Enlightened Gourmet 10Q 2009 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

X. QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended March 31, 2009

. TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ______ to______

Commission file number 0-51597

THE ENLIGHTENED GOURMET, INC.

(Name of Small Business Issuer as Specified in its Charter)


Nevada		32-0121206
(State of Incorporation)		(I.R.S. Employer Identification No.)

236 Centerbrook, Hamden, CT 06518

(Address of principal executive offices) (Zip Code)

Issuer’s Telephone Number: 203-230-9930

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X.. No .

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). .Yes .No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	.	Smaller reporting company	X.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes .. No X.

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: As of June 17, 2009, 187,068,505 shares of the issuer's Common Stock were issued and 176,423,794 were outstanding

THE ENLIGHTENED GOURMET, INC.

Index


		Page
		Number
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements	4

	Balance Sheets as of March 31, 2009 (unaudited), and December 31, 2008	4

	Statements of Operations for the three months ended March 31, 2009 and 2008 (unaudited)	5

	Statement of Stockholders’ Deficit (unaudited)	6

	Statements of Cash Flows for the three months ended March 31, 2009 and 2008 (unaudited)	8

	Notes to Financial Statements (unaudited)	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23

Item 4T.	Controls and Procedures	23

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	23

Item 1A.	Risk Factors	23

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	Submission of Matters to a Vote of Security Holders	24

Item 5.	Other Information	25

Item 6.	Exhibits	25

SIGNATURES		26

ITEM 1. FINANCIAL STATEMENTS

THE ENLIGHTENED GOURMET, INC.

BALANCE SHEETS

As of March 31, 2009 and December 31, 2008


ASSETS
		(Unaudited)
		March 31,		December 31,
		2009		2008
CURRENT ASSETS:
Cash and cash equivalents	$	49	$	2,629
Accounts receivable		311,213		251,786
Less slotting fees		300,000		240,000
Accounts receivable, net		11,213		11,786
Inventory
Finished goods		27,054		34,136
Raw materials		200,318		176,877
Total inventory		227,372		211,013

TOTAL CURRENT ASSETS		238,634		225,428

DEFERRED FINANCING COSTS		11,220		-

INTANGIBLE ASSETS		250,000		250,000

TOTAL ASSETS	$	499,854	$	475,428

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES:
Accounts payable	$	484,675	$	445,811
Accrued expenses		549,744		474,338

Notes payable
Stockholders		449,000		449,000
Other		808,055		699,599
		1,257,055		1,148,599
TOTAL CURRENT LIABILITIES		2,291,474		2,068,748

STOCKHOLDERS’ DEFICIT:
Preferred stock, series B, $0.001 par value; 250,000 shares authorized
183,333 shares issued and outstanding		183		183
Additional paid in capital on preferred stock		1,938,174		1,938,174
Common stock,par value $0.001, 350,000,000 shares authorized,
187,068,505 shares issued and outstanding		187,069		185,069
Additional Paid in Capital		6,952,139		6,867,638
Accumulated Deficit		(10,858,540)		(10,546,017)
		(1,780,975)		(1,544,953)
Less: Treasury stock, 10,644,711 shares		(10,645)		(10,645)
Deferred financing costs		-		(27,722)
Unearned compensation		-		-
TOTAL STOCKHOLDERS’ DEFICIT		(1,791,620)		(1,593,320)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	499,854	$	475,428

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

THE ENLIGHTENED GOURMET, INC.

STATEMENTS OF OPERATIONS

For the Three Months ended March 31, 2009 and 2008


		March 31, 2009		March 31, 2008

REVENUE:
Sales of products	$	64,194	$	190,893
Less discounts and slotting fees		(60,000)		(15,382)
NET REVENUE		4,194		175,511

COST OF SALES		65,933		102,840

GROSS MARGIN		(61,739)		(72,671)

EXPENSES:
Selling, general & administrative		154,510		424,058
Interest		96,274		337,278
		250,784		761,336

LOSS BEFORE TAXES		(312,523)		(688,665)

INCOME TAX EXPENSE		-		-

NET LOSS	$	(312,523)	$	(688,665)

BASIC AND DILUTED LOSS PER SHARE	$	(0.01)	$	(0.01)

Weighted average number of
shares of common of stock outstanding		186,502,571		169,581,073

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

THE ENLIGHTENED GOURMET, INC.

STATEMENTS OF STOCKHOLDERS' DEFICIT


					Additional		Deferred			Total
	Common Stock		Preferred Stock		Paid – In	Unearned	Offering	Accumulated	Treasury	Stockholders’
	Shares	Amount	Shares	Amount	Capital	Compensation	Expense	Deficit	Stock	Equity

Balance at December 31, 2007	169,430,536	$169,430	-	$ -	$5,795,290	$(646,042)	$(292,951)	$(7,771,650)	$(16,445)	$(2,762,368)
Issuance of common stock from treasury as payment for convertible debenture obligation	-	-	-	-	578,200	-	-	-	11,800	590,000
Issuance of common stock for consulting services	15,012,785	15,013	-	-	191,418	-	-	-	(6,000)	200,431
Issuance of common stock as payment for accrued interest on convertible debt	625,184	626	-	-	48,965	-	-	-	-	49,591
Issuance of preferred stock	-	-	172,083	172	3,441,488	-	-	-	-	3,441,660
Placement fees & expenses for issuance of preferred stock	-	-	-	-	(1,728,303)	-	-	-	-	(1,728,303)
Issuance of preferred stock as payment of note payable	-	-	11,250	11	224,989	-	-	-	-	225,000
Issuance of warrants pursuant to certain notes payable	-	-	-	-	77,701	-	-	-	-	77,701
Amortization of unearned compensation	-	-	-	-	-	646,042	-	-	-	646,042
Amortization of deferred financing cost	-	-	-	-	-	-	265,229	-	-	265,229
Compensation expense for stock option plan	-	-	-	-	176,064	-	-	-	-	176,064
Net loss	-	-	-	-	-	-	-	(2,774,367)	-	(2,774,367)
Balance at December 31, 2008	185,068,505	$185,069	183,333	$ 183	$8,805,812	$ -	$(27,722)	$(10,546,017)	$(10,645)	$(1,593,320)

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

THE ENLIGHTENED GOURMET, INC.

STATEMENTS OF STOCKHOLDERS' DEFICIT


					Additional		Deferred			Total
	Common Stock		Preferred Stock		Paid – In	Unearned	Offering	Accumulated	Treasury	Stockholders’
	Shares	Amount	Shares	Amount	Capital	Compensation	Expense	Deficit	Stock	Equity

Balance at December 31, 2008	185,068,505	$185,069	183,333	$ 183	$8,805,812	$ -	$(27,722)	$(10,546,017)	$(10,645)	$(1,593,320)

Issuance of common stock for consulting services	500,000	500	-	-	9,500	-	-	-	-	10,000
Issuance of common stock pursuant to certain notes payable	1,500,000	1,500	-	-	28,500	-	-	-	-	30,000
Amortization of deferred financing cost	-	-	-	-	-	-	27,722	-	-	27,716
Compensation expense for stock option plan	-	-	-	-	46,501	-	-	-	-	46,507
Net loss	-	-	-	-	-	-	-	-	-	(312,523)
Balance at March 31, 2009	187,068,505	$187,069	183,333	$ 183	$8,890,313	$ -	$ -	$(10,858,540)	$(10,645)	$(1,791,620)

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

THE ENLIGHTENED GOURMET, INC.

STATEMENTS OF CASH FLOWS

For the three months ended March 31, 2009 and 2008


		Three Months		Three Months
		Ended		Ended
		2009		2008

CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(312,523)	$	(688,665)
Adjustments to reconcile net loss to net cash
used in operating activities:
Non-Cash stock based expense		56,507		115,135
Amortization of deferred financing costs		29,497		89,512
Amortization of debt discount		23,535		80,333
Increase (decrease) in sales allowances taken		60,000		-
Issuance of stock pursuant to a note payable		40,000		-
Amortization of stock based management
Fee expense		-		175,312
Changes in Current Assets and Liabilities:
Accounts Receivable		(59,427)		(70,034)
Inventory		(16,360)		(68,954)
Prepaid Expenses		-		26,750
Accounts Payable		38,864		119,268
Accrued Expenses		50,355		443

NET CASH USED IN OPERATING ACTIVITIES		(89,552)		(220,900)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sale of Preferred stock		-		229,250
Proceeds from Notes		86,972		-

NET CASH PROVIDED BY FINANCING ACTIVITIES		86,972		229,250

NET INCREASE (DECREASE) IN CASH		(2,580)		8,350
CASH, BEGINNING		2,629		6,240

CASH, ENDING	$	49	$	14,590

Supplemental cash flow information:
Issuance of stock for payment of fees	$	40,000	$	750,000
Issuance of stock for payment of debt	$	-	$	765,000
Interest paid	$	-	$	18,482

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

THE ENLIGHTENED GOURMET, INC.

NOTES TO FINANCIAL STATEMENTS

For the 3 months ended March 31, 2009 and 2008

NOTE 1.

FORMATION AND OPERATIONS OF THE COMPANY, GOING CONCERN AND MANAGEMENT’S PLAN:

Formation and Operations of the Company:

The Enlightened Gourmet, Inc. (the “Company”) was organized in the State of Nevada on June 25, 2004. On September 27, 2004, the Company acquired, via a tax free stock exchange with a wholly-owned and newly-formed subsidiary of the Company, all of the outstanding shares of Milt & Geno’s Frozen Desserts, Inc. (“M&G’s”). The Company acquired M&G’s because it believed that M&G’s had certain formulas and recipes that would enhance the Company’s development. Additionally, the Company acquired the brand name and tradedress, together with some limited inventory (less than $10,000) and certain liabilities, related to M & G’s fat free ice cream product Absolutely Free™. The transaction did not result in a business combination since M & G’s had no operations at the time. The subsidiary was subsequently dissolved.

The Company seeks to establish itself as a leading marketer and manufacturer of fat-free foods. As of March 31, 2009, the Company’s products were authorized in 18 supermarket chains having approximately 700 stores. This total does not include any convenience stores, smaller grocery stores or independent distributors for which we have also received authorizations. The Company’s major activities consist of producing and selling product and expanding its existing sales base; therefore management has determined that it is no longer a development stage entity.

Going Concern and Management’s Plan:

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. However, the Company is presently still dependent upon additional capital in the form of either debt or equity to continue its operations and is in the process of continuing to raise such additional capital through private placements of securities. This additional capital is necessary, because the Company’s working capital is presently insufficient to pay for the necessary ingredients and packaging, as well as production costs to manufacture the Company’s present and expected orders. There can be no assurance that the Company will be able to obtain additional financing in amounts or on terms acceptable to us, or at all. Compounding this problem, the Company presently does not have any sources of credit that it can access on a ready basis. In addition to needing additional capital to maintain it operations, the Company also needs to raise capital to pay for the various shareholder notes that are currently in default. (See Note 4)

As shown in the accompanying consolidated financial statements, the Company incurred a net loss of $312,523 for the three months ending March 31, 2009 and a net loss of $2,774,367 for the year ended December 31, 2008. Additionally, as of March 31, 2009, the Company’s current liabilities exceeded its current assets. Those factors, and those described above, create an uncertainty about the Company’s ability to continue as a going concern. Management is developing a plan to (i) continue to contain overhead costs, (ii) increase sales (iii) significantly increase gross profits by reducing the slotting fees to be paid in 2009 and (iv) raise additional capital. These steps, if successful, together with the monies raised throughout 2008 (see Note 13) and 2009 provide management with a course of action they believe will allow the Company to deal with the current financial conditions and continue its operations.

NOTE 2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Inventories:

Inventories are stated at the lower of cost or market. The cost of inventories is determined by the first-in, first-out (“FIFO”) method. Inventory costs associated with Semi-Finished Goods and Finished Goods include material, labor, and overhead, while costs associated with Raw Materials include only material. The Company provides inventory allowances for any excess and obsolete inventories.

Intangible Assets and Debt Issuance Costs:

Management assesses intangible assets for impairment whenever facts and circumstances indicate that the carrying amount may not be fully recoverable. For other intangible assets, the impairment test consists of a comparison of the fair value of the intangible assets to their respective carrying amount. The Company uses a discount rate equal to its average cost of funds to discount the expected future cash flows. There were no intangible assets deemed impaired as of March 31, 2009 or 2008.

Debt issuance costs are amortized over the life of the related debt or amendment. Amortization expense for debt issuance costs for the years ended March 31, 2009 and 2008 were $23,535 and $89,512, respectively.

Stock Options:

The Company complies with SFAS No. 123R, “Share-Based Payment,” issued in December 2004 (“SFAS 123R”). SFAS No. 123R is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation,” and supersedes APB Opinion No. 25 (“APB No. 25”). Among other items, SFAS No. 123R eliminates the use of APB No. 25 and the intrinsic value method of accounting, and requires companies to recognize in the financial statements the cost of employee services received in exchange for awards of equity instruments, based on the fair value of those awards as of the vested date.

Income Taxes:

Income tax expense is based on pretax financial accounting income. The Company recognizes deferred tax assets and liabilities based on the difference between the financial reporting and tax bases of assets and liabilities, applying tax rates applicable to the year in which the differences are expected to reverse, in accordance with Statement of Financial Accounting Standards No. 109,Accounting for Income Taxes (“SFAS 109”). A valuation allowance is recorded when it is more likely than not that the deferred tax asset will not be realized.

SFAS No. 109 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether it will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded.

Revenue Recognition:

Sales, net of an estimate for discounts, returns, rebates and allowances, and related cost of sales are recorded in income when goods are shipped, at which time risk of loss and title transfers to the customer, in accordance with Staff Accounting Bulletin No. 101,Revenue Recognition in Financial Statements, as amended by Staff Accounting Bulletin No. 104,Revenue Recognition.

Additionally, the Company must initially pay customers for shelving space in the form of “slotting fees.” “Slotting fees” are one-time payments made to retail outlets to access their shelf space. These fees are common in most segments of the food industry and vary from chain to chain. Supermarket chains generally are reluctant to give up shelf space to new products when existing products are performing. These fees are deducted directly from revenues and revenues are shown net of such costs.

Accounts Receivable:

Accounts receivable are carried at original invoice amount less slotting fees deducted by the customers and less an estimate made for doubtful accounts. Management determines the allowance for doubtful accounts by regularly evaluating past due balances. Individual accounts receivable are written off when deemed uncollectible, with any future recoveries recorded as income when received.

Shipping and Handling Costs:

Shipping and handling costs are included in Selling, General and Administrative expense and are expensed as incurred. For the three months ending March 31, 2009 and 2008 shipping and handling costs totaled $7,339 and $48,396, respectively.

Advertising and Promotions:

Advertising and promotional costs including print ads, commercials, catalogs, brochures and co-op are expensed during the year incurred.

Cash and Cash Equivalents:

Cash and Cash Equivalents include demand deposits with banks and highly liquid investments with remaining maturities, when purchased, of three months or less.

Financial Instruments:

Market values of financial instruments were estimated in accordance with Statement of Financial Accounting Standards No. 107,Disclosures about Fair Value of Financial Instruments, and are based on quoted market prices, where available, or on current rates offered to the Company for debt with similar terms and maturities. Unless otherwise disclosed, the fair value of financial instruments approximates their recorded values.

Use of Estimates:

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

Recent Accounting Pronouncements:

The Company adopted the provisions of FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (an interpretation of FASB Statement No. 109)” on January 1, 2007. As a result of the implementation of FIN 48, the Company performed a comprehensive review of any uncertain tax positions in accordance with recognition standards established by FIN 48. In this regard, an uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return, or planned to be taken in a future tax returns that has not been reflected in measuring income tax expense for financial reporting purposes. As a result of this review, the Company believes it has no uncertain tax positions and, accordingly, did not record any charges.

The Company will recognize accrued interest and penalties related to uncertain tax positions in income tax expense. As of April 1, 2009, the Company did not have any tax-related interest or penalties. The Company files income tax returns in the U.S. Federal and various state jurisdictions. The Company is not currently under examination by The Internal Revenue Service (IRS) or any other state jurisdictions. The tax years 2004-2006 remain subject to examination.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, “Fair Value Measurements”(“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring the fair value of assets and liabilities, and expands disclosure requirements regarding the fair value measurement. SFAS 157 does not expand the use of fair value measurements. This statement, as issued, is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. FASB Staff Position (FSP) FAS No. 157-2 was issued in February 2008 and deferred the effective date of SFAS 157 for non-financial assets and liabilities to fiscal years beginning after November 2008. As such, the Company adopted SFAS 157 as of January 1, 2008 for financial assets and liabilities only. There was no significant effect on the Company’s financial statements. The Company does not believe that the adoption of SFAS 157 to non-financial assets and liabilities will significantly affect its financial statements.

In February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Liabilities – including an amendment of FASB Statement No. 115” (“SFAS 159”). SFAS 159 expands the use of fair value accounting but does not affect existing standards which requires assets or liabilities to be carried at fair value. The objective of SFAS 159 is to improve financial reporting by providing companies with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. Under SFAS 159, a company may elect to use fair value to measure eligible items at specified election dates and report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. Eligible items include, but are limited to, accounts receivable, accounts payable, and issued debt. If elected, SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company has not elected to measure any additional assets or liabilities at fair value that are not already measured at fair value under existing standards.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business Combinations”(“SFAS 141”). SFAS 141 establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquired and the goodwill acquired. SFAS 141 also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141 is effective for fiscal years beginning after December 15, 2008. The Company will apply the provisions of SFAS 141 to any acquisition after January 1, 2009.

In December 2007, the FASB issued SFAS No. 160, “Accounting for Non-controlling Interests.” SFAS 160 clarifies the classification of non-controlling interests in consolidated balance sheets and reporting transactions between the reporting entity and holders of non-controlling interests. Under this statement, non-controlling interests are considered equity and reported as an element of consolidated equity. Further, net income encompasses all consolidated subsidiaries with disclosure of the attribution of net income between controlling and non-controlling interests. SFAS No. 160 is effective prospectively for fiscal years beginning after December 15, 2008. Currently, there are no non-controlling interests in the Company.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”. SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411 of the AIPCA Professional Standards. SFAS No. 162 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In April 2009, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position (“FSP”) FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments”(“FAS 107-1 and APB 28-1”), which amends SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” and APB opinion No. 28, “Interim Financial Reporting,” to require disclosures about fair value of financial instruments in interim as well as in annual financial statements. FSP FAS 107-1 and ABP 28-1 are effective for interim reporting periods ending after June 15, 2009. It is not believed that, based on the Company’s current corporate structure, FSP FAS 107-1 and ABP 28-1 will have an impact on the Company’s financial position, results of operations or cash flows.

NOTE 3.

IMPAIRMENT:

The impairment of intangible assets with respect to the non patented technology was assessed in accordance with the provisions of Statement of Financial Accounting Standards No. 142,Goodwill and Other Intangible Assets (“SFAS 142”). The impairment test required us to estimate the fair value of the intangible asset. Management estimated fair value using a discounted cash flow model. Under this model, management utilized estimated revenue and cash flow forecasts, as well as assumptions of terminal value, together with an applicable discount rate, to determine fair value. Management then compared the carrying value of the intangible asset to its fair value. Since the fair value is greater than its carrying value, no impairment charge was recorded.

NOTE 4.

NOTES PAYABLE:

Stockholders

(a) A stockholder, on December 21, 2005, made cash advances to the Company of $245,000 (the “December 2005 Promissory Note”), which is $5,000 less than its face value of $250,000, resulting in a discount. The December 2005 Promissory Note did not accrue interest and is prepayable by the Company without penalty at any time. The borrowing was due and payable on April 1, 2006. In consideration of making the December 2005 Promissory Note, the lender received 666,667 warrants exercisable at $0.15 per share. Following a Black Scholes valuation model, the value of a warrant was $0.0463, which resulted in an additional debt discount and corresponding additional paid in capital of approximately $31,000, which has been fully amortized. This December 2005 Promissory Note was refinanced with the stockholder under identical terms and conditions and the new maturity date was July 1, 2006 (the “April Promissory Note”). In consideration of making the April 2006 Promiss ory Note the lender received an additional 666,667 warrants exercisable at $0.15 per share. Following a Black Scholes valuation model, the value of a warrant was $0.0437, which resulted in an additional debt discount and corresponding additional paid in capital of approximately $29,133, which has been fully amortized. The April Promissory Note is in default for failure to pay the principal when due at maturity. Since July 1, 2006, the April Promissory Note has borne interest at the rate of 18% per annum. Accrued interest for this Promissory Note is $123,668 and $78,688 as of March 31, 2009 and 2008 respectively.

(b) Another stockholder, on February 28, 2006, made cash advances to the Company of $94,000 (the “February 2006 Promissory Note”), which is $6,000 less than its face value of $100,000, resulting in a discount. The February 2006 Promissory Note did not accrue interest. The borrowing was due and payable on August 15, 2006. In consideration of making the February 2006 Promissory Note, the lender received 266,667 warrants exercisable at $0.15 per share. Following a Black Scholes valuation model, the value of a warrant was $0.0463, which resulted in an additional debt discount and corresponding additional paid in capital of approximately $11,893, which has been fully amortized. The February 2006 Promissory Note is in default for failure to pay the principal when due at maturity. Since August 15, 2006, the February 2006 Promissory Note has borne interest at the rate of 18% per annum. Accrued interest for this Promissory Note is $47,305 and $29,305 as of March 31, 2009 and 2008 respectively.

(c) Another stockholder, on March 10, 2006, made cash advances to the Company of $22,560 (the “March 2006 Promissory Note”), which is $1,440 less than its face value of $24,000, resulting in a discount. The March Promissory Note did not accrue interest. The borrowing was due and payable on August 15, 2006. In consideration of making the March 2006 Promissory Note, the lender received 64,000 warrants exercisable at $0.15 per share. Following a Black Scholes valuation model, the value of a warrant was $0.0436, which resulted in an additional debt discount and corresponding additional paid in capital of approximately $2,854, which has been fully amortized. The March 2006 Promissory Note is in default for failure to pay the principal when due at maturity. Since August 15, 2006, the March 2006 Promissory Note has borne interest at the rate of 18% per annum. Accrued interest for this Promissory Note is $11,353 and $2,854 as of March 31, 2009 and 2008 respectively.

(d) Another stockholder, on May 1, 2006, made cash advances to the Company of $23,875 (the “May 2006 Promissory Note”), which is $1,125 less than its face value of $25,000 resulting in a discount. The May 2006 Promissory Note did not accrue interest. The borrowing was due and payable on September 1, 2006. In consideration of making the May 2006 Promissory Note, the lender received 83,333 warrants exercisable at $0.15 per share. Following a Black Scholes valuation model, the value of a warrant was $0.0467, which resulted in an additional debt discount and corresponding additional paid in capital of approximately $3,600, which has been fully amortized. The May 2006 Promissory Note is in default for failure to pay the principal when due at maturity. Since September 1, 2006, the May 2006 Promissory Note has borne interest at the rate of 18% per annum. Accrued interest for this Promissory Note is $11,616 and $7,117 as of March 31, 2009 and 20 08 respectively.

(e) Another stockholder, on April 27, 2006, made cash advances to the Company of $47,750 (the “April 2006 Promissory Note”), which is $2,250 less than its face value of $50,000 resulting in a discount. The April 2006 Promissory Note did not accrue interest. The borrowing was due and payable on July 31, 2006. In consideration of making the April 2006 Promissory Note, the lender received 133,333 warrants exercisable at $0.15 per share. Following a Black Scholes valuation model, the value of a warrant was $0.046, which resulted in an additional debt discount and corresponding additional paid in capital of approximately $5,700, which has been fully amortized. The face value of the April 2006 Promissory Note ($50,000) was refinanced with the same stockholder with a new maturity date of December 1, 2006 and a stated interest rate of twelve percent (12%) (the “July 2006 Promissory Note”). In consideration of making the July 2006 Promissory Note, the lender rec eived 266,667 warrants exercisable at $0.15 per share. Following a Black Scholes valuation model, the value of a warrant was $0.047, which resulted in an additional debt discount and corresponding additional paid in capital of approximately $12,534, of which $5,837 has been fully amortized. The stockholder agreed to extend the terms of the July 2006 Promissory Note as of December 1, 2006, with a maturity date of April 1, 2007 (the “December 2006 Promissory Note”). The stockholder received an additional 266,667 warrants exercisable at $0.05 per share. Following the same Black Scholes valuation model as previously, the value of a warrant was $0.0155, which resulted in an additional debt discount and corresponding additional paid in capital of approximately $4,133, of which approximately $1,001 was amortized through December 31, 2006. The December 2006 Promissory Note is now in default for failure to pay the principal when due at maturity. Since April 1, 2007, the December 2006 Promissory Note has bor e interest at the rate of 18% per annum. Accrued interest for this Promissory Note is $18,000 and $9,000 as of March 31, 2009 and 2008 respectively.

The following summarizes the stockholders notes as of March 31, 2009 and 2008:


Stockholder Notes in Default:

(a) Note matured July 1, 2006	$	250,000
(b) Note matured August 15, 2006		100,000
(c) Note matured August 15, 2006		24,000
(d) Note matured September 1, 2006		25,000
(e) Note matured April 1, 2007		50,000

Total Stockholder Notes outstanding	$	449,000

On June 13, 2007, each stockholder lender entered into an agreement to accept their pro rata amount of an aggregate of 4,644,711 shares of common stock in provisional satisfaction of the indebtedness represented by the Stockholder Notes in default. Under the terms of these agreements, each stockholder lender may, for a period of 30 days following the date that the Securities and Exchange Commission (“SEC”) declares effective the Registration Statement filed by the Company on Form SB-2 with the SEC on June 18, 2007, sell these shares, or, at their option, elect to return their shares of common stock to the Company, in whole or in part, and have all or a portion of their Stockholder Note reinstated.

On October 3, 2007, the Company notified the SEC that it was voluntarily withdrawing the previously filed SB-2. Consequently, the conditional settlement negotiated with each of the stockholder lenders could not be completed. The $449,000 in stockholder loans remains in default, and continue to accrue interest at the Default Rate of 18% per annum. The Company is negotiating with each of the lenders a new and different settlement to repay the amounts due them.

Bridge Loan Financing

During the period March 15, 2007 through November 21, 2007 the Company entered into eight promissory notes (collectively the “2007 Promissory Notes”) with a combined face value $1,975,000. Each of the 2007 Promissory Notes were due one year from the date of its issuance and accrue interest at the annual rate of 12%. The Company pledged all of its tangible and intangible assets as security for each of the 2007 Promissory Notes. However, this security interest in the Company’s assets was subordinate to the security interest granted to the Convertible Notes described in this Note 5. In consideration of making the 2007 Promissory Notes, the lenders received a total of 6.3 million shares of the Company’s common stock valued at $0.05 per share, which resulted in an additional debt discount and corresponding additional paid in capital of $315,000 which was amortized over the life of the loan.The following is the dollar amoun t of bridge loans outstanding as of March 31:


		March 31, 2009		March 31, 2008
Face Value of Bridge Loans Outstanding	$	575,000	$	1,975,000
Less: Debt discount due to share issuance		-		171,587
Net Bridge Loans Outstanding	$	575,000	$	1,803,413

Charles Morgan Securities (“CMS”) acted as placement agent and sold each of the 2007 Promissory Notes to investors that were neither officers nor directors of the Company. In connection with the sale of the 2007 Promissory Notes, CMS received a placement fee equal to 10% of the aggregate proceeds ($197,500) and a non-accountable expense allowance equal to 3% of the aggregate proceeds ($59,250). Additionally, CMS received 7,612,501 shares of the Company’s Common Stock as compensation for placing the 2007 Promissory Notes.

On September 14, 2007, the Company entered into a promissory note with a face value of $200,000 (the “September 2007 Bridge Loan”). The September 2007 Bridge Loan accrued interest at the annul rate of 12% and was due September 14, 2008. The Company pledged all of its tangible and intangible assets as security for the September 2007 Bridge Loan. The September 2007 Bridge Loan is currently in default for failure to pay the principal amount and accrued interest due at maturity On January 14, 2009 the Lender agreed to waive the default and extend the maturity of the September 2007 Bridge Loan to September 14, 2009.

On October 24, 2007, the Company entered into a promissory note with a face value of $100,000 (the “October 2007 Bridge Loan”). The October 2007 Bridge Loan accrued interest at the annul rate of 12% and was due October 24, 2008. The Company also pledged all of its tangible and intangible assets as security for October 2007 Bridge Loan. Other than being subordinate to the September 2007 Bridge Loan, the holder of the October 2007 Bridge Loan has a priority interest in all of the tangible and intangible assets of the Company. The October 2007 Bridge Loan is currently in default for failure to pay the principal amount and accrued interest due at maturity. The Company is negotiating with the holder of the October 2007 Bridge Loan to pay the accrued interest due, and to extend its maturity. No assurances can be given that the holder of the October 2007 Bridge Loan will agree to any such terms.

On November 21, 2007, the Company entered into promissory notes with three separate lenders with a combined face value of $275,000 (the “November 2007 Bridge Loans”). The November 2007 Bridge Loans accrued interest at the annul rate of 12% and were due November 21, 2008. The Company also pledged all of its tangible and intangible assets as security for November 2007 Bridge Loans. Other than being subordinate to both the September 2007 Bridge Loan and the holder of the October 2007 Bridge Loan, the November 2007 Bridge Loans have a priority interest in all of the tangible and intangible assets of the Company. The November 2007 Bridge Loans are currently in default for failure to pay the principal amount and accrued interest due at maturity. The Company is negotiating with each of the holders of the November 2007 Bridge Loans to pay the accrued interest due, and to extend its maturity. No assurances can be given that the holder of the October 2007 Bridge Loan will agree to any such terms.

Working Capital Notes

On July 14, 2008, July 28, 2008, July 31, 2008, August 29, 2008, and October 22, 2008, the Company sold to a single accredited investor (“Investor”), five unsecured promissory notes (the “July-Oct 2008 Promissory Notes”). The respective amounts of each of the July-Oct 2008 Promissory Notes are: $12,000, $35,000, $11,500, $25,000 and $4,600. Each of the July-Oct 2008 Promissory Notes accrues interest at the annual rate of 12% and is due one year from its date of issuance. As additional compensation to purchase the July-Oct 2008 Promissory Notes, the Investor was issued 250,000 warrants exercisable at $0.065 per share for the July 14^thNote, 650,000 warrants exercisable at $0.06 per share for the July 28^th Note, 250,000 warrants exercisable at $0.06 per share for the July 31^st Note, 575,000 warrants exercisable at $0.05 per share for the August 29^th Note, and 135,000 warrants exercisable at $.04 per share for th e October 22, 2008. This resulted in a debt discount of $49,126 and corresponding additional paid in capital which will be amortized over the life of the loans. Each of the warrants expires five years after the date of its issuance. The July-Oct 2008 Promissory Notes were sold in a private transaction arranged by the Company. Accordingly, no compensation was paid to any broker or placement agent.

On June 23, 2008, the Company sold to a single accredited investor (“Investor”), an unsecured promissory notes (the “June 2008 Promissory Note”) in the amount of $50,000. The June 2008 Promissory Note accrues interest at the annual rate of 12% and is due one year from its date of issuance. Additionally, as additional compensation to purchase the June 2008 Promissory Note the Investor was issued 750,000 warrants exercisable at $0.08 per share. The warrants have a cashless exercise provision and expire on June 23, 2013. Following a Black Scholes valuation model, the value of a warrant was $0.038, which resulted in a debt discount and corresponding additional paid in capital of approximately $28,575, which is being amortized over the term of the loan. The June 2008 Promissory Note was sold in a private transaction arranged by the Company. Accordingly, no compensation was paid to any broker or placement agent.

On July 31, 2008 and September 5, 2008, the Company’s investment banker, Charles Morgan Securities, Inc., (“CMS”) arranged for two unsecured loans; each in the amount of $15,000 (the “CMS Notes”). Each of the CMS Notes was arranged as a professional courtesy and accrue no interest, were due 30 days from the date they was issued. Neither loan has been repaid nor have the lenders taken any action against the Company. CMS did not charge any placement agent, or additional investment banking fees for arranging these borrowings.

On February 6, 2009, the Company entered into a promissory note with a face value of $100,000 (the “February 2009 Bridge Loan”). The February 2009 Bridge Loan accrues interest at the annul rate of 12% and is due February 14, 2010. In consideration of making the February 2009 Bridge Loan, the lender received 1,500,000 shares of the Company’s common stock valued at $0.02 per share, which resulted in an additional debt discount and corresponding additional paid in capital of $30,000 which will be amortized over the life of the loan.

On February 17, 2009, to obtain funding for working capital, the Company entered into a loan agreement with an accredited investor for the sale of an $18,000 Promissory Note (the “February Note”). The Note was sold at a discount of $3,000 and bears no interest. In connection with this transaction, the Company issued the Investor 225,000 restricted shares of common stock valued at $0.02 per share, which resulted in an additional debt discount and corresponding additional paid in capital of $4,500 which, together with the $3,000 discount, will be amortized over the life of the loan.The Note was originally due May 18, 2009. However, on May 17, 2009 the lender agreed to extend the maturity to July 18, 2009. The full principal amount of the Note is due upon default under the terms of Note.

NOTE 5.

CONVERTIBLE DEBENTURES:

During 2007, the Company sold, to a group of outside investors (“Note Purchasers”), 12% Convertible Notes (“Convertible Notes”). The Convertible Notes were sold in private transactions arranged through Charles Morgan Securities, Inc. (“CMS”) pursuant to a Placement Agreement (the “Placement Agreement”) between the Company and CMS, which provides for the private placement by CMS of up to $1,500,000 aggregate principal amount of Convertible Notes. As of December 31, 2007, $1,500,000 of Convertible Notes were issued and the net proceeds received by the Company. The Convertible Notes issued are, pursuant to the terms of the Convertible Notes, convertible into shares of the Company’s Common Stock at the rate of $.05 per share. No beneficial imbedded conversion benefit was recognized due to the conversion price being equal to or greater than the fair value of the Common Stock.

The Convertible Notes are secured by a lien upon the Company’s accounts receivable and general intangibles and a pledge of 30,000,000 shares of the Company’s Common Stock, which shares of Common Stock have been issued as treasury stock, which does not affect the Company’s net stockholders’ deficit.

In connection with the sale of the Convertible Notes, CMS received (i) a placement fee equal to 10% of the aggregate proceeds ($150,000 at December 31, 2007); (ii) a non-accountable expense allowance equal to 3% of the aggregate proceeds ($45,000 at December 31, 2007), and a common Stock Purchase Warrant (the “Warrant”) to purchase shares equal to 10% of shares issuable upon conversion of the Convertible Notes; 3,000,000 shares at December 31, 2007). The Warrant is exercisable at $.06 per share. The Company recognized the amounts paid to CMS for its accountable and non-accountable expenses and legal costs totaling $197,000 as deferred financing costs. These costs were amortized as an expense using the interest method until the Convertible Notes were repaid.

During the last quarter of 2007 and the first nine months of 2008, lenders representing $1,500,000 converted their debt to equity. The Company issued 30,000,000 common shares from Treasury in satisfaction of the debt. In addition, 1,352,876 common shares valued at $0.1125 were issued for payment of accrued interest totaling $131,459. Accrued interest unpaid as of March 31, 2009 totaled $99,175.

Pursuant to the terms of the Convertible Notes, the Company was obligated to file a registration statement with the Securities and Exchange Commission within 90 days of closing the Convertible Notes. Because the Company did not file such registration statement within this 90 day period, the Company was obligated to issue to the holders of such notes an aggregate amount of 21,874,977 shares of common stock of the Company. The shares were issued on December 31, 2007 pursuant to an exemption under Section 4(2) of the Securities Act of 1933, as amended.

NOTE 6.

PREFERRED STOCK

On February 12, 2008, the Company entered into a placement agreement (“Placement Agreement”) with CMS to sell up to $3 million of the Company’s Series B Convertible Redeemable Preferred Stock (“Series B Preferred”). Pursuant to the Placement Agreement, CMS could sell, on a best efforts basis, a maximum of 165,000 shares of Series B Preferred Stock, including a 10% broker’s over allowance, par value $.001 per share. The Series B Preferred have a liquidation preference of $20.00 per share and if all of the shares in the offering are sold, holders of all of the shares of the Series B Preferred (including those issued to CMS) would receive, upon conversion, common stock equal to 25% of the number of shares of the Company’s common stock that would be outstanding as of the date of conversion if all of our outstanding convertible securities were converted and all of the Company’s outstanding warrants were exercised.

The Company can redeem the Series B Preferred Shares upon not less than 15 days written notice to the holder at a price of $.001 per share:(i) at any time after the Company’s annual revenue is not less than $20 million, (ii) upon closing of a financing, or multiple financings, from unrelated investors totaling not less than $8,000,000, or (iii)at any time after the second anniversary of their date of issuance.

As of March 31, 2009, CMS has sold 110,000 shares of the Series B Preferred ($2,199,947).

In connection with the sale of the Series B Preferred, CMS received (i) a placement fee equal to 10% of the aggregate proceeds ($220,000 at September 30, 2008); (ii) a non-accountable expense allowance equal to 3% of the aggregate proceeds ($66,000 at September 30, 2008), and (iii) 73,333 shares of the Series B Preferred.

NOTE 7.

COMMON STOCK:

During the three months ended March 31, 2009 and 2008, the Company issued no shares of common stock in connection with private placement offerings.

NOTE 8.

STOCK BASED COMPENSATION:

The Company currently utilizes the Black-Scholes option pricing model to measure the fair value of stock options granted to employees. While SFAS No. 123R permits entities to continue to use such a model, it also permits the use of a “lattice” model. The Company expects to continue using the Black-Scholes option pricing model in connection with its adoption of SFAS No. 123R to measure the fair value of stock options.

A summary of the option awards under the Company’s Stock Option Plan as of March 31, 2009 and changes during the two-year period ended March 31, 2009 is presented below:


Stock Option Summary			Weighted
			Average
			Stock
Stock Options	Shares		Price
Outstanding, January 1, 2007	2,820,000	$	0.14
Granted, 2007	18,500,000	$	0.05
Granted, 2008	3,680,000	$	0.02
Exercised	-	$	-

Outstanding at March 31, 2009	25,000,000	$	0.0561

Options vested at March 31, 2009	7,794,000	$	0.0691

At March 31, 2009, the average remaining term for outstanding stock options is 6.7 years.

A summary of the status of non-vested shares under the Company’s Stock Option Plan, as of March 31, 2009 and changes during the two-year period ended March 31, 2009 is presented below:


Non-Vested Option Summary			Weighted
			Average
			Stock
Stock Options	Shares		Price
Non-vested, March 31, 2007	370,500	$	0.15
Non-vested, March 31, 2008	18,208,000	$	0.06
Granted during 2008	3,495,000	$	0.02
Granted during 2009	0	$	-

Total Non-vested, March 31, 2009	17,206,000	$	0.0502

As of March 31, 2009 and 2008, there was a total of $640,159 and $743,456 of unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Stock Option Plan, respectively. That cost is expected to be recognized over a weighted-average period of 7 years. This disclosure is provided in the aggregate for all awards that vest based on service conditions.

NOTE 9.

INCOME TAXES

As of March 31, 2009 and December 31, 2008, the Company had deferred tax assets of approximately $3,700,000 and $3,600,000, respectively, with equal corresponding valuation allowances in accordance with the provisions of Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (“SFAS No. 109”).

Realization of the deferred tax assets is largely dependent upon future profitable operations, if any, and the reversals of existing taxable temporary differences. As a result of previous pre-tax losses from continuing operations and future taxable income expected to arise primarily from the reversal of and creation of temporary differences for the foreseeable future, management determined that in accordance with SFAS No. 109, it is not appropriate to recognize these deferred tax assets. Although there can be no assurance that such events will occur, the valuation allowance may be reversed in future periods to the extent that the related deferred income tax assets no longer require a valuation allowance under the provisions of SFAS No. 109.

Income tax payments were approximately zero in 2008 and 2007, respectively.

At December 31, 2008, the Company has loss carry-forwards available to reduce future taxable income and tax thereon. The carry-forwards will expire as outlined in the following table:


Federal Expiration					State Expiration
Federal Expiration		Federal		State	State Expiration
2024	$	67,516	$	63,216	2009
2025		1,026,016		1,026,016	2010
2026		2,145,548		2,143,198	2011
2027		3,420,263		3,417,596	2012
2028		2,113,344		2,110,677	2013
TOTALS	$	8,772,687	$	8,760,703

NOTE 10.

RELIANCE ON OFFICERS:

The Company presently has only 1 full time employee; the president. This person is presently the only person who has the experience to develop and sell the Company’s products. If he was no longer able or willing to function in that capacity, the Company would be negatively affected. The Company also retains a full time consultant to assist with the operations of the Company.

NOTE 11.

RELATED PARTIES:

Nutmeg Farms Ice Cream, LLC (“Nutmeg”)

Nutmeg formerly manufactured and co-packed all of the Company’s ice cream cups. The Company discontinued selling ice cream cups late in 2006 and, consequently, no longer employs Nutmeg as a co-packer. However, while they no longer co-pack for the Company, they are involved in certain product testing for the Company. Nutmeg employs a director of the Company. The Company did not incur any costs to Nutmeg for the years ending March 31, 2009 and 2008.

NOTE 12.

CONCENTRATION OF CREDIT RISK:

The Company has one major customer that accounted for approximately 81% of gross sales, another customer that accounted for 8% of gross sales and a third customer that accounted for 7% of gross sales for the quarter ended March 31, 2009. Additionally, net of slotting allowances, as of March 31, 2009, one customer accounted for 29% of accounts receivables, one customer accounted for 19% of accounts receivable and three customers accounted for approximately 16% of receivables each.

NOTE 13.

FINANCIAL ADVISORY AGREEMENTS:

On March 28, 2006, the Company entered into a financial advisory and investment banking agreement (the “Agreement”) with an unrelated party (the “Investment Banker”) to secure financing and to provide general financial consulting services to the Company. The Agreement required the Company to issue to the Investment Banker 3,066,450 five-year warrants, at the time equal to five percent of the outstanding Common Stock of the Company, at an exercise price equal to the price of any securities sold by the Company in connection with any financing that is placed by the Investment Banker. The Agreement also called for reimbursement of all out-of-pocket expenses, including legal expense, incurred in conjunction with all services performed by the Investment Banker, including the raising of capital. If the Investment Banker had been successful in raising the capital, it would have received an additional cash fee of 10% of the gross proceeds raised and a cash fee f or unaccounted expenses equal to 3% of the gross proceeds raised. The Investment Banker would also have received warrants equal to ten percent of the number of shares of Common Stock underlying the securities issued in the financing. Additionally, the Company was also obligated to pay a monthly consulting fee to the Investment Banker of $5,000 a month, commencing July 1, 2006 for a period of twelve months. Simultaneously, with the execution of the Agreement, the Company issued the Investment Banker 3,066,450 warrants. Following a Black Scholes valuation model, the value of a warrant was $0.0741, which resulted in an additional debt discount and corresponding additional paid in capital of $227,225.

The Agreement required the Investment Banker to perform its obligations pursuant to raising capital within sixty days of the execution of the Agreement. The Investment Banker failed to fulfill this obligation and as a result, pursuant to the Agreement, has forfeited the 3,066,450 warrants received. The effect of the warrants on additional paid in capital has been reversed along with reversing $18,936 that was previously included as compensation expense. Lastly, on November 2, 2006, the Company and the Investment Banker entered into a release and termination agreement which terminated the services of the Investment Banker and released the Company from any further obligation to compensate the Investment Banker for any services. During 2006, the Company paid the Investment Banker a total of $52,639 for its services.

Charles Morgan Securities, Inc.

In connection with entering the Placement Agreement with CMS regarding the sale of the Convertible Notes (see Note 5), the Company and CMS entered into an Investment Advisory Agreement pursuant to which CMS has agreed to provide certain advisory services in exchange for (i) the payment of a $30,000 engagement fee, (ii) an agreement to pay $240,000 over 24 months, and (iii) the issuance to CMS of 13,250,000 shares of the Company’s Common Stock.

The fees of $270,000 ($240,000 plus $30,000) are being amortized on a straight line basis over the 24-month term of the Investment Advisory Agreement. The 13,250,000 shares received by CMS are valued at $0.05 per share based upon the exercise prices of various warrant awards. This results in a value of $662,500, which is recognized as an issuance of common stock and additional capital of which the total amount is also being amortized into expense over the 24-month period of the Investment Advisory Agreement. The unamortized amount is shown as unearned compensation expense as a further increase to stockholders’ deficit.

Also in connection with entering the Placement Agreement with CMS, the Company and CMS entered into an Investment Banking Agreement providing for the sale of the Convertible Notes and contemplating a future placement of the Company’s securities by CMS.

NOTE 14.

SUBSEQUENT EVENTS:

On May 14, 2009, the Company entered into a promissory note with a face value of $50,000 (the “May 2009 Bridge Loan”). The May 2009 Bridge Loan accrues interest at the annul rate of 12% and is due May 14, 2010. In consideration of making the May 2009 Bridge Loan, the lender received 500,000 shares of the Company’s common stock valued at $0.02 per share, which resulted in an additional debt discount and corresponding additional paid in capital of $10,000 which will be amortized over the life of the loan.

During the period May 28, 2009 through June 17, 2009, the Company entered into three promissory notes with it’s investment banker, Charles Morgan Securities, (collectively the “2009 CMS Loans”) with a combined face value $62,600. Each of the 2009 CMS Loans is due one year from the date of its issuance, bears no interest, but was sold with a 1% facility fee, or a total of $626 which resulted in an additional debt discount and corresponding additional paid in capital of $626 which will be amortized over the life of the loan.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis and other portions of this Quarterly Report contain forward-looking information that involves risks and uncertainties. Our actual results could differ materially from those anticipated by the forward-looking information. Factors that may cause such differences include, but are not limited to, availability and cost of financial resources, product demand, and market acceptance as well as other factors. This Management’s Discussion and Analysis should be read in conjunction with our financial statements and the related notes included elsewhere in this Quarterly Report.

This Management's Discussion and Analysis of Financial Condition and Results of Operations includes a number of forward-looking statements that reflect Management's current views with respect to future events and financial performance. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. Those statements include statements regarding the intent, belief or current expectations of us and members of its management team as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements.

Readers are urged to carefully review and consider the various disclosures made by us in this report and other reports filed with the Securities and Exchange Commission. Important factors currently known to Management could cause actual results to differ materially from those in forward-looking statements. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time. We believe that its assumptions are based upon reasonable data derived from and known about our business and operations and the business and operations of the Company. No assurances are made that actual results of operations or the results of our future activities will not differ materially from its assumptions. Factors that could cause differences include, but are not limited to, expected market demand for the Company’s services, fluctuations in pricing for materials, a nd competition.

Overview.

Since January 1, 2006, the Company’s major activities have been producing and selling product, as well as attempting to expand our sales base. Prior to January 1, 2006, the Company was a development stage company and recorded no revenues from sales. The Company presently has its products for sale in approximately 700 stores; primarily in the New York Metro Area and in parts of southern New England. Sales for the quarter ended March 31, 2009 were less than the comparable period of 2008, as the Company’s sales, like retail sales in general, were hampered by the economic recession. Additionally, the Company’s products were discontinued in about 900 stores, as the Company elected not to pay slotting fees again. This so called “Pay to Stay” has become prevalent in the grocery market, as stores look for additional ways to increase profits. However, sales to stores in upper level economic areas remained strong, compared to stores in middle, or lower incom e areas. Almost all of the Company’s gross revenues during the quarter were offset by slotting fees primarily for new SKUs in existing stores and for various promotional activities related to the products’ introduction.

Results of Operations.

During the quarter ended March 31, 2009, we recorded gross sales of $64,194 compared to $190,893 for the comparable quarter of 2008. The decline in sales was primarily due to the fewer number of stores that our products were authorized in 2009 compared to the first quarter of 2008. We were offered the opportunity to return to these stores in 2009, but would have had to pay additional slotting to do so. Given the scarcity of capital, we decided not to do so. Another reason for the decrease in sales was the economic recession which adversely affected sales, as consumers looked to conserve money by purchasing less expensive brands. While our products offer long term health benefits compared to regular full fatted ice cream, consumers are typically less likely to make short term sacrifices, by paying more for our products, to garner long term benefits. Additionally, consumers typically cut back on higher priced items, regardless of their health benefits, as they usually conser ve cash in during weak or uncertain economic times. Accordingly, our revenue for the 1^st quarter of 2009 was significantly less than it was for the comparable period in 2008. Nevertheless, our sales in the New York Metro Area during the 1^st quarter, which are distributed via a direct store delivery distributor rather than a warehouse delivery system, were up 18.3% compared to the 1^st quarter of 2008. We expect sales to improve as the economy improves during the year. Additionally, unlike previous years, we are going to focus more on increasing sales from our existing stores, via various marketing and promotional campaigns, rather than attempting to significantly increase the number of stores that our products are sold in.

In the past the Company looked to increase revenues by garnering authorizations from new stores rather than increasing sales in existing stores. Unfortunately, this plan reduced our cash as slotting payments for ice cream are quite expensive, and given the difficulty of raising capital, it left an insufficient amount to spend on marketing and sales. Consequently, we now believe a more effective and efficient way of increasing revenues is by focusing our attention on our existing stores, primarily the New York Metro market, rather than growing sales by obtaining authorizations from new stores. The Company typically promotes its products by offering discounted pricing to retailers, coupons and in-store demonstrations to increase customer awareness of its products. Not paying slotting for new stores will provide more funds available to market our products. The Company believes it offers the only no fat, no lactose, no sugar added ice cream with fewer calories than the competition while maintaining the taste and texture of full fatted premium ice cream, and as the economy improves, these will be attributes that consumers will find attractive. This belief is supported by positive feedback from brokers, store representatives and consumers validating that its products are well received in the marketplace.

All of our revenue during 2009 was from the sale of ice cream bars to supermarket chains. Our Double Chocolate Swirl remained our best selling flavor in the first quarter of 2009, with about 38.4% of our sales. This percentage has remained consistent for the past several years. Our Orange & Vanilla Cream bar, which was reworked to look and taste more like a traditional “50/50” bar remained our second best selling product representing about 23.5% of sales, and our Double Sundae Swirl bar, introduced in mid-2007, continued to gain acceptance as its share of sales increased to 23.3% of sales compared to 19.8% of sales for all of 2008. We reintroduced our Cappuccino Fudge bar last year and it represented about 10% of sales in the 1^st quarter, compared to less than 2% of sales for all of 2008, as several stores, including A&P, Super Fresh and Big Y authorized it for 2009. We expect it to be an attractive flavor in the New York and New England market s where coffee flavored beverages are strong sellers. Lastly, our Peach Melba bar represented about 6.7% of sales and has remained steady at this percent for quite some time.

There are several reasons why our Double Chocolate Swirl bar and Orange & Vanilla Cream bar are our best selling flavors, and why we believe in 2009, sales of the Double Sundae Swirl bar will continue to expand. Principally, our sales are dramatically influenced by what the supermarket chains authorize us to sell in their respective stores. The reasons supermarkets authorize a particular product are varied, but are directly correlated to what the supermarket chain or store already has for sale, as the stores want to have a variety of different items and flavors available for consumers to purchase, rather than having several different brands of the same product. Therefore, while we believe that all of our products appeal to consumers, if a particular supermarket chain or store doesn’t authorize a particular product, it will not be available for purchase at that respective chain or store. Almost every store that we receive an authorization from authorizes the Double Chocolate Swirl bar. Additionally, almost all of the stores authorized the Orange & Vanilla Cream bar. Consequently, it’s not surprising why these two bars were our best sellers, as compared to our other flavors; these two bars were for sale in almost every authorized store. Additionally, vanilla and chocolate historically represent the two most popular flavors in the ice cream industry. The Sundae Swirl bar has vanilla ice cream, as well as a chocolate and strawberry variegate so it has the most popular ice cream flavor (vanilla), as well as chocolate and strawberry.

The Company ended 2008 with its products authorized for sale in approximately 23 supermarket chains and independents representing approximately 1,625 stores; primarily in the New York Metro area and southern New England. As previously noted, the Company elected not to “pay to stay” in several of these stores as it was too costly to do so. Consequently, we were discontinued in about 900 stores after deciding not to pay additional slotting to stay on the shelf. “Pay to Stay” is becoming more common as grocery stores look for alternative ways to increase their slotting. Unlike much larger and well know companies, smaller companies like ours do not have the leverage to refuse to make these payments, and in many cases, either pay, or get discontinued. Presently, we are in about 18 supermarket chains and independents representing about 700 stores. On average these stores authorize, or carry about 2-3 items per store. The Company expects the number of products authorized in these stores to increase to 3-4 items per store in 2009.

We have no manufacturing facilities of our own and we rely on third-party vendors, or co-packers, to manufacture our products. Unlike traditional co-packing arrangements where the co-packer is responsible for purchasing all of the raw materials to manufacture the items and then selling the completed product back to the marketing company at a profit to reflect its manufacturing costs, we are responsible for purchasing and maintaining the inventory of all of the necessary ingredients and packaging and then paying a separate fee to the co-packer to manufacture our products. While the traditional method would be more efficient and effective for us, because we would not be responsible for purchasing and maintaining inventories of raw materials, the uniqueness of our products, coupled with the start-up nature of our Company, precluded any co-packer from entering into such an arrangement at this time.

During the 1^st quarter of 2009, we manufactured all of our ice cream bars at our original co-packing facility in New Jersey. Due to logistical concerns, we no longer manufacture any products at the second co-packer we have employed located in Wisconsin. We had no long term agreement to manufacture our products with either co-packer, and do not have a long term agreement to manufacture our product with our original co-packer. While having two co-packers helped diminish the potential adverse effects should either co-packer experience any production issues, or shortages, the logistical concerns of having two co-packers and scheduling production time caused us to consolidate back into a single co-packer. However, to the extent that our co-packer is unable to manufacture our products going forward, or produce amounts that are sufficient to meet customer demands, we would not be able to fill all of our orders and, similar to what took place i n 2007, we could be adversely impacted. We have had discussions with our co-packer to determine the likelihood that they can continue to meet our need for increased production time. Our current co-packer has assured us, given our sales expectations, and so long as we can continue to pay for such production in a timely basis, it has sufficient capacity to meet our projected needs through 2009 and 2010. We still anticipate the need to enter into a long-term production agreement with this co-packer once we can reasonably determine our sales for the next twelve to eighteen months. Additionally, we believe that until we are more stable financially, this co-packer will not be willing to enter into a long-term agreement since they cannot be reasonably assured we will be able to pay for such production.

The Company incurred a net loss of $312,523 for the 1^st quarter of 2009, compared to a net loss $688,665 for the comparable quarter ended 2008, reducing its loss by $376,142; an improvement of 54.6%. The net loss in 2009 was less than the loss for 2008, due to the fact that the Company had fewer sales in 2009, so its cost of goods sold was less in 2009 compared to 2008. While the Company’s slotting expenses were greater in the quarter, compared to 2008, the Company’s interest expense was considerably less this past quarter ($96,274) compared to the 1^st quarter of 2008 ($337,278). Additionally, the Company’s Selling, General and Administrative Expenses were also considerably less in the 1^st quarter ($154,510) compared to the 1^st quarter of 2008 ($424,058).

While the Company generated gross sales of $64,194 during the 1^st quarter, the supermarkets and stores deducted approximately $60,000 to pay for slotting charges, promotional fees and payment discounts. These slotting fees and expenses were to add additional SKUs in existing stores, rather than to pay for authorization for new stores. Accordingly, the Company recorded only $4,194 in net revenue for the quarter compared to $175,511 in the comparable quarter of 2008. Historically, slotting charges have typically been one-time payments made to retail outlets to access their shelf space. These fees are common in most segments of the food industry and vary from chain to chain. However, more recently, supermarkets have been asking for annual slotting payments, called “Pay to Stay,” to add additional revenues to the stores. The Company is examining this recent trend and how the Company can avoid paying additional slotting to retain its shelf space. Neverthele ss, the Company anticipates that until the rollout of its products to all stores in the country is completed, slotting expenses and discounts will continue to offset a portion of sales revenue. However over time, as more stores authorize the Company’s products, even with “Pay to Stay,” slotting payments should represent a smaller portion of gross revenues. However, slotting fees are not a guarantee that a store will reauthorize our product from one year to the next. For example, if sales of the Company’s products are not acceptable to the stores, the Company’s products may be discontinued, similar to what happened with certain supermarket chains the Company was selling to in 2007 and to a lesser degree in 2008. The Company intends to focus on increasing its sales revenues by attempting to increase existing store sales via marketing and promotional programs rather than adding new stores. The Company believes this emphasis, primarily in the New York Metro region will be a more effectiv e and efficient way to increase sales. Nevertheless, as the Company receives new store authorizations, or receives an order from an authorized store for a new product that was not previously authorized, additional slotting expenses will most likely be assessed.

The $312,523 loss for the 1^st quarter of 2009 resulted primarily from (i) slotting fees and discounts, (ii) the Company’s unusually high cost of goods sold incurred during the quarter, (iii) selling, general and administrative expenses and (iv) interest expenses. Additionally, supermarkets deducted $60,000, or almost 93.5% of sales, during the 1^st quarter of 2009 to pay for slotting charges, promotional fees and payment discounts for new items in existing stores. The Company’s cost of goods sold, $65,933, or 102.7% of sales was considerably greater than normal as a result of one time issues with ordering and supplying the Company’s raw materials to its co-packer. However, subsequent to the 1^st quarter of 2009, the Company changed the way it orders its raw materials to make its basic ice cream mix, as well as how it is blended and mixed. This has resulted in a decrease in the Company’s cost of goods sold compared to what it experienced in 2008, and the Company is continuing to look for ways to increase its gross margin without sacrificing the quality of its product. The Company has never had sufficient financial resources to purchase its raw materials in greater volume, so it still incurs smaller batch pricing. The Company continues to believe it will be able to lower the cost of its ingredients and packaging if and when it can purchase these items in greater quantity. The Company continues to believe that as its sales increase, and the payments for slotting as a percentage of gross sales are eventually reduced, the Company’s working capital will improve. Additionally, the Company expects that it will be able to purchase its raw materials, including packaging and ingredients, in sufficient volume to obtain discounts from what it has paid for these materials to date.

The Company’s selling, general and administrative expenses equaled $154,510 for the 1^st quarter of 2009. Of this amount, $33,921 represented professional fees including legal, accountingand consulting fees, as well consultants’ reimbursable expenses; $15,152 represented sales and distribution expenses including brokerage commissions, cold storage and freight charges to deliver the Company’s products from both its co-packers to its clients; $46,357 represented salaries and benefits. However, to conserve the Company’s cash, no salaries were paid during the quarter; $2,483 was related to travel and entertainment expenses during the year primarily for the costs incurred in attending various sales meetings, trade conferences and making sales calls to the Company’s customers, and $3,836 was related to auto expense including car rental fees, gas and related expenses. The balance was expended on related overhead .

The Company’s interest charges were significantly reduced in the first quarter compared to the comparable quarter of 2008. Interest charges including the amortization of debt discount was $96,274 in the quarter compared to $337,278 in the 1^st quarter of 2008. A net reduction of $241,004, or about 71.5%. Of the $96,274, $43,242 represented interest charges, $29,497 represented amortization charges and $23,535 represented non-cash interest costs associated with the value of the stock or warrants issued to lenders as additional compensation for providing loans to the Company. The value of this stock is deemed as interest and therefore is included in the Company’s interest expense even though it is a non-cash transaction. During 2008, the Company paid off a considerable portion of its debt in the first half of the year with proceeds from the sale of a preferred stock offering, this resulted in lower interest costs.

Demand for the Company’s products began to weaken at the beginning of the 3^rd quarter last year as the economy slowed. Sales for the second half of the year were less than expected, as consumers conserved their money and purchased less expensive brands. This trend continued into the 1^st quarter of this year. Even though the Company’s products offer greater health benefits compared to full fatted ice cream, consumers appeared reluctant to spend more money in the short run for long term benefits. However, as we entered the peak summer selling season, it appears that the Company’s sales have stabilized. For example sales to our New York Metro distributor in the first quarter of 2009 were up over 18% compared to the same period in 2008.

Liquidity and Capital Resources.

For the quarter ended March 31, 2009, the Company recorded a net loss of $312,523 compared to a net loss of $688,665 for the 1^st quarter of 2008. Since December 31, 2008, the Company’s total assets increased by $24,426 from $475,428 to $499,854. Current Assets increased by $13,206 primarily as a result of an increase in our raw materials inventory ($23,441), offset by a decline in our finished goods inventory ($7,082), as the Company drew down it’s finished goods inventory to fill orders. The Company’s account receivables net of allowances for slotting and other discounts ($11,213) remained essentially unchanged from December 31, 2008 ($11,786). The Company’s assets also increased as a result of an $11,200 increase in Deferred Financing Costs related to the Company’s recent borrowings. Cash decreased by $2,580 and the value of our intangible property, our proprietary formula, was unchanged from December 31, 2008.

The Company did not sell any equity during the quarter, either common or preferred, but did issue 1.5 million shares of common stock to a lender as additional compensation for making a $100,000 loan to the Company. The details of the loan are outlined later in this Report. The Company also issued 500,000 shares of common stock to a vendor in lieu of a cash payment of $10,000.

During the quarter the Company’s liabilities increased by $222,726 to $2,291,474 from $2,068,748 at December 31, 2008. The increase came from primarily from an increase in accounts payable ($38,864) and an increase in short term borrowings of $108,456. After paying down a considerable portion of its debt in 2008, the Company was unable to sell any new equity during the quarter, and consequently needed to borrow money to finance its operations. The Company’s accrued expenses also increased by $75,406 from $474,338 at year end to $549,744 at March 31^st. During the 1^st quarter of 2009, the Company borrowed $100,000. The Note comes due in February, 2010, or upon the first raise of additional equity capital. The Note accrues interest at 12% per annum. Additionally, the lender was paid 1.5 million shares of common stock as an additional incentive to make the loan. The Company also financed a portion of its accounts receivables with its New York Me tro distributor. The Company sold $18,000 of accounts receivables and received $15,000 in cash. The company also paid the distributor 225,000 shares as an additional incentive to purchase the receivables.

The Company remains in default with five separate shareholder lenders, each of which is neither an officer or a director of the Company, for unsecured loans totaling $449,000. The unsecured loans have been in default since 2006. If the Company’s current equity offering is successful, the Company is looking to pay down a considerable portion of theses defaulted loans. The defaulted loans continue to accrue interest at the default rate of interest (18%). The Company is also in default with $375,000 bridge loans the Company entered into during the 4^th quarter of 2007. The Company was in default with another bridge loan from 2007 in the amount of $200,000, but the lender agreed to waive the default and extend the maturity to September, 2009.

Other than the typical 30 day grace period for paying vendors, the Company presently has no bank credit lines that it may rely on to fund working capital. However, in the past many of the Company’s vendors have been willing to lengthen payment terms and generally accommodate the Company’s needs. However, because of the Company’s continuing cash flow constraints, vendors have been less accommodating and several have requested payment in advance, or to be paid before shipping future orders. Nevertheless the Company continues to operate in spite of its cash position.

The Company is still dependent upon additional capital in the near term in the form of either debt or equity to continue its operations. This is necessary because the Company’s working capital is presently insufficient to pay for the necessary ingredients and packaging, as well as production costs to manufacture the Company’s expected orders, as well as to pay down its accounts payable and existing indebtedness. The current situation in the financial markets has made this task even more difficult than it has been. The Company has been able to finance its operations, but has never received sufficient capital at any given time not to have to focus considerable attention to raising capital. Consequently, it is still dependent upon additional capital, particularly equity capital, to pay down its indebtedness to a more manageable amount and to insure its long term financial stability. Compounding the Company’s liquidity problem, the Comp any presently does not have any sources of credit that it can access on a ready basis. The Company requires additional capital in order to (i) purchase additional raw materials, including ingredients and packaging, as well as pay the cost of manufacturing its products all in a timely basis; (ii) pay advertising costs and other marketing expenses to promote the sale of its products; (iii) finish paying its slotting fees; (iv) repay its existing indebtedness including its accounts payable and (v) increase its corporate infrastructure. The Company believes that it needs about $1,000,000 of additional capital. A significant portion of this capital, if received, would go towards reducing the Company’s remaining indebtedness, and to purchase raw materials to insure the Company can fill all of the orders it expects to receive during 2009. However, there can be no assurance that the Company will be able to obtain additional financing in amounts or on terms acceptable to us, or at all. To the extent that the Com pany is unable to receive such funding on a timely basis, the Company’s ability to continue to pay its existing obligations, as well as enter new markets or exploit existing markets may be delayed or potentially lost, and management’s revenue projections will not be met. Additionally, it’s possible that the Company’s reputation may be damaged if it is not able to deliver its products to the supermarkets from which it has received orders.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

N/A

ITEM 4T. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedure

As of March 31, 2009, the Company’s management carried out an evaluation, with the participation of the Company's Chief Executive Officer (principal executive officer) and Chief Accounting Officer (principal financial officer), of the effectiveness of the Company's disclosure controls and procedures and the Company’s internal control over financial reporting. Management concluded that the Company's disclosure controls and procedures as of the end of the period covered by this report were effective in timely alerting it to material information required to be included in the Company's periodic Securities and Exchange Commission filings and were also effective to ensure that the information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There was no change in the Company's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Pioneer Logistics, Inc. (“Pioneer”) commenced, by summons and complaint dated July 8, 2008, an action against The Enlightened Gourmet, Inc. in the State of Connecticut Superior Court. The amount claimed is $32,422.42 for unpaid amounts due Pioneer. The Company does not dispute the amount owed, and Pioneer received a Default Judgment against the Company and the Company is working with Pioneer’s legal counsel to work out a payment plan.

The Company is not a party to any other legal proceeding.

ITEM 1 A. RISK FACTORS

Not Applicable

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On February 17, 2009, to obtain funding for working capital, the Company entered into a loan agreement with an accredited investor for the sale of an $18,000 Promissory Note (the “Note”). The Note was sold at a discount of $3,000 and bears no interest. In connection with this transaction, the Company issued the Investor 225,000 restricted shares of common stock. The Note is due May 18, 2009. The full principal amount of the Note is due upon default under the terms of Note. The Company claims an exemption from the registration requirements of the Act for the private placement of these securities pursuant to Section 4(2) of the Securities Act of 1933 and/or Regulation D promulgated thereunder since, among other things, the transaction did not involve a public offering, and the investor was an accredited investor.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

The Company continues to be in default with respect to $449,000 aggregate principal amount of unsecured promissory notes (the “Promissory Notes”) payable to various stockholders of the Company (each a “Lender”). The interest rate on such Promissory Notes has increased to the Default Rate of 18% per annum from the stated rate of 12% per annum.

On June 13, 2007, each Lender entered into an agreement to accept their prorata amount of an aggregate of 4,644,711 shares of common stock in conditional satisfaction of the indebtedness represented by such Promissory Notes. Under the terms of theses agreements, each Lender may, for a period of 30 days following the date that the Securities and Exchange Commission (“SEC”) declares effective the Registration Statement filed by the Company on Form SB-2 with the SEC on June 18, 2007, sell these shares, or, at their option, elect to return their shares of common stock to the Company, in whole or in part, and have all or a portion of their Promissory Notes reinstated.

To the extent any Lender elects to return some or all of their shares of common stock to the Company, the Company intends to repay such Promissory Notes with the proceeds from future financings, although there can be no assurance that such future financings will be available to the Company, or that if financings become available in the future what the terms of such financings will be, or that they will be in amounts sufficient to pay these Promissory Notes and other obligations of the Company.

On October 2, 2007, the Company notified the SEC that it was withdrawing the Registration Statement, and the Promissory Notes are still in default and continue to accrue interest at the Default Rate of 18% per annum. The Company is negotiating with each of the lenders a new and different settlement to repay the amounts due.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Exhibits filed with this report:


No.	Description

31.1	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this Report to be signed on its behalf by the undersigned thereunto duly authorized on this 22^nd day of June 2009.

THE ENLIGHTENED GOURMET, INC.

By:/s/ ALEXANDER L. BOZZI, III

Alexander L. Bozzi, III, President

(Principal Executive Officer and

Principal Financial Officer and Chief Accounting Officer)

Positive
Negative
Uncertain
Constraining
Legalese
Litigious
Readability	H.S. freshman Avg

Enlightened Gourmet Inactive 10-Q2009 Q1 Quarterly report

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