FLORIDA
(State
of or Other Jurisdiction of
Incorporation
or Organization)
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20-1167761
(IRS
Employer I.D. No.)
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Page
|
||
PART
I.
|
FINANCIAL
INFORMATION
|
|
Item
1.
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Consolidated
Financial Statements (unaudited)
|
|
Balance
Sheet as of June 30, 2006
|
4
|
|
Statements
of Operations for the three months ended June 30, 2006 and June 30,
2005
and for the six months ended June 30, 2006 and June 30, 2005.
|
5
|
|
Statements
of Cash Flows for the six months ended June 30, 2006 and June 30,
2005
|
6
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Notes
to Financial Statements
|
7
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|
Item
2.
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Management's
Discussion and Analysis (including cautionary statement)
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10
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Item
3.
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Controls
and Procedures
|
14
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PART
II.
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OTHER
INFORMATION
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|
Item
1.
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Legal
Proceedings
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14
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Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
|
14
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Item
3.
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Defaults
Upon Senior Securities
|
15
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Item
4.
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Submission
of Matters to a Vote of Securities Holders
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15
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Item
5.
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Other
Information
|
15
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Item
6.
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Exhibits
|
15
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Signatures
|
16
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Consolidated
Balance Sheet
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UNAUDITED
|
AUDITED
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||||||
30-Jun
|
31-Dec
|
||||||
ASSETS
|
2006
|
2005
|
|||||
Current
Assets
|
|||||||
Cash
|
$
|
4,827
|
$
|
34,063
|
|||
Accounts
receivable
|
359,159
|
439,341
|
|||||
Loan
Receivable
|
419,302
|
186,745
|
|||||
Inventory
|
5,201
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4,281
|
|||||
Prepaid
Expenses
|
18,658
|
1,507
|
|||||
Total
Current Assets
|
807,147
|
665,937
|
|||||
Property
and equipment - at cost, net of
|
|||||||
accumulated
depreciation and amortization
|
84,403
|
87,368
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|||||
$
|
891,550
|
$
|
753,305
|
||||
LIABILITIES
AND STOCKHOLDERS' DEFICIENCY
|
|||||||
Curent
Liabilities
|
|||||||
Accounts
payable
|
$
|
621,767
|
$
|
419,030
|
|||
Accrued
taxes and expenses
|
68,904
|
229,479
|
|||||
Accrued
interest payable
|
147,805
|
108,312
|
|||||
Accrued
bonus payable
|
6,000
|
||||||
Loan
payable bank
|
24,247
|
24,247
|
|||||
Convertible
notes payable-current maturities
|
464,000
|
||||||
Convertible
debentures payable
|
184,105
|
107,749
|
|||||
Total
Current Liabilities
|
1,046,828
|
1,358,817
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|||||
Notes
& loans payable
|
710,190
|
110,000
|
|||||
Loans
payable stockholders
|
2,758
|
||||||
Stockholders'
Deficiency
|
|||||||
Common
stock authorized 500,000,000
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|||||||
111,686,537
issued and outstanding
|
11,169
|
10,474
|
|||||
Preferred
stock authorized 10,000,000, none issued
|
-
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||||||
Additional
paid-in capital
|
2,273,151
|
2,233,223
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|||||
Paid-in-capital-warrants
|
294,101
|
289,164
|
|||||
Accumulated
deficit
|
(3,443,889
|
)
|
(3,251,131
|
)
|
|||
(865,468
|
)
|
(718,270
|
)
|
||||
$
|
891,550
|
$
|
753,305
|
||||
The
accompanying notes are an integral part of the financial statements
|
Innovative
Food Holdings, Inc. and Subsidiary
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|||||||||
Consolidated
Statements of Operations
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|||||||||
Unaudited
|
Three
months ended
|
Six
months ended
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||||||||||||
June
30,
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June
30,
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||||||||||||
2006
|
2005
|
2006
|
2005
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||||||||||
Revenues
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|||||||||||||
Sales
|
$
|
1,825,309
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$
|
1,281,850
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$
|
3,448,451
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$
|
2,385,647
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|||||
Other
income
|
43,580
|
43,964
|
61,484
|
110,542
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|||||||||
1,868,889
|
1,325,814
|
3,509,935
|
2,496,189
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||||||||||
Costs
and expenses
|
|||||||||||||
Cost
of goods sold
|
1,394,282
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1,034,733
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2,659,376
|
1,961,455
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|||||||||
Selling
expenses
|
249,194
|
202,675
|
446,064
|
393,962
|
|||||||||
General
and administrative expenses
|
246,156
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210,467
|
469,648
|
355,492
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|||||||||
1,889,632
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1,447,875
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3,575,088
|
2,710,909
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||||||||||
Loss
before other income (expense) and
|
|||||||||||||
provision
for income taxes
|
(20,743
|
)
|
(122,061
|
)
|
(65,153
|
)
|
(214,720
|
)
|
|||||
Other
income (expense):
|
|||||||||||||
Interest
expense
|
(24,593
|
)
|
(19,748
|
)
|
(48,330
|
)
|
(35,657
|
)
|
|||||
Amortization
of discount on debentures
|
(33,634
|
)
|
(79,386
|
)
|
-
|
||||||||
(58,227
|
)
|
(19,748
|
)
|
(127,716
|
)
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(35,657
|
)
|
||||||
Income/Loss
before income taxes expense
|
(78,970
|
)
|
(141,809
|
)
|
(192,869
|
)
|
(250,377
|
)
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|||||
Income
tax expense
|
-
|
-
|
-
|
-
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|||||||||
NET
LOSS
|
$
|
(78,970
|
)
|
$
|
(141,809
|
)
|
$
|
(192,869
|
)
|
$
|
(250,377
|
)
|
|
Loss
per share - basic and diluted
|
$
|
(0.0007
|
)
|
$
|
(0.0018
|
)
|
$
|
(0.0017
|
)
|
$
|
(0.0031
|
)
|
|
The
accompanying notes are an integral part of the financial statements.
|
Consolidated
Statements of Cash Flows
|
||||||
Unaudited
|
Six
months ended June,
|
|||||||
2006
|
2005
|
||||||
Cash
flows from operating activities
|
|||||||
Net
loss
|
$
|
(192,869
|
)
|
$
|
(250,377
|
)
|
|
Adjustments
to reconcile net loss to net cash
|
|||||||
used
in operating activities
|
|||||||
Depreciation
|
25,794
|
25,642
|
|||||
Amortization
on discount on debentures
|
79,386
|
||||||
Changes
in operating assets and liabilities
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|||||||
Accounts
receivable
|
80,182
|
7,199
|
|||||
Inventory
|
(921
|
)
|
4,664
|
||||
Prepaid
expenses
|
(17,151
|
)
|
(84,564
|
)
|
|||
Loan
Receivable
|
(232,557
|
)
|
-
|
||||
Accounts
payable
|
202,737
|
(72,011
|
)
|
||||
Accrued
taxes and expenses
|
(126,970
|
)
|
28,223
|
||||
Net
cash used in operating activities
|
(182,369
|
)
|
(341,225
|
)
|
|||
Cash
flows from investing activities
|
|||||||
Acquisition
of property and equipment
|
(22,829
|
)
|
30,795
|
||||
Net
cash (used in) provided by investing activities
|
(22,829
|
)
|
30,795
|
||||
Cash
flows from financing activities
|
|||||||
Proceeds
from issuance of long-term-debt
|
-
|
452,000
|
|||||
Payment
of loan payable bank
|
-
|
(46,521
|
)
|
||||
Payment
of loans from stockholders
|
(2,758
|
)
|
(3,227
|
)
|
|||
Debentures
issed from stock conversion
|
178,720
|
-
|
|||||
Net
cash provided by financing activities
|
175,962
|
402,252
|
|||||
NET
(DECREASE) INCREASE IN CASH
|
|||||||
AND
CASH EQUIVALENTS
|
(29,236
|
)
|
91,822
|
||||
Cash
and cash equivalents at beginning of period
|
34,063
|
28,011
|
|||||
Cash
and cash equivalents at end of period
|
$
|
4,827
|
$
|
119,833
|
|||
Supplemental
cash flow disclosures:
|
|||||||
Interest
Paid
|
$
|
665
|
$
|
-
|
|||
Income
taxes paid
|
$
|
-
|
$
|
-
|
The
accompanying notes are an integral part of the financial
statements.
|
Period
Ended June 30, 2006 Earnings Per
Share
|
Income
|
Number
of Shares
|
Amount
|
||||||||
(numerator)
|
outstanding
|
per
share
|
||||||||
Net
Loss
|
(192,869
|
)
|
||||||||
Less:
Preferred stock dividends
|
0
|
|||||||||
Basic
EPS
|
||||||||||
Loss
available to common stockholders
|
(192,869
|
)
|
111,686,537
|
($0.002
|
)
|
|||||
Effects
of Dilutive Securities
|
||||||||||
Options
to purchase common stock
|
||||||||||
8%
convertible notes
|
388,313,463
|
|||||||||
Warrants
|
||||||||||
Diluted
EPS
|
||||||||||
Loss
available to common stockholders
|
||||||||||
adjusted
for the effects of assumed
|
||||||||||
exercise
of options and conversion of notes
|
(192,869
|
)
|
500,000,000
|
($0.000
|
)
|
Quarter
ended June 30,
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
2006
|
2005
|
2006
|
2005
|
|||||||||||
Net
Revenue
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
||||||
Cost
of Goods Sold
|
(74.60
|
%)
|
(78.04
|
%)
|
(75.77
|
%)
|
(78.58
|
%)
|
||||||
Gross
Margin
|
25.39
|
%
|
21.95
|
%
|
24.23
|
%
|
21.42
|
%
|
||||||
Selling,
general and administrative expenses
|
(26.50
|
%)
|
(31.16
|
%)
|
(26.09
|
%)
|
(30.02 | %) | ||||||
Interest
& amortization expense
|
(3.06
|
%)
|
(1.49
|
%)
|
(3.60
|
%)
|
(1.42
|
%)
|
||||||
Net
Loss
|
(4.17
|
%)
|
(10.70
|
%)
|
(5.46
|
%)
|
(10.03
|
%)
|
SIGNATURE
|
TITLE
|
DATE
|
Sam
Klepfish
/s/
Sam Klepfish
|
Interim
President
|
August
18, 2006
|
Carol
Houston
/s/
Carol Houston
|
Principal
Financial Officer
|
August
18, 2006
|