SMOKY MARKET FOODS INC - FORM 10-Q

Attached files

file	filename
EX-32.2 - CERTIFICATION - SMOKY MARKET FOODS INC	smoky_10q-ex3202.htm
EX-31.2 - CERTIFICATION - SMOKY MARKET FOODS INC	smoky_10q-ex3102.htm
EX-32.1 - CERTIFICATION - SMOKY MARKET FOODS INC	smoky_10q-ex3201.htm
EX-31.1 - CERTIFICATION - SMOKY MARKET FOODS INC	smoky_10q-ex3101.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 2010

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________ TO _________________

Commission file number: 000-52158

Smoky Market Foods, Inc.

(Exact name of registrant as specified in its charter)

	Nevada		20-4748589
	(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

804 Estates Dr.

Suite 100

Aptos, CA 95003

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (866) 851-7787

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

þ Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

o Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b02 of the Exchange Act. (Check one):

	Large accelerated filer o	Accelerated filer o
	Non-accelerated filer o	Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

o Yes þ No

As of July 31, 2010, the registrant had 91,527,246 shares of common stock outstanding.

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

SMOKY MARKET FOODS, INC.

Balance Sheets

	June 30, 2010 (Unaudited)			December 31, 2009 (Audited)
ASSETS:
Current Assets
Cash	$	1,362		$	110,646
Prepaid expenses		-			11,609
Inventory		108,838			117,270
Total Current Assets		110,200			239,525
Property & Equipment, net of accumulated depreciation		253,396			750,406
Other Assets
Impaired assets for sale		10,000			-
Prepaid consulting contract		50,000			50,000
Real estate option		75,000			75,000
Deposits		2,683			11,616
Total Other Assets		137,683			136,616
Total Assets	$	501,279		$	1,126,547

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
Current Liabilities
Promissory notes payable to a related party, including accrued interest, less amortized discount	$	2,034,940		$	-
Accounts payable		356,522			136,758
Accounts payable - related parties		114,826			106,457
Due to employees		294,578			244,537
Short-term advances		85,500			75,000
Short-term secured promissory note - related party		150,000			-
Other current liabilities		4,876			1,883
Total Current Liabilities		3,041,242			564,635


Promissory notes payable to a related party, including accrued interest, less amortized discount		-			1,880,056

Total Liabilities		3,041,242			2,444,691


Stockholders' Equity (Deficit)
Preferred Stock, par value $.001, 10,000,000 shares
authorized; no shares issued and outstanding		-			-
Common Stock, par value $.001, 200,000,000 shares authorized:
issued and outstanding 90,627,246 and 86,963,746
at June 30, 2010 and December 31, 2009, respectively		90,627			86,964
Deferred Stock-Based Compensation		(68,556	)		(81,885	)
Other paid-in capital		4,905,586			4,849,244
Additional paid-in capital for warrants		1,079,512			1,030,077
Accumulated deficit		(8,547,132	)		(7,202,544	)
Total Stockholders' Equity (Deficit)		(2,539,963	)		(1,318,144	)
Total Liabilities and Stockholders' Equity (Deficit)	$	501,279		$	1,126,547

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

SMOKY MARKET FOODS, INC.

Statements of Operations

(Unaudited)

	For the Three Months Ended:						For the Six Months Ended:
	June 30, 2010			June 30, 2009			June 30, 2010			June 30, 2009
Sales
Restaurant Sales, Net of Discounts	$	-		$	-		$	13,966		$	-
Internet Sales		-			-			44			-
Total Sales		-			-			14,010			-

Restaurant Operating Costs
Food, beverage and packaging		-			-			20,896			-
Labor and related costs		-			-			28,959			-
Occupancy		-			-			19,887			-
Other		-			-			2,223			-
Total Restaurant Operating Costs		-			-			71,965			-

Net Operating Loss		-			-			(57,955	)		-

General & Administrative Expenses
Salaries, wages & benefits		76,061			75,535			143,845			167,269
Professional fees		34,685			42,227			78,257			98,302
Rent		37,364			24,976			47,772			65,582
Depreciation/amortization		30,485			57,687			61,470			73,921
Stock based compensation
Salaries, Wages & Benefits - related parties		46,564			6,664			57,233			13,328
Financing		11,097			590			15,626			13,532
Professional		37,559			-			49,909			2,905
Marketing		-			214			11,993			214
Impairment loss on assets		255,853			-			653,529			-
Other		21,527			22,747			54,374			39,183

Total General & Administrative Expenses		551,195			230,640			1,174,008			474,236

Operating Loss		(551,195	)		(230,640	)		(1,231,963	)		(474,236	)

Other Income (Expense)
Interest income		2			961			53			961
Other income		-			19,353			-			19,353
Interest expense		(57,810	)		(21,188	)		(112,678	)		(23,839	)

Other Expense - Net		(57,808	)		(874	)		(112,625	)		(3,525	)

Loss before Income Taxes		(609,003	)		(231,514	)		(1,344,588	)		(477,761	)

Income Taxes		-			-			-			-

Net (Loss)	$	(609,003	)	$	(231,514	)	$	(1,344,588	)	$	(477,761	)

(Loss) per Share:
Basic and Diluted	$	(0.007	)	$	(0.003	)	$	(0.015	)	$	(0.006	)

Weighted Average
Number of Shares		87,586,913			79,756,437			88,155,579			74,778,629

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

SMOKY MARKET FOODS, INC.

Statements of Stockhoder's Equity

(Unaudited)

										Additional
					Deferred			Other		Paid-in
	Common Stock				Stock-Based			Paid-in		Capital for		Accumulated			Total
	Shares		Amount		Compensation			Capital		Warrants		Deficit			(Deficit)

Balance, January 1, 2009		67,422,820	$	67,423	$	(108,542	)	$	4,424,630	$	862,895	$	(5,951,446	)	$	(705,040	)
Common stock issued for:
Consideration for financing		3,325,000		3,325		-			108,970		-		-			112,295
Consideration for professional services		103,000		103		-			2,802		-		-			2,905
Consideration for future consulting services		1,000,000		1,000		-			49,000		-		-			50,000
Consideration in financing		15,112,926		15,113		-			263,842		-		-			278,955
Warrants issued in for:
Consideration for debt restructuring		-		-		-			-		92,182		-			92,182
Consideration for option on real estate		-		-		-			-		75,000		-			75,000
Amortization of stock-based compensation		-		-		26,657			-		-		-			26,657
Net (Loss) for the Year Ended December 31, 2009		-		-		-			-		-		(1,251,098	)		(1,251,098	)
Balance, December 31, 2009		86,963,746		86,964		(81,885	)		4,849,244		1,030,077		(7,202,544	)		(1,318,144	)
Common stock issued for:
Consideration for professional services		563,500		563		-			15,792		-		-			16,355
Consideration for financing
Warrants issued for:
Consideration for financing		-		-		-			-		4,529		-			4,529
Amortization of stock-based compensation		-		-		6,664			-		-		-			6,664
Net (Loss) for the three months ended March 31, 2010		-		-		-			-		-		(735,585	)		(735,585	)
Balance, March 31, 2010		87,527,246		87,527		(75,221	)		4,865,036		1,034,606		(7,938,129	)		(2,026,181	)
Common stock issued for:
Consideration for employment services		2,650,000		2,650		-			34,450		-		-			37,100
Consideration for financing		450,000		450		-			6,100		-		-			6,550
Warrants issued for:
Consideration for professional services		-		-		-			-		37,559		-			37,559
Consideration for financing											7,347					7,347
Amortization of stock-based compensation		-		-		6,665			-		-		-			6,665
Net (Loss) for the three months ended June 30, 2010		-		-		-			-		-		(609,003	)		(609,003	)
Balance, June 30, 2010		90,627,246	$	90,627	$	(68,556	)	$	4,905,586	$	1,079,512	$	(8,547,132	)	$	(2,539,963	)

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

SMOKY MARKET FOODS, INC.

Statements of Cash Flows

(Unaudited)

	For the Three Months Ended:						For the Six Months Ended:
	June 30, 2010			June 30, 2009			June 30, 2010			June 30, 2009

Operating Activities
Net (Loss)	$	(609,003	)	$	(231,514	)	$	(1,344,588	)	$	(477,761	)
Stock-based financing and compensation costs		95,220			30,896			122,768			62,929
Gain from non-cash settlement of bank overdraft		-			(19,353	)		-			(19,353	)
Impairment loss on assets		255,853			-			653,529			-
Depreciation and amortization		30,485			34,045			61,470			40,757
Adjustments to reconcile net loss to cash used in operating activities:
(Increase) decrease in inventory		46			(4,432	)		8,431			(5,206	)
(Increase) decrease in other current assets		5,961			(20,533	)		11,609			(20,383	)
Increase (decrease) in accounts payable		49,153			(137,027	)		52,280			(90,868	)
Increase (decrease) in due to employees		57,305			19,299			50,041			40,115
Increase (decrease) in bank overdraft		-			(20,000	)		-			(20,000	)
Increase (decrease) in other accrued liabilities		56,997			19,933			110,596			19,933

Net Cash (Used) by Operating Activities		(57,983	)		(328,686	)		(273,864	)		(469,837	)

Investing Activities
Purchase of property and equipment		(1,003	)		(57,495	)		(4,853	)		(72,012	)
Refunds (deposits) on other assets		8,933			(70,283	)		8,933			(70,283	)

Net Cash Provided (Used) by Investing Activities		7,930			(127,778	)		4,080			(142,295	)

Financing Activities
Proceeds from issuance of common stock		-			-			-			-
Proceeds from issuance of convertible notes		-			-			-			-
Proceeds from issuance of promissory notes		-			1,500,000			150,000			1,650,000
Proceeds from (payments on) short term advances - net		10,500			(16,250	)		10,500			-
Principal payments on capital lease obligations		-			(7,231	)					(12,578	)

Net Cash Provided by Financing Activities		10,500			1,476,519			160,500			1,637,422

Net Increase (Decrease) in Cash		(39,553	)		1,020,055			(109,284	)		1,025,290

Cash, Beginning of Year		40,915			5,517			110,646			282

Cash, End of Year	$	1,362		$	1,025,572		$	1,362		$	1,025,572



Supplemental Information:
Interest Paid	$	-		$	3,254		$	-		$	5,905
Income Taxes Paid	$	-		$	-		$	-		$	-

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

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Smoky Market Foods, Inc, (the “Company”) was incorporated on April 18, 2006 under the laws of the State of Nevada.

The Company engages in the development and operation of fast service casual restaurants. The restaurants feature proprietary menu items and emphasize the preparation of food with high quality ingredients developed under the Smoky Market™ brand, as well as unique recipes and special seasonings to provide high quality food at competitive prices. The Company may also engage in other retail or wholesale distribution strategies intended to exploit the Smoky Market brand.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, management reviews those estimates, including those related to allowances for loss contingencies for litigation, income taxes, and projection of future cash flows used to assess the recoverability of long-lived assets.

Cash and Cash Equivalents

For purposes of balance sheet classification and the statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

Management monitors the liquidity and creditworthiness of accounts receivable due from customers on an ongoing basis, considering industry and economic conditions and other factors. These factors form the basis for calculating and recording an allowance for doubtful accounts, which is an estimate of future credit losses. The Company writes off individual accounts receivable against the bad debt allowance when the Company determines a balance is uncollectible. Management has determined that the bad debt allowance is appropriately established at $-0- and $-0, as of June 30, 2010 and December 31, 2009, respectively.

Inventory

Inventory consists of Smoky Market food items and branded packaging. It is valued at the lower of cost or market using the average cost method. Inventory was as follows at:

	June 30, 2010		December 31, 2009

Food and beverages	$	65,103	$	73,534
Packaging materials		28,740		28,740
Shipping materials		14,995		14,996
	$	108,838	$	117,270

Property and Equipment

Property and equipment are stated at cost and are being depreciated using the straight-line method over the assets’ estimated economic lives, which range from 3 to 25 years. Property and equipment were as follows as of:

	June 30, 2010			December 31, 2009

Processing Equipment	$	104,771		$	104,771
Kiosks		90,205			90,205
Operating Equipment		68,404			142,783
Software		67,756			83,941
Office Equipment		34,400			34,307
Smallwares		15,219			23,746
Transportation Equipment		10,078			10,078
Leasehold Improvements		-			409,992
Warehouse Equipment		-			1,548
		390,833			901,371
Accumulated depreciation		(137,437	)		(150,965	)
	$	253,396		$	750,406

Leasehold improvements are capitalized and amortized over the remaining term of the leased facility. The Company recorded $6,843 and $5,712 in depreciation expense relating to the assets above for the three months ended June 30, 2010 and 2009, respectively. The Company recorded $14,186 and $11,424 in depreciation expense relating to the assets above for the six months ended June 30, 2010 and 2009, respectively.

Deposits

Deposits were as follows as of:

	June 30, 2010		December 31, 2009
Security deposits at leased real estate facilities	$	2,500	$	10,500
Other		183		1,116
	$	2,683	$	11,616

Advances

As of June 30, 2010 and December 31, 2009, the Company was indebted to several individuals for non-interest bearing, unsecured advances issued in June 2008 and in the second quarter of 2010. 2,335,000 shares of common stock and 500,000 warrants to purchase common stock were issued to the individuals as part of the transactions. Some of the advances, totaling $75,000 are past due as of June 30, 2010. Management intends to repay the advances upon the realization of additional debt/equity financing in 2010. Accordingly, the advances have been classified as current obligations.

Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2010 and December 31, 2009. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values are assumed to approximate carrying values for these financial instruments because they are short term in nature, or are receivable or payable on demand, and their carrying amounts approximate fair value.

Impairment of Long-Lived Assets

The Company periodically reviews the carrying amount of property and equipment and its identifiable intangible assets to determine whether current events or circumstances warrant adjustments to such carrying amounts. If an impairment adjustment is deemed necessary, such loss is measured by the amount that the carrying value of such assets exceeds their fair value. Considerable management judgment is necessary to estimate the fair value of assets; accordingly, actual results could vary significantly from such estimates. Management estimated and recorded an impairment loss at March 31, 2010 relating to the closure of a restaurant in Los Gatos, California. The loss calculation was based on a pending offer on the property. During the three months ended June 30, 2010, the offer was rescinded, so Management recorded an additional impairment loss for the three months ended June 30, 2010. The impairment loss is estimated by management as follows:

Net book value of assets impaired	$	487,676
Continuing lease obligation on the leased real property		175,853
Total		663,529
Expected sale proceeds		(10,000	)
Estimated loss from impairment		653,529
Impairment loss estimated at March 31, 2010		397,676
Additional impairment loss estimated at June 30, 2010	$	255,853

Revenue Recognition

Revenue from restaurant sales is recognized when food and beverage products are sold. The Company sells gift cards which do not have an expiration date and it does not deduct non-usage fees from outstanding gift card balances. The Company recognizes revenue from gift cards when: (i) the gift card is redeemed by the customer; or (ii) the likelihood of the gift card being redeemed by the customer is remote (gift card breakage) and the Company determines that there is not a legal obligation to remit the unredeemed gift cards to the relevant jurisdiction. The Company will consider a reduction of the unredeemed gift card liability when more historical evidence will allow a reliable percentage of unredeemed and/or broken gift cards to be estimated. Revenue on internet sales is recognized at the time of shipment.

Shipping and Handling (Internet Sales)

Shipping and handling charged to customers can vary depending on pricing strategies, market conditions, etc., and is not necessarily based on the recovery of cost. Accordingly, shipping and handling charges are recorded as a component of sales while the corresponding shipping and handling costs are reflected as a component of cost of goods sold.

Advertising Costs

All advertising costs are charged to expense as incurred or the first time the advertising takes place, unless it is direct-response advertising that results in probable future economic benefits. Advertising expenses were $-0- and $-0- for the three months ended June 30, 2010 and 2009, respectively. Advertising expenses were $-0- and $-0- for the six months ended June 30, 2010 and 2009, respectively.

Segment Information

Certain information is disclosed based on the way management organizes financial information for making operating decisions and assessing performance. The Company currently operates in one business segment and will evaluate additional segment disclosure requirements if it expands operations.

Net (Loss) Per Common Share

Basic earnings (loss) per common share calculations are determined by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per common share calculations are determined by dividing net income (loss) by the weighted average number of common shares, outstanding stock options, and the equivalent number of common shares that would have been outstanding had the convertible debt holders converted their debt instruments to common stock. All potential dilutive securities have been excluded from the computation, as their effect is anti-dilutive.

Stock-Based Compensation

The Company has issued its common shares as compensation to directors, officers, and non-employees (“recipients”). The Company measures the amount of stock-based compensation based on the fair value of the equity instrument issued or the services or goods provided as of the earlier of (1) the date at which an agreement is reached with the recipient as to the number of shares to be issued for performance, or (2) the date at which the recipient’s performance is complete.

Income Taxes

Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

Uncertainty in income taxes is recognized in the Company’s financial statements. Specifically, the accounting policy determines (a) a consistent recognition threshold and (b) a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides related guidance on derecognition, classification, interest and penalties, accounting interim periods, disclosure and transition. To the extent interest and penalties would be assessed by taxing authorities on any underpayment of income taxes, such amounts would be accrued and classified as a component of income tax expenses on the consolidated statement of operations. The Company has evaluated the presence of any such tax uncertainties and determined that they do not have a material impact on the financial statements.

Recent Accounting Pronouncements

The Company’s management has reviewed recent accounting pronouncements issued through the date of the issuance of these financial statements. In management’s opinion, except for the pronouncement detailed below, no other pronouncements apply or will have a material effect on the Company’s financial statements. In May 2009, the FASB issued ASC 855 Subsequent Events, which establishes principles and requirements for subsequent events. In accordance with the provisions of ASC 855, the Company currently evaluates subsequent events through the date the financial statements are available to be issued.

NOTE 2. GOING CONCERN

Management believes that there is substantial doubt about the company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is contingent upon its ability to commence profitable operations and/or obtain additional debt and/or capital financing. Management is attempting to obtain additional financing with various parties, but the eventual success of such efforts can not be assured.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.

The Company has experienced $8,547,132 in losses since inception. The Company has had minimal revenue generating operations since inception.

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

NOTE 3. NOTES PAYABLE TO RELATED PARTY

In September 2008, the Company received $500,000 from a trust in exchange for a $500,000 promissory note and 300,000 warrants to purchase the Company’s common stock. The promissory note is non-interest bearing and is due on September 30, 2010. The warrants have an exercise price of $.15 per share and expire on the due date of the promissory note. The warrants were valued at $9,172 using the Black-Scholes method, and classified as a note discount.

In January 2009, the Company received $150,000 from a limited liability company (“LLC”) which is related to the trust described above, in exchange for a $150,000 promissory note and 1,500,000 shares of common stock. The note was due and payable within 60 days subsequent to issuance. According to the loan agreement, an additional 1,500,000 common shares were issued to the LLC in March 2009 as the note was not repaid during the mandatory 60-day repayment period. The note shall accrue interest beginning in the second quarter of 2009. The shares were valued at $100,500 and classified as a note discount.

In June 2009, the above loans were combined, along with an additional $1,500,000 in proceeds, plus $2,000 in previously accrued interest, to form a new $2,152,000 loan. The loan accrues interest at a 10% annual rate, with all principal and interest due and payable upon the two-year maturity on May 28, 2011. A portion of the principal must be retired, under the terms of the note agreement, when/if the Company obtains in excess of $2 million of equity financing. Fifty percent of any equity raised above $2 million must be used to pay down principal on this promissory note. The lender received 11,587,926 common shares and 1,852,500 warrants to purchase common stock as additional compensation in the transaction. The warrants have an exercise price of $.15 per share and expire in May 2014. They were valued at $92,182 using the Black Scholes method and are being amortized over the two year life of the note along with the value of the common stock issued in connection with the debt. The combined warrants and common stock issued to-date with respect to the combined debt reflect a note discount, and are therefore netted against the promissory note on the balance sheet. Amortization expense on this note discount was $23,642 and $23,642 for the three months ended June 30, 2010 and 2009, respectively. Amortization expense on this note discount was $47,284 and $47,284 for the six months ended June 30, 2010 and 2009, respectively.

The LLC acquired over 10% of the common stock of the Company as a result of the June 2009 transaction, and is therefore now deemed a related party. However, the LLC does not have management control. The transaction is therefore considered at “arm’s length.”

In March of 2010, the LLC loaned an additional $150,000 to the Company. The loan bears interest at a 10% annual rate, is secured by tangible and intangible restaurant assets located in Los Gatos, California, and was due in March 2011. The loan is now in default due to the cancellation of a pending sale of restaurant property mentioned at Note 1 Impairment of Long-Lived Assets. The Company issued the LLC 445,000 warrants to purchase shares of common stock in connection with the loan. The warrants are exercisable for five years through March 2005 at a $.15 exercise price. The warrants were valued at $4,529 using the Black-Scholes method and recorded as stock based compensation – financing expense in the first quarter of 2010.

The Company accrued $57,608 and $19,933 in interest expense with respect to these promissory notes for the three months ended June 30, 2010 and 2009, respectively. The Company accrued $112,477 and $19,933 in interest expense with respect to these promissory notes for the six months ended June 30, 2010 and 2009, respectively. These amounts are included, with other interest charges, in interest expense as reflected in the statements of operations. The interest charges above are related party transactions, as the limited liability company is considered an affiliate.

The promissory note obligation was as follows as of:

	June 30, 2010			December 31, 2009
Face amount of note	$	2,152,000		$	2,152,000
Accrued interest		233,133			125,533
Less unamortized loan discount		(350,193	)		(397,477	)
	$	2,034,940		$	1,880,056

NOTE 4. CAPITAL STOCK

Common Stock

On April 18, 2006, the State of Nevada authorized the Company to issue a maximum of 200,000,000 shares of the Company’s common stock. The assigned par value was $.001. On the same day, the Company issued 40,000,000 common shares to Smoky Systems, LLC, a Nevada LLC and related party, in exchange for certain assets.

Preferred Stock

In June 2006, the State of Nevada authorized the Company to issue a maximum of 10,000,000 shares of the Company’s preferred stock with a $.001 par value. Shares of Preferred Stock may be issued from time to time in one or more series as may from time to time be determined by the Board of Directors. Each series shall be distinctly designated. All shares of any one series of the Preferred Stock shall be alike in every particular, except that there may be different dates from which dividends thereon, if any, shall be cumulative, if made cumulative. The powers, preferences and relative, participating, optional and other rights of each such series, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. No preferred shares had been issued as of June 30, 2010.

Stock Transactions:

The Company has engaged in numerous transactions whereby shares of common stock (description above) were issued in exchange for cash and/or services. The Statement of Stockholders’ Equity provides a summary of such transactions.

NOTE 5. RELATED PARTY TRANSACTIONS

As of June 30, 2010 and December 31, 2009, the Company owed $114,826 and $106,457 to a related party for past operating expenses. Such debt was reflected as related party trade payables on the balance sheets, bears no interest and has no formal repayment terms.

NOTE 6. COMMITMENTS AND CONTINGENCIES

Operating Lease Commitment

The Company is obligated under a long-term lease of restaurant property in Los Gatos, California through February 2013. Base monthly rent was $5,305 as of March 31, 2010 with monthly common area maintenance (“CAM”) charges estimated at $1,043. Required minimum rent was $16,391 and $15,914 for the three months ended June 30, 2010 and 2009, respectively. Future minimum lease payments, exclusive of CAM charges, are as follows for the twelve months ending March 31:

2011	$	64,450
2012		66,383
2013		45,020
2014		-
2015		-
Total	$	175,853

Employment Contract

Effective May 1, 2007, the Company entered into a three-year employment contract with the chief executive officer. Terms of the agreement included annual compensation of $175,000, a potential 80% bonus, a stock award of 1,500,000 common shares, 425,000 options to purchase common stock at $.10 per share, and an additional contingent 1,000,000 shares assuming that certain operating performance metrics are achieved. The employment contract expired and has not yet been renewed as of the date of these financial statements.

Real Estate Option and Consulting Agreement

The Company entered into an agreement with Mary Anne’s Specialty Foods, Inc. (“Supplier”) in October 2009. Under the terms of the agreement, the Company issued the Supplier 1,500,000 warrants to purchase the Company’s common stock at a $.15 exercise price, expiring in five years, in exchange for certain real property rights to purchase and build production facilities located on property presently owned by the Supplier. The transaction was valued at $75,000 using the Black-Scholes Method. The Company also issued 1,000,000 common shares to the Supplier in exchange for a three-year real estate related consulting contract that the Company may require in subsequent years in order to build the new facility described above. The transaction was valued at $50,000, and based on the $.05 per share fair value of the Company’s common shares on the date of the agreement.

NOTE 7. COMMON STOCK OPTIONS AND WARRANTS

Common Stock Option Plan

The Company has reserved 6,500,000 common shares for the exercise of stock options to be issued pursuant to the 2006 Stock Option Plan. Information relating to options issued under this plan is as follows:

	Options and Stock Awards Available for Grant		Number of Shares		Weighted Average Option Exercise Price
Outstanding as of January 31, 2009		742,500		5,757,500	$	0.10
Shares reserved		-		-		-
Options granted		-		-		-
Stock awards granted		-		-		n/a
Options exercised		-		-		-
Options canceled		-		-		-
Outstanding as of December 31, 2009		742,500		5,757,500	$	0.10
Shares reserved		-		-		-
Options granted		-		-		-
Stock awards granted		-		-		n/a
Options exercised		-		-		-
Options canceled		-		-		-
Outstanding as of June 30, 2010		742,500		5,757,500	$	0.10

The following table summarizes information about stock options outstanding and exercisable at June 30, 2010:

Stock Options Outstanding
Number of Options Outstanding		Weighted-Average Remaining Contractual Life in Years		Weighted- Average Exercise Price
	1,887,500		3.08	$	0.10


Stock Options Exercisable
Number of Options Exercisable		Weighted-Average Remaining Contractual Life in Years		Weighted- Average Exercise Price
	1,887,500		3.08	$	0.10

The assumptions used in computing fair value of options is as follows:

Expected stock price volatility	186.0%
Risk-free interest rate	4.7%
Expected term (years)	7.00
Weighted-average fair value of stock options granted	$ 0.099

Common Stock Warrants

The following is a summary of the status of all the Company's stock warrants as of June 30, 2010:

	Number of Warrants		Weighted Average Exercise Price
Ouststanding, January 1, 2009		300,000		0.15
Granted		3,352,500		0.15
Exercised		-		-
Cancelled		-		-
Ouststanding, December 31, 2009		3,652,500		0.15
Granted		3,450,000		0.06
Exercised		-		-
Cancelled		-		-
Ouststanding, June 30, 2010		7,102,500	$	0.11

Warrants exercisable at June 30, 2010		7,102,500	$	0.11

The following table summarizes information about stock warrants outstanding and exercisable at June 30, 2010:

Stock Warrants Outstanding
Number of Warrants Outstanding		Weighted-Average Remaining Contractual Life in Years		Weigted- Average Exercise Price
	4,102,500		4.04	$	0.11
	3,000,000		3.57	$	0.05

Stock Warrants Exercisable
Number of Warrants Exercisable		Weighted-Average Remaining Contractual Life in Years		Weighted- Average Exercise Price
	4,102,500		4.04	$	0.11
	3,000,000		3.57	$	0.05

Warrants issued in 2010 were valued and recorded pursuant to the Black-Scholes Method. Assumptions used were an average risk-free rate of return of .12%, average expected stock price volatility of 347%, weighted average expected term of 4.67 years, and a weighted average fair value of $.0149 per warrant.

NOTE 8. SUBSEQUENT EVENTS

Subsequent to June 30, 2010, the Company engaged in the following transactions:

1.	In exchange for $2,500, sold 500,000 common shares and 500,000 warrants to purchase common shares at $.05, exercisable over 3 years, to a related party.

2.	In exchange for $2,000, sold 400,000 common shares and 400,000 warrants to purchase common shares at $.05, exercisable over 3 years, to an individual. Also received another $2,000 in cash advances from this individual subsequent to June 30, 2010.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation

This Quarterly Report on Form 10-Q (this “Report”) contains various forward-looking statements. Such statements can be identified by the use of the forward-looking words "anticipate," "estimate," "project," "likely," "believe," "intend," "expect," “will” or similar words. These statements discuss future expectations, contain projections regarding future developments, operations, or financial conditions, or state other forward-looking information. When considering such forward-looking statements, you should keep in mind the risk factors noted in Part II – Other Information, “Item 1A. Risk Factors” and other cautionary statements throughout this Report and our other filings with the Securities and Exchange Commission. You should also keep in mind that all forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. If one or more risks identified in this Report or any other applicable filings materializes, or any other underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected, or intended.

Overview

We use proprietary, custom-engineered, USDA-approved wood-burning oven technology to mass produce a complete line of real Smoke-BakedTM meat and fish, and special recipe dishes, which we believe to be unique and of superior quality to other commercially produced smoked meat products. Our meat and fish are prepared 100% naturally without the addition of additives (water, sugar, high sodium) or chemical preservatives, and are individually portion-packaged and vacuum-sealed for convenience and quality retention. From a 15-acre food production campus located in central Iowa and owned by our exclusive meat processor, Mary Ann’s Specialty Foods, Inc. (“Specialty Foods”), we produce and ship our smoked foods to distribution facilities strategically established to support nationwide marketing.

A key operating element in our business model is the culinary systemization we have created – through mass production – designed for highly specialized and profitable foodservice operation within a very small footprint of space. We plan to generate revenue principally from sales of our smoked foods through the operations of two channels of Smoky Market brand distribution: sales of retail packaged product sold over the Internet and development of a chain of franchised foodservice outlets that include self-contained (modular) mini kitchens, mobile vans and smaller-sized fast-casual restaurants. We are able to deliver food of consistent size, taste and quality without the need to install smoking ovens for on-site cooking or to train skilled cooks to handle raw product at numerous locations. We believe this will permit our development of national chain operations with substantially reduced costs relative to investment, labor and product shrinkage.

We produce our smoked foods under an agreement with Specialty Foods, a commercial meat processor in whose USDA facility we placed out first wood-burning oven system, which is capable of producing approximately 100,000 pounds of smoked meat and fish per month. To demonstrate the systemization of our foodservice menu operation, we opened a 1,000 square foot Smoky Market restaurant in October 2009, which was located in Los Gatos, California and featured a selection of certain of our smoked meat and fish that was prepared within a kitchen area of 150 square feet. However, after less than five months of testing, we chose to close the restaurant due to insufficient traffic in the area , but we plan to open Smoky Market restaurants in the near future when financing is secured.

Beginning in 2010 with receipt of financing, we plan to commence retail sales from our Internet web site, which will enable food buyers from across the country to order our products online and to receive their order within just a few days. Our Internet operating plan is to create marketing affiliations with existing network marketers and selected corporate businesses and consumer trade organizations under which we would pay commissions in return for sponsorship and promotional representation by these marketing affiliates.

We have generated net losses in each fiscal year since our inception in the development of our business model. In October 2009, we began to generate initial revenue from food sales at our Los Gatos, CA Smoky Market restaurant, but subsequently closed the restaurant. As discussed in “Liquidity and Capital Resources” below, in June 2009 we received $1.5 million in capital financing, which we used toward opening the restaurant and completing the operating systems for our web site to launch the Internet business. We estimate that we will need a minimum of $2.5 million of additional financing in order to launch our Smoky Market foodservice concept and Internet retail operations. Proceeds from anticipated future financings will be used to finance the placement of up to seven Smoky Market self-contained mini-kitchens ranging in size from 100s/f to 350 s/f that cost from $85,000 to $150,000 respectively, and the launch of Internet marketing campaigns with a budget cost of $150,000. The opening of Smoky Market restaurants will follow in subsequent rounds of financing.

Liquidity and Capital Resources

As of June 30, 2010, we had cash and cash equivalents of $1,362 and a working capital deficit of $2,931,042, as compared to cash and cash equivalents of $110,646 and a working capital deficit of $325,110 as of December 31, 2009.

To finance the expansion of our foodservice concept and Internet operations, we intend to seek additional financing during the remainder of 2010. Given that we are not yet in a positive cash flow or earnings position, the options available to us are fewer than to a positive cash flow company and generally do not include bank financing. To raise additional capital, we expect to issue debt and/or equity securities, including warrants and convertible securities. We do not have any commitments from any party to provide required capital and may, or may not, be able to obtain such capital on reasonable terms or at all.

During the three-month period ended June 30, 2010, principal uses of cash were to cover for continuing net operating losses.

Expected capital expenditures during the remainder of 2010 once financing is achieved are expected to include advertising and marketing costs of approximately $250,000 to promote our Smoky Market foodservice and Internet sales operations, $150,000 relating to inventory requirements, and approximately $1,000,000 for seven Smoky Market mini-kitchen placements.

Assuming the success of our initial foodservice concept and Internet operations, which are expected to utilize a substantial portion of our existing production capacity, we anticipate the need to invest as much as $1,000,000 to create additional production capacity at Specialty Food’s production facility to support our expanded marketing operations. This will most likely require the construction of an additional building adjacent to Specialty Food’s existing production space for more ovens and packaging equipment. We recently entered into agreements with Specialty Foods under which we were granted an option to construct an up to 80 thousand square foot building on its property to accommodate additional smoker ovens and equipment and an option to purchase the 15-acre campus on which Specialty Foods operates if needed to accommodate growth of the Company’s business (subject to an obligation to lease back to Specialty Foods its processing facility). We anticipate that the financing to pay for the proposed building addition will be generated from a combination of our sales and additional financing transactions involving debt or equity securities. If we are unable to obtain financing to construct the building addition as planned, we will be forced to significantly curtail our proposed expansion, and our ability to grow revenue will be halted until increased capacity can be created.

Results of Operations

We had no revenues from operations during both the three-month period ending June 30, 2010 and the comparable period ending June 30, 2009, and our general and administrative expenses increased in the three-month period ending June 30, 2010, as compared to the same period ending June 30, 2009. Additionally, both our revenues and our general administrative expenses increased in the six-month period ending June 30, 2010, as compared to the comparable period in 2009. The changes in revenues and expenses are summarized and discussed in the table below and in the discussion that follows.

Revenues and Expenses. Our operating results for the three-month and six-month periods ended June 30, 2010 and the comparable periods in 2009 are summarized as follows:

	For the three-month period ended						For the six-month period ended
	June 30, 2010			June 30, 2009			June 30, 2010			June 30, 2009
Sales		- 0 -			- 0 -		$	14,010			- 0 -
Restaurant Operating Costs		- 0 -			- 0 -		$	71,965			- 0 -
Net Operating Loss		- 0 -			- 0 -		$	(57,955	)		- 0 -
General & Administrative Expenses
Salaries, Wages & Benefits	$	76,061		$	75,535		$	143,845		$	167,290
Professional Fees	$	34,685		$	42,227		$	78,257		$	98,302
Rent	$	37,364		$	24,976		$	47,772		$	65,582
Depreciation/amortization	$	30,485		$	57,687		$	61,470		$	73,921
Stock based compensation
Salaries, Wages & Benefits – related parties	$	46,564		$	6,664		$	57,233		$	13,328
Financing	$	11,097		$	590		$	15,626		$	13,532
Professional	$	37,559			- 0 -		$	49,909		$	2,905
Marketing		- 0 -		$	214		$	11,993		$	214
Impairment loss on assets	$	255,853			- 0 -		$	653,529			- 0 -
Other	$	21,527		$	22,747		$	54,374		$	39,183
Operating Loss	$	(551,195	)	$	(230,640	)	$	(1,231,963	)	$	(474,236	)
Other Expense – Net	$	(57,808	)	$	(874	)	$	(112,625	)	$	(3,525	)
Net (Loss)	$	(609,003	)	$	(231,514	)	$	(1,344,588	)	$	(477,761	)

THREE MONTH PERIODS ENDED JUNE 30, 2010 AND JUNE 30, 2009

We had no sales or restaurant operating costs for the quarterly periods ended June 30, 2010 and June 30, 2009. Consequently, we had no operating loss for either of these periods.

Our general and administrative expenses increased by $320,555, from $230,640 in the quarterly period ended June 30, 2009 to $551,195 in the same period in 2010. The increase in general and administrative expenses was due primarily to a new impairment loss on assets for the period, increases in rent expense, and increases in stock-based compensation expenses. We incurred an impairment loss on assets of $255,853 during the quarterly period ended June 30, 2010, while we did not incur this expense during the same period in 2009. The impairment loss on assets is due to the closure of the restaurant due to less than desirable sales and lack of profitability. Our rent expense increased by $12,388, from $24,976 in the quarterly period ended June 30, 2009 to $37,364 in the same period in 2010. The rent expense increase is due primarily to rent escalation and common area maintenance charges on the lease of our restaurant property. Our stock-based compensation expenses increased by $87,966, from $7,254 in the quarterly period ended June 30, 2009 to $95,220 during the same period in 2010, due to increases in stock-based compensation associated with professional services received, financing services, and salaries, wages and benefits (related parties). The increase in stock-based compensation associated with professional services is due primarily to the grant of common stock warrants to the Company’s Chief Financial Officer and Chief Information Officer, the increase in stock-based compensation associated with financing services is due primarily to the issuance of common stock warrants in relation to loan advances by individuals to the Company, and the increase in stock-based compensation associated with salaries, wages and benefits (related parties) is due primarily to the grant of common stock shares to the Company’s Chief Executive Officer.

The increases in general and administrative expenses described in the previous paragraph were partially offset by decreases in other general and administrative expenses. Our professional fees expenses decreased by $7,542, from $42,227 for the quarterly period ended June 30, 2009 to $34,685 in the same period in 2010. The decrease in professional fee expenses is due primarily to less billings for accounting and finance related services from the Company’s Chief Financial Officer, who serves the Company on a part-time, consulting basis. Additionally, our depreciation/amortization expenses decreased by $27,202, from $57,687 for the quarterly period ended June 30, 2009 to $30,485 in the same period in 2010. The decrease in depreciation/amortization expenses is due primarily to the impairment loss taken on restaurant equipment and related assets, which the Company has written down to fair market value while recording no additional depreciation. Overall, the decreases in these categories of general and administrative expenses were not as great as the increases in the general and administrative expenses described in the previous paragraph.

SIX MONTH PERIODS ENDED JUNE 30, 2010 AND JUNE 30, 2009

We had no sales or restaurant operating costs for the six-month period ended June 30, 2009, while we had $14,010 in sales and $71,965 in restaurant operating costs for the same period in 2010. Consequently, our operating loss for the six-month period ended June 30, 2010 was $57,955, compared to no operating loss for the same period in 2009. These increases are due to our operating our restaurant during the six-month period ended June 30, 2010 with no comparable operation during the same period in 2009.

Our general and administrative expenses increased by $699,772, from $474,236 in the six-month period ended June 30, 2009 to $1,174,008 in the same period in 2010. The increase in general and administrative expenses was due primarily to a new impairment loss on assets for the period and to increases in stock-based compensation expenses, marketing expenses, and other expenses. We incurred an impairment loss on assets of $653,529 during the six-month period ended June 30, 2010, while we did not incur this expense during the same period in 2009. The impairment loss on assets is due to the closure of the restaurant due to less than desirable sales and lack of profitability. Our stock-based compensation expenses increased by $93,003, from $29,765 in the six-month period ended June 30, 2009 to $122,768 during the same period in 2010, due to increases in stock-based compensation associated with professional services received, financing services, and salaries, wages and benefits (related parties). The increase in stock-based compensation associated with professional services is due primarily to the issuance of common stock warrants to the Company’s Chief Financial Officer and Chief Information Officer, the increase in stock-based compensation associated with financing services is due primarily to the issuance of common stock warrants to individuals in relation to loan advances, and the increase in stock-based compensation associated with salaries, wages and benefits (related parties) is due primarily to the grant of common stock shares to the Company’s Chief Executive Officer. Our marketing expenses increased by $11,779, from $214 in the six-month period ended June 30, 2009 to $11,993 in the same period in 2010. The increase in marketing expenses was due primarily to the retention of an outside marketing professional in the 2010 period and no corresponding transaction in the corresponding 2009 period. Our other expenses increased by $15,191, from $39,183 in the six-month period ended June 30, 2009 to $54,374 in the same period in 2010. The increase in other expenses was due primarily to increased insurance costs and restaurant repairs.

The increases in general and administrative expenses described in the previous paragraph were partially offset by decreases in other general and administrative expenses. Expenses associated with our salaries, wages and benefits decreased by $23,424, from $167,269 in the six-month period ended June 30, 2009 to $143,845 in the same period in 2010. The decrease in expenses associated with salaries, wages and benefits is due primarily to reduction in the Company’s employment force in light of our restaurant closure. Our professional fees expenses decreased by $20,045, from $98,302 in the six-month period ended June 30, 2009 to $78,257 in the same period in 2010. The decrease in professional fees expenses is due primarily to less legal and accounting fees associated with financing transactions and SEC reporting. Our rent expenses decreased by $17,810, from $65,582 in the six-month period ended June 30, 2009 to $47,772 in the same period in 2010. The decrease in rent expenses was due primarily to the inclusion of restaurant rent in general and administrative expenses for accounting purposes in the 2009 period while the restaurant was not yet operational. Our depreciation and amortization expenses decreased by $12,451, from $73,921 in the six-month period ended June 30, 2009 to $61,470 in the same period in 2010. The decrease in depreciation and amortization expenses is due primarily to the asset impairment loss described above, wherein the impaired assets were written down to fair market value, and no additional depreciation being recorded. Overall, the decreases in these categories of general and administrative expenses were not as great as the increases in the general and administrative expenses described in the previous paragraph.

Working Capital. Our working capital as of June 30, 2010 and as of December 31, 2009 are summarized in the table below.

	As of
	June 30, 2010		December 31, 2009
Current Assets
Cash	$	1,362	$	110,646
Prepaid expenses	$	- 0 -	$	11,609
Inventory	$	108,838	$	117,270
Total Current Assets	$	110,200	$	239,525

Current Liabilities
Promissory notes payable to a related party, including accrued interest, less amortized discount	$	2,034,940	$	- 0 -
Accounts payable	$	356,522	$	136,758
Accounts payable – related parties	$	114,826	$	106,457
Due to employees	$	294,578	$	244,537
Short-term advance	$	85,500	$	75,000
Short-term secured promissory note – related party	$	150,000		-
Other current liabilities	$	4,876	$	1,833
Total Current Liabilities	$	3,041,242	$	564,635

Working Capital Deficiency	$	2,931,042	$	325,110

Our working capital deficiency increased by $2,605,932, from $325,110 at fiscal-year end 2009 to $2,931,042 as of June 30, 2010. The increase in our working capital deficiency was primarily due to (i) a decrease in cash of $109,284, from $110,646 at 2009 year end to $1,362 as of June 30, 2010, (ii) the recognition of promissory notes payable to a related party, including accrued interest, less amortized discount, in the amount of $2,034,940, which was not recognized at year end 2009, (iii) an increase in accounts payable of $219,764, from $136,758 at year end 2009 to $356,522 as of June 30, 2010, (iv) an increase in amounts due to employees of $50,041, from $244,537 at year end 2009 to $294,578 as of June 30, 2010, and (v) a short-term secured promissory note to a related party in the amount of $150,000 as of June 30, 2010, which was not present at year end 2009. The decrease in cash is due primarily to continuing net operating losses. The increase in accounts payable and in amounts due to employees is due primarily to the Company’s inability to satisfy these obligations as they come due. The promissory notes all become due and payable within twelve months of June 30, 2010, causing the notes to be classified as current obligations.

Cash Flows. Our cash flows for the three-month and six-month periods ended June 30, 2010 and comparable periods in 2009 are summarized as follows:

	For the Three-Month Periods Ended						For the Six-Month Periods Ended
	June 30, 2010			June 30, 2009			June 30, 2010			June 30, 2009
Net Cash Used in Operating Activities	$	(57,983	)	$	(328,686	)	$	(273,864	)	$	(469,837	)
Net Cash Provided (Used) by Investing Activities	$	7,930		$	(127,778	)	$	4,080		$	(142,295	)
Cash Provided by Financing Activities	$	10,500		$	1,476,519		$	160,500		$	1,637,422
Net Increase (Decrease) in Cash	$	(39,553	)	$	1,020,055		$	(109,284	)	$	1,025,290

Cash, Beginning of Period	$	40,915		$	5,517		$	110,646		$	282
Cash, End of Period	$	1,362		$	1,025,572		$	1,362		$	1,025,572

We utilized less cash in our operating activities in the three-month period ended June 30, 2010, from $328,686 in the three-month period ended June 30, 2009 to $57,983 in the same period in 2010, primarily due to non-cash expense charges during the 2010 period for asset impairment and stock based compensation. Our investing activities provided $7,930 in cash during the three-month period ended June 30, 2010, compared to $127,778 in cash used during the same period in 2009, primarily due to the cash outflow for purchases of equipment and other assets during the 2009 period without similar purchases in the corresponding period in 2010. We generated less cash from financing activities, from $1,476,519 during the three-month period ended June 30, 2009 to $10,500 during the same period in 2010, primarily due to the securing of debt financing in the 2009 period and no such transaction in the corresponding 2010 period.

We utilized less cash in our operating activities in the six-month period ended June 30, 2010, from $469,837 in the six-month period ended June 30, 2009 to $273,864 in the same period in 2010, primarily due to the non-cash asset impairment loss recognition. Our investing activities provided $4,080 in the six-month period ended June 30, 2010, compared to $142,295 in cash used during the same period in 2009, primarily due to the cash outflow for purchases of equipment and other assets during the 2009 period. We generated less cash from financing activities, from $1,637,422 during the six-month period ended June 30, 2009 to $160,500 during the same period in 2010, primarily due to primarily due to the securing of debt financing in the 2009 period and no such transaction in the corresponding 2010 period.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our critical accounting policies and estimates, including those related to long-lived assets, share-based compensation, revenue recognition, overhead allocation, allowance for doubtful accounts, inventory, and deferred income tax. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies affect the more significant judgments and estimates used in the preparation of our consolidated financial statements. These judgments and estimates affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting periods. Changes to these judgments and estimates could adversely affect the Company’s future results of operations and cash flows.

Impairment of Long-Lived Assets

Net book value of assets impaired	$	487,676
Continuing lease obligation on the leased real property		175,853
Total		663,529
Expected sale proceeds		(10,000	)
Estimated loss from impairment		653,529
Impairment loss estimated at March 31, 2010		397,676
Additional impairment loss estimated at June 30, 2010	$	255,853

Revenue Recognition

Net (Loss) Per Common Share

Stock-Based Compensation

Income Taxes

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, the Company is not required to provide the information required by this Item, as per Item 305(e) of Regulation S-K promulgated under the Exchange Act of 1934.

Item 4T. Controls and Procedures

(a) Under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, the Company conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-14(c) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2010. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are not effective in ensuring that information required to be disclosed by the Company in its reports that it files or submits under the Securities Exchange Act of 1934 (as amended) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. This conclusion is based in part on the fact that the Company did not complete this Report and related audits within required time periods.

(b) There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1A. Risk Factors

Material Changes in Risk Factors

The Risk Factors set forth below do not reflect any material changes from the “Risk Factors” identified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009. We have made immaterial edits and updated the financial and other data referenced in the risk factors as of a recent practicable date.

Risk Factors

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, and all of the other information set forth in this prospectus before deciding to invest in shares of our common stock. In addition to historical information, the information in this prospectus contains forward-looking statements about our future business and performance. Our actual operating results and financial performance may be different from what we expect as of the date of this prospectus. The risks described in this prospectus represent the risks that management has identified and determined to be material to our company. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also materially harm our business operations and financial condition.

We have generated only a nominal amount of revenue and may be unable to generate significant revenue in the future.

We were incorporated in April 2006 and are in the process of commencing operations. As a result, we have generated only a nominal amount of revenue, and all of our plans are speculative. We may be unable to generate or expand revenue at the rate anticipated. If we do not generate significant revenue in the future, or if costs of expansion and operation exceed revenues, we will not be profitable. We may be unable to execute our business plan, generate significant revenue or be profitable.

The inexperience of our key management, and our limited operating history and evolving business plan, make it difficult to evaluate our performance and forecast our future.

We were formed in April 2006. Our key management individuals have experience in the restaurant industry, but have limited or no experience in internet retailing, establishing a national food service business (directly or through franchise arrangements) or operating a reporting issuer. Our limited operating history and limited experience make it difficult to evaluate our ability to generate revenues, manage growth, obtain necessary capital, manage costs, create profits, and generate cash from operations. Specifically, our ability to do the following may be impaired:

	●	implement our business plan (which may be based upon faulty assumptions and expectations arising from our limited experience);
	●	obtain capital necessary to continue operations and implement our business plan;
	●	comply with SEC rules and regulations and manage market expectations;
	●	differentiate ourselves from our competitors; and
	●	establish a significant retail and restaurant customer base.

If we fail to successfully manage these risks, we may never expand our business or become profitable and our business may fail.

We will be unable to implement our business plan if we cannot raise sufficient capital and may be required to pay a high price for capital.

As of June 30, 2010, we had $1,362 in cash and cash equivalents. We need to obtain a significant amount of additional capital to implement our business plan and meet our financial obligations as they become due. We may not be able to raise the additional capital needed or may be required to pay a high price for capital. Factors affecting the availability and price of capital may include the following:

	●	the availability and cost of capital generally;
	●	our financial results;
	●	the experience and reputation of our management team;
	●	market interest, or lack of interest, in our industry and business plan;
	●	the trading volume of, and volatility in, the market for our common stock;
	●	our ongoing success, or failure, in executing our business plan;
	●	the amount of our capital needs; and
	●	the amount of debt, options, warrants and convertible securities we have outstanding.

We may be unable to meet our current or future obligations or to adequately exploit existing or future opportunities if we cannot raise sufficient capital. If we are unable to obtain capital for an extended period of time, we may be forced to discontinue operations.

Our auditors have included an explanatory paragraph in our financial statements regarding our status as a going concern.

Our independent registered public accounting firm has stated that it substantially doubts our ability to continue as a going concern in a report dated April 15, 2010. This doubt is based on the fact that we have had losses since inception, have a stockholders’ deficit and have had no material revenue generating operations since inception.

If we fail to develop our brand recognition, our ability to compete in a highly fungible restaurant market will be impaired.

The foodservice industry is intensely competitive with respect to the quality and value of food products, service, price, dining experience and location. We compete with major restaurant chains, some of which dominate the industry. Our competitors also include a variety of mid-price, full-service casual-dining restaurants, health and nutrition-oriented restaurants, delicatessens and prepared food restaurants, as well as supermarkets and convenience stores. Our competitors have substantially greater brand recognition, as well as greater financial, marketing, operating and other resources than we have, which may give them competitive advantages. The fast-casual and quick-services restaurant segments are growing rapidly with numerous restaurant chains competing for quality site locations. Suitable locations for our restaurants may be difficult to locate, or we may be unable to finance the acquisition of such locations. Our competitors could also make changes to pricing or other marketing strategies which may impact us detrimentally. As our competitors expand operations, we expect competition to intensify. Such competition could prevent us from generating significant revenue, which is necessary to sustain our operations in the long term.

The packaged food market is competitive, and we may be unable to successfully capture retail customers.

The market for packaged meat products, and competing packaged products, is highly competitive. We propose to sell packaged meat products over the Internet and at retail locations. We may be unable to differentiate ourselves in the marketplace and compete successfully against existing or future competitors of our business. In order to succeed, we will be required to take customers away from established smoked meat and fish brands and alternative food products sold over the Internet or at retail stores. Our retail products will be sold at higher prices than some of our competitor’s products, and consumers may not differentiate the quality of our products or may not be willing to pay higher prices. If we fail to establish customers for our packaged food business, it is unlikely that we will generate significant revenue or become profitable, and in the long run our business will likely fail.

We may be unable to establish a significant number of restaurant-stores or kiosks.

Many factors may affect our ability to establish new restaurant-stores and kiosks, including:

	●	identification and availability of suitable locations;
	●	negotiation of favorable lease or purchase arrangements;
	●	management of the costs of construction and development;

	●	securing required governmental approvals and permits and complying with governmental regulations;
	●	recruitment of qualified operating personnel;
	●	labor disputes;
	●	shortages of materials and skilled labor;
	●	environmental concerns; and
	●	other increases in costs, any of which could give rise to delays or cost overruns.

If we are not able to establish and expand our restaurant-store or kiosk business, our revenues will not grow as expected, which would inhibit our ability to continue operations in the long term.

The risk of product contamination and recall may harm our public image and result in decreased revenues and harm to our business.

There is a risk that our food processor could produce contaminated meat or other products that we would ship or serve at our restaurant-markets or kiosks. If such an event occurs, we may be required to recall our products from retail stores, affiliate warehouses and from the restaurant outlets being served. A product recall would increase costs, result in lost revenues and harm our public relations image, in addition to exposing us to liability for any personal injury resulting from such contamination.

The availability of raw meat, fish and other food products may change without notice, and the fluctuating cost of these products may unexpectedly increase our operating costs and harm our business.

The costs of obtaining the meat, fish and other food products required for our products are subject to constant fluctuations and frequent shortages of item availability. Adequate supplies of raw meat, fish and other food products may not always be available, and the price of raw meat, fish and other food products may rise unexpectedly, resulting in increased operating costs, potential interruptions in our supply chain, and harm to our business.

Adverse publicity regarding fish, poultry or beef could negatively impact our business.

Our business can be adversely affected by reports regarding mad cow disease, Asian bird flu, meat contamination within the U.S. generally or food contamination generally. In addition, concerns regarding hormones, steroids and antibiotics may cause consumers to reduce or avoid consumption of fish, poultry, or beef. Any reduction in consumption of fish, poultry, or beef by consumers, would harm our revenues, financial condition and results of operations.

Our supply chain may be subject to shipping losses, various accidents, or spoilage, which would decrease revenues and potentially lead to a loss of customers.

We have contracted with a food processor that will be responsible for shipping our processed products, restaurant-stores or consumers to distribution centers or marketing affiliates. Shipping losses, various accidents and product spoilage during this process may lead to decreased sales, potentially disgruntled commercial customers and possible shortages at our distribution centers and retail locations. Repeated or extensive problems of this nature would harm our reputation and revenues.

We may lose our processor affiliation or experience a breakdown in our single processing oven system, substantially harming our ability to generate revenues until another processor is located.

We are completely dependent upon Mary Ann’s Specialty Foods, Inc., and upon a single oven-system located at Specialty Foods, to produce our smoked foods in order to operate the business and generate revenue. If our oven system breaks down, becomes contaminated or is removed from Specialty Foods’ facility, we would experience an interruption in our ability to supply products to customers. This would harm our relationships with our customers and internet affiliates, and harm our revenues in the short run. Any long-term interruptions in our ability to produce smoked foods would significantly limit our ability to continue operations.

We are dependent upon key personnel to manage business, and the loss of such personnel could significantly impair our ability to implement our business plan.

We are highly dependent upon the efforts of management, particularly Edward C. Feintech, our Chairman, President and Chief Executive Officer. The number of qualified managers in the smoked-food industry is limited. As our business grows, we will need to recruit executive and regional managers who are capable of implementing our business plan. The e-commerce and restaurant industries are highly competitive, and we may be unable to attract qualified management personnel. If we are unsuccessful in retaining or attracting such employees, our ability to grow and service capacity will be harmed.

In addition, the success of each Smoky Market foodservice concept will be largely dependent upon the efforts of local management. We may be unable to locate qualified persons willing to manage local stores under the terms we expect to offer. We may be required to increase salaries, benefits, and ownership beyond that anticipated, or management personnel we hire may have limited qualifications and may not perform as anticipated. We may also experience rapid turnover and unexpected legal and other costs associated with our compensation and/or ownership programs for local management. If we are unable to hire and maintain qualified, capable local management, we may experience lower revenues and higher costs than expected.

We expect to be dependent on third party affiliates to provide design, advertising, foodservice operations management, and franchising assistance in relation to our Smoky Market restaurants and kiosks and to assist in development of our general operating and marketing plan.

We intend to engage well-established consulting firms for design, advertising, operations management and franchising to assist us in the development and execution of our Smoky Market restaurant and kiosk plan. If we are unable to engage and sustain long-term agreements with these operating affiliate firms, our ability to generate revenue will be delayed or reduced, and we may incur substantial costs in obtaining the necessary services to execute the roll out for our restaurants and kiosks.

Labor disputes affecting common carriers and foodservice distributors may hamper our ability to deliver our product to customers and harm our business.

We will be dependent upon UPS and other package delivery contractors and foodservice distributors to ship internet orders to customers and products to our foodservice concept outlets. Labor disputes involving package delivery contractors, or other events creating delays, unpredictability or lost increases in the express delivery market may significantly damage our shipping and delivery capability. This would increase our costs, likely cause us to fail to comply with delivery commitments to our customers, and eventually harm our ability to generate revenues.

Our business may be affected by increased compensation and benefits costs.

We expect labor costs to be a significant expense for our business. We may be negatively affected by increases in workers’ wages and costs associated with providing benefits, particularly healthcare costs. Such increases can occur unexpectedly and without regard to our efforts to limit them. If such increases occur, we may be unable to pass them along to the consumer through product price increases, resulting in decreased operating results.

Changes in general economic and political conditions affect consumer spending and may harm our revenues and operating results.

Our country’s economic condition affects our customers’ levels of discretionary spending. A decrease in discretionary spending due to a recession or decreases in consumer confidence in the economy could affect the frequency with which our customers choose to purchase smoked-foods or dine out or the amount they spend on smoked-food or meals while dining out. This would likely decrease our revenues and operating results.

Failure to comply with governmental regulations could harm our business and our reputation.

We will be subject to regulation by federal agencies and regulation by state and local health, sanitation, building, zoning, safety, fire and other departments relating to the development and operation of restaurant-markets. These regulations include matters relating to:

	●	the environment;
	●	building construction;
	●	zoning requirements;
	●	worker safety;
	●	the preparation and sale of food and alcoholic beverages; and
	●	employment.

Our facilities will need to be licensed and will be subject to regulation under state and local fire, health and safety codes. The construction of modular restaurant-markets will be subject to compliance with applicable zoning, land use, and environmental regulations. We may not be able to obtain necessary licenses or other approvals on a cost-effective and timely basis in order to construct and develop modular restaurant-markets in the future.

If we elect to serve alcohol to our customers, we will be required to comply with the alcohol licensing requirements of the federal, state, and municipal governments having jurisdiction where our restaurant-markets are located. Alcoholic beverage control regulations require applications to state authorities and, in certain locations, county and municipal authorities for a license and permit to sell alcoholic beverages. Typically, licenses must be renewed annually and may be revoked or suspended for cause at any time. Alcoholic beverage control regulations relate to numerous aspects of the daily operations of restaurant-markets, including minimum age of guests and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling, storage and dispensing of alcoholic beverages. If we fail to comply with federal, state, or local regulations, our licenses may be revoked and we may be forced to terminate the sale of alcoholic beverages at one or more of our restaurant-markets.

The Americans with Disabilities Act prohibits discrimination on the basis of disability in public accommodations and employment. We will likely be required to comply with the Americans with Disabilities Act and regulations relating to accommodating the needs of the disabled in connection with the construction of new facilities and with significant renovations of existing facilities.

Failure to comply with these and other regulations could increase our cost structure, slow our expansion, and harm our reputation, any of which would harm our operating results.

Compliance with existing and new regulations of corporate governance and public disclosure may result in additional expenses.

Compliance with changing laws, regulations, and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and other SEC regulations, requires large amounts of management attention and external resources. This may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

Our directors, executive officers and principal stockholders have effective control of the company, preventing non-affiliate stockholders from significantly influencing our direction and future.

Our directors, officers, and 5% stockholders and their affiliates control a significant percentage of our outstanding shares of common stock and are expected to continue to control a significant percentage of our outstanding common stock following any financing transactions projected for the foreseeable future. These directors, officers, 5% stockholders and affiliates effectively control all matters requiring approval by the stockholders, including any determination with respect to the acquisition or disposition of assets, future issuances of securities, declarations of dividends and the election of directors. This concentration of ownership may also delay, defer, or prevent a change in control and otherwise prevent stockholders other than our affiliates from influencing our direction and future.

There is a public market for our stock, but it is thin and subject to manipulation.

The volume of trading in our common stock is limited and can be dominated by a few individuals. The limited volume can make the price of our common stock subject to manipulation by one or more stockholders and will significantly limit the number of shares that one can purchase or sell in a short period of time. An investor may find it difficult to dispose of shares of our common stock or obtain a fair price for our common stock in the market.

The market price of our common stock may be harmed by our need to raise capital.

We need to raise additional capital in order to roll out our business plan and expect to raise such capital through the issuance of common stock and/or convertible debt. Because securities in private placements and other transactions by a company are often sold at a discount to market prices, this need to raise additional capital may harm the market price of our common stock. In addition, the re-sale of securities issued in such capital-raising transactions, whether under Rule 144 or a re-sale registration statement, may harm the market price of our common stock.

The market price for our common stock is volatile and may change dramatically at any time.

The market price of our common stock, like that of the securities of other early-stage companies, is highly volatile. Our stock price may change dramatically as the result of announcements of our quarterly results, the rate of our expansion, significant litigation or other factors or events that would be expected to affect our business or financial condition, results of operations and other factors specific to our business and future prospects. In addition, the market price for our common stock may be affected by various factors not directly related to our business, including the following:

	●	intentional manipulation of our stock price by existing or future stockholders
	●	short selling of our common stock or related derivative securities;
	●	a single acquisition or disposition, or several related acquisitions or dispositions, of a large number of our shares
	●	the interest, or lack of interest, of the market in our business sector, without regard to our financial condition or results of operations;
	●	the adoption of governmental regulations and similar developments in the United States or abroad that may affect our ability to offer our products and services or affect our cost structure;
	●	developments in the businesses of companies that purchase our products; or
	●	economic and other external market factors, such as a general decline in market prices due to poor economic indicators or investor distrust.

Our ability to issue preferred stock and common stock may significantly dilute ownership and voting power, negatively affect the price of our common stock and inhibit hostile takeovers.

Under our Articles of Incorporation, as amended, we are authorized to issue up to 10 million shares of preferred stock and 200 million shares of common stock without seeking stockholder approval. Our board of directors has the authority to create various series of preferred stock with such voting and other rights superior to those of our common stock and to issue such stock without stockholder approval. Any issuance of such preferred stock or common stock would dilute the ownership and voting power of existing holders of our common stock and may have a negative effect on the price of our common stock. The issuance of preferred stock without stockholder approval may also be used by management to stop or delay a change of control, or might discourage third parties from seeking a change of control of our company, even though some stockholders or potential investors may view possible takeover attempts as potentially beneficial to our stockholders.

We are unlikely to pay dividends on our common stock in the foreseeable future.

We have never declared or paid dividends on our stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business. We do not anticipate paying any cash dividends in the foreseeable future, and it is unlikely that investors will derive any current income from ownership of our stock. This means that your potential for economic gain from ownership of our stock depends on appreciation of our stock price and will only be realized by a sale of the stock at a price higher than your purchase price.

Our common stock is a “low-priced stock” and subject to regulation that limits or restricts the potential market for our stock.

Shares of our common stock are “low-priced” or “penny stock,” resulting in increased risks to our investors and certain requirements being imposed on some brokers who execute transactions in our common stock. In general, a low-priced stock is an equity security that:

	●	Is priced under five dollars;
	●	Is not traded on a national stock exchange;
	●	Is issued by a company that has less than $5 million in net tangible assets (if it has been in business less than three years) or has less than $2 million in net tangible assets (if it has been in business for at least three years); and
	●	Is issued by a company that has average revenues of less than $6 million for the past three years.

We believe that our common stock is presently a “penny stock.” At any time the common stock qualifies as a penny stock, the following requirements, among others, will generally apply:

	●	Certain broker-dealers who recommend penny stock to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to a transaction prior to sale.
	●	Prior to executing any transaction involving a penny stock, certain broker-dealers must deliver to certain purchasers a disclosure schedule explaining the risks involved in owning penny stock, the broker-dealer’s duties to the customer, a toll-free telephone number for inquiries about the broker-dealer’s disciplinary history and the customer’s rights and remedies in case of fraud or abuse in the sale.
	●	In connection with the execution of any transaction involving a penny stock, certain broker-dealers must deliver to certain purchasers the following:

o	bid and offer price quotes and volume information;

o	the broker-dealer’s compensation for the trade;

o	the compensation received by certain salespersons for the trade;

o	monthly accounts statements; and

o	a written statement of the customer’s financial situation and investment goals.

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

Other than as previously reported, the Company offered and sold the following securities during the quarter ended June 30, 2010 in reliance upon exemptions from the registration requirements of the Securities Act:

In May 2010, we offered and sold an aggregate of 150,000 shares of common stock to an individual and an entity in exchange for financing services with a fair market value of $2,250 (or $0.015 per share). The offer and sale of such shares of our common stock and warrants to purchase shares of our common stock were effected in reliance upon the exemptions for sales of securities not involving a public offering, as set forth in Section 4(2) of the Securities Act, based upon the following: (a) each investor confirmed to us that the investor was an “accredited investor,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to each offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.

In June 2010, (i) we offered and sold 100,000 shares of common stock to an individual in exchange for financing services with a fair market value of $1,500 (or $0.015 per share); (ii) we offered and sold 200,000 shares of common stock to an individual in exchange for financing services with a fair market value of $2,800 (or $0.014 per share); and (iii) we offered and sold an aggregate of 2,650,000 shares of common stock to two individual employees in exchange for services rendered with a fair market value of $37,100 (or $0.014 per share). The offer and sale of such shares of our common stock and warrants to purchase shares of our common stock were effected in reliance upon the exemptions for sales of securities not involving a public offering, as set forth in Section 4(2) of the Securities Act, based upon the following: (a) each investor confirmed to us that the investor was an “accredited investor,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to each offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.

Item 6. Exhibits

See the Exhibit Index attached hereto following the signature page.

SIGNATURES

Pursuant to the requirements 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.

			Smoky Market Foods, Inc.


	August 23, 2010		By: /s/ Edward C. Feintech
	Date		Edward C. Feintech, President & Chief Executive Officer

	August 23, 2010		By: /s/ Shane Campbell
	Date		Shane Campbell Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Exhibit	Incorporated by Reference/ Filed Herewith
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer	Filed herewith

31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer	Filed herewith

32.1	Section 1350 Certification of Chief Executive Officer	Filed herewith

32.2	Section 1350 Certification of Chief Financial Officer	Filed herewith

Attached files

SMOKY MARKET FOODS INC Reports

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