10-Q 1 organic10q063009.htm organic10q063009.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
 
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2009

OR

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

Commission File Number
000-51119

ORGANIC ALLIANCE, INC.
(Exact name of registrant as specified in its charter)

Nevada
20-0853334
State of incorporation
I.R.S. Employer Identification No.
 
401 Monterey Street, Suite 202
Salinas, CA 93901
 (Address of principal executive offices)
 
(831) 240-0295
 (Issuer’s telephone number)
  
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes o No x
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  o No o

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer  o
Accelerated filer  o
   
Non-accelerated filer  o
Smaller reporting company x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o No x

 Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class
  
Outstanding at  May 18, 2010
Common stock, $0.0001 par value
  
29,649,943
 
 
 
ORGANIC ALLIANCE, INC. AND SUBSIDIARY

FORM 10-Q

TABLE OF CONTENTS
 
     
Page
PART I - FINANCIAL INFORMATION
  
3
       
ITEM 1.
FINANCIAL STATEMENTS
  
3
       
 
        Consolidated Balance Sheets as of June 30, 2009 (Unaudited) and December 31, 2008 (Audited)
  
4
       
 
        Consolidated Statements of Operations for the three months ended June 30, 2009 and 2008, six months ended June 30, 2009 and the period of inception (February 19, 2008) to June 30, 2008 (Unaudited)
  
5
       
 
Consolidated Statements of Cash Flows for the Six months ended June 30, 2009 and period of inception (February 19, 2008) to June 30, 2008 (Unaudited)
  
6
       
 
Notes to Consolidated Financial Statements (Unaudited)
  
7
       
ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
  
19
       
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
24
       
ITEM 4.
CONTROLS AND PROCEDURES
  
24
       
PART II - OTHER INFORMATION
  
25
       
ITEM 1.
LEGAL PROCEEDINGS
  
25
       
ITEM 1A.
RISK FACTORS
    
       
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
25
       
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
  
26
       
ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
26
       
ITEM 5.
OTHER INFORMATION
  
26
       
ITEM 6.
EXHIBITS
  
26
       
SIGNATURES
    
27
 
 
 
PART I - FINANCIAL INFORMATION
 
ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-Q and article 10 of Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, the financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.

The results for the three and six months ended June 30, 2009 are not necessarily indicative of the results of operations for the full year. These financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the period ended December 31, 2008 filed with the Securities and Exchange Commission on March 18, 2010.
 
 
 


 
 
-3-
 
Organic Alliance, Inc. and Subsidiary
            
Consolidated Balance Sheets
            
             
             
   
June 30, 2009
    
December 31, 2008
  
   
(Unaudited)
        
Assets
            
Current assets:
            
Cash
   $ 83,343     $ 250  
Accounts Receivable
     531,994       -  
Due from factor
     44,756       -  
Prepaid expenses and other current assets
     34,593       4,461  
Total current assets
     694,686       4,711  
                 
Other assets (Note 4)
     -       30,000  
                 
Total Assets
   $ 694,686     $ 34,711  
                 
Liabilities and Stockholders' Deficiency
                
                 
Current liabilities:
                
Accounts payable
   $ 911,346     $ 141,898  
Accrued expenses and other current liabilities
     376,582       82,990  
Notes payable to related parties and other (Note 11)
     276,157       104,270  
Total current liabilities
     1,564,085       329,158  
                 
Stockholders' Deficiency:
                
Common stock, $.0001 par value, 60,000,000 shares
                
authorized, 26,892,443 and 13,131,967 shares outstanding as of
                
June 30, 2009 and December 31, 2008, respectively
     2,689       1,313  
Additional paid-in capital
     6,317,497       4,654,217  
Accumulated deficit
     (7,189,585 )     (4,949,977 )
Total stockholders' deficiency
     (869,399 )     (294,447 )
                 
Total Liabilities and Stockholders' Deficiency
   $ 694,686     $ 34,711  
                 
The accompanying notes are an integral part of the consolidated interim financial statements
 
-4-
 
Organic Alliance, Inc. and Subsidiary
                        
Consolidated Statements of Operations (Unaudited)
                    
                         
   
For the Three Months Ended June 30,
    
For the
Six Months Ended
    
Period from Inception
(February 19, 2008) to
  
   
2009
    
2008
    
June 30, 2009
    
June 30, 2008
  
                         
                         
Net sales
   $ 1,174,661     $ -     $ 1,177,542     $ -  
Cost of sales
     1,144,705       -       1,146,829       -  
                                 
Gross profit
     29,956       -       30,713       -  
                                 
General and administrative
     951,588       376,420       2,228,597       3,285,734  
                                 
Operating Loss
     (921,632 )     (376,420 )     (2,197,884 )     (3,285,734 )
                                 
Other (income) expense:
                                
Interest expense
     9,684       460       11,724       504  
Interest income
     -       (11,038 )     -       (11,038 )
Loss from impairment of intangible assets
     -       -       30,000       -  
Total net other expense (income)
     9,684       (10,578 )     41,724       (10,534 )
                                 
Net loss
   $ (931,316 )   $ (365,842 )   $ (2,239,608 )   $ (3,275,200 )
                                 
Basic and diluted loss per share
   $ (0.04 )   $ (0.03 )   $ (0.10 )   $ (0.31 )
                                 
Weighted average number of
                                
common shares outstanding - basic and diluted
     24,385,190       11,289,289       22,738,409       10,506,314  
                                 
The accompanying notes are an integral part of the consolidated interim financial statements
 
-5-
 
Organic Alliance, Inc. and Subsidiary
            
Consolidated Statements of Cash Flows (Unaudited)
            
             
   
For the
    
Period from Inception
  
   
Six Months Ended
    
February 19, 2008 to
  
   
June 30, 2009
    
June 30, 2008
  
             
Cash flows from operating activities:
            
Net loss
   $ (2,239,608 )   $ (3,275,200 )
Adjustments to reconcile net loss to net cash
                
used in operating activities:
                
Common stock issued for services
     1,618,018       3,183,875  
Share-based compensation
     17,432       -  
Amortization on discount of notes payable
     710       -  
Loss from impairment of intangible assets
     30,000       -  
Changes in assets and liabilities:
                
Accounts receivable
     (531,994 )     -  
Due from factor
     (44,756 )     -  
Prepaid expenses and other current assets
     (30,132 )     (12 )
Accounts payable
     769,448       7,118  
Accrued expenses and other current liabilities
     298,745       15,406  
Net cash used in operating activities
     (112,137 )     (68,813 )
                 
Cash flows from financing activities
                
Proceeds from notes payable
     170,230       187,000  
Proceeds from issuance of shares of common stock
     25,000       -  
Principal payments on note receivables for common stock
     -       120,801  
Payment for repurchase of common stock
     -       (200,000 )
Net cash provided by financing activities
     195,230       107,801  
                 
Net increase in cash
     83,093       38,988  
Cash - beginning of the period
     250       -  
Cash - end of the period
   $ 83,343     $ 38,988  
                 
Supplemental disclosures for non-cash financing activities:
                
Issuance of shares of common stock for note receivable
   $ -     $ 993,500  
Discount on notes payable
   $  4,206       -  
                 
Supplemental disclosures:
                
Interest paid
   $ 3,508     $ 504  
                 
The accompanying notes are an integral part of the consolidated interim financial statements
 
-6-
 
Organic Alliance, Inc. and Subsidiary
Notes to Consolidated Financial Statements (unaudited)
 
1.
NATURE OF BUSINESS AND OTHER MATTERS

NB Design & Licensing, Inc., (“NB Design”) was organized in September 2001.  The former parent, New Bridge Products, Inc., was originally incorporated in August 1995 as a manufacturer of minivans and filed a petition in bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. Its Plan of Reorganization was approved by the U.S. Bankruptcy Court for the District of Arizona in September 2002 and NB Design was discharged from bankruptcy in October 2002.   NB Design was inactive from October 2002 to April 29, 2008.

Organic Alliance Inc., a Texas corporation, (“Organic Texas”) was organized on February 19, 2008 to sell organically grown fruits and vegetables.

On April 29, 2008, NB Design, a Nevada corporation, acquired all 10,916,917 issued and outstanding shares of common stock and assumed all liabilities Organic Texas for 9,299,972 shares of NB Design’s common stock. Organic Texas thereupon became a wholly owned subsidiary of NB Design. All Organic Texas common shares issued prior to April 29, 2008 for services provided are retroactively presented based on the ratio of 0.8435 NB Design common share issued for one Organic Texas common share (See Note 8).  All Organic Texas common shares issued prior to April 29, 2008 for cash are presented based on one NB Design common share issued for one Organic Texas common share (See Note 8).  The business of Organic Texas is the only business of NB Design.

The acquisition of Organic Texas by NB Design on April 29, 2008 was accounted for as a reverse capitalization in accordance with the Securities and Exchange Commission’s (“SEC”) Division of Corporate Financial Reporting manual Topic 12 “Reverse Acquisition and Reverse Capitalization”. The reverse capitalization was the acquisition of a private operating company (Organic Texas) into a non-operating public shell corporation (NB Design) with nominal net assets and as such is treated as a capital transaction, rather than a business combination. As a result no goodwill is recorded.  In this situation, NB Design is the legal acquirer because it issued its equity interests, and Organic Texas is the legal acquiree because its equity interests were acquired.  However, NB Design is the acquiree and Organic Texas as the acquirer for accounting purposes.  Organic Texas is treated as the continuing reporting entity that acquired the registrant, NB Design.  The pre-acquisition financial statements of Organic Texas are treated as the historical financial statements of the consolidated companies. 

Prior to April 29, 2008, NB Design had outstanding 1,000,028 each of Class A, Class B, Class C, Class D, Class E and Class F warrants.  The warrants were exercisable at $2.00, $2.00, $4.00, $4.00, $6.00 and $6.00, respectively, at any time until December 31, 2008.  As a condition to closing the Exchange Agreement, the exercise prices of the warrants were subsequently reduced to $1.00 per share for all classes of Warrants and the expiration date was extended to December 31, 2011.   In exchange for the exercise price reduction, the holders of at least 80% of the Warrants agreed to a call provision by NB Design on 10 days notice to them if (i) the bid price of our common stock is quoted at $1.25 per share or higher and the average share volume exceeds 300,000 shares for at least one day, and (ii) the shares underlying the warrants are subject to a current registration statement on file with the SEC.  Both the share price and volume must be met on the same day for the call provision to be effective.  A registration statement has not been filed with the SEC for the warrants as of the date of this Form 10-Q.

On June 2, 2008, the name NB Design was changed to Organic Alliance, Inc.  On August 29, 2008, the name of Organic Texas was changed to Organic Texas, Inc.  All references throughout this Report to “Organic Alliance, Inc.,” or the “Company” refer to the combined operations of Organic Alliance, Inc., a Nevada corporation, and our wholly-owned subsidiary, Organic Texas.

On December 31, 2008, we filed a Form S-1 with the SEC covering 2,638,250 shares of our .0001 par value Common Stock.

The Company was formed on February 19, 2008 and was in development stage through the first quarter of 2009.  2009 was the first year during which it is considered an operating company. During the second quarter of 2009, the Company commenced its operations and the Company generated approximately $1,200,000 of revenues for the six months ended June 30, 2009.
 
-7-
 

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - The Company's consolidated financial statements have been prepared on an accrual basis of accounting, in conformity with accounting principles generally accepted in the United States of America applicable for a going concern which assumes that the Company will realize it's assets and discharging it's liabilities in the ordinary course of business. These principles contemplate the realization of assets and liquidation of liabilities in the normal course of business.

Principles of Consolidation - The consolidated financial statements include the accounts of the Organic Alliance, Inc. and its wholly owned subsidiary, Organic Texas. Inc. (collectively, the "Company”). All significant inter-company transactions and balances have been eliminated in consolidation.

Revenue Recognition - Revenue is recorded when (1) the customer accepts delivery of the product and title has been transferred and the Company has no significant obligations remaining to be performed; (2) a final understanding as to specific nature and terms of the agreed upon transaction has occurred; (3) price is fixed and (4) collection is reasonably  assured.  Sales are presented net of discounts and allowances. 

Impairment of Long-Lived and Intangible Assets - Long-lived assets consist of intangible assets. Intangible assets are comprised of AvocadoMan brand and an order processing web software system. The Company evaluates long-lived assets, including intangible assets, for impairment in accordance with Statement of Financial Accounting Standards No. 144 (“SFAS No. 144”) (primarily codified into Topic 360), “Accounting for the Impairment or Disposal of Long-Lived Assets” whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value.
 
When the Company determines that the carrying value of long-lived assets may not be recoverable based upon the existence of one or more of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company believes the carrying value of its AvocadoMan brand name will not be recovered in the future and so recorded impairment loss of $30,000.

Debt Discount - Costs incurred with parties who are providing long-term financing, which generally include the value of shares of the Company’s common stock are reflected as a debt discount. These discounts are amortized over the life of the related debt.  Amortization expense related to the cost and discount was $710 for the six months ended June 30, 2009 and is included in interest expense.

Estimated Fair Value of Financial Instruments - The Company's financial instruments include cash, accounts receivable, accounts payable, accrued expenses and notes payable. Management believes the estimated fair value of these financial instruments at June 30, 2009 approximate their carrying value as reflected in the balance sheets due to the short-term nature of these instruments
 
Concentrations

 
·
Credit Risk - The Company maintains cash balances at various financial institutions. Accounts at each financial institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) for up to $250,000.  At June 30, 2009, the Company’s cash did not exceed the FDIC insurance limit.
 
·
Major customers - The Company has four major customers, which accounted for approximately 88% of sales during six months ended June 30, 2009. The loss of any of these customers could adversely affect the Company's operations.
 
·
Major suppliers - The Company has three major suppliers, which accounted for approximately 91% of purchases during six months ended June 30, 2009. The loss of any of these suppliers could adversely affect the Company's operations.
 
-8-
 
Allowance for Doubtful Accounts - An allowance for uncollectible accounts receivable will be recorded based on a combination of aging analysis and any specific troubled accounts. Starting in 2009, our produce were sold to our customers for cash or on credit terms which are established in accordance with local and industry practices and typically require payment within 10 to 30 days of delivery. Accounts are written off when uncollectibility is confirmed. Subsequent recoveries, if any, are credited to the allowance account.

Income Taxes - Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating losses. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. At June 30, 2009 and December 31, 2008, the Company had a full valuation allowance against its deferred tax assets.

The Company files an income tax return in the U.S. federal jurisdiction, California and Texas. Tax returns for  2008 remain open for examination. The Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes-An Interpretation of FASB Statement No. 109, Accounting for Income Taxes” (“FIN 48”) (primarily codified into Topic 740 of Accounting Standards Codification (“ASC”)), at February 19, 2008.  The Company’s estimate of the potential outcome of any uncertain tax issues is subject to management’s assessment of relevant risks, facts, and circumstances existing at that time. The Company uses a more likely than not threshold for financial statement recognition and measurement of tax position taken or expected to be taken in a tax return. To the extent that our assessment of such tax position changes, the change in estimate is recorded in the period in which the determination is made.  As a result of the implementation of FIN 48, the Company recognized no material adjustment in the liability for unrecognized income tax benefits at February 19, 2008. At June 30, 2009 and 2008, there were no unrecognized tax benefits. Interest and penalties related to uncertain tax positions will be recognized in income tax expense. As of June 30, 2009 and 2008, no interest and penalties related to uncertain tax positions had been accrued.

Share Based Compensation - The Company accounts for its share-based employee compensation arrangement in accordance with SFAS No. 123R, “Share Based Payment” (SFAS No. 123(R)”) (primarily codified into Topic 718 of Accounting Standards Codification (‘ASC’)). Under SFAS No. 123R, share-based payments are measured at the estimated fair value on the date of grant and are recognized as an expense over the requisite service period (generally the vesting period).

The Company uses the provisions of FAS 123(R) and EITF 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services”  (primarily codified into Topic 505 of ASC) to account for the compensation expense associated with equity grants to non-employees. The Company measures the compensation associated with these grants based on the fair value of the equity instruments issued.  The measurement date to calculate the fair value of the equity instruments granted is based upon the date that the performance commitment has occurred.

Net Loss Per Share - Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. 

Diluted net loss per share is computed by dividing the net loss by the weighted average number of common and common equivalent shares outstanding during the period. Basic and diluted net loss per share are the same.
 
               
Period from Inception
  
   
Three Months ended
June 30,
    
Six Months ended
June 30,
    
(February 19, 2008) to
  
   
2009
    
2008
    
2009
    
June 30, 2008
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
Numerator:
                        
Net loss - basic and diluted
   $ (931,316 )   $ (365,842 )   $ (2,239,608 )   $ (3,275,200 )
                                 
Denominator:
                                
Weighted average shares - basic
     24,385,190       11,289,289       22,738,409       10,560,214  
                                 
Effect of dilutive stock options and warrants
     -       -       -       -  
                                 
Denominator for diluted earnings per share
     23.385,190       11,289.289       22,738,409       10,560,214  
                                 
Loss per share:
                                
Basic
   $ (0.04 )   $ (0.03 )   $ (0.10 )   $ (0.31 )
                                 
Diluted
   $ (0.04 )   $ (0.03 )   $ (0.10 )   $ (0.31 )


 
 
-9-
 
At June 30, 2009, the Company stock options outstanding totaled 675,000. In addition, at June 30, 2009 and 2008, the Company’s warrants outstanding represented 6,000,168 common shares. Inclusion of the Company’s options and warrants in diluted loss per share for the three and six months ended June 30, 2009 and for the three months ended June 30, 2008 and period from inception (February 19, 2008) to June 30, 2008, have an anti-dilutive effect because the Company incurred a net loss from operations.

Use of Estimates - The preparation of consolidated 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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 Recently Issued Accounting Standards

Effective February 19, 2008, the Company adopted the provisions Topic 820 of FASB ASC, “Fair Value Measurements and Disclosures”, which did not have a material impact on the Company’s consolidated financial statements. In February 2008, the FASB provided a one year deferral for all nonrecurring fair value measurements of nonfinancial assets and nonfinancial liabilities until fiscal years beginning after November 15, 2008. The adoption of this statement had no impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued FSP FAS 157-4 (primarily codified into Subtopic 820-10 of FASB ASC), “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly”. FSP FAS 157-4 must be applied prospectively and retrospective application is not permitted. FSP FAS 157-4 is effective for interim and annual periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. An entity early adopting FSP FAS 157-4 must also early adopt FSP FAS 115-2 and FAS 124-2 (primarily codified into Subtopic 320-10 of FASB ASC), “Recognition and Presentation of Other-Than-Temporary Impairments”. The adoption of these statements had no material impact on the Company’s consolidated financial statements.

In December 2007, the FASB issued Statement No. 141(R), "Business Combinations” (“SFAS 141(R)”) (primarily codified into Topic 805 of FASB ASC). SFAS 141(R) expands the definition of transactions and events that qualify as business combinations; requires that the acquired assets and liabilities, including contingencies, be recorded at the fair value determined on the acquisition date and changes thereafter reflected in revenue, not goodwill; changes the recognition timing for restructuring costs; and requires acquisition costs to be expensed as incurred. Adoption of SFAS 141(R) is required for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Early adoption and retroactive application of SFAS 141(R) to fiscal years preceding the effective date are not permitted.

In April 2009 the FASB issued FSP FAS 141(R)-1 (primarily codified into Topic 805 of FASB ASC), “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies”. This FSP amends the guidance in SFAS 141 (R). This FSP is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The adoption of these statements had no material impact on the Company’s consolidated financial statements.

In June 2008 the FASB issued FSP Emerging Task Force (“EITF”) 03-6-1 (primarily codified into Topic 260 of FASB ASC), “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities.” FSP EITF 03-6-1 provides that unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. FSP EITF-03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those years. Upon adoption, a Company is required to retrospectively adjust its earnings per share data (including any amounts related to interim periods, summaries of earnings and selected financial data) to conform to the provisions of FSP EITF 03-6-1.  The adoption of these statements had no material impact on the Company’s consolidated financial statements.
 
-10-
 
In June 2009 FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets” — an amendment of SFAS No. 140” (“SFAS 166”)”, (primarily codified into Topic 860 of FASB ASC).  This statement removes the concept of a qualifying special-purpose entity which was primarily codified into Topic 810 of FASB ASC, Consolidation of Variable Interest Entities, to qualifying special-purpose entities.  This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. Earlier application is prohibited. The Company is currently evaluating the impact this statement may have on the consolidated financial statements.

In June 2009 the FASB issued SFAS No. 167, “Amendments to FASB interpretation No. 46(R)” (“SFAS 167”), (primarily codified into ASC Topic 810). This statement requires an analysis of existing investments to determine whether variable interest or interests gives the Company a controlling financial interest in a variable interest entity. This analysis identifies the primary beneficiary of a variable interest entity as the enterprise that has both the power to direct the activities of significant impact on a variable interest entity and the obligation to absorb losses or receive benefits from the variable interest entity that could potentially be significant to the variable interest entity. This statement requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. This statement is effective as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period, and for interim and annual reporting periods thereafter. Earlier application is prohibited. The Company is currently evaluating the impact this statement may have on the consolidated financial statements.

In June 2009 the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles (“US GAAP”) -a replacement of FASB Statement No. 162” (“SFAS 168”) (primarily codified into Topic 105 of FASB ASC). The FASB Accounting Standards Codification is intended to be the source of authoritative U.S. GAAP and reporting standards as issued by the Financial Accounting Standards Board. Its primary purpose is to improve clarity and use of existing standards by grouping authoritative literature under common topics. This statement is effective beginning with the quarter ended September 15, 2009.   The Codification does not change or alter existing GAAP; therefore, it does not have an impact on the Company’s consolidation financial statements.

In June 2009 the SEC released “Update of codification of Staff Accounting Bulletins”. This update amends or rescinds existing portions of the interpretive guidance included in the SEC’s Staff Accounting Bulletin Series to be consistent with the authoritative accounting guidance of SFAS No. 141 (revised 2007), “Business Combinations” (“SFAS 141(R)”) (primarily codified into Topic 805 of FASB ASC) and SFAS No. 160, “Non-controlling Interests in Consolidated Financial Statements” (“SFAS 160”) (primarily codified into Topic 810 of FASB ASC). This update is effective for the Company beginning with the first fiscal quarter of 2010 and will be utilized in conjunction with future business combinations and non-controlling interests.

In August 2009 the FASB issued Accounting Standards Update (“ASU”) No. 2009-05, “Fair Value Measurements and Disclosures (Topic 820) —Measuring Liabilities at Fair Value”. This statement includes amendments to Subtopic 820-10, “Fair Value Measurements and Disclosures—Overall”, for the fair value measurement of liabilities and provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update. This statement is effective for the first report period (including interim periods) beginning after issuance. The Company is currently evaluating the impact this statement may have on the consolidated financial statements.
 
In January 2010, FASB issued ASU 2010-02, “Accounting and Reporting for Decreases in Ownership of a Subsidiary- a Scope Clarification”, which addresses the accounting for non-controlling interests and changes in ownership interests of a subsidiary. ASU 2010-02 is effective for the interim or annual reporting periods ending on or after December 15, 2009, and must be applied retrospectively to interim or annual reporting periods beginning on or after December 15, 2008. The adoption of ASU 2010-02 had no impact on the Company's consolidated financial statements.
 
In January 2010, FASB issued ASU 2010-06, “Improving Disclosures about Fair Measurements”, which provides amendments to subtopic 820-10 that require separate disclosure of significant transfers in and out of Level 1 and Level 2 fair value measurements and the presentation of separate information regarding purchases, sales, issuances and settlements for Level 3 fair value measurements. Additionally, ASU 2010-06 provides amendments to subtopic 820-10 that clarify existing disclosures about the level of disaggregation and inputs and valuation techniques. ASU 2010-06 is effective for financial statements issued for interim and annual periods ending after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in the rollforward of activity in Level 3 fair value measurements, which are effective for interim and annual periods ending after December 15, 2010. The Company is currently evaluating the impact of the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. The Company is currently evaluating the impact this statement may have on the consolidated financial statements.
 
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In February 2010, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2010-09, Subsequent Events (Topic 855) Amendments to Certain Recognition and Disclosure Requirements, which amends disclosure requirements within Subtopic 855-10. An entity that is an SEC filer is not required to disclose the date through which subsequent events have been evaluated. This change alleviates potential conflicts between Subtopic 855-10 and the SEC's requirements. ASU 2010-09 is effective upon issuance. The Company is currently evaluating the impact this statement may have on the consolidated financial statements.

3.
GOING CONCERN

The consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable for a going concern which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. As of June 30, 2009, the Company has a working capital deficit of approximately $869,000 and has accumulated losses of approximately $7,190,000 since its inception.  Its ability to continue as a going concern is dependent upon the ability of the Company to obtain the necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due and upon profitable operations. The outcome of these matters cannot be predicted with any certainty at this time and raises substantial doubt that the Company will be able to continue as a going concern. These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

The Company intends to overcome the circumstances that impact its ability to remain a going concern through a combination of the growing high margin revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company anticipates raising additional funds through public or private financing, strategic relationships or other arrangements in the near future to support its business operations; however the Company may not have commitments from third parties for a sufficient amount of additional capital. The Company cannot be certain that any such financing will be available on acceptable terms, or at all, and its failure to raise capital when needed could limit its ability to continue its operations. The Company’s ability to obtain additional funding will determine its ability to continue as a going concern. Furthermore, additional equity financing may be dilutive to the holders of the Company’s common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that the Company relinquish valuable rights.
 
4.
ASSET PURCHASE AGREEMENT
 
On January 7, 2009, the Company entered into an Asset Purchase Agreement with American Eagle Transport LLC to purchase The AvocadoMan brand and an order processing web software system for $30,000.  The purchase price was paid in November 2008 and was included in other assets on the consolidated balance sheet at December 31, 2008.

During March 2009, the Company determined that the AvocadoMan brand has zero fair value and so recorded an impairment loss of $30,000. The Company's methodology to determine this impairment was based upon its assessment of future undiscounted cash flows and certain market-based assumptions.

5.
DUE FROM FACTOR

During April 2009, the company entered into an account receivable factoring facility with a financial service company specializing in short term financing facilities for produce companies with maximum borrowing of $1,500,000.

The financial service company advances 85% of qualified customer invoices to the Company and holds the remaining 15% as a reserve until the customer pays the financial services company.  The Company is charged .083% interest per day for all advances made to the Company.  Uncollectable customer invoices will be charged back to the Company.  At June 30, 2009, the advances from the factor amounted to $266,618, which was offset against due from factor of $311,374, net of accrued interest of $2,295.  Advances from the factor are collateralized by substantially all assets of the Company. (See Note 13)
 
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6.
INCOME TAXES

   
June 30, 2009
    
December 31, 2008
  
Share based compensation
   $ 2,116,000     $ 1,464,000  
 Start up costs
     286,000       191,000  
 Net operating losses
     156,000       23,000  
 Less: valuation allowance
     (2,558,000 )     (1,678,000 )
 Net deferred tax asset
   $ -     $ -  

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. As a result of uncertainty of achieving sufficient taxable income in the future, the Company has recorded a full valuation allowance against its deferred tax asset.

At June 30, 2009, the Company had net operating losses of approximately $391,000 that may be used to reduce future tax liabilities, including net operating losses of approximately $68,000 of NB Design at December 31, 2008 acquired per the Exchange Agreement. Such net operating losses expire through 2029 and may be limited as the annual amount available for use under Internal Revenue Code Section 382.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible
 
7.
PREFERRED STOCK

The Company has not assigned any preference rights to the preferred stock, nor has any preferred stock been issued as of June 30, 2009 and December 31, 2008.

8.
SHARE EXCHANGE AGREEMENT
 
On April 29, 2008, NB Design exchanged 9,299,972 shares of its common stock for 10,916,917 shares of Organic Texas common stock.  The shares were exchanged in two groups as follows:

 
Group A represents 44 Organic Texas stockholders that received Organic Texas common stock for consulting services, executive compensation and director compensation prior to the April 29, 2008 merger date.  These stockholders exchanged 10,331,917 shares of Organic Texas common stock for 8,714,972 shares of the NB Design common stock using the ratio of .8435 share of NB Design common stock to one share of Organic Texas common stock.
 
Group B represents 8 investors who received Organic Texas common stock for investing funds in Organic Texas prior to the April 29, 2008 merger date.  These stockholders exchanged 585,000 shares of Organic Texas common stock for 585,000 shares of NB Design common stock.

As part of the transaction, $200,000 was paid to certain shareholders of the Company by Organic Texas to re-purchase 500,000 shares of Company’s common stock.  These shares were subsequently retired.

 
 
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9.
EQUITY TRANSACTIONS
 
Unregistered Sales of Equity Securities:

In March 2008, the Company sold 335,000 unregistered shares of common stock (Group B, See Note 8) for $100,500. 
 
In March 2008, the Company issued 5,000,000 shares of common stock to Officers, Directors and a related party of the Company.  These shares were exchanged for 4,217,500 unregistered shares of the Company’s common stock (Group A, See Note 8) on April 29, 2008.  These shares were valued at $1,500,000 or $0.30 per share based on the sales price of shares to non-related third parties during March 2008.  

In March and April 2008, the Company issued 5,331,917 shares of common stock to consultants to perform services for the Company including legal, public relations, investor relations, and others.  These shares were exchanged for 4,497,472 unregistered shares of the Company’s common stock (Group A, See Note 8) on April 29, 2008.  These shares were valued at $1,599,575 or $0.30 per share based on the sales price of shares to non-related third parties during March and April 2008.  
 
In April 2008, the Company sold 250,000 unregistered shares of common stock (Group B, See Note 8) for $75,000 and 16,667 unregistered shares of common stock for $5,000.

During May 2008, the Company issued 90,000 unregistered shares or common stock to an attorney to perform legal services for the Company.  These shares were valued at $54,000 or $0.60 per share based on the closing price of the Company’s common stock on the date of the agreement.

During June 2008, the Company issued 30,000 unregistered shares of common stock to a consultant to perform accounting services for the Company.  These shares were valued at $30,300 or $1.01 per share based on the closing price of the Company’s common stock on the date of the agreement. 

During July 2008, the Company issued 73,000 unregistered shares of common stock to a group of six physicians that served on a medical advisory board for the Company.  These shares were valued at $72,270 or $0.99 per share based on the closing price of the Company’s common stock on the date of the agreement.

During July 2008, the Company issued 357,300 unregistered shares of common stock to a six individuals that performed investor relation services for the Company.  These shares were valued at $353,727 or $0.99 per share based on the closing price of the Company’s common stock on the date of the agreement.

During August 2008, the Company issued 10,000 unregistered shares of common stock to an individual that performed investor relation services for the Company.  These shares were valued at $10,300 or $1.03 per share based on the closing price of the Company’s common stock on the date of the agreement. Also during August 2008, the Company issued 5,000 unregistered shares of common stock to an individual that performed administrative services for the Company.  These shares were valued at $5,000 or $1.00 per share based on the closing price of the Company’s common stock on the date of the agreement. 
 
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During September 2008, the Company issued 50,000 unregistered shares of common stock to an individual that performed investor relation services for the Company.  These shares were valued at $45,500 or $0.91 per share based on the closing price of the Company’s common stock on the date of the agreement.

During January 2009 and March 2009, the Company exchanged 1,747,071 shares of its registered common stock from a group of investors and related parties for two shares of the Company’s unregistered common stock (3,493,476 shares).  The registered shares were transferred to Edge Trading, LLC and Partners in an unsuccessful attempt to obtain financing.  As part of the transaction an additional 2,000,000 unregistered shares of the Company’s common stock were transferred to this group in January 2009. These shares were valued at $535,488, or $0.10 and $0.07 per share based on the closing price of the Company’s common stock in January and March 2009, the dates of the shares were exchanged. The Company received proceeds of $25,000 from this transaction, the remaining $510,488 included in the general and administrative expense on the consolidated statement of operations for the six months ended June 30, 2009.

During February 2009, the Company compensated Thomas Morrison, chief executive officer, with 2,500,000 unregistered shares of the Company’s common stock, Parker Booth, president, with 645,000 unregistered shares of the Company’s common stock and a financial consultant, with 2,000,000 unregistered shares of the Company’s common stock for service to the Company.  The Company also compensated three investor relations consultants with a total of 270,000 unregistered shares of the Company’s common stock.  The total compensation was valued at $487,350 or $0.09 per share based on the closing price of the Company’s common stock on the date of the shares issued.

During June 2009, the Company compensated Dr. Corey Ruth, director, with 843,000 unregistered shares of the Company’s common stock, Parker Booth, CEO, with 1,500,000 unregistered shares of the Company’s common stock and a financial consultant, with 476,000 unregistered shares of the Company’s common stock for services to the Company.  The total compensation was valued at $620,180 or $0.22 per share based on the closing price of the Company’s common stock on the date of the shares issued.

Registered Sales of Equity Securities:
 
In May 2008, the Company sold 16,250 registered shares of common stock for $0.40 a share to an investor to help fund the Company.  The Company also sold 2,483,750 registered shares of common stock for $0.40 per share to an investor for a 90 day promissory note that bore interest at 8% per annum on any unpaid balance.  On December 31, 2008, the unpaid balance of $750,630 including accrued interest of $22,657 was written off as uncollectable.

10.  STOCK OPTIONS AND WARRANTS

Stock Options – Employment Contract: 

On October 1, 2008 we executed an employment contract with Mr. Booth as the Company’s President.  Mr. Booth’s employment contract was effective on November 15, 2008 provides for options to purchase 675,000 shares of the Company stock at $0.51 per share.  The options vest annually for three years beginning September 30, 2009.  The options expire five years from the date of the original grant.

The Company uses historical data to estimate option exercise and employee termination within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding.  The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.
 
The fair value was determined to be $100,230 utilizing the Black-Scholes option pricing model with the following assumptions: stock price $0.15, expected term of 5 years, expected dividends of 0, 246.3% volatility, and a risk-free interest rate of 2.31 %. The Company recognized compensation expense of $8,716 and $17,432 for three and six months ended June 30, 2009, respectively.
 
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Options Summary:

A summary of option activity as of June 30, 2009 and changes during the six months then ended is presented below:
 
 
Shares
  
Weighted
  
Weighted -
  
Weighted -
Average
Average
  
Average
Exercise
Remaining
  
Remaining
Price
Contractual
  
Contractual
 
Term
  
Term
                 
Options
                
Outstanding, January 1, 2009 and June 30, 2009
675,000
  
 $
           0.51
  
4.38
  
                                -
                 
 
A summary of the status of the Company's non-vested shares as of June 30, 2009 and changes during the six months then ended is presented below:
  
 
 
Shares
  
Weighted-
  
Average
  
Grant-Date
  
Fair Value
  
Non-vested Shares
        
Non-vested, January 1, 2009 and June 30, 2009
         675,000
  
$
                                     0.15
  


The Company expects to issues shares upon exercise of the options from its authorized shares of common stock.

Common Stock Warrants:

At June 30, 2009 and December 31, 2008 the Company had 6,000,168 warrants outstanding with an exercise price of $1.00 and an expiration date of December 31, 2011 (See Note 1).
 
11. 
RELATED PARTY TRANSACTIONS
 
Consulting agreement

On July 1, 2008, the Company signed a 16 month consulting agreement with a consultant and a shareholder of the Company. The consulting services include financial advisory, investment relations and certain administrative and other services for $6,250 monthly fees. At June 30, 2009 and December 31, 2008, the Company owed approximately $75,000 and $26,000, respectively related to above consulting services, which is included in accrued expenses and other current liabilities on the consolidated balance sheets.  Mr. Gallagher contributed approximately $11,500 to the Company during the six months ended June 30, 2009, which is included in $75,000.  This contract expired on October 31, 2009 and was not renewed.
 
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Notes payable

In September 2008, Earnest Mathis, a related party, advanced the Company $15,000. The advance is evidenced by a promissory note bearing interest at 10% per annum.  The unpaid balance including accrued interest was $16,186 at June 30, 2009.

During the fourth quarter of 2008 through June 30, 2009, Parker Booth, Chief Executive Officer, advanced the Company $248,730. The advances are evidenced by promissory notes bearing interest at 5% per annum.  The unpaid balance including accrued interest was $253,440 at June 30, 2009.    The promissory notes with accrued interest were due on various dates from March 2009 through October 2009. (See Note 13)
 
In June 2009, Dr. Corey Ruth, Director, advanced the Company $10,000. The advance is evidenced by a promissory note bearing interest at 5% per annum.  The unpaid balance including accrued interest was $10,026 at June 30, 2009. The promissory note includes the issuance of 33,000 shares of the Company’s common stock upon the maturity of the note as a financing incentive. The promissory note paid off during August 2009.  A total discount of $4,206 was taken on this note for the fair value of the shares of common stock issued during June 2009.

At June 30, 2009, notes payable was $276,157, net of $3,495 discount and include the accrued interest of $5,922. The Company amortized the discount using the effective interest rate method over the term of the promissory notes. The amortization of discount of $710 for the three and six months ended June 30, 2009, is included in interest expense on the consolidated statement of operations.
 
12. 
COMMITMENTS AND CONTINGENCIES
 
Operating Leases
 
From February 2008 through January 2009, the corporate office was in San Antonio, Texas.  The terms were $1,500 a month for one year.  In December 2008 the Company opened a new office in Salinas, California and moved the Corporate Office and terminated the lease in San Antonio after January 2009.  The Salinas lease for $2,230 per month terminated on December 31, 2009.  The Company is currently paying rent on a month to month basis.  Rent expense for the three  months ended June 30, 2009 and June 30, 2008 was approximately $7,000 and $4,500, respectively.  Rent expense for the six months ended June 30, 2009 and from the period February 19, 2008, date of inception to June 30, 2008 was approximately $15,000 and $7,500, respectively. The lease commitment at June 30, 2009 was approximately $13,000.

13. 
SUBSEQUENT EVENTS

In July 2009, Alicia Smith, Director, advanced the Company $35,000. The advances are evidenced by promissory notes bearing interest at 5% per annum.  The promissory note includes the issuance of 231,000 shares of the Company’s common stock upon the maturity of the note as financing incentive. The promissory note paid off during August  2009. The 231,000 shares of the Company’s common stock were issued during September 2009.

In July 2009, an individual advanced the Company $50,000. The advances are evidenced by promissory notes bearing interest at 5% per annum.  The promissory note includes the issuance of 166,000 shares of the Company’s common stock upon the maturity of the note as financing incentive. The promissory note matured on November 1, 2009. The Company issued 166,000 shares of the Company’s common stock during September 2009.  The note has not been paid off as of the date of this Form 10-Q.

During August 2009, Mike Rosenthal and Mark Klein joined the Company’s Board of Directors.  Both were to each receive 350,000 unregistered shares of the Company's common stock upon appointment to the board.  These shares were issued in March 2010.  The total compensation was valued at $91,000 or $0.13 per share based on the closing price of the Company’s common stock on the date of the agreement.

During September 2009, the Company issued 10,500 unregistered shares of common stock to an individual to become part of our medical advisory board.  These shares were valued at $788 or $0.075 per share based on the closing price of the Company’s common stock on the date of the agreement.

In October and December 2009, Mike Rosenthal, Director, advanced the Company $100,000 and $30,000, respectively, totaling $130,000. The advances are evidenced by promissory notes bearing interest at 5% per annum.  The promissory notes also include the issuance of 900,000 shares of the Company’s common stock to Mr. Rosenthal as a financing incentive.  These shares were issued to Mr. Rosenthal in March 2010. The October and December 2009 notes are due on March 31, 2010 and June 30, 2010, respectively.  The October note has not been paid back as of the date of this Form 10-Q.
 
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In November 2009, Morrison Partners, LLC, Tom Morrison, former Chairman of Board of the Company is the President, advanced the Company $10,000. The advance is evidenced by promissory note bearing interest at 5% per annum and due on June 30, 2010.  The promissory note also includes the issuance of 55,400 shares of the Company’s common stock to Mr. Morrison as a financing incentive.  These shares have not been issued to Morrison Partners, LLC.

In December 2009, Corey Ruth, Director, advanced the Company $50,000. The advance is evidenced by promissory notes bearing interest at 5% per annum.  The promissory note of matures on February 4, 2010, which includes the issuance of 200,000 shares of the Company’s common stock as financing incentive.  The loan was paid back in February 2010. The 200,000 shares of the Company’s common stock were issued to Mr. Ruth during March 2010.

On March 11, 2010, the Company accepted the resignation of Dr. Corey Ruth as Director of the Company.

During February 2010, Tom Morrison, Director loaned the Company $15,000 payable with interest at 5% and a maturity date of June 30, 2010.  

During March 2010, the Company issued Michael Rosenthal 50,000 unregistered shares of the Company's common stock for service to the Company. 
 
During March, 2010, an employee of the Company loaned the Company $16,000 payable with interest at 5% which is due on demand. The Company repaid $1,000 of the loan during March 2010.
 
During April 2010, we terminated our account receivable factoring facility with a financial services company. We are presently negotiating a factoring facility with a new financial services company.

During April 2010, the Company announced receiving a new loan from Mr. Parker Booth, CEO, for $136,560 ($50,000 was received in 2009) and consolidated his previous note dated December 10, 2009 into a single promissory note totaling $580,060 that pays interest at 5% and matures on December 31, 2010. 
 
During April 2010, a consultant was issued 500,000 unregistered shares of the Company’s common stock for investor relations.  These shares were valued at $0.04 per share.
 
On April 22, 2010, Tom Morrison, Non-Executive Chairman of the Board of Directors, informed the management of the Company that he was retiring from his position as the Company's Chairman.  The retirement was effective immediately.   There have been no disagreements between Mr. Morrison and the Company.  In connection with his retirement, Mr. Morrison gratuitously reconveyed to the Company for cancellation 1,500,000 shares of the Company’s common stock that was previously granted to him as compensation.
 
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion should be read in conjunction with the consolidated financial statements and related notes to the consolidated financial statements included elsewhere in this report. This discussion contains forward-looking statements that relate to future events or our future financial performance. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These forward-looking statements are based largely on our current expectations and are subject to a number of uncertainties and risks including the Risk Factors identified in our Annual Report on Form 10-K for the year ended December 31, 2008. Actual results could differ materially from these forward-looking statements. Organic Alliance, Inc. is sometimes referred to herein as “we”, “us”, “our” and the “Company”. 

OVERVIEW
 
Organic Alliance, Inc. brings together a unique alliance of respected growers, packers and shippers from around the world in order to source, market and distribute best-quality certified-organic, conventional, and certified Fair Trade food products.  Crops are grown, packed and shipped under Organic Alliance supervision using advanced quality, food safety and sustainable agriculture practices. In the case of our certified Fair Trade program, we work directly with the growers to develop the structure and standards to be certified under the Fair Trade Labeling Organization (FLO) standards. The Company’s Approved Origins™ Program delivers not only on-demand traceability through a partnership with Yottamark’s Harvestmark technology, but transparency in all business-critical practices, including leading-edge food safety practices, continuous improvement and work force fairness.

While we offer conventional fresh food products to our customers, our focus is on growing our certified organic and certified Fair Trade markets as these are areas we believe offer the most opportunity for growth and support.

Our primary go-to-market segments for supplying our products are the grocery channel, food service distribution, fresh processors, CPG, and the overseas markets focusing on those grocery chains and their importer partners. We currently supply product to these market segments with overseas markets in Europe and Asia being served.

Since we began marketing products in June 2009, we have been establishing supplies of organic fresh fruits and vegetables from several regions globally. We have made significant strides as we have established long-term relationships with growers in Mexico, USA, Argentina, Peru, and Costa Rica that will help ensure a continuous year round supply to our customers. We are continuing to expand our sourcing areas from other Latin America countries as well as from the Asia continent in 2010 and beyond.

We have added several sourcing areas that are Fair Trade certified and we have several projects in line for 2010 that will establish new products grown and packed by growers who have not had market access prior to the establishment of their cooperatives. This is the essence of our Company mission of helping improve the lives of growers and those in their community as well as providing our customers with this unique product so they can sell to those consumers who want to make a social and ecological difference.

Based on 2008 data from the Organic Monitor, the global organic food market grew by 13.7% in 2008 to reach a value of $52 billion.   In 2013, the market is forecast to have a value of $85.1 billion, an increase of 63.6% since 2008.   The sale of fruit and vegetables accounts for 36% of the market's value.  Based on 2008 data from FLO, Fair Trade certified sales amounted to approximately $4 billion worldwide, a 22% year-to-year increase. This leaves room for other innovative organizations like Organic Alliance to develop new solutions and build a leading position in this young and growing industry.

NB Design & Licensing, Inc., (“NB Design”) was organized in September 2001.  The former parent, New Bridge Products, Inc., was originally incorporated in August 1995 as a manufacturer of minivans and filed a petition in bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. Its Plan of Reorganization was approved by the U.S. Bankruptcy Court for the District of Arizona in September 2002 NB Design was discharged from bankruptcy in October 2002.   NB Design was inactive from October 2002 to April 29, 2008.

Organic Alliance Inc., a Texas corporation, (“Organic Texas”) was organized on February 19, 2008 to sell organically grown fruits and vegetables.

On April 29, 2008, NB Design, a Nevada corporation, acquired all 10,916,917 issued and outstanding shares of common stock and assumed all liabilities of Organic Texas for 9,299,972 shares of the NB Design’s shares of common stock. Organic Texas thereupon became a wholly owned subsidiary of NB Design. The business of Organic Texas is the only business of NB Design.
 
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 The acquisition of Organic Texas by NB Design on April 29, 2008 was accounted for as a reverse capitalization in accordance with the SEC’s Division of Corporate Financial Reporting manual Topic 12 “Reverse Acquisition and Reverse Capitalization”. The reverse capitalization was the acquisition of a private operating company (Organic Texas) into a non-operating public shell corporation with nominal net assets and as such is treated as a capital transaction, rather than a business combination. As a result no goodwill is recorded.  In this situation, NB Design is the legal acquirer because it issued its equity interests, and Organic Texas is the legal acquiree because its equity interests were acquired.  However, NB Design is the acquiree and Organic Texas as the acquirer for accounting purposes.  Organic Texas is treated as the continuing reporting entity that acquired the registrant, NB Design.  The pre-acquisition financial statements of Organic Texas are treated as the historical financial statements of the consolidated companies.  Pursuant to the Securities Exchange, NB Design issued 9,299,972 shares of our Common Stock for all of the issued and outstanding Common Stock of Organic Texas and assumed all assets and liabilities. NB Design also had outstanding 1,000,028 each of Class A, Class B, Class C, Class D, Class E and Class F warrants prior to April 29, 2008.  The warrants were exercisable at $2.00, $2.00, $4.00, $4.00, $6.00 and $6.00, respectively, at any time until December 31, 2008.  As a condition to close the Exchange Agreement, the exercise prices of the warrants were subsequently reduced to $1.00 per share for all classes of Warrants and the expiration date was extended to December 31, 2011.  In exchange for the exercise price reduction, the holders of at least 80% of the Warrants agreed to a call provision by us on 10 days notice to them if (i) the bid price of our common stock is quoted at $1.25 per share or higher and the average share volume exceeds 300,000 shares for at least one day, and (ii) the shares underlying the warrants are subject to a current registration statement on file with the Securities and Exchange Commission (SEC).  Both the share price and volume must be met on the same day for the call provision to be effective.   As of the date of this Form 10-Q the common shares are unregistered with the SEC.

On June 2, 2008, the name NB Design was changed to Organic Alliance, Inc.  On August 29, 2008, the name of Organic Texas was changed to Organic Texas, Inc.
 
We recorded our first sale in March 2009 and emerged from a development stage company during the second quarter of calendar year 2009.

Critical Accounting Estimates and Policies
 
Revenue Recognition
 
Starting in March 2009, our produce are sold to distributors and retailers (collectively the “customers”) for cash or on credit terms which are established in accordance with local and industry practices and typically require payment within 10 to 30 days of delivery.  Revenue is recorded when (1) the customer accepts delivery of the product and title has been transferred and the Company has no significant obligations remaining to be performed; (2) a final understanding as to specific nature and terms of the agreed upon transaction has occurred; (3) price is fixed and (4) collection is reasonably assured.  Sales are presented net of discounts and allowances. 
 
 Allowance for Doubtful Accounts
  
An allowance for uncollectible accounts receivable will be recorded based on a combination of aging analysis and any specific troubled accounts. Starting in 2009, our produce are sold to our customers for cash or on credit terms which are established in accordance with local and industry practices and typically require payment within 10 to 30 days of delivery. Accounts are written off when uncollectibility is confirmed. Subsequent recoveries, if any, are credited to the allowance account.

Share-Based Compensation

The Company expenses the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of such instruments. The Company uses the Black-Sholes model to calculate the fair value of the equity instrument on the grant date.

Impairment of Long-Lived and Intangible Assets

Long-lived assets consist of property and equipment and intangible assets. Intangible assets are comprised of AvocadoMan brand and an order processing web software system. The Company evaluates long-lived assets, including property and equipment and intangible assets, for impairment in accordance with Statement of Financial Accounting Standards No. 144 (“SFAS No. 144”) (primarily codified into Topic 360), “Accounting for the Impairment or Disposal of Long-Lived Assets” whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If the estimated future cash flows (undiscounted and without interest charges) from the use of an asset are less than the carrying value, a write-down would be recorded to reduce the related asset to its estimated fair value.
 
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When the Company determines that the carrying value of long-lived assets may not be recoverable based upon the existence of the above indicators of impairment and the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company believes the carrying value of its AvocadoMan brand name will not be recover in the future and so recorded impairment loss of $30,000.
 
Deferred Tax Assets

In assessing the realization of deferred tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. As a result of uncertainty of achieving sufficient taxable income in the future a full valuation allowance against its deferred tax asset has been recorded. If these estimates and assumptions change in the future, the Company may be required to reverse the valuation allowance against deferred tax assets, which could result in additional income tax income.

Debt Discount

Costs incurred with parties who are providing the actual long-term financing, which generally include the value of shares of the Company’s common stock are reflected as a debt discount. These discounts are amortized over the life of the related debt.  Amortization expense related to these costs and discounts is $711 for the six months ended June 30, 2009 and is included in interest expense.

Results of Operations

 Results of operations for the three months ended June 30, 2009 compared to the three months ended June 30, 2008

For the three months ended June 30, 2009, net sales of $1,174,661 were recorded compared to no revenue for the three months ended June 30, 2009.  During March 2009, we began selling organically and non-organically grown fruit and vegetables to our customers.
 
For the three months ended June 30, 2009, cost of goods sold was $1,144,705 compared to no cost of goods sold for the three months ended June 30, 2008. 
 
For the three months ended June 30, 2009, gross margin was $29,956 compared to no gross margin for the three months ended June 30, 2008. Until such time as we have sufficient capital to efficiently purchase our products we will continue to experience higher costs and such costs will not necessarily correlate directly to revenue.
 
For the three months ended June 30, 2009, general and administrative (G&A) expenses of $951,588 compared to $376,420 for the three months ended June 30, 2008.  The increase in G&A expenses of $575,168 are primarily attributable to increased stock compensation costs of approximately $353,000 for executive, director and financing compensation and by increased expenses for moving from a development stage to an operating Company.   A decrease of approximately 64,000 of professional fees primarily related to decreased investor relations’ spending was offset by approximately $234,000 for payroll expense and $52,000 for travel and entertainment expense, for director and officer, general liability and other insurance expense, rent expense, phone expense and other expenses.

For the three months ended June 30, 2009, operating loss was $921,632 compared to $376,420 for the three months ended June 30, 2008.
 
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For the three months ended June 30, 2009, other expense was $9,684 compared to other income of $10,578 for three months ended June 30, 2008.  The Company recorded interest expense of $3,112 and $460 on promissory notes payable to related parties and other for the three months ended June 30, 2009 and 2008, respectively.  The interest expense for the three months ended June 30, 2009 also includes $710 amortization of discount on notes payable and $5,861 related to factor advances.  During the three months ended June 30, 2008 a note receivable earned $11,038.  This notes receivable for $750,630 including accrued interest of $22,657 was deemed uncollectable and written off during the fourth quarter of 2009.  

For the three months ended June 30, 2009, net loss was $931,316 or $0.04 basic and basic and diluted loss per share compared to $365,842 or $0.03 basic and basic and diluted loss per share for the three months ended June 30, 2008. The $565,474 increase in net loss was primarily attributable to the decreased operating and other expenses described above.
 
Results of operations for the six months ended June 30, 2009 compared to the period from inception (February 19, 2008) to June 30, 2008

For the period from inception (February 19, 2008) until March 31, 2009, we were a development stage company with little revenues. We began to earn significant revenues during second quarter of  2009 and therefore we are no longer reporting as a development stage company.

For the six months ended June 30, 2009, net sales of $1,177,542 were recorded compared to no revenue for the period from inception (February 19, 2008) to June 30, 2008.
 
For the six months ended June 30, 2009, cost of goods sold was $1,146,829 compared to no cost of goods sold for the period from inception (February 19, 2008) to June 30, 2008. 
 
For the six months ended June 30, 2009, gross margin was $30,713 compared to no gross margin for the period from inception (February 19, 2008) to June 30, 2008.  Until such time as we have sufficient capital to efficiently purchase our products we will continue to experience higher costs and such costs will not necessarily correlate directly to revenue.
 
For the six months ended June 30, 2009, general and administrative (G&A) expenses of $2,228,597 compared to $3,285,734 for the period from inception (February 19, 2008) to June 30, 2008.  The decrease in G&A expenses of $1,057,137 are primarily attributable to decreased stock compensation costs of approximately $1,548,000.  A decrease of approximately $7,000 of professional fees primarily related to decreased investor relations’ spending was offset by increased expenses for moving from a development stage to an operating Company.   These increased operating expenses include approximately $383,000 for payroll expense, $54,000 for travel and entertainment expense, $19,000 for director and officer, general liability and other insurance expense, $11,000 for rent expense, $7,000 for phone expense and $24,000 for other expenses.

For the six months ended June 30, 2009, operating loss was $2,197,884 compared to $3,285,734 for the period from inception (February 19, 2008) to June 30, 2008.

For the six months ended June 30, 2009, other expense was $41,724 compared to other income of $10,534 for the period from inception (February 19, 2008) to June 30, 2008.  The interest expense of $11,724 for the six months ended June 30, 2009 includes, $5,153 of interest expense on promissory notes payable to related parties and other, $5,861 of interest expense related  to factor and $710 of amortization on discount of notes payable, The interest expense related to notes payable for the period from February 19, 2008, date of inception to June 30, 2008 was $504. During the six months ended 2009 the Company wrote-off a deposit related to an intangible asset that was deemed impaired. During the period from inception (February 19, 2008) to June 30, 2008 a Note Receivable earned $11,038.  This Notes Receivable for $750,630 including accrued interest of $22,657 was deemed uncollectable and written off during the fourth quarter of 2009. 
 
For the six months ended June 30, 2009, net loss was $2,239,608 or $0.10 basic and basic and diluted loss per share compared to $3,275,200 or $0.31 basic and basic and diluted loss per share for the period from inception (February 19, 2008) to June 30, 2008. The $1,035,592 decrease in net loss was primarily attributable to the decreased operating and other expenses described above.
 
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Liquidity and Capital Resources
 
Our operations to date have generated substantial losses that have been funded through the issuance of common stock and loans from related parties and other. We will require additional sources of outside capital to continue our operations. We expect that our primarily source of cash in the future will be from the issuance of common stock, loans, accounts receivable factoring and a line of credit.  During April 2010, we terminated our account receivable factoring facility with a financial services company. We are presently negotiating a factoring facility with a new financial services company.
 
Our financial statements contained within have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. For the period from inception (February 19, 2008) to June 30, 2009, we reported a net loss of $7,189,585.  Our ability to continue as a going concern is dependent upon achieving sales, profitability and our ability to obtain the necessary financing to meet our obligations and pay our liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time and raise substantial doubt that we will be able to continue as a going concern. The financial statements contained in this Form 10-Q do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. We anticipate that additional funding may be generated from the sale of common shares and/or debt with an equity feature and from asset based financing or factoring.

Generally, we have primarily financed operations to date through the proceeds of the private placement of equity securities and the issuance of promissory notes.

 For the period from inception (February 19, 2008) to June 30, 2008 we sold 617,917 shares of our common stock for $187,000

During May 2008, we also sold 2,483,750 shares of our common stock for $0.40 per share to an investor for a 90 day promissory note that bore interest at 8% per annum on any unpaid balance.  The unpaid balance of $750,630 including accrued interest of $22,657 was deemed uncollectable and written off as of December 31, 2008.

In September 2008, Earnest Mathis, a related party, advanced the Company $15,000. The advance is evidenced by a promissory note bearing interest at 10% per annum.  The unpaid balance including accrued interest was $16,186 at June 30, 2009.

During the fourth quarter of 2008 through June 30, 2009, Parker Booth, Chief Executive Officer, advanced the Company $248,730. The advances are evidenced by a promissory note bearing interest at 5% per annum.  The unpaid balance including accrued interest was $253,235 at June 30, 2009.

During June 2009, a director of the Company advanced $10,000, which paid off by the Company with accrued interest thereon during August 2009. The unpaid balance including accrued interest was $10,230 at June 30, 2009.

We have limited funding available for marketing and will rely solely on our ability to raise debt or equity funds in the immediate future.

Our contractual obligation consists of current notes payable to an officer, director and related party.  Our total obligation was $276,157 (net of discount on notes payable of $3,495) for the notes at June 30, 2009.  As of the date of this Form 10-Q, we have paid $10,000 retire one of these notes.

In December 2008 the Company opened a new office in Salinas, California and moved the Corporate Office.  The Salinas lease for $2,230 per month terminated on December 31, 2009.  The lease commitment at June 30, 2009 was approximately $13,000. The Company is currently paying rent on a month to month basis. 

Net Cash Flows
 
For the six months ended June 30, 2009, net cash used in operating activities was $112,137 compared to $68,813 for the period from inception (February 19, 2008) to June 30, 2008.  The increase of $43,324 was attributable to higher general and administrative spending and our initial account receivable balance offset by much higher accounts payable and accrued expenses as we moved from a development stage company during the second quarter of 2009.

For the six months ended June 30, 2009, net cash provided by financing activities was $195,230 compared to $107,801 for the period from inception (February 19, 2008) to June 30, 2008.  The increase of $87,429 was related to increases in loans and advances from officer, directors and others.
 
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At June 30, 2009 and December 31, 2008, we had 675,000 stock options and 6,000,128 common stock purchase warrants outstanding. The outstanding stock options have a weighted average exercise price of $0.51 per share. The outstanding warrants have a weighted average exercise price of $1 per share. Accordingly, at June 30, 2009, the outstanding options and warrants represented a total of 6,675,128 shares issuable for a maximum of $6,344,378 if these options and warrants were exercised in full. The exercise of these options and warrants is at the discretion of the holder while the holders of at least 80% of the Warrants agreed to a call provision by us on 10 days’ notice to them if (i) the bid price of our common stock is quoted at $1.25 per share or higher and the average share volume exceeds 300,000 shares for at least one day, and (ii) the shares underlying the warrants are subject to a current registration statement on file with the SEC. The 6,000,128 warrants have not been registered with the SEC as of the date of this Form 10-Q.  There is no assurance that any of these options or any additional warrants will be exercised.

Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
Not applicable to smaller reporting companies.
 
ITEM 4. CONTROLS AND PROCEDURES
 
Evaluation of Disclosure Controls and Procedures  
            
Our management team, under the supervision and with the participation of our principal executive officer/financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of the last day of the fiscal period covered by this report, June 30, 2009. The term disclosure controls and procedures means our controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our principal executive officer/principal financial officer is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Management is required to base its assessment of the effectiveness of our internal control over financial reporting on a suitable, recognized control framework, such as the framework developed by the Committee of Sponsoring Organizations (COSO). The COSO framework, published in Internal Control-Integrated Framework, is known as the COSO Report. Our principal executive officer /principal financial officer, has chosen the COSO framework on which to base its assessment. Based on this evaluation, our principal executive officer/principal financial officer concluded that our disclosure controls and procedures were not effective as of June 30, 2009.

The controls designed were adequate for financial disclosures required for the preparation of the 10-Q filing; however due to lack of resources in the company’s accounting department the controls were not operating effectively. The remediation plan for improving the effectiveness over financial disclosure controls, which caused the material weakness over financial disclosures required in the 10-Q, include the creation of a financial disclosures roll-forward model in accordance with the disclosures contained in the 10-Q report.  This model will be maintained and updated by Company staff and management as new business transactions require additional financial disclosures. As the Company obtains additional  resources these financial disclosures will be reviewed by an outside financial disclosure expert for completeness and accuracy earlier in the financial statement closing process cycle in order to help ensure completeness and accuracy for reporting financial disclosures.  We intend to hire a full time Chief Financial Officer to augment our internal controls procedures and expand our accounting staff.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
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PART II-OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS

In the normal course of business, the Company is, and in the future may be, subject to various disputes, claims, lawsuits, and administrative proceedings arising in the ordinary course of business with respect to commercial, product liability, employment, and other matters, which could involve substantial amounts of damages. In the opinion of management, any liability related to any such known proceedings would not have a material adverse effect on the business or financial condition of the Company.  Additionally, from time to time, we may pursue litigation against third parties to enforce or protect our rights under our trademarks, trade secrets and our intellectual property rights generally.

During April 2010, the Company was served with two lawsuits for past due liabilities of the Company.  The first lawsuit was Executive Dynamics Search, Inc., plaintiff, vs. Organic Alliance, Inc., defendant, for approximately $97,000 plus attorney fees and interest. The suit was filed in the Superior Count of California, case number 37-2010-00053560-CU-BC-NC.  Executive Dynamics Search, Inc. provided executive placement services to the Company.  The second lawsuit was Full Circle Sales, Inc, plaintiff, vs. Organic Alliance, Inc., defendant, for approximately $257,000 plus attorney fees and interest. The suit was filed in the United States District Count for the Northern District of California, case number CV10-01615. Full Circle Sales, Inc. is a produce supplier of the Company.

ITEM 1a. RISK FACTORS
 
Not applicable to smaller reporting companies
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
Since February 19, 2008, the Company has issued the following shares of its securities:
 
All of the securities set forth below, except as otherwise indicated, were issued by us pursuant to Section 4(2) of the Securities Act of 1933 as amended. Unless indicated, all such shares issued contained a restrictive legend (unregistered) and the holders confirmed that they were acquiring the shares for investment and without intent to distribute the shares. All of the purchasers were friends or business associates of our management, had access to all information related to us, were experienced in making speculative investments, understood the risks associated with investments, and could afford a loss of the entire investment.
 
 
 
(i)
During 2009, officers, directors and related parties were issued 8,234,000 unregistered shares of the Company’s common stock for director, officer and administrative services compensation.  These shares were valued from $0.09 to $0.22 per share
 
 
(ii)
During 2009, we issued 440,500 unregistered share of the Company’s common stock to a group of five consultants for investor relations, medical advisory and for a financing incentive.  These shares were valued from $0.08 to $0.22 per share.
 
 
(iii)
During January 2009 and March 2009, the Company exchanged a total of 1,747,071 shares of our registered common stock from a group of investors and related parties for two shares of the Company’s unregistered common stock (3,493,476 shares).  The registered shares were transferred to group of financing partners in an unsuccessful attempt to obtain capital.  As part of this transaction, an additional 2,000,000 unregistered shares of the Company’s common stock were transferred to this group in January 2009.
 
 
(iv)
During March 2010, directors were issued 1,850,000 unregistered shares of the Company’s common stock for director compensation and financing incentive.  These shares were valued from $0.08 to $0.13 per share.
     
 
(v)
During April 2010, a consultant was issued 500,000 unregistered shares of the Company’s common stock for Investor relations.  These shares were valued at $0.04 per share.
 
 
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ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
We have no senior securities during the period covered by this report.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters have been submitted to a vote of security holders during the period covered by this report.
 
ITEM 5. OTHER INFORMATION
 
There is no information with respect to which information is not otherwise called for by this form.
 
ITEM 6. EXHIBITS
 
31.1
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
   
32.1
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act
 

 
 
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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
ORGANIC ALLIANCE, INC.
   
 
By: /s/ Parker Booth
 
Parker Booth
 
Chief Executive Officer, Chief Financial Officer (Principal
 
Accounting Officer) and Director
   
 
Date: May 18, 2010

 


 
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