FLORIDA | 20-116776 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer o | Accelerated filer o | |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company x |
PART I | PAGE | |
Item 1. | 4 | |
Item 1A. | 7 | |
Item 1B. | Unresolved Staff Comments | N/A |
Item 2. | ||
Item 3. | 13 | |
Item 4. | ||
PART II | ||
Item 5. | 14 | |
Item 6. | ||
Item 7. | ||
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | N/A |
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Item 9B. | ||
PART III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
PART IV | ||
Item 15. | ||
● | Seafood - Alaskan wild king salmon, Hawaiian sashimi-grade ahi tuna, Gulf of Mexico day-boat snapper, Chesapeake Bay soft shell crabs, New England live lobsters, Japanese hamachi | |
● | Meat & Game - Prime rib of American kurobuta pork, dry-aged buffalo tenderloin, domestic lamb, Cervena venison, elk tenderloin | |
● | Produce - White asparagus, baby carrot tri-color mix, Oregon wild ramps, heirloom tomatoes | |
● | Poultry - Grade A foie gras, Hudson Valley quail, free range and organic chicken, airline breast of pheasant | |
● | Specialty - Truffle oils, fennel pollen, prosciutto di Parma, wild boar sausage | |
● | Mushrooms - Fresh morels, Trumpet Royale, porcini powder, wild golden chanterelles | |
● | ||
Cheese - Maytag blue, buffalo mozzarella, Spanish manchego, Italian gorgonzola dolce |
● | Flavor profile and eating qualities |
● | Recipe and usage ideas |
● | Origin, seasonality, and availability |
● | Cross utilization ideas and complementary uses of products |
· | failure of the acquired businesses to achieve expected results; | |
· | diversion of management’s attention and resources to acquisitions; | |
· | failure to retain key customers or personnel of the acquired businesses; | |
· | disappointing quality or functionality of acquired equipment and people: and | |
· | risks associated with unanticipated events, liabilities or contingencies. |
● that a broker or dealer approve a person's account for transactions in penny stocks; and ● | ||
the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. |
● obtain financial information and investment experience objectives of the person; and ● | ||
make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. |
● Sets forth the basis on which the broker or dealer made the suitability determination, and ● | ||
that the broker or dealer received a signed, written agreement from the investor prior to the transaction. |
Fiscal Year Ending December 31, 2015 | HIGH | LOW | ||||||
First Quarter | $ | 1.90 | $ | 1.30 | ||||
Second Quarter | 1.39 | 1.13 | ||||||
Third Quarter | 1.28 | 0.95 | ||||||
Fourth Quarter | 0.94 | 0.51 |
Fiscal Year Ending December 31, 2014 | HIGH | LOW | ||||||
First Quarter | $ | 1.80 | $ | 1.13 | ||||
Second Quarter | 1.75 | 1.20 | ||||||
Third Quarter | 1.69 | 1.16 | ||||||
Fourth Quarter | 1.75 | 1.20 |
Fiscal Year Ending December 31, 2013 | HIGH | LOW | ||||||
First Quarter | $ | 0.45 | $ | 0.21 | ||||
Second Quarter | 0.48 | 0.30 | ||||||
Third Quarter | 1.09 | 0.36 | ||||||
Fourth Quarter | 1.75 | 1.020 |
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants, and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants, and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||||||||||||
Equity compensation plans approved by security holders | 3,245,000 | $ | 0.822 | 96,755,000 | 3,120,000 | $ | 0.890 | 96,755,000 | ||||||||||||||||
Equity compensation plans not approved by shareholders | 8,550,000 | $ | 1.000 | N/A | 8,198,106 | $ | 1.008 | N/A |
● | Our ability to raise capital necessary to sustain our anticipated operations and implement our business plan, |
● | Our ability to implement our business plan, |
● | Our ability to generate sufficient cash to pay our lenders and other creditors, |
● | Our dependence on one major customer, |
● | Our ability to employ and retain qualified management and employees, |
● | Our dependence on the efforts and abilities of our current employees and executive officers, |
● | Changes in government regulations that are applicable to our current or anticipated business, |
● | Changes in the demand for our services, |
● | The degree and nature of our competition, |
● | The lack of diversification of our business plan, |
● | The general volatility of the capital markets and the establishment of a market for our shares, and |
● | Disruption in the economic and financial conditions primarily from the impact of past terrorist attacks in the United States, threats of future attacks, police and military activities overseas and other disruptive worldwide political and economic events and environmental weather conditions. |
December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2015 | 2014 | |||||||||||||
Number of warrants outstanding | 4,798,469 | 5,819,129 | 3,537,284 | 4,798,469 | ||||||||||||
Value at December 31 | N/A | N/A | N/A | N/A | ||||||||||||
Number of warrants issued during the period | - | - | - | - | ||||||||||||
Value of warrants issued during the year | N/A | N/A | N/A | N/A | ||||||||||||
Revaluation (gain) loss during the period | N/A | N/A | N/A | N/A | ||||||||||||
Number of warrants exercised during the period | 1,020,660 | - | 1,261,185 | 1,020,660 | ||||||||||||
Value of warrants exercised during the period | N/A | N/A | N/A | N/A | ||||||||||||
Number of warrants cancelled or expired during the period | - | - | - | - | ||||||||||||
Value of warrants cancelled or expired during the period | N/A | N/A | N/A | N/A | ||||||||||||
Black-Scholes model variables: | ||||||||||||||||
Volatility | N/A | N/A | N/A | N/A | ||||||||||||
Dividends | N/A | N/A | N/A | N/A | ||||||||||||
Risk-free interest rates | N/A | N/A | N/A | N/A | ||||||||||||
Term (years) | N/A | N/A | N/A | N/A |
December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2015 | 2014 | |||||||||||||
Number of conversion options outstanding | 3,162,130 | 3,594,592 | 5,771,665 | 5,786,866 | ||||||||||||
Value at December 31 | $ | N/A | $ | N/A | $ | N/A | $ | N/A | ||||||||
Number of conversion options issued during the year | 129,870 | - | 49,724 | 237,786 | ||||||||||||
Value of conversion options issued during the year | $ | - | $ | - | $ | - | $ | - | ||||||||
Number of options exercised or underlying notes paid during the year | 562,332 | 1,773,603 | ||||||||||||||
Number of options exercised or underlying notes or accrued interest paid or converted during the year | 64,935 | 926,268 | ||||||||||||||
Value of options exercised during the year | $ | N/A | $ | N/A | $ | N/A | $ | N/A | ||||||||
Revaluation loss (gain) during the period | N/A | N/A | N/A | N/A | ||||||||||||
Black-Scholes model variables: | N/A | N/A | N/A | N/A | ||||||||||||
Volatility | N/A | N/A | N/A | N/A | ||||||||||||
Dividends | N/A | N/A | N/A | N/A | ||||||||||||
Risk-free interest rates | N/A | N/A | N/A | N/A | ||||||||||||
Term (years) | N/A | N/A | N/A | N/A |
December 31, | December 31, | |||||||||||||||
2014 | 2013 | 2015 | 2014 | |||||||||||||
Number of options outstanding | 3,245,000 | 2,580,000 | 3,105,000 | 3,245,000 | ||||||||||||
Value at December 31 | N/A | N/A | N/A | N/A | ||||||||||||
Number of options issued during the year | 705,000 | 910,000 | 50,000 | 705,000 | ||||||||||||
Value of options issued during the year | $ | 393,737 | - | $ | 6,894 | $ | 393,737 | |||||||||
Number of options recognized during the year pursuant to SFAS 123(R) | 0 | 910,000 | 0 | 0 | ||||||||||||
Number of options exercised or expired during the year | 40,000 | 190,000 | 40,000 | |||||||||||||
Value of options recognized during the year pursuant to SFAS 123(R) | $ | 308,782 | $ | 178,183 | $ | 188,491 | $ | 308,782 | ||||||||
Revaluation (gain) during the period | N/A | $ | N/A | $ | N/A | $ | N/A | |||||||||
Black-Scholes model variables: | ||||||||||||||||
Volatility | 89.42% to 189.71 | % | 186.46% to 189.28 | % | 47.35% to 57.56 | % | 89.42% to 189.71 | % | ||||||||
Dividends | 0 | 0 | 0 | 0 | ||||||||||||
Risk-free interest rates | 0.37% - 0.42 | % | 0.11 to 1.18 | % | 0.14% to 0.99 | % | 0.37% to 0.42 | % | ||||||||
Term (years) | 2.00 - 4.00 | 0.26 - 5.00 | 0.92 to 3.00 | 2.00 to 4.00 |
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 3,112,526 | $ | 2,073,605 | ||||
Accounts receivable net | 1,242,970 | 771,205 | ||||||
Inventory | 1,195,327 | 839,979 | ||||||
Other current assets | 625,495 | 11,316 | ||||||
Due from related parties | 461,130 | - | ||||||
Total current assets | 6,637,448 | 3,696,105 | ||||||
Property and equipment, net | 1,922,044 | 954,068 | ||||||
Investment | 204,000 | - | ||||||
Intangible assets, net | 23,610,549 | 887,442 | ||||||
Total assets | $ | 32,374,041 | $ | 5,537,615 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 4,096,700 | $ | 1,285,149 | ||||
Deferred revenue | 4,792,609 | - | ||||||
Accrued liabilities - related parties | 1,137,692 | 523,110 | ||||||
Accrued interest | 603,034 | 671,481 | ||||||
Accrued interest - related parties | 78,945 | 48,708 | ||||||
Revolving credit facilities | 360,871 | - | ||||||
Notes payable, current portion, net of discount | 714,811 | 1,150,253 | ||||||
Notes payable - related parties, current portion | 110,500 | 110,500 | ||||||
Deferred tax liability | 1,069,200 | - | ||||||
Contingent liabilities | 572,500 | 80,881 | ||||||
Total current liabilities | 13,536,862 | 3,870,082 | ||||||
Note payable - long term portion, net of discount | 1,251,745 | 727,328 | ||||||
Notes payable - related parties, long term portion | 2,199,970 | - | ||||||
Total liabilities | 16,988,577 | 4,597,410 | ||||||
Stockholders' equity | ||||||||
Common stock, $0.0001 par value; 500,000,000 shares authorized; 21,393,989 and 7,732,456 shares issued and 20,693,326 and 7,117,743 shares outstanding at December 31, 2014 and December 31, 2013, respectively | 2,140 | 774 | ||||||
Additional paid-in capital | 25,937,734 | 7,702,893 | ||||||
Treasury stock, 486,254 and 400,304 shares outstanding at December 31, 2014 and December 31, 2013, respectively | (160,099 | ) | (100,099 | ) | ||||
Accumulated deficit | (10,395,495 | ) | (6,663,363 | ) | ||||
Total Innovative Food Holdings, Inc. stockholders' equity | 15,384,280 | 940,205 | ||||||
Noncontrolling interest in variable interest entity | 1,184 | - | ||||||
Total stockholder's equity | 15,385,464 | 940,205 | ||||||
Total liabilities and stockholders' equity | $ | 32,374,041 | $ | 5,537,615 |
December 31, | December 31, | |||||||
2015 | 2014 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 1,645,320 | $ | 2,601,834 | ||||
Accounts receivable net | 1,650,584 | 1,240,058 | ||||||
Inventory | 920,885 | 938,906 | ||||||
Current assets - discontinued operations | 1,767,333 | 1,845,334 | ||||||
Other current assets | 68,559 | 11,316 | ||||||
Due from related parties | - | - | ||||||
Total current assets | 6,052,681 | 6,637,448 | ||||||
Property and equipment, net | 2,193,463 | 877,867 | ||||||
Investment | 150,000 | 204,000 | ||||||
Non-current assets - discontinued operations | 4,665,554 | 23,414,449 | ||||||
Intangible assets, net | 940,452 | 1,240,277 | ||||||
Total assets | $ | 14,002,150 | $ | 32,374,041 | ||||
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued liabilities | $ | 1,702,526 | $ | 1,610,823 | ||||
Accrued liabilities - related parties | 458,710 | 914,964 | ||||||
Accrued interest | 9,230 | 603,034 | ||||||
Accrued interest - related parties | - | 54,150 | ||||||
Revolving credit facilities | 1,380,000 | - | ||||||
Notes payable, current portion | 897,615 | 440,682 | ||||||
Notes payable - related parties, current portion | - | 110,500 | ||||||
Current liabilities - discontinued operations | 10,512,255 | 9,630,209 | ||||||
Contingent liabilities | 91,000 | 172,500 | ||||||
Total current liabilities | 15,051,336 | 13,536,862 | ||||||
Accrued interest – long term | 614,465 | - | ||||||
Note payable - long term portion, net of discount | 1,254,042 | 737,534 | ||||||
Notes payable - related parties, long term portion | 164,650 | - | ||||||
Long term liabilities - discontinued operations | 2,301,151 | 2,714,181 | ||||||
Total liabilities | 19,385,644 | 16,988,577 | ||||||
Commitments and contingencies (see Note 16) | ||||||||
Stockholders' (deficit) equity | ||||||||
Common stock, $0.0001 par value; 500,000,000 shares authorized; 24,248,486 and 21,393,989 shares issued, and 23,547,823 and 20,693,326 shares outstanding at December 31, 2015 and 2014, respectively | 2,423 | 2,140 | ||||||
Additional paid-in capital | 32,344,584 | 25,937,734 | ||||||
Treasury stock, 486,254 shares outstanding at December 31, 2015 and 2014, respectively | (160,099 | ) | (160,099 | ) | ||||
Accumulated deficit | (37,570,402 | ) | (10,394,311 | ) | ||||
Total stockholders' (deficit) equity | (5,383,494 | ) | 15,385,464 | |||||
Total liabilities and stockholders' (deficit) equity | $ | 14,002,150 | $ | 32,374,041 |
For the Year | For the Year | For the | For the | |||||||||||||
Ended | Ended | Year Ended | Year Ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
2014 | 2013 | 2015 | 2014 | |||||||||||||
Revenue | $ | 30,800,858 | $ | 22,511,929 | $ | 30,648,381 | $ | 25,883,828 | ||||||||
Cost of goods sold | 22,691,387 | 15,862,746 | 21,460,812 | 17,863,418 | ||||||||||||
Gross margin | 8,109,471 | 6,649,183 | 9,187,569 | 8,020,410 | ||||||||||||
Selling, general and administrative expenses | 11,025,083 | 5,683,364 | 8,990,658 | 7,151,135 | ||||||||||||
Total operating expenses | 11,025,083 | 5,683,364 | 8,990,658 | 7,151,135 | ||||||||||||
Operating (loss) income | (2,915,612 | ) | 965,819 | |||||||||||||
Operating income | 196,911 | 869,275 | ||||||||||||||
Other (income) expense: | ||||||||||||||||
Interest expense, net | 824,070 | 2,452,076 | 575,914 | 788,946 | ||||||||||||
Other (income) | (8,734 | ) | - | (5,400 | ) | (1,700 | ) | |||||||||
Total other (income) expense | 815,336 | 2,452,076 | 570,514 | 787,246 | ||||||||||||
Net loss before taxes | (3,730,948 | ) | (1,486,257 | ) | ||||||||||||
Net (loss) income before taxes | (373,603 | ) | 82,029 | |||||||||||||
Income tax expense | - | - | - | - | ||||||||||||
Net loss | $ | (3,730,948 | ) | $ | (1,486,257 | ) | ||||||||||
Net (loss) income from continuing operations | $ | (373,603 | ) | $ | 82,029 | |||||||||||
Less net income attributable to noncontrolling interest in variable interest entities | 1,184 | - | ||||||||||||||
Net loss from discontinued operations | (26,802,488 | ) | (3,812,977 | ) | ||||||||||||
Net loss attributable to Innovative Food Holdings, Inc. | $ | (3,732,132 | ) | $ | (1,486,257 | ) | ||||||||||
Consolidated net loss | $ | (27,176,091 | ) | $ | (3,730,948 | ) | ||||||||||
Net loss per share - basic | $ | (0.32 | ) | $ | (0.23 | ) | ||||||||||
Net (loss) income per share from continuing operations - basic | $ | (0.016 | ) | $ | 0.007 | |||||||||||
Net loss per share - diluted | $ | (0.32 | ) | $ | (0.23 | ) | ||||||||||
Net loss per share from discontinued operations - basic | $ | (1.166 | ) | $ | (0.334 | ) | ||||||||||
Net (loss) income per share from continuing operations - diluted | $ | (0.016 | ) | $ | 0.005 | |||||||||||
Net loss per share from discontinued operations - diluted | $ | (1.166 | ) | $ | (0.334 | ) | ||||||||||
Weighted average shares outstanding - basic | 11,421,690 | 6,500,506 | 22,996,003 | 11,421,690 | ||||||||||||
Weighted average shares outstanding - diluted | 11,421,690 | 6,500,506 | 22,996,003 | 15,990,111 |
For the Year | For the Year | |||||||||||||||
Ended | Ended | |||||||||||||||
December 31, | December 31, | For the | For the | |||||||||||||
2014 | 2013 | Year Ended | Year Ended | |||||||||||||
December 31, | December 31, | |||||||||||||||
2015 | 2014 | |||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (3,730,948 | ) | $ | (1,486,257 | ) | $ | (27,176,091 | ) | $ | (3,730,948 | ) | ||||
Gain on disposition of property and equipment | (8,734 | ) | - | (8,734 | ) | |||||||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
Increase in allowance for bad debts | 15,687 | 38,264 | ||||||||||||||
Gain on sale of investment | (5,400 | ) | - | |||||||||||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 630,086 | 262,882 | 1,417,916 | 630,086 | ||||||||||||
Non-cash compensation | 1,212,891 | 309,013 | ||||||||||||||
Impairment of goodwill | 16,614,373 | - | ||||||||||||||
Stock based compensation | 2,427,231 | 1,212,891 | ||||||||||||||
Stock based compensation for FD employees | 2,258,216 | - | ||||||||||||||
Amortization of discount on notes payable | 707,698 | 2,322,909 | 489,187 | 707,698 | ||||||||||||
Increase in allowance for doubtful accounts | 24,808 | 15,687 | ||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Accounts receivable, net | (485,112 | ) | 150,336 | (432,422 | ) | (485,112 | ) | |||||||||
Deferred revenue | 2,080,609 | - | 243,657 | 2,080,609 | ||||||||||||
Inventory and other current assets, net | (347,278 | ) | (319,911 | ) | 17,254 | (347,278 | ) | |||||||||
Accounts payable and accrued expenses - related party | 715,654 | 58,242 | (192,935 | ) | 715,654 | |||||||||||
Accounts payable and accrued expenses | 131,378 | 19,403 | 683,382 | 131,378 | ||||||||||||
Due from related party | 1,496 | - | (110 | ) | 1,496 | |||||||||||
Contingent liability | 16,619 | - | (31,500 | ) | 16,619 | |||||||||||
Net cash provided by operating activities | 940,046 | 1,354,881 | ||||||||||||||
Net cash (used in) provided by operating activities | (3,662,434 | ) | 940,046 | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Investments in food related companies | (204,000 | ) | - | - | (204,000 | ) | ||||||||||
Cash received from sale of investment | 59,400 | - | ||||||||||||||
Acquisition of Organic Food Brokers | (100,000 | ) | - | - | (100,000 | ) | ||||||||||
Cash received in acquisition of The Fresh Diet | 277,885 | - | - | 277,885 | ||||||||||||
Cash received in sale of property and equipment | 44,481 | - | ||||||||||||||
Cash received from sale of property and equipment | - | 44,481 | ||||||||||||||
Acquisition of property and equipment | (4,519 | ) | (341,438 | ) | (1,551,618 | ) | (4,519 | ) | ||||||||
Net cash provided by (used in) investing activities | 13,847 | (341,438 | ) | |||||||||||||
Cash paid to re-acquire shares issued in acquisition of The Fresh Diet | (3,000,000 | ) | - | |||||||||||||
Net cash (used in) provided by investing activities | (4,492,218 | ) | 13,847 | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Common stock sold for cash | 1,585,000 | - | 4,288,596 | 1,585,000 | ||||||||||||
Common stock sold for exercise of options and warrants | 357,000 | - | 788,860 | 357,000 | ||||||||||||
Purchase of treasury stock for cash | (60,000 | ) | (100,000 | ) | - | (60,000 | ) | |||||||||
Payments made on revolving credit facilities | (5,586,785 | ) | (1,446,072 | ) | ||||||||||||
Borrowings on revolving credit facilities | 585,543 | - | 6,817,125 | 585,543 | ||||||||||||
Payments made on revolving credit facilities | (1,446,072 | ) | - | |||||||||||||
Proceeds from bank loan | - | 324,676 | ||||||||||||||
Borrowings on debt | 2,625,015 | - | ||||||||||||||
Principal payments on debt | (816,522 | ) | (511,543 | ) | (1,565,253 | ) | (816,522 | ) | ||||||||
Principal payments capital leases | (119,921 | ) | - | (188,143 | ) | (119,921 | ) | |||||||||
Net cash provided by (used in) financing activities | 85,028 | (286,867 | ) | |||||||||||||
Net cash provided by financing activities | 7,179,415 | 85,028 | ||||||||||||||
Increase in cash and cash equivalents | 1,038,921 | 726,576 | ||||||||||||||
(Decrease) increase in cash and cash equivalents | (975,237 | ) | 1,038,921 | |||||||||||||
Cash and cash equivalents at beginning of period | 2,073,605 | 1,347,029 | 3,112,526 | 2,073,605 | ||||||||||||
Cash and cash equivalents at end of period | $ | 3,112,526 | $ | 2,073,605 | $ | 2,137,289 | $ | 3,112,526 | ||||||||
Cash and cash equivalents at end of period - discontinued operations (see Note 3) | $ | 491,969 | $ | 510,692 | ||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||||
Cash paid during the period for: | ||||||||||||||||
Interest | $ | 52,319 | $ | 48,278 | $ | 113,271 | $ | 52,319 | ||||||||
Taxes | $ | - | $ | - | $ | - | $ | - | ||||||||
Non cash investing and financing activities: | ||||||||||||||||
Issuance of 150,000 shares of common stock pursuant to the Haley Group acquisition | $ | 37,500 | $ | - | ||||||||||||
Issuance of 10,000,000 shares of common stock for acquisition of The Fresh Diet | $ | - | $ | 14,000,000 | ||||||||||||
Issuance of 846,263 shares of common stock for conversion of notes payable and accrued interest | $ | 211,567 | $ | - | $ | - | $ | 211,567 | ||||||||
Issuance of shares previously subscribed | $ | 7,302 | ||||||||||||||
Mortgage and purchase of land and building | $ | - | $ | 546,000 | ||||||||||||
Conversion of notes payable and accrued interest to common stock | $ | 293,426 | ||||||||||||||
Issuance of common stock for cashless conversion of warrants | $ | 26 | ||||||||||||||
Payoff of common stock from proceeds of bank term loan | $ | 675,324 | ||||||||||||||
Issuance of 10,000,000 shares of common stock for acquisition of The Fresh Diet | $ | 14,000,000 | $ | - | ||||||||||||
Discount on notes payable due to extension of term | $ | 732,565 | $ | - | $ | 647,565 | $ | 732,565 | ||||||||
Additions to vehicles under capital lease | $ | 85,464 | $ | - | ||||||||||||
Acquisition note and options issued for the purchase of Organic Food Brokers | $ | - | $ | 271,349 | ||||||||||||
Issuance of 175,000 shares of common stock to officers, previously accrued | $ | 65,835 | $ | - | ||||||||||||
Issuance of 16,202 shares of common stock under cashless exercise of warrants | $ | - | $ | - | ||||||||||||
Increase in acquisition intangible assets due to deferred tax liability | $ | 1,069,200 | $ | - | ||||||||||||
Equipment acquired under capital lease | $ | 101,635 | $ | - |
Common Stock | Common stock | Treasury stock | Accumulated | Noncontrolling | ||||||||||||||||||||||||||||||||
Amount | Value | APIC | Subscribed | Amount | Value | Deficit | Interest | Total | ||||||||||||||||||||||||||||
Balance as of December 31, 2012 | 6,023,801 | 602 | 6,329,553 | 68,336 | 304 | (99 | ) | (5,177,106 | ) | 1,221,286 | ||||||||||||||||||||||||||
Common stock issued for conversion of notes payable and accrued interest | 1,173,712 | 118 | 293,308 | - | - | - | - | 293,426 | ||||||||||||||||||||||||||||
Common stock issued, previously subscribed | 279,310 | 28 | 75,637 | (68,336 | ) | - | - | - | 7,329 | |||||||||||||||||||||||||||
Cashless exercise of warrants | 255,633 | 26 | (26 | ) | - | - | - | - | - | |||||||||||||||||||||||||||
Common stock repurchased | - | - | - | - | 400,000 | (100,000 | ) | - | (100,000 | ) | ||||||||||||||||||||||||||
Fair value of stock options and vested options issued to management | - | - | 178,183 | - | - | - | - | 178,183 | ||||||||||||||||||||||||||||
Discount on notes payable | - | - | 826,238 | - | - | - | - | 826,238 | ||||||||||||||||||||||||||||
Loss for the year ended December 31, 2013 | - | - | - | - | - | - | (1,486,257 | ) | (1,486,257 | ) | ||||||||||||||||||||||||||
Balance as of December 31, 2013 | 7,732,456 | 774 | 7,702,893 | - | 400,304 | (100,099 | ) | (6,663,363 | ) | 940,205 | ||||||||||||||||||||||||||
Common stock issued for conversion of notes payable and accrued interest | 846,263 | 84 | 211,483 | - | - | - | - | - | 211,567 | |||||||||||||||||||||||||||
Common stock issued for the cashless exercise of warrants | 16,203 | 2 | (2 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||
Fair value of vested stock options issued to management | - | - | 265,995 | - | - | - | - | - | 265,995 | |||||||||||||||||||||||||||
Common stock repurchased | - | - | - | - | 85,950 | (60,000 | ) | - | - | (60,000 | ) | |||||||||||||||||||||||||
Discount on notes payable | - | - | 732,565 | - | - | - | - | - | 732,565 | |||||||||||||||||||||||||||
Common stock issued to officers, previously accrued | 175,000 | 17 | 65,818 | - | - | - | - | - | 65,835 | |||||||||||||||||||||||||||
Common stock issued to service provider | 17,248 | 2 | 17,591 | - | - | - | - | - | 17,593 | |||||||||||||||||||||||||||
Common stock sold for cash | 1,585,000 | 159 | 1,584,841 | - | - | - | - | - | 1,585,000 | |||||||||||||||||||||||||||
Options issued in acquisition of Organic Food Brokers | - | - | 71,349 | - | - | - | - | - | 71,349 | |||||||||||||||||||||||||||
Shares issued in acquisition of The Fresh Diet | 6,889,937 | 689 | 9,645,223 | - | - | - | - | - | 9,645,912 | |||||||||||||||||||||||||||
Shares held for issuance in acquisition of The Fresh Diet | 3,110,063 | 311 | 4,353,777 | - | - | - | - | - | 4,354,088 | |||||||||||||||||||||||||||
Shares issued for exercise of warrants | 1,001,819 | 100 | 349,900 | - | - | - | - | - | 350,000 | |||||||||||||||||||||||||||
Fair value of stock options issued to a service provider | - | - | 42,787 | - | - | - | - | - | 42,787 | |||||||||||||||||||||||||||
Stock issued for exercise of options | 20,000 | 2 | 6,998 | - | - | - | - | - | 7,000 | |||||||||||||||||||||||||||
Value of RSU's recognized during the period | - | - | 886,516 | - | - | - | - | - | 886,516 | |||||||||||||||||||||||||||
Loss for the twelve months ended December 31, 2014 | - | - | - | - | - | - | (3,732,132 | ) | 1,184 | (3,730,948 | ) | |||||||||||||||||||||||||
Balance at December 31, 2014 | 21,393,989 | 2,140 | 25,937,734 | - | 486,254 | (160,099 | ) | (10,395,495 | ) | 1,184 | 15,385,464 |
Common Stock | Treasury stock | Accumulated | ||||||||||||||||||||||||||
Amount | Value | APIC | Amount | Value | Deficit | Total | ||||||||||||||||||||||
Balance as of December 31, 2013 | 7,732,456 | 774 | 7,702,893 | 400,304 | (100,099 | ) | (6,663,363 | ) | 940,205 | |||||||||||||||||||
�� | ||||||||||||||||||||||||||||
Common stock issued for conversion of notes payable and accrued interest | 846,263 | 84 | 211,483 | - | - | - | 211,567 | |||||||||||||||||||||
Common stock issued for the cashless exercise of warrants | 16,203 | 2 | (2 | ) | - | - | - | - | ||||||||||||||||||||
Fair value of vested stock options issued to management and board | - | - | 265,995 | - | - | - | 265,995 | |||||||||||||||||||||
Common stock repurchased | - | - | - | 85,950 | (60,000 | ) | - | (60,000 | ) | |||||||||||||||||||
Discount on notes payable | - | - | 732,565 | - | - | - | 732,565 | |||||||||||||||||||||
Common stock issued to officers, previously accrued | 175,000 | 17 | 65,818 | - | - | - | 65,835 | |||||||||||||||||||||
Common stock issued to service provider | 17,248 | 2 | 17,591 | - | - | - | 17,593 | |||||||||||||||||||||
Common stock sold for cash | 1,585,000 | 159 | 1,584,841 | - | - | - | 1,585,000 | |||||||||||||||||||||
Options issued in acquisition of Organic Food Brokers | - | - | 71,349 | - | - | - | 71,349 | |||||||||||||||||||||
Shares issued in acquisition of The Fresh Diet | 6,889,937 | 689 | 9,645,223 | - | - | - | 9,645,912 | |||||||||||||||||||||
Shares held for issuance in acquisition of The Fresh Diet | 3,110,063 | 311 | 4,353,777 | - | - | - | 4,354,088 | |||||||||||||||||||||
Shares issued for exercise of warrants | 1,001,819 | 100 | 349,900 | - | - | - | 350,000 | |||||||||||||||||||||
Fair value of stock options issued to a service provider | - | - | 42,787 | - | - | - | 42,787 | |||||||||||||||||||||
Stock issued for exercise of options | 20,000 | 2 | 6,998 | - | - | - | 7,000 | |||||||||||||||||||||
Value of RSU's recognized during the period | - | - | 886,516 | - | - | - | 886,516 | |||||||||||||||||||||
Loss for the twelve months ended December 31, 2014 | - | - | - | - | - | (3,730,948 | ) | (3,730,948 | ) | |||||||||||||||||||
Balance at December 31, 2014 | 21,393,989 | 2,140 | 25,937,734 | 486,254 | (160,099 | ) | (10,394,311 | ) | 15,385,464 | |||||||||||||||||||
Common stock sold for cash | 4,122,249 | 412 | 4,288,184 | - | - | - | 4,288,596 | |||||||||||||||||||||
Cancellation of shares issued in acquisition of The Fresh Diet | (3,110,063 | ) | (311 | ) | (4,353,777 | ) | - | - | - | (4,354,088 | ) | |||||||||||||||||
Value of RSU's recognized during the period | - | - | 2,397,973 | - | - | - | 2,397,973 | |||||||||||||||||||||
Fair value of RSUs charged to The Fresh Diet discontinued operations | - | - | 2,258,216 | - | - | - | 2,258,216 | |||||||||||||||||||||
Fair value of vested stock options issued to management and board | - | - | 98,938 | - | - | - | 98,938 | |||||||||||||||||||||
Shares issued for exercise of warrants | 1,261,185 | 126 | 706,874 | - | - | - | 707,000 | |||||||||||||||||||||
Shares issued for exercise of options | 190,000 | 19 | 81,841 | - | - | - | 81,860 | |||||||||||||||||||||
Value of options extensions | - | - | 89,553 | - | - | - | 89,553 | |||||||||||||||||||||
Shares issued pursuant to Haley Acquisition - previously accrued | 150,000 | 15 | 37,485 | - | - | - | 37,500 | |||||||||||||||||||||
Fair value of stock options issued to service provider | - | - | 6,894 | - | - | - | 6,894 | |||||||||||||||||||||
Fair value of stock issued to service provider | 55,000 | 5 | 72,995 | - | - | - | 73,000 | |||||||||||||||||||||
Fair value of stock granted to employee | 40,000 | 3 | 52,997 | - | - | - | 53,000 | |||||||||||||||||||||
Discount on notes payable due to conversion feature of extended notes | - | - | 647,565 | - | - | - | 647,565 | |||||||||||||||||||||
Shares issued to Haley - performance bonus - previously accrued | 21,126 | 2 | 21,124 | - | - | - | 21,126 | |||||||||||||||||||||
Shares issued pursuant to exercises of RSUs | 125,000 | 12 | (12 | ) | - | - | - | - | ||||||||||||||||||||
Loss for the twelve months ended December 31, 2015 | (27,176,091 | ) | (27,176,091 | ) | ||||||||||||||||||||||||
Balance at December 31, 2015 | 24,248,486 | 2,423 | 32,344,584 | 486,254 | (160,099 | ) | (37,570,402 | ) | (37,570,402 | ) |
Computer Equipment | 3 years |
Warehouse Equipment | 5 years |
Office Furniture and Fixtures | 5 years |
Vehicles | 5 years |
December 31, | ||||||||
2014 | 2013 | |||||||
Option expense | $ | 308,782 | $ | 178,183 |
December 31, | ||||||||
2015 | 2014 | |||||||
Option expense | $ | 195,385 | $ | 308,782 |
December 31, | ||||||||
2014 | 2013 | |||||||
RSUs expense | $ | 886,516 | $ | - |
December 31, | ||||||||
2015 | 2014 | |||||||
RSUs expense – Continuing operations | $ | 1,948,066 | $ | 327,132 | ||||
RSUs expense – Discontinued operations | 2,258,216 | 559,384 | ||||||
Total | $ | 4,206,282 | $ | 886,516 |
Common Stock - 10,000,000 shares | $ | 14,000,000 | ||
Total purchase price | $ | 14,000,000 | ||
Tangible assets acquired | $ | 2,567,223 | ||
Liabilities assumed | 11,035,724 | |||
Net tangible assets | (8,468,501 | ) | ||
Customer relationships | 2,700,000 | |||
Trade names | 1,800,000 | |||
Goodwill | 17,968,501 | |||
Total purchase price | $ | 14,000,000 |
Cash | $ | 3,000,000 | ||
Common Stock – 6,889,937 shares | 9,645,912 | |||
Total purchase price | $ | 12,645,912 | ||
Tangible assets acquired | $ | 2,567,223 | ||
Liabilities assumed | 11,035,724 | |||
Net tangible assets | (8,468,501 | ) | ||
Customer relationships | 2,700,000 | |||
Trade names | 1,800,000 | |||
Goodwill | 16,614,413 | |||
Total purchase price | $ | 12,645,912 |
Twelve months ended | ||||||||||||
Twelve months ended December 31, | December 31, | |||||||||||
2014 | 2013 | 2014 | ||||||||||
Total revenues | $ | 44,409,414 | $ | 48,530,096 | $ | 25,883,828 | ||||||
Net loss attributable to Innovative Food Holdings, Inc. | (2,649,813 | ) | (2,973,805 | ) | ||||||||
Basic net income (loss) per common share | $ | (0.125 | ) | $ | (0.150 | ) | ||||||
Diluted net income (loss) per common share | $ | (0.125 | ) | $ | (0.150 | ) | ||||||
Net income attributable to Innovative Food Holdings, Inc. | $ | 82,029 | ||||||||||
Basic net income per common share | $ | 0.007 | ||||||||||
Diluted net income per common share | $ | 0.005 | ||||||||||
Weighted average shares - basic | 21,117,743 | 19,809,088 | 11,421,690 | |||||||||
Weighted average shares - diluted | 21,117,743 | 19,809,088 | 15,990,111 |
December 31, | December 31, | |||||||
2015 | 2014 | |||||||
Current assets - discontinued operations: | ||||||||
Cash and cash equivalents | $ | 491,969 | $ | 510,692 | ||||
Accounts receivable net | - | 2,912 | ||||||
Inventory | 173,987 | 256,421 | ||||||
Other current assets | 640,137 | 614,179 | ||||||
Due from related parties | 461,240 | 461,130 | ||||||
Total current assets - discontinued operations | $ | 1,767,333 | $ | 1,845,334 | ||||
Noncurrent assets - discontinued operations: | ||||||||
Property and equipment, net | $ | 802,843 | $ | 1,044,177 | ||||
Intangible assets, net | 3,862,711 | 22,370,272 | ||||||
Total noncurrent assets - discontinued operations | $ | 4,665,554 | $ | 23,414,449 | ||||
Current liabilities - discontinued operations: | ||||||||
Accounts payable and accrued liabilities | $ | 3,022,466 | $ | 2,485,877 | ||||
Deferred revenue | 5,035,906 | 4,792,609 | ||||||
Accrued liabilities - related parties | 135,935 | 222,728 | ||||||
Accrued interest | 58,943 | - | ||||||
Accrued interest - related parties | - | 24,795 | ||||||
Revolving credit facilities | 211,211 | 360,871 | ||||||
Notes payable, current portion | 528,594 | 274,129 | ||||||
Notes payable - related parties, current portion | - | |||||||
Deferred tax liability | 1,069,200 | 1,069,200 | ||||||
Contingent liabilities | 450,000 | 400,000 | ||||||
Total current liabilities - discontinued operations: | $ | 10,512,255 | $ | 9,630,209 | ||||
Long term liabilities - discontinued operations: | ||||||||
Note payable - long term portion | 101,181 | 514,211 | ||||||
Notes payable - related parties, long term portion | 2,199,970 | 2,199,970 | ||||||
Total long term liabilities - discontinued operations | $ | 2,301,151 | $ | 2,714,181 |
Twelve Months Ended | ||||||||
December 31, | December 31, | |||||||
2015 | 2014 | |||||||
Revenue | 17,426,760 | 4,917,030 | ||||||
Cost of goods sold | 13,787,300 | 4,827,969 | ||||||
Gross margin | 3,639,460 | 89,061 | ||||||
Impairment of goodwill | 16,614,373 | - | ||||||
Selling, general and administrative expenses | 13,742,846 | 3,873,948 | ||||||
Total operating expenses | 30,357,219 | 3,873,948 | ||||||
Operating income (loss) | (26,717,759 | ) | (3,784,887 | ) | ||||
Other (income) expense: | ||||||||
Interest expense, net | 85,529 | 35,124 | ||||||
Other (income) | (800 | ) | (7,034 | ) | ||||
Total other (income) expense | 84,729 | 28,090 | ||||||
Loss from discontinued operations, net of tax | $ | (26,802,488 | ) | $ | (3,812,977 | ) |
Twelve Months Ended | ||||||||
December 31, | December 31, | |||||||
2015 | 2014 | |||||||
Cash Flow: Major line items | ||||||||
Depreciation and Amortization | 1,033,465 | 306,701 | ||||||
Impairment of goodwill | 16,614,373 | - | ||||||
Non-cash compensation | 2,258,216 | 559,384 | ||||||
Purchase of equipment | (150,606 | ) | - | |||||
Cash from revolving credit facilities | 4,537,125 | 585,543 | ||||||
Payments made on revolving credit facilities | (4,686,785 | ) | (1,446,072 | ) | ||||
Principal payments made on notes payable | (72,058 | ) | (62,607 | ) | ||||
Principal payments made on capital leases | (188,143 | ) | (119,921 | ) |
2014 | 2013 | |||||||
Accounts receivable from customers | $ | 1,272,470 | $ | 827,945 | ||||
Allowance for doubtful accounts | (29,500 | ) | (56,740 | ) | ||||
Accounts receivable, net | $ | 1,242,970 | $ | 771,205 |
2015 | 2014 | |||||||
Accounts receivable from customers | $ | 1,706,948 | $ | 1,269,558 | ||||
Allowance for doubtful accounts | (56,364 | ) | (29,500 | ) | ||||
Accounts receivable, net | $ | 1,650,584 | $ | 1,240,058 |
2014 | 2013 | |||||||
Specialty food products | $ | 1,034,786 | $ | 839,979 | ||||
Operating materials and supplies | 160,541 | 0 | ||||||
Total | $ | 1,195,327 | $ | 839,979 |
2015 | 2014 | |||||||
Finished Goods Inventory | $ | 920,885 | $ | 938,906 |
December 31, 2014 | December 31, 2013 | December 31, 2015 | December 31, 2014 | |||||||||||||
Land | $ | 177,383 | $ | 177,383 | $ | 385,523 | $ | 177,383 | ||||||||
Building | 619,955 | 619,955 | 1,326,165 | 619,955 | ||||||||||||
Computer and Office Equipment | 502,277 | 462,508 | 466,177 | 466,176 | ||||||||||||
Warehouse Equipment | 7,733 | 7,733 | 197,561 | 7,733 | ||||||||||||
Furniture and Fixtures | 373,360 | 162,128 | 451,346 | 162,128 | ||||||||||||
Kitchen equipment | 429,850 | - | ||||||||||||||
Vehicles | 503,309 | 33,239 | 40,064 | 33,239 | ||||||||||||
Total before accumulated depreciation | 2,613,867 | 1,462,946 | 2,866,836 | 1,466,614 | ||||||||||||
Less: accumulated depreciation | (691,823 | ) | (508,878 | ) | (673,373 | ) | (588,747 | ) | ||||||||
Total | $ | 1,922,044 | $ | 954,068 | $ | 2,193,463 | $ | 877,867 |
December 31, 2014 | ||||||||||||
Accumulated | ||||||||||||
Gross | Amortization | Net | ||||||||||
Trade Name | $ | 2,121,271 | $ | - | $ | 2,121,271 | ||||||
Non-Compete Agreement | 244,000 | (152,500 | ) | 91,500 | ||||||||
Customer Relationships | 3,830,994 | (552,717 | ) | 3,278,277 | ||||||||
Goodwill | 18,119,501 | - | 18,119,501 | |||||||||
Total | $ | 25,315,766 | $ | (705,217 | ) | $ | 23,610,549 |
December 31, 2013 | ||||||||||||
Accumulated | ||||||||||||
Gross | Amortization | Net | ||||||||||
Trade Name | $ | 217,000 | $ | - | $ | 217,000 | ||||||
Non-Compete Agreement | 244,000 | (91,500 | ) | 152,500 | ||||||||
Customer Relationships | 534,645 | (167,703 | ) | 366,942 | ||||||||
Goodwill | 151,000 | - | 151,000 | |||||||||
$ | 1,146,645 | $ | (259,203 | ) | $ | 887,442 |
December 31, 2015 | ||||||||||||
Accumulated | ||||||||||||
Gross | Amortization | Net | ||||||||||
Trade Name | $ | 217,000 | $ | - | $ | 217,000 | ||||||
Non-Compete Agreement | 244,000 | (213,500 | ) | 30,500 | ||||||||
Customer Relationships | 1,130,994 | (589,042 | ) | 541,952 | ||||||||
Goodwill | 151,000 | - | 151,000 | |||||||||
Total | $ | 1,742,994 | $ | (802,542 | ) | $ | 940,452 |
December 31, 2014 | ||||||||||||
Accumulated | ||||||||||||
Gross | Amortization | Net | ||||||||||
Trade Name | $ | 217,000 | $ | - | $ | 217,000 | ||||||
Non-Compete Agreement | 244,000 | (152,500 | ) | 91,500 | ||||||||
Customer Relationships | 1,130,994 | (350,217 | ) | 780,777 | ||||||||
Goodwill | 151,000 | - | 151,000 | |||||||||
Total | $ | 1,742,994 | $ | (502,717 | ) | $ | 1,240,277 |
2015 | $ | 839,828 | ||||||
2016 | 772,770 | $ | 232,770 | |||||
2017 | 700,770 | 160,770 | ||||||
2018 | 659,270 | 119,270 | ||||||
2019 and thereafter | 397,139 | |||||||
2019 | 59,642 | |||||||
2020 and thereafter | - | |||||||
Total | $ | 3,369,777 | $ | 572,452 |
2014 | 2013 | 2015 | 2014 | |||||||||||||
Trade payables | $ | 3,853,374 | $ | 1,252,746 | $ | 1,623,856 | $ | 1,563,504 | ||||||||
Accrued payroll and commissions | 243,326 | 32,403 | 78,670 | 47,319 | ||||||||||||
Total | $ | 4,096,700 | $ | 1,285,149 | $ | 1,702,526 | $ | 1,610,823 |
December 31, 2015 | December 31, 2014 | |||||||
Line of credit facility with Fifth Third Bank in the original amount of $1,000,000. In August 2015, the amount of the credit facility was increased to $1,500,000 and the due date was extended to August 1, 2016. Interest on the line of credit is LIBOR plus 3.25%. During the twelve months ended December 31, 2015, the Company made net borrowings in the amount of $1,380,000 from this facility. During the twelve months ended December 31 2015, the Company recorded interest in the amounts of $19,295. | $ | 1,380,000 | $ | - | ||||
Total | $ | 1,380,000 | $ | - |
December 31, 2014 | December 31, 2013 | |||||||
Business loan of $500,000 from a credit card merchant, with a loan fee of 0.5% and repayment rate of 100% of the sum of charge volume during the loan period, maturing no later than April 19, 2015, renewable annually unless terminated, and secured by the assets of The Fresh Diet. During the period from the date of The Fresh Diet acquisition (August 15, 2014) through December 31, 2014, net payments of principal in the amount of $294,298 on this loan. | $ | 125,159 | $ | - | ||||
Business loan of $1,000,000 from a credit card merchant, with a loan fee of 20% and repayment rate of 12% of the sum of charge volume until all amounts have been paid, and guaranteed by certain shareholders of the Company who were former shareholder of FD. During the period from the date of The Fresh Diet acquisition (August 15, 2014) through December 31, 2014, net payments of principal in the amount of $566,231 were made on this loan. | 235,712 | - | ||||||
Total | $ | 360,871 | $ | - |
December 31, 2014 | December 31, 2013 | |||||||
Secured mortgage note payable for the acquisition of land and building in Bonita Springs, Florida in the amount of $546,000. Principal payments of $4,550 and interest at the rate of Libor plus 3% are due monthly. The balance of the principal amount will be due March 2018. During the twelve months ended December 31, 2014, the Company made payments of principal and interest in the amounts of $54,600 and $15,444, respectively. | $ | 445,900 | $ | 500,500 | ||||
Term loan from Fifth Third Bank in the original amount of $1,000,000; $660,439 of this amount was used to pay a note payable; $339,561 was used for working capital. This loan is secured by first priority perfected security interest in all personal property of the Company, bears interest at the rate of Libor plus 4.75%, with principal monthly principal payments of $55,556 plus accrued interest. The note is due May 26, 2015. During the twelve months ended December 31, 2014, the Company made payments of principal and interest in the amounts of $666,667 and $32,376, respectively. | 277,778 | 944,444 |
December 31, 2015 | December 31, 2014 | |||||||
Secured mortgage note payable for the acquisition of land and building in Bonita Springs, Florida in the amount of $546,000. Principal payments of $4,550 and interest at the rate of Libor plus 3% are due monthly. The balance of the principal amount will be due February 28, 2018. During the twelve months ended December 31, 2015, the Company made payments of principal and interest in the amounts of $54,600 and $13,657, respectively. | $ | 391,300 | $ | 445,900 | ||||
Term loan from Fifth Third Bank in the original amount of $1,000,000; $660,439 of this amount was used to pay a note payable; $339,561 was used for working capital. This loan is secured by first priority perfected security interest in all personal property of the Company, bears interest at the rate of Libor plus 4.75%, with monthly principal payments of $55,556 plus accrued interest. The note was fully paid in May 2015. During the twelve months ended December 31, 2015, the Company made net principal and interest payments in the amounts of $277,778 and $3,511, respectively. | - | 277,778 | ||||||
Term loan in the amount of $1,000,000. This loan bears interest at the rate of LIBOR plus 4.00%, is collateralized by all personal property of the Company; and is due on December 1, 2015. During the twelve months ended December 31, 2015, the Company borrowed and repaid principal in the amount of $1,000,000 and recorded interest in the amount of $13,223. | - | - | ||||||
Secured mortgage note payable for the acquisition of land and building in Broadview, Illinois in the amount of $980,000. Payments of $8,167 including principal and interest at the rate of LIBOR plus 2.75% are due monthly. The principal balance in the amount of $490,000 will be due May 29, 2020. During the twelve months ended December 31, 2015, the Company made payments of principal and interest in the amounts of $57,167 and $17,068, respectively. | 922,833 | - | ||||||
A total of 17 convertible notes payable (the “Convertible Notes Payable”). Certain of the Convertible Notes Payable contain cross default provisions, and are secured by subordinated interest in a majority of the Company’s assets. The Convertible Notes Payable bear interest at the rate of 1.9% per annum; principal and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share; however, the interest may be paid in cash by the Company and certain limited amounts of principle may also be prepaid in cash. Effective May 13, 2014, the due date of these notes was extended from May 15, 2014 to December 31, 2015, and a discount to the notes in the aggregate amount of $732,565 was recorded to recognize the value of the beneficial conversion feature embedded in the extension of the term of the notes. In March 2015 the notes were further extended to January 1, 2016. During the twelve months ended December 31, 2015, $396,678 of this discount was charged to operations. On September 30, 2015, the notes and accrued interest in the amount of $614,465 were further extended to July 1, 2017, and a discount in the amount of $647,565 was recorded to recognize the value of the beneficial conversion featured embedded in the extension of the term of the notes. During the twelve months ended December 31, 2015, $92,509 of this discount was charged to operations. During the twelve months ended December 31, 2015, the Company accrued interest in the amount of $12,431 on these notes. | 647,565 | 647,565 | ||||||
Secured vehicle leases payable at an effective interest rate of 9.96% for purchase of truck, payable in monthly installments (including principal and interest) of $614 through January 2015. During the twelve months ended December 31, 2015, the Company made payments in the aggregate amount of $614 on this lease, consisting of $609 of principal and $5 of interest. The lease was paid on full in January, 2015. | - | 609 | ||||||
An unsecured note to Sam Klepfish for $164,650 which may not be prepaid without Mr. Klepfish’s consent originally carrying an interest rate of 8% per annum and no due date. As of July 1, 2014, the interest rate was reduced to 1.9% and as of November 17, 2014 the interest rate was further reduced to 0%. During the three months ended December 31, 2015, interest in the amount of $54,150 was capitalized, and the aggregate principal amount of $164,650 was extended to July 1, 2017. This note and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. | 164,650 | 110,500 |
A total of 18 convertible notes payable (the “Convertible Notes Payable”). Certain of the Convertible Notes Payable contain cross default provisions, and are secured by subordinated interest in a majority of the Company’s assets. The Convertible Notes Payable bear interest at the rate of 1.9% per annum; principal and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share; however, the interest may be paid in cash by the Company and certain limited amounts of principle may also be prepaid in cash. During the twelve months ended December 31, 2014 principal in the amount of $120,583 was converted to 482,332 shares of common stock, and accrued interest in the amount of $10,357 was converted to 41,428 shares of common stock. Also during the twelve months ended December 31, 2014, principal and interest in the amounts of $20,000 and $52,319, respectively, was paid in cash. Effective May 13, 2014, the due date of these notes was extended from May 15, 2014 to December 31, 2015. Effective March 31, 2015, the notes were extended to January 1, 2016. A discount to the notes in the aggregate amount of $732,565 was recorded to recognize the value of the beneficial conversion feature embedded in the extension of the term of the notes. During the twelve months ended December 31, 2014, $335,887 of this discount was charged to operations; in addition, the amount of $371,811 representing a previous discount to these notes was also charge to operations during the period. | 647,565 | 788,148 | ||||||
Secured vehicle leases payable at an effective interest rate of 9.96% for purchase of truck, payable in monthly installments (including principal and interest) of $614 through January 2015. During the twelve months ended December 31, 2014, the Company made payments in the aggregate amount of $7,368 on this lease, consisting of $6,928 of principal and $440 of interest. | 609 | 7,537 |
December 31, 2014 | December 31, 2013 | |||||||
Twenty-nine convertible notes payable in the amount of $4,500 each to Sam Klepfish, the Company’s CEO and a related party, dated the first of the month beginning on November 1, 2006, issued pursuant to the Company’s then employment agreement with Mr. Klepfish, which provided that the amount of $4,500 in salary is accrued each month to a note payable. These notes are unsecured and may not be prepaid without Mr. Klepfish’s consent. These notes bear interest at the rate of 8% per annum and have no due date. As of July 1, 2014, the notes bear an interest rate of 1.9% and as of November 17, 2014 the interest rate was reduced to 0%. These notes and accrued interest are convertible into common stock of the Company at a conversion price of $0.25 per share. During the twelve months ended December 31, 2014, Mr. Klepfish gifted three notes to an unrelated third parties. During the twelve months ended December 31, 2014, the Company accrued interest in the amount of $5,189 on these notes. | $ | 110,500 | $ | 110,500 | ||||
Promissory note in the amount of $200,000 bearing interest at the rate of 1% per annum. Principal in the amount of $100,000 is due June 30, 2015; principal in the amount of $100,000 is due June 30, 2016. The note is convertible into shares of the Company’s common stock at the conversion price of $1.54 per share. During the twelve months ended December 31, 2014, the Company accrued interest in the amount of $1,000 on this note. | 200,000 | - | ||||||
Four notes payable to shareholders in the aggregate amount of $1,500,000. These notes are unsecured, currently bear no interest, and mature on August 15, 2017. In the event the notes are not paid when due, amounts not paid under the notes shall bear interest at a rate of 21% per annum until paid in full. | 1,500,000 | - | ||||||
Two notes payable to shareholders in the aggregate amount of $699,970. These notes are unsecured, and bear interest at the rate of 4% per annum. These notes are due on August 17, 2017. In the event the notes are not paid when due, amounts not paid under the notes shall bear interest at a rate of 21% per annum until paid in full. During the twelve months ended December 31, 2014, the Company accrued interest in the amount of $10,695 accrued on these notes. | 699,970 | - | ||||||
Note payable in monthly installments, including interest at the rate of 2% over prime (5.25% as of December 31, 2014), due October 1, 2019, and secured by all assets of The Fresh Diet, the life insurance policies maintained on two of the shareholders of the Company, and personally guaranteed by these shareholders. During the twelve months ended December 31, 2014, principal payments in the aggregate amount of $5,493 were made on this note, and interest expense in the amount of $2,256 was recorded. | 123,926 | - | ||||||
The Company has a $75,000 line of credit which bears monthly interest at the variable interest rate of 2% over prime rate. The line of credit is overdue. The line of credit is secured by all corporate assets and by a condominium owned by one of the former shareholders of FD. During the twelve months ended December 31, 2014, interest in the amount of $1,334 was recorded on this line of credit. | 75,000 | - | ||||||
Note payable in monthly installments, including interest at the rate of 1.75% over prime adjusted quarterly (5% as of December 31, 2014), due on December 20, 2017, and secured by all assets of The Fresh Diet and personally guaranteed by the spouse of one of its officers. During the twelve months ended December 31, 2014, principal payments in the aggregate amount of $23,558 were made on this note, and interest expense in the amount of $5,616 was recorded. | 316,337 | - |
December 31, 2015 | December 31, 2014 | |||||||
Promissory note in the amount of $200,000 bearing interest at the rate of 1% per annum issued in connection with the OFB acquisition. Principal in the amount of $100,000 was due June 30, 2015; this payment was made in July 2015 within the 5 day grace period stipulated in the note agreement. During the twelve months ended December 31, 2015, the Company paid accrued interest in the amount of $2,000. Principal in the amount of $100,000 is due June 30, 2016. The note is convertible into shares of the Company’s common stock at the conversion price of $1.54 per share. During the twelve months ended December 31, 2015, the Company accrued interest in the amount of $1,500 on this note. | $ | 100,000 | $ | 200,000 | ||||
Promissory note payable to Alpha Capital in the amount of $469,010 dated November 6, 2015 bearing interest at the rate of 9.9% per annum. This note is unsecured, and became due December 6, 2015. This note is unpaid at December 31, 2015. During the twelve months ended December 31, 2015, the Company accrued interest expense in the amount of $6,273 on this note. This note was paid subsequently in March 2016. See Note 19. | $ | 469,010 | $ | - | ||||
Promissory note payable to Alpha Capital in the amount of $176,005 dated November 20, 2015 bearing interest at the rate of 9.9% per annum. This note is unsecured, and became due December 20, 2015. This note is unpaid at December 31, 2015. During the twelve months ended December 31, 2015, the Company accrued interest expense in the amount of $1,957 on this note. This note was paid subsequently in March 2016. See Note 19. | $ | 176,005 | $ | - | ||||
Secured vehicle lease payable at an effective interest rate of 8.26% for purchase of a truck payable in monthly installments (including principal and interest) of $519 through June 2015. This lease was fully paid in June 2015. During the twelve months ended December 31, 2015, the Company made payments in the aggregate amount of $3,116 on this lease, consisting of $3,042 of principal and $74 of interest. | $ | - | $ | 3,042 | ||||
Total | $ | 2,871,363 | $ | 1,685,394 | ||||
Less: Discount | (555,056 | ) | (396,678 | ) | ||||
Net | $ | 2,316,307 | $ | 1,288,716 |
Current maturities, net of discount | $ | 897,615 | $ | 551,182 | ||||
Long-term portion, net of discount | 1,418,692 | 737,534 | ||||||
Total | $ | 2,316,307 | $ | 1,288,716 |
December 31, 2014 | December 31, 2013 | |||||||
Capital lease obligation for equipment payable in monthly installments, including interest at the rate of 20.35%, due on November 9, 2014, and collateralized by the equipment. During the twelve months ended December 31, 2014, principal payments in the aggregate amount of $12,438 were made on this lease, and interest expense in the amount of $747 was recorded. | $ | - | $ | - | ||||
Secured vehicle lease payable at an effective interest rate of 8.26% for purchase of truck payable in monthly installments (including principal and interest) of $519 through June 2015. During the twelve months ended December 31, 2014, the Company made payments in the aggregate amount of $6,232 on this lease, consisting of $5,721 of principal and $510 of interest. | 3,042 | 8,764 | ||||||
Total | $ | 4,673,704 | $ | 2,359,893 | ||||
Less: Discount | (396,678 | ) | (371,812 | ) | ||||
Net | $ | 4,277,026 | $ | 1,988,081 |
For the Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
Discount on Notes Payable amortized to interest expense: | $ | 707,698 | $ | 2,322,909 |
For the Year Ended December 31, | ||||||||
2015 | 2014 | |||||||
Discount on Notes Payable amortized to interest expense: | $ | 489,187 | $ | 707,698 |
2015 | $ | 1,593,934 | ||||||
2016 | 336,559 | $ | 897,615 | |||||
2017 | 2,395,126 | 964,815 | ||||||
2018 | 95,064 | 152,600 | ||||||
2019 | 80,121 | 152,600 | ||||||
2020 | 585,433 | |||||||
Thereafter | 172,900 | 118,300 | ||||||
Total | $ | 4,673,704 | $ | 2,871,363 |
December 31, | ||||||||
2015 | 2014 | |||||||
Number of conversion options outstanding | 5,771,655 | 5,785,854 | ||||||
Value at December 31 | $ | N/A | $ | N/A | ||||
Number of conversion options issued during the period | - | 446,050 | ||||||
Value of conversion options issued during the period | $ | N/A | $ | N/A | ||||
Number of conversion options exercised or underlying notes paid during the period | 64,935 | 1,135,544 | ||||||
Value of conversion options exercised or underlying notes paid during the period | $ | N/A | $ | N/A | ||||
Revaluation loss (gain) during the period | $ | N/A | $ | N/A |
December 31, | ||||||||
2014 | 2013 | |||||||
Number of conversion options outstanding | 5,785,854 | 6,475,348 | ||||||
Value at December 31 | $ | N/A | $ | N/A | ||||
Number of conversion options issued during the period | 446,050 | - | ||||||
Value of conversion options issued during the period | $ | N/A | $ | N/A | ||||
Number of conversion options exercised or underlying notes paid during the period | 1,135,544 | 1,773,603 | ||||||
Value of conversion options exercised or underlying notes paid during the period | $ | N/A | $ | N/A | ||||
Revaluation loss (gain) during the period | $ | N/A | $ | N/A |
2014 | 2013 | 2015 | 2014 | |||||||||||||
Current | $ | - | $ | - | $ | - | $ | - | ||||||||
Deferred | - | - | - | - | ||||||||||||
Total | $ | - | $ | - | $ | - | $ | - |
2014 | 2013 | 2015 | 2014 | |||||||||||||
Income (loss) before income taxes | $ | (3,730,948 | ) | $ | (1,486,257 | ) | $ | (373,603 | ) | $ | 82,029 | |||||
Statutory tax rate | 39.6 | % | 39.6 | % | 39.6 | % | 39.6 | % | ||||||||
Total tax at statutory rate | (1,477,455 | ) | (428,220 | ) | (148,000 | ) | 32,500 | |||||||||
Temporary differences | 37,500 | (40,000 | ) | 37,500 | 37,500 | |||||||||||
Permanent difference – meals and entertainment | 13,100 | 3,000 | 10,000 | 13,100 | ||||||||||||
Permanent differences- non cash compensation, derivatives and discount amortization | 880,000 | 1,054,220 | 1,155,000 | 760,500 | ||||||||||||
Total | (546,855 | ) | 589,000 | 1,054,500 | 843,600 | |||||||||||
Changes in valuation allowance | 546,855 | (589,000 | ) | (1,054,500 | ) | (843,600 | ) | |||||||||
Income tax expense | $ | - | $ | - | $ | - | $ | - |
2014 | 2013 | |||||||
Deferred Tax Assets (Liabilities): | ||||||||
Net operating loss carryforwards | $ | 1,014,000 | $ | 529,000 | ||||
Allowance for doubtful accounts | 11,000 | 42,000 | ||||||
Intangible assets | (1,781,000 | ) | ||||||
Property and equipment | (87,000 | ) | (20,000 | ) | ||||
Net deferred tax assets (liabilities) | (843,000 | ) | 551,000 | |||||
Valuation allowance | (226,000 | ) | (551,000 | ) | ||||
Net deferred tax assets (liabilities) | $ | (1,069,000 | ) | $ | - |
2015 | 2014 | |||||||
Deferred Tax Assets (Liabilities): | ||||||||
Net operating loss carryforwards | $ | 2,845,500 | $ | 3,900,000 | ||||
Allowance for doubtful accounts | 11,000 | 11,000 | ||||||
Property and equipment | (87,000 | ) | (87,000 | ) | ||||
Net deferred tax assets (liabilities) | 2,769,500 | 3,824,000 | ||||||
Valuation allowance | (2,769,500 | ) | (3,824,000 | ) | ||||
Net deferred tax assets (liabilities) | $ | - | $ | - |
Weighted | Weighted | Weighted | Weighted | Weighted | Weighted | |||||||||||||||||||||||||||||||||||||||
average | average | average | average | average | average | |||||||||||||||||||||||||||||||||||||||
Range of | Range of | Number of | remaining | exercise | exercise | Range of | Number of | remaining | exercise | exercise | ||||||||||||||||||||||||||||||||||
exercise | exercise | warrants | contractual | price of | Number of | price of | exercise | warrants | contractual | price of | Number of | price of | ||||||||||||||||||||||||||||||||
Prices | Prices | Outstanding | life (years) | outstanding Warrants | warrants Exercisable | exercisable Warrants | Prices | Outstanding | life (years) | outstanding Warrants | warrants Exercisable | exercisable Warrants | ||||||||||||||||||||||||||||||||
$ | 0.010 | 700,000 | 5.38 | $ | 0.010 | 700,000 | $ | 0.010 | 0.010 | 700,000 | 4.38 | $ | 0.010 | 700,000 | $ | 0.010 | ||||||||||||||||||||||||||||
$ | 0.250 | 94,783 | 1.09 | $ | 0.250 | 94,783 | $ | 0.250 | 0.250 | 94,783 | 1.50 | $ | 0.250 | 94,783 | $ | 0.250 | ||||||||||||||||||||||||||||
$ | 0.550 | 1,175,281 | 2.09 | $ | 0.550 | 1,175,281 | $ | 0.550 | 0.550 | 448,010 | 1.50 | $ | 0.550 | 448,010 | $ | 0.550 | ||||||||||||||||||||||||||||
$ | 0.575 | 2,828,405 | 2.09 | $ | 0.575 | 2,828,405 | $ | 0.575 | 0.575 | 2,294,491 | 1.50 | $ | 0.575 | 2,294,491 | $ | 0.575 | ||||||||||||||||||||||||||||
4,798,469 | 2.55 | $ | 0.480 | 4,798,469 | $ | 0.480 | 3,537,284 | 2.07 | $ | 0.451 | 3,537,284 | $ | 0.451 |
Weighted Average | Weighted Average | |||||||||||||||
Number of Shares | Exercise Price | Number of Shares | Exercise Price | |||||||||||||
Warrants outstanding at December 31, 2012 | 7,036,000 | $ | 0.409 | |||||||||||||
Warrants outstanding at December 31, 2013 | 5,819,129 | $ | 0.457 | |||||||||||||
Granted | - | $ | - | - | $ | - | ||||||||||
Exercised | (396,871 | ) | $ | 0.504 | (1,020,660 | ) | $ | 0.348 | ||||||||
Cancelled / Expired | (820,000 | ) | 0.100 | - | - | |||||||||||
Warrants outstanding at December 31, 2013 | 5,819,129 | $ | 0.457 | |||||||||||||
Warrants outstanding at December 31, 2014 | 4,798,469 | $ | 0.480 | |||||||||||||
Exercised | (1,020,660 | ) | $ | 0.348 | (1,261,185 | ) | $ | 0.561 | ||||||||
Cancelled / Expired | - | $ | - | - | $ | - | ||||||||||
Warrants outstanding at December 31, 2014 | 4,798,469 | $ | 0.480 | |||||||||||||
Warrants outstanding at December 31, 2015 | 3,537,284 | $ | 0.451 |
Weighted | Weighted | |||||||||||||||||||||
Weighted | average | average | ||||||||||||||||||||
average | exercise | exercise | ||||||||||||||||||||
Range of | Number of | Remaining | price of | Number of | price of | |||||||||||||||||
exercise | options | contractual | outstanding | options | exercisable | |||||||||||||||||
Prices | Outstanding | life (years) | Options | Exercisable | Options | |||||||||||||||||
$ | 0.350 | 1,170,000 | 1.66 | $ | 0.350 | 1,170,000 | $ | 0.350 | ||||||||||||||
$ | 0.380 | 92,500 | 1.00 | $ | 0.380 | 92,500 | $ | 0.380 | ||||||||||||||
$ | 0.400 | 275,000 | 1.01 | $ | 0.400 | 250,000 | $ | 0.400 | ||||||||||||||
$ | 0.450 | 92,500 | 1.00 | $ | 0.450 | 92,500 | $ | 0.450 | ||||||||||||||
$ | 0.474 | 92,500 | 1.00 | $ | 0.474 | 92,500 | $ | 0.474 | ||||||||||||||
$ | 0.480 | 92,500 | 1.00 | $ | 0.480 | 92,500 | $ | 0.480 | ||||||||||||||
$ | 0.570 | 225,000 | 2.01 | $ | 0.570 | 225,000 | $ | 0.570 | ||||||||||||||
$ | 1.310 | 75,000 | 2.67 | $ | 1.310 | 25,000 | $ | 1.310 | ||||||||||||||
$ | 1.440 | 15,000 | 0.84 | $ | 1.440 | 15,000 | $ | 1.440 | ||||||||||||||
$ | 1.460 | 100,000 | 2.50 | $ | 1.460 | 100,000 | $ | 1.460 | ||||||||||||||
$ | 1.600 | 310,000 | 2.01 | $ | 1.600 | 310,000 | $ | 1.600 | ||||||||||||||
$ | 1.900 | 15,000 | 1.84 | $ | 1.900 | 15,000 | $ | 1.900 | ||||||||||||||
$ | 2.000 | 500,000 | 1.16 | $ | 2.000 | 500,000 | $ | 2.000 | ||||||||||||||
$ | 2.400 | 20,000 | 2.42 | $ | 2.400 | 20,000 | $ | 2.400 | ||||||||||||||
$ | 3.400 | 30,000 | 2.42 | $ | 3.400 | 30,000 | $ | 3.400 | ||||||||||||||
3,105,000 | 1.57 | $ | 0.887 | 3,030,000 | $ | 1.007 |
Weighted | Weighted | |||||||||||||||||||||
Weighted | average | average | ||||||||||||||||||||
average | exercise | exercise | ||||||||||||||||||||
Range of | Number of | Remaining | price of | Number of | price of | |||||||||||||||||
exercise | options | contractual | outstanding | options | exercisable | |||||||||||||||||
Prices | Outstanding | life (years) | Options | Exercisable | Options | |||||||||||||||||
$ | 0.350 | 1,200,000 | 2.67 | $ | 0.350 | 1,200,000 | $ | 0.350 | ||||||||||||||
$ | 0.380 | 132,500 | 0.25 | $ | 0.380 | 132,500 | $ | 0.380 | ||||||||||||||
$ | 0.400 | 275,000 | 2.01 | $ | 0.400 | 125,000 | $ | 0.400 | ||||||||||||||
$ | 0.450 | 132,500 | 0.50 | $ | 0.450 | 132,500 | $ | 0.450 | ||||||||||||||
$ | 0.474 | 132,500 | 0.75 | $ | 0.474 | 132,500 | $ | 0.474 | ||||||||||||||
$ | 0.480 | 132,500 | 1.00 | $ | 0.480 | 132,500 | $ | 0.480 | ||||||||||||||
$ | 0.570 | 225,000 | 3.01 | $ | 0.570 | 200,000 | $ | 0.570 | ||||||||||||||
$ | 1.310 | 75,000 | 3.67 | $ | 1.310 | 12,500 | $ | 1.310 | ||||||||||||||
$ | 1.440 | 15,000 | 1.84 | $ | 1.440 | 15,000 | $ | 1.440 | ||||||||||||||
$ | 1.460 | 100,000 | 3.50 | $ | 1.460 | 100,000 | $ | 1.460 | ||||||||||||||
$ | 1.600 | 310,000 | 3.01 | $ | 1.600 | 280.000 | $ | 1.600 | ||||||||||||||
$ | 1.900 | 15,000 | 2.84 | $ | 1.900 | 15,000 | $ | 1.900 | ||||||||||||||
$ | 2.000 | 500,000 | 2.17 | $ | 2.000 | 500,000 | $ | 2.000 | ||||||||||||||
3,245,000 | 1.97 | $ | 0.822 | 2,477,500 | $ | 0.591 |
Options | Weighted Average Exercise Price | |||||||
Outstanding at December 31, 2012 | 2,070,000 | $ | 0.375 | |||||
Issued | 910,000 | $ | 0.807 | |||||
Exercised | - | - | ||||||
Forfeited or expired | (400,000 | ) | 0.350 | |||||
Outstanding as December 31, 2013 | 2,580,000 | $ | 0.544 | |||||
Issued | 705,000 | 1.836 | ||||||
Exercised | (20,000 | ) | 0.350 | |||||
Forfeited or expired | (20,000 | ) | 0.350 | |||||
Outstanding at December 31, 2014 | 3,245,000 | $ | 0.822 |
Options | Weighted Average Exercise Price | |||||||
Outstanding at December 31, 2013 | 2,580,000 | $ | 0.544 | |||||
Issued | 705,000 | $ | 1.836 | |||||
Exercised | (20,000 | ) | 0.350 | |||||
Forfeited or expired | (20,000 | ) | 0.350 | |||||
Outstanding as December 31, 2014 | 3,245,000 | $ | 0.822 | |||||
Issued | 50,000 | 3.000 | ||||||
Exercised | (190,000 | ) | 0.431 | |||||
Forfeited or expired | - | - | ||||||
Outstanding at December 31, 2015 | 3,105,000 | $ | 0.887 |
2014 | 2013 | 2015 | 2014 | |||||||||||||
Exercise price lower than market price | - | - | - | - | ||||||||||||
Exercise price equal to market price | - | - | - | - | ||||||||||||
Exercise price exceeded market price | $ | 1.31 to $2.00 | $ | 0.40 to $1.60 | $ | 2.40 to $3.40 | $ | 1.31 to $2.00 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the twelve months ended: | ||||
December 31, 2015 | $ | 644,064 | ||
December 31, 2016 | 267,432 | |||
December 31, 2017 | 124,728 | |||
December 31, 2018 | 117,612 | |||
Thereafter | - | |||
Total | $ | 1,153,836 |
Level 1 - | Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; |
Level 2 - | Inputs other than Level 1 inputs that are either directly or indirectly observable; and |
Level | Unobservable inputs, for which little or no market data exist, therefore requiring an entity to develop its own assumptions. |
Name | Age | Position | ||
Sam Klepfish | Chief Executive Officer and Director | |||
Justin Wiernasz | President and Director | |||
Joel Gold | ||||
Director | ||||
Hank Cohn | Director |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||||||||
Sam Klepfish | 2015 | $ | 317,709 | $ | 85,000 | (a) | $ | 644,835 | (b) | $ | $ | $ | $ | $ | 1,047,544 | |||||||||||||||||||
CEO | 2014 | $ | 297,858 | $ | 40,000 | (c) | $ | 97,838 | (b) | $ | - | $ | - | $ | - | $ | 2,112 | (d) | $ | 437,808 | ||||||||||||||
2013 | $ | 215,828 | $ | 48,000 | (e) | $ | 27,937 | (f) | $ | 69,047 | (g) | $ | - | $ | - | $ | 1,972 | (d) | $ | 362,784 | ||||||||||||||
Justin Wiernasz | 2015 | $ | 312,119 | $ | 124,800 | (h) | $ | 667,780 | (i) | $ | $ | $ | $ | 8,016 | (d) | $ | 1,112,715 | |||||||||||||||||
President | 2014 | $ | 264,400 | $ | 145,000 | (j) | $ | 133,055 | (b) | $ | - | $ | $ | - | $ | 5,827 | (d) | $ | 548,282 | |||||||||||||||
2013 | $ | 233,776 | $ | 214,293 | (k) | $ | - | $ | 101,411 | (l) | $ | - | $ | - | $ | 6,838 | (d) | $ | 556,318 | |||||||||||||||
John McDonald | 2015 | $ | 163,611 | $ | 38,407 | (m) | $ | - | $ | - | $ | - | $ | - | $ | 8,016 | (d) | $ | 210,034 | |||||||||||||||
Chief Information and | 2014 | $ | 153,484 | $ | 50,000 | (n) | $ | - | $ | - | $ | - | $ | - | $ | 7,445 | (d) | $ | 210,938 | |||||||||||||||
Principal Accounting Officer | 2013 | $ | 134,677 | $ | 50,000 | (e) | $ | 15,000 | (o) | $ | 7,725 | (p) | $ | - | $ | - | $ | 4,489 | (d) | $ | 211,891 |
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)( | Total ($) | |||||||||||||||||||||||||
Sam Klepfish | 2014 | $ | 297,858 | $ | 40,000 | (a) | $ | 97,838 | (b) | $ | - | $ | - | $ | - | $ | 2,112 | (d) | $ | 437,808 | ||||||||||||||
CEO | 2013 | $ | 215,828 | $ | 48,000 | (c) | $ | 27,937 | (e) | $ | 69,047 | (f) | $ | - | $ | - | $ | 1,972 | (d) | $ | 362,784 | |||||||||||||
2012 | $ | 198,037 | $ | 90,500 | (f) | $ | - | $ | 63,414 | (h) | $ | - | $ | - | $ | 1,004 | (d) | $ | 352,955 | |||||||||||||||
Justin Wiernasz | 2014 | $ | 264,400 | $ | 145,000 | (n) | $ | 133,055 | (b) | $ | - | $ | $ | - | $ | 5,827 | (d) | $ | 548,282 | |||||||||||||||
President | 2013 | $ | 233,776 | $ | 214,293 | (i) | $ | - | $ | 101,411 | (j) | $ | - | $ | - | $ | 6,838 | (d) | $ | 556,318 | ||||||||||||||
2012 | $ | 188,934 | $ | 90,500 | (g) | $ | - | $ | 31,050 | (k) | $ | - | $ | - | $ | 4,372 | (d) | $ | 314,856 | |||||||||||||||
John McDonald | 2014 | $ | 153,484 | $ | 50,000 | (c) | $ | - | $ | - | $ | - | $ | - | $ | 7,445 | (d) | $ | 210,938 | |||||||||||||||
Chief Information and | 2013 | $ | 134,677 | $ | 50,000 | (c) | $ | 15,000 | (l) | $ | 7,725 | (m) | $ | - | $ | - | $ | 4,489 | (d) | $ | 211,891 | |||||||||||||
Principal Accounting Officer | 2012 | $ | 119,942 | $ | 25,000 | (c) | $ | - | $ | $ | - | $ | - | $ | 4,023 | (d) | $ | 148,965 |
(a) | Consists of a cash bonus paid during the year for services performed in | |
(b) | Consists of the portion of RSUs which were recognized as a period cost during the year. | |
(c) | Consists of a cash bonus paid during the year. Does not include $85,000 in cash bonuses and $175,000 of stock bonuses for services performed in 2014 but not paid during the year. | |
(d) | Consists of cash payments for health care benefits. | |
(e) | Consists of a cash bonus paid during the year. | |
Consists of a stock grant of 84,658 shares of common stock. | ||
Consists of options to purchase 62,500 shares of common stock at a price of $1.60 per share. | ||
(h) | ||
Consists of a cash bonus paid during the year for services performed in 2014. Does not include $50,000 in cash bonuses and 116,279 of | ||
(i) | Consists of the portion of RSUs which were recognized as a | RSUs which were recognized as a period cost during the year for services as a board member. |
(j) | ||
Consists of a cash bonus paid during the year for services performed in 2013. Does not include $100,000 cash bonus and $175,000 in stock bonus for services performed in 2014 but not paid during the year. | ||
(k) | Consists of a cash bonus of $145,000 and 47,385 shares of common stock at a price of $1.462 per share. | |
(l) | Consists of options to purchase 62,500 shares of common stock at a price of $1.60 per share, and options to purchase 100,000 shares of common stock at a price of $0.35 per share. | |
(m) | Consists of a cash bonus paid during the year for services performed in 2014. Does not include $30,000 in cash bonuses and 46,512 RSUs with a fair value of $30,000 for services performed in 2015 but not paid during the year.. | |
(n) | Consists of a cash bonus paid during the year for services performed in 2013. Does not include $38,407 cash bonus and $38,407 in stock bonus for services performed in 2014 but not paid during the year. | |
(o) | Consists of a stock grant of 39,474 shares of common stock. | |
(p) | Consists of options to purchase 25,000 shares of common stock at a price of $0.40 per share. |
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sam Klepfish | 1,450,000 | (a) | $ | 1,957,500 | (b) | 1,000,000 | (a) | $ | 451,500 | (c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | $ | 0.350 | 05/04/17 | 100,000 | $ | 0.350 | 05/04/17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | - | - | $ | 0.350 | 12/31/17 | - | - | - | 100,000 | - | - | $ | 0.350 | 12/31/17 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sam Klepfish | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sam Klepfish | 50,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | 50,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sam Klepfish | - | 50,000 | - | $ | 0.400 | 01/01/17 | 50,000 | - | - | $ | 0.400 | 01/01/17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | - | - | $ | 0.570 | 01/01/18 | 100,000 | - | - | $ | 0.570 | 01/01/18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sam Klepfish | 62,500 | - | - | $ | 1.600 | 01/01/18 | 62,500 | - | - | $ | 1.600 | 01/01/18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sam Klepfish | 100,000 | - | - | $ | 2.000 | 02/28/17 | 100,000 | - | - | $ | 2.000 | 02/28/17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | 1,720,000 | (a) | $ | 2,322,000 | (b) | 955,000 | (b) | $ | 615,975 | (c) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | 160,000 | (c) | - | - | $ | 0.446 | (d) | - | (e) | - | - | - | - | 160,000 | (c) | - | - | $ | 0.446 | (d) | - | (e) | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 0.350 | 05/04/17 | - | - | - | - | 100,000 | - | - | $ | 0.350 | 05/04/17 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 0.350 | 12/31/17 | - | - | - | 100,000 | - | - | $ | 0.350 | 12/31/17 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | 50,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | 50,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | - | 50,000 | - | $ | 0.400 | 01/01/17 | - | - | - | 50,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 0.570 | 01/01/18 | - | - | - | - | 100,000 | - | - | $ | 0.570 | 01/01/18 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | 62,500 | - | - | $ | 1.600 | 01/01/18 | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | 100,000 | - | - | $ | 2.000 | 02/28/17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John McDonald | 50,000 | (c) | - | - | $ | (d) | - | (e) | 50,000 | (d) | - | - | $ | 0.446 | (e) | - | (f) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
John McDonald | 25,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | - | 25,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.400 | 01/01/17 | - | - | - | - | 25,000 | - | - | $ | 0.400 | 01/01/17 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.400 | 01/01/17 | - | - | - | - | 25,000 | - | $ | 0.400 | 01/01/17 | - | - | - | - | |||||||||||||||||||||||||||||||||||||||||||||||||||||
John McDonald | - | 25,000 | - | $ | 0.570 | 01/01/18 | 25,000 | - | - | $ | 0.570 | 01/01/18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John McDonald | 30,000 | - | - | $ | 1.600 | 01/01/18 | 30,000 | - | - | $ | 1.600 | 01/01/18 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John McDonald | - | 30,000 | - | $ | 1.600 | 01/01/18 | 30,000 | - | - | $ | 1.600 | 01/01/18 |
(a) |
(b) | RSUs vest according to the following schedule: 75,000 on May 1, 2016; 90,000 on July 1, 2016; 300,000 on December 31, 2016; and 490,000 on July 1, |
Amounts are calculated by multiplying the number of shares shown in the table by |
Options vest at the rate of 25% each quarter beginning March 31, 2010. |
Weighted-average exercise price. |
Option term is 5 years from the date of vesting. |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (a) | Option Awards ($) (b) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | Fees Earned or Paid in Cash ($) | Stock Awards ($) (a) | Option Awards ($) (b) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||
Joel Gold | $ | 10,000 | $ | 270,000 | $ | 38,283 | $ | - | $ | - | $ | - | $ | 318,283 | $ | 10,000 | $ | - | (a) | $ | - | $ | - | $ | - | $ | - | $ | 10,000 | |||||||||||||||||||||||||||
Sam Klepfish | $ | - | $ | - | $ | 38,283 | $ | - | $ | - | $ | - | $ | 38,283 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||||||||||||||
Solomon Mayer | $ | 10,000 | $ | 270,000 | $ | 38,283 | $ | - | $ | - | $ | - | $ | 318,283 | $ | 10,000 | $ | - | (a) | $ | - | $ | - | $ | - | $ | - | $ | 10,000 | |||||||||||||||||||||||||||
Hank Cohn | $ | 10,000 | $ | 270,000 | $ | 38,283 | $ | - | $ | - | $ | - | $ | 318,283 | $ | 10,000 | $ | - | (a) | $ | - | $ | - | $ | - | $ | - | $ | 10,000 | |||||||||||||||||||||||||||
Justin Wiernasz | $ | - | $ | 270,000 | $ | 38,283 | $ | - | $ | - | $ | - | $ | 308,283 | $ | - | $ | - | (a) | $ | - | $ | - | $ | - | $ | - | $ | - |
Name and Address of Beneficial Owners | Number of Shares Beneficially Owned | Percent of Class | Number of Shares Beneficially Owned | Percent of Class | ||||||||||||||
Sam Klepfish (Officer, Director) | (1) | 2,788,600 | 11.4 | % | (1) | 2,942,333 | 11.2 | % | ||||||||||
Michael Ferrone | (2) | 1,599,282 | 7.3 | % | (2) | 1,599,282 | 6.7 | % | ||||||||||
Joel Gold (Director) | (3) | 859,054 | 3.8 | % | (3) | 859,054 | 3.5 | % | ||||||||||
Solomon Mayer (Director) | (4) | 570,000 | 2.6 | % | ||||||||||||||
Hank Cohn (Director) | (5) | 570,000 | 2.6 | % | (5) | 570,000 | 2.4 | % | ||||||||||
Justin Wiernasz (Officer, Director) | (6) | 2,605,000 | 10.8 | % | (6) | 2,428,733 | 9.4 | % | ||||||||||
YS Catering | (7) | 4,647,206 | 21.4 | % | (7) | 4,647,206 | 19.7 | % | ||||||||||
Yorkmont Capital Partners, LP | (8) | 2,073,498 | 9.6 | % | (8) | 2,073,398 | 8.8 | % | ||||||||||
Alpha Capital Anstalt | (9) | 1,779,776 | 8.2 | % | (9) | 1,811,354 | 7.7 | % | ||||||||||
All officers and directors as a whole (5 persons) | (10 | 7,392,654 | 25.7 | % | (10) | 6,620,120 | 22.2 | % |
(1) | Includes |
(2) | Includes |
(3) | Includes 110,654 shares of common stock held by Mr. Gold, RSUs representing 270,000 shares of common stock, and options to purchase 460,000 shares of common stock. Also includes 18,400 shares of common stock held by Mr. Gold’s spouse. |
(4) | Intentionally omitted. |
(5) | Includes options to purchase 300,000 shares of common stock held by Mr. Cohn, and RSUs representing 270,000 shares of common stock. Does not include 5,000 shares issuable for services as a board member for 2010, but not yet issued. Upon issuance of these shares, Mr. Cohn will beneficially own |
(6) | Includes 100,000 shares of common stock held by Mr. Wiernasz, options to purchase 785,000 shares of common stock, and RSUs representing |
(7) | Includes 4,647,206 shares of common stock. The address of YS Catering is 9455 Collins Ave., Apt. 605, Surfside, FL |
(8) | Consists of |
(9) | Consists of |
(10) | Includes |
Key Employee John McDonald Mr. McDonald, age 53, has been the Chief Information Officer of IVFH since November 2007 and our principal accounting officer since November 2007. From 2004 through 2007, Mr. McDonald worked as a consultant with Softrim Corporation of Estero, Florida where he created custom applications for a variety of different industries and assisted in building interfaces to accounting applications. Since 1999 he has also been President of McDonald Consulting Group, Inc. which provide consulting on accounts receivable, systems and accounting services. Qualification of Directors We believe that all of our directors are qualified for their positions and each brings a benefit to the board. Messrs. Kelpfish and Wiernasz, as our executive officers, are uniquely qualified to bring management’s perspective to the board’s deliberations. Mr. Gold, with his lengthy career working for broker/dealers, brings “Wall Street’s” perspective. Mr. Cohn, with his prior history of being an executive and his experience as a director of other companies, brings a well-rounded background and wealth of experience to our board. Committees The Board of Directors does not currently have an Audit Committee, a Compensation Committee, a Nominating Committee or a Governance Committee. The usual functions of such committees are performed by the entire Board of Directors. We are currently having difficulties attracting additional qualified directors, specifically to act as the audit committee financial expert. However, we believe that at least a majority of our directors are familiar with the contents of financial statements. Code of Ethics We have adopted a Code of Ethics that applies to each of our employees, including our principal executive officer and our principal financial officer, as well as members of our Board of Directors. A copy of such Code has been publicly filed with, and is available for free from, the Securities and Exchange Commission. Section 16(a) Beneficial Ownership Reporting Compliance During 2015, Messrs. Gold, Wiernasz and McDonald did not file two Forms 4 and Mr. Klepfish did not file one Form 4. None of the Forms 4 related to the sale or purchase of securities. ITEM 11. Executive Compensation The following table sets forth information concerning the compensation for services rendered to us for the year ended December 31, 2015, of our Chief Executive Officer and our other executive officers whose annual compensation exceeded $100,000 in the fiscal year ended December 31, 2015, if any. We refer to the Chief Executive Officer and these other officers as the named executive officers. SUMMARY COMPENSATION TABLE
Outstanding Equity Awards at Fiscal Year-End as of December 31, 2015
Director Compensation
Employment Agreements Our subsidiary, Food Innovations, has employment agreements with certain officers and certain employees. The employment agreements provide for salaries and benefits, including stock grants and extend up to five years. In addition to salary and benefit provisions, the agreements include defined commitments should the employer terminate the employee with or without cause. SAM KLEPFISH On November 20, 2012 we entered into an employment agreement with Mr. Klepfish, the Corporation’s CEO, having an effective date of January 1, 2013 and terminating on December 31, 2015. The agreement provides a base compensation in the amount of $198,312 in cash plus an additional $27,937 in restricted stock units for year one, $223,987 in cash plus an additional $24,875 in restricted stock units for year two, and $260,075 in cash plus an additional $13,688 in restricted stock units for year three. The agreement also provides for annual bonuses including bonuses based on increases in EBITDA (as defined in the agreement) of our various subsidiaries; additional bonuses upon the occurrence of certain events such as: listing on specific stock exchanges, spin-offs, investments and stock trading and volume levels. The agreement also provides for stock options with exercise prices ranging from $0.40 - $1.60 and an award of restricted stock, which only vests if certain volume and pricing milestones with respect to our common stock are met. Mr. Klepfish also has the option of receiving any portion of his salary or bonus in the form of equity. The agreement also contains non-compete and non-solicitation provisions. On August 7, 2014, our board of directors approved the amendment of the Employment Agreement with Mr. Klepfish effective as of August 13, 2014. The employment agreement was amended as follows: (i) it has been extended by one year to December 31, 2016; (ii) it provides for 10% annual increases of Base Salary commencing in 2014; (iii) certain performance based bonuses in the employment agreement are eliminated; (iv) stock grants previously issued with vesting based upon performance or stock price are cancelled; (v) a new performance based bonus structure to partially replace the previous structure, based upon meeting certain Cash EBITDA (earnings before interest, taxes, depreciation, and amortization and non-cash compensation charges) targets, the new bonus will have a cash portion and a stock portion and all Base Salary can be paid in cash or in stock at the option of Mr. Klepfish, and (vi) 125,00 restricted stock units which vest if the 30 day average closing price of our common stock is $2.00 or above and there is a 50,000 average daily volume or there is a 50,000 average daily volume for 14 straight trading days; and 175,000 restricted stock units which vest if the 30 day average closing price of our common stock is $3.00 or above and there is a 50,000 average daily volume for 14 straight trading days. Mr. Klepfish will have the option, on an annual basis, to take all or part of the cash portion of the bonus, or any part of Base Salary in the form of stock at a valuation based upon the closing stock price on the last trading day of the prior year. The decision on how much, if any, of the bonus to take in stock must be made by May 1 of each year, unless earlier required. The Cash EBITDA target levels do not include the effect of any potential future acquisitions and also do not include certain one time or non-recurring expenses in the calculation of the Cash EBITDA. If a Cash EBITDA target is missed by 3% or less, the bonus for the target so missed shall be reduced by 20% and if it is missed by 3.1% -5%, the bonus for such target shall be reduced by 30%, except in both cases, Mr. Klepfish has negative discretion to further reduce the bonuses or even cancel them. In March 2016, Mr. Klepfish’s employment agreement was extended for another year under the same terms. In November 2014, the employment agreement of Mr. Klepfish was amended (i) ) in the event of a change of control (as defined below) all equity based compensation (including options and restricted stock units) payable pursuant to such employment agreements, shall immediately vest and/or restrictions thereon shall lapse, and (ii) to provide that in the event of a termination without Cause (as defined in the employment agreement) they shall receive a lump sum payment equal to the greater of (x) the salary payable over the last six months of the term of the agreement, or (y) the Base Salary (as defined in the employment agreement) remaining through the end of the then-current term of the agreement. The definition of change of control shall mean the occurrence of any of the following events: (w) the sale or transfer by the Company for at least $25 million (such consideration consisting of cash, cash equivalents, notes or securities) of more than 50% of its Voting Securities (as defined below) or substantially all of its assets; or (x) the acquisition, other than from the Company or employees of it or any of its subsidiaries, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) (other than an employee benefit plan of the Company) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Voting Securities"); or (y) the approval by the stockholders of the Company of a reorganization, merger, consolidation or recapitalization of the Company (a "Business Combination"), other than a Business Combination in which more than 50% of the combined voting power of the outstanding Voting Securities of the surviving or resulting entity immediately following the Business Combination is held by the persons who, immediately prior to the Business Combination, were the holders of the Voting Securities; or (z) the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, or a sale of all or substantially all of the assets of the Company. Mr. Klepfish was awarded, as a special bonus, effective November 17, 2014, an aggregate of 1,000,000 restricted stock units (“RSU”) subject to time and performance vesting conditions, with the timing conditions as follows: 150,000 RSUs vest on each of July 1 and December 31, 2015; 300,000 RSUs vest on December 31, 2016 and 400,000 RSUs vest on July 1, 2017, and the performance conditions are as follows: for the RSUs vesting in 2015, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2015, for the RSUs vesting in 2016, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2016 and for the RSUs vesting in 2017, the Corporation, on a consolidated basis, must have four months with sales above $2,500,000 during 2017, provided however, that if the performance condition is not met in any year, the RSUs scheduled to vest in such year will still vest if the Corporation, on a consolidated basis, has six months with sales of at least $2,500,000 during the following year. The company's board of directors will modify and increase the performance requirements, with the consent of executive, if warranted and appropriate. JUSTIN WIERNASZ On November 20, 2012 we entered into an employment agreement with Mr. Wiernasz, the Company’s President, having an effective date of January 1, 2013 and terminating on December 31, 2015 The agreement is for a term of three years, and provides a base compensation in the amount of $226,250 per annum for year one, $248,875 per annum for year two, and $273,763 per annum for year three. The agreement also provides for annual bonuses including bonuses based on increases in EBITDA (as defined in the agreement) of our various subsidiaries; additional bonuses upon the occurrence of certain events such as: listing on specific stock exchanges, spin-offs, investments and stock trading and volume levels. The agreement also provides for stock options with exercise prices ranging from $0.40 - $1.60 and an award of restricted stock, which only vests if certain volume and pricing milestones with respect to our common stock are met. Mr. Wiernasz also has the option of receiving any portion of his salary or bonus in the form of equity. The agreement also contains non-compete and non-solicitation provisions. On August 7, 2014, our board of directors approved the amendment of the Employment Agreement with Mr. Wiernasz effective as of August 13, 2014. The employment agreement was amended as follows: (i) it has been extended by one year to December 31, 2016; (ii) it provides for 10% annual increases of Base Salary commencing in 2014; (iii) certain performance based bonuses in the employment agreement are eliminated; (iv) stock grants previously issued with vesting based upon performance or stock price are cancelled; (v) a new performance based bonus structure to partially replace the previous structure, based upon meeting certain Cash EBITDA (earnings before interest, taxes, depreciation, and amortization and non-cash compensation charges) targets, the new bonus will have a cash portion and a stock portion and all Base Salary can be paid in cash or in stock at the option of Mr. Wiernasz, and (vi) an award of 75,000 restricted stock units which vest on January 1, 2015 and 75,000 restricted stock units which vest on May 1, 2016. Mr. Wiernasz will have the option, on an annual basis, to take all or part of the cash portion of the bonus, or any part of Base Salary in the form of stock at a valuation based upon the closing stock price on the last trading day of the prior year. The decision on how much, if any, of the bonus to take in stock must be made by May 1 of each year, unless earlier required. The Cash EBITDA target levels do not include the effect of any potential future acquisitions and also do not include certain one time or non-recurring expenses in the calculation of the Cash EBITDA. If a Cash EBITDA target is missed by 3% or less, the bonus for the target so missed shall be reduced by 20% and if it is missed by 3.1% -5%, the bonus for such target shall be reduced by 30%. In March 2016, Mr. Wiernasz’s employment agreement was extended for another year under the same terms. The employment agreement of Mr. Wiernasz was amended (i) ) in the event of a change of control (as defined below) all equity based compensation (including options and restricted stock units) payable pursuant to such employment agreements, shall immediately vest and/or restrictions thereon shall lapse, and (ii) to provide that in the event of a termination without Cause (as defined in the employment agreement) they shall receive a lump sum payment equal to the greater of (x) the salary payable over the last six months of the term of the agreement, or (y) the Base Salary (as defined in the employment agreement) remaining through the end of the then-current term of the agreement. The definition of change of control shall mean the occurrence of any of the following events: (w) the sale or transfer by the Company for at least $25 million (such consideration consisting of cash, cash equivalents, notes or securities) of more than 50% of its Voting Securities (as defined below) or substantially all of its assets; or (x) the acquisition, other than from the Company or employees of it or any of its subsidiaries, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) (other than an employee benefit plan of the Company) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Voting Securities"); or (y) the approval by the stockholders of the Company of a reorganization, merger, consolidation or recapitalization of the Company (a "Business Combination"), other than a Business Combination in which more than 50% of the combined voting power of the outstanding Voting Securities of the surviving or resulting entity immediately following the Business Combination is held by the persons who, immediately prior to the Business Combination, were the holders of the Voting Securities; or (z) the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, or a sale of all or substantially all of the assets of the Company. Compensation Committee Interlocks and Insider Participation None of our executive officers has served as a director or member of a compensation committee (or other board committee performing equivalent functions) of any other entity, one of whose executive officers served as a director or a member of our Compensation Committee. ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The following table sets forth certain information as of March 8, 2016, with respect to the beneficial ownership of our common stock by (1) each person known by us to own beneficially more than 5% of the outstanding shares of our common stock, (2) each of our directors, (3) each Named Officer, and (4) all our directors and executive officers as a group. Unless otherwise stated, each person listed below uses the Company’s address. Pursuant to SEC rules, includes shares that the person has the right to receive within 60 days from March 8, 2016.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence We are not currently subject to the requirements of any stock exchange or national securities association with respect to having a majority of “independent directors”. Messrs. Gold and Cohn, are “independent” and only Messrs. Klepfish and Wiernasz, by virtue of being our Executive Officers, are not independent. Mr. Klepfish and Mr. Wiernasz do not participate in board discussions concerning their compensation. In January 2015, the Company extended the expiration date to December 31, 2015 of certain options to purchase a total of 277,500 shares of the Company’s common stock which were held by board members and key employees. The Company valued the options at the extended due dates using the Black-Scholes valuation model, and charged the amount of $146 to operations during the period ended December 31, 2015. In December 2015, the Company extended the expiration date to December 31, 2016 of certain options to purchase a total of 370,000 shares of the Company’s common stock which were held by board members and key employees. The Company valued the options at the extended due dates using the Black Scholes valuation model, and charged the amount of $89,407 to operations during the period ended December 31, 2015. (See Note 15). In November 2015, the Company issued 125,000 shares of common stock to its Chief Executive Officer for the exercise of RSUs. In December 2015, the Company’s board of directors agreed to issue 107,501 shares of the Company’s common stock with a fair value of $75,000 to the Company’s President as a bonus ITEM 14. Principal Accountant Fees and Services Audit Fees The Company engaged Liggett & Webb P.A. (“LW”) as our independent registered public accounting firm since November 9, 2012. During the year ended December 31, 2015 and 2014, LW billed us audit fees of approximately $108,000 and $92,800, respectively. Audit-Related Fees The aggregate fees billed in each of the last two fiscal years for assurance and related services by LW that are reasonably related to the performance of the audit or review of our consolidated financial statements including our quarterly interim reviews on Form 10-Q and are reported under Audit Fees above. Tax Fees LW tax fees were $15,000 and $10,125 for the years ended December 31, 2015 and 2014, respectively. All Other Fees LW has not billed any other fees since their engagement on November 9, 2012. Chief Executive Officer and Director | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Justin Wiernasz | 50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Joel Gold
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INNOVATIVE FOOD HOLDINGS, INC. By: /s/ Sam Klepfish Sam Klepfish, Chief Executive Officer and Director Dated: March 30, 2016 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
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