating Committee or a Governance Committee. The usual functions of such committees are performed by the entire Board of Directors. We are currently having difficulties attracting additional qualified directors, specifically to act as the audit committee financial expert. However, we believe that at least a majority of our directors are familiar with the contents of financial statements. Code of Ethics We have adopted a Code of Ethics that applies to each of our employees, including our principal executive officer and our principal financial officer, as well as members of our Board of Directors. A copy of such Code has been publicly filed with, and is available for free from, the Securities and Exchange Commission. Section 16(a) Beneficial Ownership Reporting Compliance During 2014, each officer and director did not file one Form 4 and Mr. Wiernasz did not file two Forms 4. ITEM 11. Executive Compensation The following table sets forth information concerning the compensation for services rendered to us for the year ended December 31, 2014, of our Chief Executive Officer and our other executive officers whose annual compensation exceeded $100,000 in the fiscal year ended December 31, 2014, if any. We refer to the Chief Executive Officer and these other officers as the named executive officers. SUMMARY COMPENSATION TABLE | ||||
Outstanding Equity Awards at Fiscal Year-End as of December 31, 2014
Director Compensation
(a) Consists of the grant date fair value of 270,000 RSUs at $1.00 per share granted to each director in 2014 for service in years 2015, 2016, and 2017 and is contingent upon being a member of the board in those years. Mr. Klepfish declined this grant of RSUs which the Company offered to all Directors in 2014. (b) Consists of the grant date fair value of two-year options to purchase 100,000 shares of common stock at a price of $2.00 per share granted to each director in 2014.Employment Agreements Our subsidiary, Food Innovations, has employment agreements with certain officers and certain employees. The employment agreements provide for salaries and benefits, including stock grants and extend up to five years. In addition to salary and benefit provisions, the agreements include defined commitments should the employer terminate the employee with or without cause. SAM KLEPFISH On November 20, 2012 we entered into an employment agreement with Mr. Klepfish, the Corporation’s CEO, having an effective date of January 1, 2013 and terminating on December 31, 2015. The agreement provides a base compensation in the amount of $198,312 in cash plus an additional $27,937 in restricted stock units for year one, $223,987 in cash plus an additional $24,875 in restricted stock units for year two, and $260,075 in cash plus an additional $13,688 in restricted stock units for year three. The agreement also provides for annual bonuses including bonuses based on increases in EBITDA (as defined in the agreement) of our various subsidiaries; additional bonuses upon the occurrence of certain events such as: listing on specific stock exchanges, spin-offs, investments and stock trading and volume levels. The agreement also provides for stock options with exercise prices ranging from $0.40 - $1.60 and an award of restricted stock, which only vests if certain volume and pricing milestones with respect to our common stock are met. Mr. Klepfish also has the option of receiving any portion of his salary or bonus in the form of equity. The agreement also contains non-compete and non-solicitation provisions. On August 7, 2014, our board of directors approved the amendment of the Employment Agreement with Mr. Klepfish effective as of August 13, 2014. The employment agreement was amended as follows: (i) it has been extended by one year to December 31, 2016; (ii) it provides for 10% annual increases of Base Salary commencing in 2014; (iii) all performance based bonuses are eliminated; (iv) stock grants previously issued with vesting based upon performance or stock price are cancelled; (v) a new performance based bonus structure to partially replace the previous structure, based upon meeting certain Cash EBITDA (earnings before interest, taxes, depreciation, and amortization and non-cash compensation charges) targets, the new bonus will have a cash portion and a stock portion and all Base Salary can be paid in cash or in stock at the option of Mr. Klepfish, and (vi) 125,00 restricted stock units which vest if the 30 day average closing price of our common stock is $2.00 or above and there is a 50,000 average daily volume or there is a 50,000 average daily volume for 14 straight trading days; and 175,000 restricted stock units which vest if the 30 day average closing price of our common stock is $3.00 or above and there is a 50,000 average daily volume for 14 straight trading days. Mr. Klepfish will have the option, on an annual basis, to take all or part of the cash portion of the bonus, or any part of Base Salary in the form of stock at a valuation based upon the closing stock price on the last trading day of the prior year. The decision on how much, if any, of the bonus to take in stock must be made by May 1 of each year, unless earlier required. The Cash EBITDA target levels do not include the effect of any potential future acquisitions and also do not include certain one time or non-recurring expenses in the calculation of the Cash EBITDA. If a Cash EBITDA target is missed by 3% or less, the bonus for the target so missed shall be reduced by 20% and if it is missed by 3.1% -5%, the bonus for such target shall be reduced by 30%, except in both cases, Mr. Klepfish has negative discretion to further reduce the bonuses or even cancel them. In November 2014, the employment agreement of Mr. Klepfish was amended (i) ) in the event of a change of control (as defined below) all equity based compensation (including options and restricted stock units) payable pursuant to such employment agreements, shall immediately vest and/or restrictions thereon shall lapse, and (ii) to provide that in the event of a termination without Cause (as defined in the employment agreement) they shall receive a lump sum payment equal to the greater of (x) the salary payable over the last six months of the term of the agreement, or (y) the Base Salary (as defined in the employment agreement) remaining through the end of the then-current term of the agreement. The definition of change of control shall mean the occurrence of any of the following events: (w) the sale or transfer by the Company for at least $25 million (such consideration consisting of cash, cash equivalents, notes or securities) of more than 50% of its Voting Securities (as defined below) or substantially all of its assets; or (x) the acquisition, other than from the Company or employees of it or any of its subsidiaries, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) (other than an employee benefit plan of the Company) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Voting Securities"); or (y) the approval by the stockholders of the Company of a reorganization, merger, consolidation or recapitalization of the Company (a "Business Combination"), other than a Business Combination in which more than 50% of the combined voting power of the outstanding Voting Securities of the surviving or resulting entity immediately following the Business Combination is held by the persons who, immediately prior to the Business Combination, were the holders of the Voting Securities; or (z) the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, or a sale of all or substantially all of the assets of the Company. Mr. Klepfish was awarded, as a special bonus, effective November 17, 2014, an aggregate of 1,000,000 restricted stock units (“RSU”) subject to time and performance vesting conditions, with the timing conditions as follows: 150,000 RSUs vest on each of July 1 and December 31, 2015; 300,000 RSUs vest on December 31, 2016 and 400,000 RSUs vest on July 1, 2017, and the performance conditions are as follows: for the RSUs vesting in 2015, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2015, for the RSUs vesting in 2016, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2016 and for the RSUs vesting in 2017, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2017, provided however, that if the performance condition is not met in any year, the RSUs scheduled to vest in such year will still vest if the Corporation, on a consolidated basis, has six months with sales of at least $2,500,000 during the following year. The company's board of directors will modify and increase the performance requirements, with the consent of executive, if warranted and appropriate. JUSTIN WIERNASZ On November 20, 2012 we entered into an employment agreement with Mr. Wiernasz, the Company’s President, having an effective date of January 1, 2013 and terminating on December 31, 2015 The agreement is for a term of three years, and provides a base compensation in the amount of $226,250 per annum for year one, $248,875 per annum for year two, and $273,763 per annum for year three. The agreement also provides for annual bonuses including bonuses based on increases in EBITDA (as defined in the agreement) of our various subsidiaries; additional bonuses upon the occurrence of certain events such as: listing on specific stock exchanges, spin-offs, investments and stock trading and volume levels. The agreement also provides for stock options with exercise prices ranging from $0.40 - $1.60 and an award of restricted stock, which only vests if certain volume and pricing milestones with respect to our common stock are met. Mr. Wiernasz also has the option of receiving any portion of his salary or bonus in the form of equity. The agreement also contains non-compete and non-solicitation provisions. On August 7, 2014, our board of directors approved the amendment of the Employment Agreement with Mr. Wiernasz effective as of August 13, 2014. The employment agreement was amended as follows: (i) it has been extended by one year to December 31, 2016; (ii) it provides for 10% annual increases of Base Salary commencing in 2014; (iii) all performance based bonuses are eliminated; (iv) stock grants previously issued with vesting based upon performance or stock price are cancelled; (v) a new performance based bonus structure to partially replace the previous structure, based upon meeting certain Cash EBITDA (earnings before interest, taxes, depreciation, and amortization and non-cash compensation charges) targets, the new bonus will have a cash portion and a stock portion and all Base Salary can be paid in cash or in stock at the option of Mr. Wiernasz, and (vi) an award of 75,000 restricted stock units which vest on January 1, 2015 and 75,000 restricted stock units which vest on May 1, 2016. Mr. Wiernasz will have the option, on an annual basis, to take all or part of the cash portion of the bonus, or any part of Base Salary in the form of stock at a valuation based upon the closing stock price on the last trading day of the prior year. The decision on how much, if any, of the bonus to take in stock must be made by May 1 of each year, unless earlier required. The Cash EBITDA target levels do not include the effect of any potential future acquisitions and also do not include certain one time or non-recurring expenses in the calculation of the Cash EBITDA. If a Cash EBITDA target is missed by 3% or less, the bonus for the target so missed shall be reduced by 20% and if it is missed by 3.1% -5%, the bonus for such target shall be reduced by 30%. The employment agreement of Mr. Wiernasz was amended (i) ) in the event of a change of control (as defined below) all equity based compensation (including options and restricted stock units) payable pursuant to such employment agreements, shall immediately vest and/or restrictions thereon shall lapse, and (ii) to provide that in the event of a termination without Cause (as defined in the employment agreement) they shall receive a lump sum payment equal to the greater of (x) the salary payable over the last six months of the term of the agreement, or (y) the Base Salary (as defined in the employment agreement) remaining through the end of the then-current term of the agreement. The definition of change of control shall mean the occurrence of any of the following events: (w) the sale or transfer by the Company for at least $25 million (such consideration consisting of cash, cash equivalents, notes or securities) of more than 50% of its Voting Securities (as defined below) or substantially all of its assets; or (x) the acquisition, other than from the Company or employees of it or any of its subsidiaries, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) (other than an employee benefit plan of the Company) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Voting Securities"); or (y) the approval by the stockholders of the Company of a reorganization, merger, consolidation or recapitalization of the Company (a "Business Combination"), other than a Business Combination in which more than 50% of the combined voting power of the outstanding Voting Securities of the surviving or resulting entity immediately following the Business Combination is held by the persons who, immediately prior to the Business Combination, were the holders of the Voting Securities; or (z) the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, or a sale of all or substantially all of the assets of the Company. Mr. Wiernasz was awarded, as a special bonus, effective November 17, 2014, an aggregate of 1,000,000 restricted stock units (“RSU”) subject to time and performance vesting conditions, with the timing conditions as follows: 150,000 RSUs vest on each of July 1 and December 31, 2015; 300,000 RSUs vest on December 31, 2016 and 400,000 RSUs vest on July 1, 2017, and the performance conditions are as follows: for the RSUs vesting in 2015, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2015, for the RSUs vesting in 2016, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2016 and for the RSUs vesting in 2017, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2017, provided however, that if the performance condition is not met in any year, the RSUs scheduled to vest in such year will still vest if the Corporation, on a consolidated basis, has six months with sales of at least $2,500,000 during the following year. The company's board of directors will modify and increase the performance requirements, with the consent of executive, if warranted and appropriate. Compensation Committee Interlocks and Insider Participation None of our executive officers has served as a director or member of a compensation committee (or other board committee performing equivalent functions) of any other entity, one of whose executive officers served as a director or a member of our Compensation Committee. ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth certain information as of March 10, 2015 with respect to the beneficial ownership of our common stock by (1) each person known by us to own beneficially more than 5% of the outstanding shares of our common stock, (2) each of our directors, (3) each Named Officer, and (4) all our directors and executive officers as a group. Unless otherwise stated, each person listed below uses the Company’s address. Pursuant to SEC rules, includes shares that the person has the right to receive within 60 days from March 10, 2015.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence We are not currently subject to the requirements of any stock exchange or national securities association with respect to having a majority of “independent directors” although we believe that we meet the standard established by NASDAQ inasmuch as Messrs. Gold, Mayer, and Cohn, are “independent” and only Messrs. Klepfish and Wiernasz, by virtue of being our Executive Officers, are not independent. Mr. Klepfish and Mr. Wiernasz do not participate in board discussions concerning their compensation ITEM 14. Principal Accountant Fees and Services Audit Fees The Company engaged Liggett, Vogt & Webb P.A. (“LVW”) as our new independent registered public accounting firm as of November 9, 2012. During the year ended December 31, 2014 and 2013, LVW billed us audit fees of approximately $67,700 and $55,700, respectively. Audit-Related Fees The aggregate fees billed in each of the last two fiscal years for assurance and related services by LVW that are reasonably related to the performance of the audit or review of our consolidated financial statements including our quarterly interim reviews on Form 10-Q and are reported under Audit Fees above. Tax Fees LVW tax fees were $5,500 and $5,500 for the years ended December 31, 2014 and 2013, respectively. All Other Fees LVW has not billed any other fees since their engagement on November 9, 2012. PART IV ITEM 15. Exhibits
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INNOVATIVE FOOD HOLDINGS, INC. By: /s/ Sam Klepfish Sam Klepfish, Chief Executive Officer and Director Dated: March 31, 2015 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Exhibit Index
64 |