10-Q/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________

FORM 10-Q/A

(Amendment No. 1 )

_________________

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

For the quarterly period ended: September 30, 2012

or

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

For the transition period from: ______ to ______

_________________

Organic Alliance , INC.

(Exact name of registrant as specified in its charter) 

_________________

Nevada	000-29711	20-0853334
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation or Organization)	File Number)	Identification No.)

401,Monterey Street, Suite 202,Salinas, CA 93901
(Address of Principal Executive Offices) (Zip Code)

(831) 240-0295
(Registrant’s telephone number, including area code)

N/A
(Former name or former address and former fiscal year, if changed since last report)

_________________

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  þ

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  þ     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.

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

Class	Outstanding at November 30, 2012
Common stock, $0.0001 par value	16,974,165

EXPLANATORY NOTE

The purpose of this Amendment No. 1 to the Organic Alliance Inc. Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2012, filed with the Securities and Exchange Commission on November 14, 2012 (the “Form 10-Q”), is to re-furnish Exhibit 101 to the Form 10-Q in accordance with Rule 405 of Regulation S-T and to reference such Exhibit in the Exhibit table. Exhibit 101 provides the financial statements and related notes from the Form 10-Q formatted in XBRL (eXtensible Business Reporting Language). The registrant filed Exhibit 101 with the Form 10-Q, however Exhibit 101 does not appear on the SEC website for some reason unknown to the Company. The Company has elected to file this Amendment No. 1 in order to furnish Exhibit 101 again.

This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way disclosures made in the Form 10-Q.

ITEM 6. EXHIBITS

31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
31.2	Certification of Principal Financial 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
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act
101*	The following financial information from the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2012, formatted in Extensible Business Reporting Language: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Cash Flows; and (iv) the Notes to the Condensed Consolidated Financial Statements.

**furnished herewith

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this Amendment No. 1 to its 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, and Director

Date: November 30, 2012

By: /s/ Barry Brookstein

Barry Brookstein

Chief Financial Officer

Date: November 30, 2012

EXHIBIT INDEX

EXHIBIT NO.	DESCRIPTION
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
31.2	Certification of Principal Financial 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
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act
101*	The following financial information from the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2012, formatted in Extensible Business Reporting Language: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Cash Flows; and (iv) the Notes to the Condensed Consolidated Financial Statements.

** Furnished, not filed, herewith

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Notes payable, Loans and Derivative Liabilities:Convertible Notes Payable Derivative and Hedging(Details Narrative) (USD $) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended		1 Months Ended	3 Months Ended		9 Months Ended			3 Months Ended			9 Months Ended			9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended		3 Months Ended	12 Months Ended		3 Months Ended	9 Months Ended	3 Months Ended
	Feb. 28, 2012 Note 7 Note Payable Related Party	Sep. 30, 2012 Note 7 Note Payable Related Party	Sep. 30, 2012 Note 7 Note Payable Related Party	Sep. 30, 2012 Note 7 Convertible Note Payable	Feb. 28, 2010 Note 4 Note Payable Related Party	Sep. 30, 2012 Note 4 Convertible Note Payable	Sep. 30, 2011 Note 4 Convertible Note Payable	Sep. 30, 2012 Note 4 Convertible Note Payable	Sep. 30, 2011 Note 4 Convertible Note Payable	Jun. 15, 2011 Note 4 Convertible Note Payable	Sep. 30, 2012 Note 4 Notes Payable	Sep. 30, 2012 Note 1 Convertible Note Payable	Mar. 31, 2012 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Convertible Note Payable	Jul. 14, 2010 Note 1 Convertible Note Payable	Feb. 18, 2011 Note 2 Note Payable Related Party	Sep. 30, 2012 Note 2 Convertible Note Payable	Jul. 30, 2010 Note 2 Convertible Note Payable	Sep. 30, 2012 Note 2 Notes Payable	Sep. 30, 2011 Note 2 Notes Payable	Sep. 30, 2012 Note 2 Notes Payable	Sep. 30, 2011 Note 2 Notes Payable	Sep. 30, 2012 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Note Payable Related Party	Oct. 17, 2011 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Convertible Note Payable	Sep. 30, 2012 Note 6 Convertible Note Payable	Mar. 02, 2012 Note 6 Convertible Note Payable	Sep. 30, 2012 Note 6 Notes Payable	Dec. 31, 2011 Note 5 Convertible Note Payable	Jun. 15, 2011 Note 5 Convertible Note Payable	Sep. 30, 2012 Note 5 Notes Payable	Sep. 30, 2012 Note 3 Convertible Note Payable	Sep. 30, 2012 Note 3 Notes Payable
Fair Market Value				$ 482,861						$ 50,000					$ 52,380	$ 68,824		$ 8,000							$ 105,363			$ 789,073			$ 95,497		$ 60,000
Debt Discount	$ 7,997	$ 2,592	$ 7,997	$ 64,116	$ 2,935	$ 12,500	$ 0	$ 22,917	$ 14,583		$ 2,271	$ 6,548	$ 13,095	$ 9,526			$ 1,333		$ 21,038	$ 15,300	$ 63,114	$ 59,289	$ 0	$ 85,342		$ 443,655	$ 789,073		$ 2,019	$ 95,497		$ 4,748	$ 60,000	$ 7,392

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Commitments and Contingencies Litigation (Details Narrative) (USD $) (USD $)	9 Months Ended
	Sep. 30, 2012
Lawsuit 3
Litigation
Plantiffs Paid	$ 30,000
Damages Sought	34,000	[1]
Lawsuit 2
Litigation
Plantiffs Paid	31,000
Litigation Fees	97,000
Lawsuit 1
Litigation
Balance Due on Litigation	$ 21,000

[1] principal plus interest at 18% per annum and attorney fees

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Related Party Transactions (Details Narrative) (USD $)	0 Months Ended			1 Months Ended	9 Months Ended
	Jul. 01, 2008	Sep. 30, 2012	Dec. 31, 2011	Feb. 29, 2012 Employee	Sep. 30, 2012 Employee
Monthly Consulting Fees	$ 6,250
Consulting Fees		100,000	100,000
Options				300,000
Per Share				$ 0.25
Life				3 years
Stock Based Compensation Expense					$ 6,149

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Notes payable, Loans and Derivative Liabilities - Notes payable (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Notes to Financial Statements
Notes Payable (net of debt discount of $11,597 at September 30, 2012 and $63,114 at December 31, 2011) (A)	$ 863,214	$ 551,978
Notes Payable – Related Parties (net of debt discount of $50,053 at December 31, 2011) (B)	570,494	348,130
Convertible Notes Payable (net of debt discount of $418,745 at September 30, 2012 and $41,469 at December 31, 2011) (C)	1,530,925	228,441
Total	$ 2,964,633	$ 1,128,549

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Summary of Significant Accounting Policies (Details Narrative) (USD $) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Allowance for Doubtful Accounts	$ 0	$ 77,969
Inventory	$ 244,630	$ 0
Maximum
Factoring Accounts Receivable, fees	5.00%
Minimum
Factoring Accounts Receivable, fees	3.00%

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Subsequent Events (Details Narrative) (USD $)	0 Months Ended
	Oct. 12, 2012 Investor	Oct. 10, 2012 Promissory Note
Warrants Issued	50,000
Exercise Price	0.50
Conversion price		$ 0.05
Convertible Note	$ 25,000	$ 57,500
Common stock, issued		1,265,000

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Stock options and Warrants (Details Narrative) (USD $)	3 Months Ended	9 Months Ended	0 Months Ended		4 Months Ended	0 Months Ended	1 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Jul. 03, 2011 VicePresidentMember	Jan. 06, 2012 Director of Sales	May 01, 2012 Director of Sales	May 18, 2012 Director of National Sales	Apr. 24, 2012 Director of National Procurement	Aug. 31, 2012 Manager, National Retail Sales
Options			2,950,000	1,500,000		500,000	325,000	396,427
Per Share			$ 0.20	$ 0.20		$ 0.25	$ 0.25	$ 0.35
Life			7 years	5 years		3 years	3 years	3 years
Options Vested			1,180,000	250,000	250,000	134,000	100,000	135,714
Options vest each year			295,000	416,667		132,000	75,000	86,904
Fair Value options			$ 317,400	$ 44,000	$ 7,400	$ 33,900	$ 18,400	$ 102,524	[1]
Forfeitures					1,250,000
Stock Based Compensation Expense	$ 35,099	$ 97,722

[1] Final 86,905 shares on March 6, 2015

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Notes payable, Loans and Derivative Liabilities:Notes Payable-Convertible Notes Payable 1(Details Narrative) (USD $) (USD $)	0 Months Ended	3 Months Ended	9 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended	3 Months Ended	0 Months Ended		1 Months Ended				3 Months Ended		9 Months Ended			9 Months Ended		0 Months Ended	12 Months Ended		9 Months Ended		3 Months Ended	0 Months Ended	3 Months Ended		9 Months Ended			1 Months Ended				3 Months Ended	1 Months Ended	9 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended	1 Months Ended	9 Months Ended			3 Months Ended	1 Months Ended	9 Months Ended			3 Months Ended		9 Months Ended
	Mar. 02, 2012 Note 6 Convertible Note Payable	Sep. 30, 2012 Note 6 Convertible Note Payable	Sep. 30, 2012 Note 6 Convertible Note Payable	Oct. 17, 2011 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Note Payable Related Party	Dec. 31, 2011 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Notes Payable	Jul. 14, 2010 Note 1 Convertible Note Payable		Sep. 30, 2011 Note 1 Convertible Note Payable	Mar. 31, 2011 Note 1 Convertible Note Payable	Dec. 31, 2010 Note 1 Convertible Note Payable	Sep. 30, 2010 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Convertible Note Payable	Mar. 31, 2012 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Note Payable Related Party	Dec. 31, 2011 Note 1 Note Payable Related Party	Sep. 30, 2012 Note 1 Notes Payable	Dec. 31, 2011 Note 1 Notes Payable	Jun. 15, 2011 Note 5 Convertible Note Payable	Dec. 31, 2011 Note 5 Convertible Note Payable	Sep. 30, 2012 Note 5 Convertible Note Payable	Sep. 30, 2012 Note 5 Note Payable Related Party	Dec. 31, 2011 Note 5 Note Payable Related Party	Sep. 30, 2012 Note 5 Notes Payable	Jun. 15, 2011 Note 4 Convertible Note Payable	Sep. 30, 2012 Note 4 Convertible Note Payable	Sep. 30, 2011 Note 4 Convertible Note Payable	Sep. 30, 2012 Note 4 Convertible Note Payable	Sep. 30, 2011 Note 4 Convertible Note Payable	Dec. 31, 2011 Note 4 Convertible Note Payable	Feb. 28, 2010 Note 4 Note Payable Related Party		Sep. 30, 2012 Note 4 Note Payable Related Party	Dec. 31, 2011 Note 4 Note Payable Related Party	Sep. 30, 2012 Note 4 Notes Payable	Aug. 31, 2012 Note 7 Convertible Note Payable	Sep. 30, 2012 Note 7 Convertible Note Payable	Feb. 28, 2012 Note 7 Note Payable Related Party	Sep. 30, 2012 Note 7 Note Payable Related Party	Sep. 30, 2012 Note 7 Note Payable Related Party	Apr. 28, 2011 Note 3 Convertible Note Payable	Sep. 30, 2012 Note 3 Convertible Note Payable	Dec. 31, 2011 Note 3 Convertible Note Payable	Feb. 18, 2011 Note 3 Note Payable Related Party	Sep. 30, 2012 Note 3 Notes Payable	Jul. 30, 2010 Note 2 Convertible Note Payable	Sep. 30, 2012 Note 2 Convertible Note Payable	Dec. 31, 2011 Note 2 Convertible Note Payable	Feb. 18, 2011 Note 2 Note Payable Related Party	Sep. 30, 2012 Note 2 Notes Payable	Sep. 30, 2011 Note 2 Notes Payable	Sep. 30, 2012 Note 2 Notes Payable	Sep. 30, 2011 Note 2 Notes Payable	Dec. 31, 2011 Note 2 Notes Payable
Convertible Promissory Note	$ 1,000,000		$ 850,000	$ 400,000		$ 125,000	$ 275,000	$ 30,000	$ 52,380								$ 0	$ 15,000		$ 20,000		$ 109,822			$ 65,958		$ 60,000	$ 57,500						$ 25,000	[1]			$ 30,000	$ 3,000,000				$ 50,000	$ 70,588				$ 60,000	$ 8,000						$ 500,000
Maturity date	Sep. 02, 2012			Apr. 17, 2012				Nov. 21, 2012	Sep. 13, 2012									Sep. 13, 2009									Nov. 20, 2012											Nov. 05, 2012					Aug. 28, 2012	May 31, 2011				Oct. 29, 2012	Mar. 02, 2011
Interest rate	18.00%			21.00%					20.00%									10.00%		6.00%					5.00%									5.00%									21.00%						6.00%						15.00%
Terms	Three-year warrants to purchase an aggregate of 2,500,000 shares the Company’s common stock (2.5 shares for each $1 of the principal amount of the notes purchased) exercisable at $0.10 per share. The notes bear interest at 18% and have various maturity dates beginning September 2, 2012. At the time of any new debt or equity financing by the Company, the principal and interest then due under the notes may be converted into the number of fully paid and non-assessable debt instruments, shares/or units issued in the financing. Notes in the aggregate principal amount of 850,000 and warrants to purchase an aggregate of 2,125,000 were sold in the offering. In addition, the investment banker who facilitated the sale of the notes and warrants received a three-year warrant to purchase 212,500 shares of the Company’s common stock equal (10% of the number of shares of common stock issuable upon exercise of the warrants sold in the offering) exercisable at $0.10 per share.								Note	[2]												an original issue discount of 15%. The convertible promissory note has a maturity date of the earlier of (i) the Company raising debt or equity financing of $600,000 or more, or (ii) June 14, 2012. The note may be converted into the Company's common stock by the holder at $0.05 per share. The Company received a waiver from the lender on September 1, 2011 that waives the provision for payment upon the Company closing a debt or equity financing of $600,000 or more. As a financing incentive, the lender received five-year warrants vesting June 15, 2011, to purchase 575,000 shares of Company’s common stock at an exercise price of $0.25 per share.						an original issue discount of 15%. The convertible promissory note has a maturity date of the earlier of (i) the Company raising debt or equity financing of $600,000 or more, or (ii) June 14, 2012. The note may be converted into the Company's common stock by the holder at $0.05 per share. The Company received a waiver from the lender on September 1, 2011 that waives the provision for payment upon the Company closing a debt or equity financing of $600,000 or more. As a financing incentive, the lender received five-year warrants vesting June 15, 2011, to purchase 575,000 shares of Company’s common stock at an exercise price of $0.25 per share.											Three-year warrants to purchase an aggregate of 6,000,000 shares the Company’s common stock (two shares for each $1 of the principal amount of the notes purchased) exercisable at $0.50 per share. The notes bear interest at 18% and have various maturity dates beginning March 13, 2013. At the time of any new debt or equity financing by the Company, the principal and interest then due under the notes may be converted into the number of fully paid and non-assessable debt instruments, shares/or units issued in the financing. During the three months ended September 30, 2012, notes in the aggregate principal amount of $850,000 and warrants to purchase an aggregate of 1,700,000 shares of the Company’s common stock were sold in the offering. In addition, the investment banker who facilitated the sale of the notes and warrants received a three-year warrant to purchase 170,000 shares of the Company’s common stock equal (10% of the number of shares of common stock issuable upon exercise of the warrants sold in the offering) exercisable at $0.50 per share.	Thereafter, additional notes in the aggregate principal amount of $22,500 ($872,500 for the entire offering) and additional warrants to purchase an aggregate of 45,000 shares of the Company’s common stock (1,745,000 for the entire offering) were sold in the offering, and the investment banker received a warrant to purchase an additional 4,500 shares of the Company’s common stock in connection therewith. The Company currently is seeking to amend the notes to remove the conversion right and extend the due date to June 30, 2013, and to amend the warrants to remove certain anti-dilution provisions. Each holder of notes and warrants who agrees to such amendments will be granted a warrant to purchase that number of shares of the Company’s common stock equal to 0.5 times the principal amount of the note amended, exercisable at $0.50 per share (437,500 shares in the aggregate if all of the note holders agree to such amendments).				an original issue discount of 15%. The convertible promissory note has a maturity date of the earlier of (i) the Company raising debt or equity financing of $600,000 or more, or (ii) May 31, 2011. The note may be converted into the Company's common stock by the holder at $0.05 per share. The Company has not made a note payment and received a waiver from the lender on September 1, 2011 that defers payment until May 31, 2012 and waives the provision for payment upon the Company closing a debt or equity financing of $600,000 or more. The Company is currently negotiating an extension of such loan. As a financing incentive, the lender received five-year warrants vesting April 28, 2011, to purchase 705,882 shares of Company’s common stock at an exercise price of $0.25 per share.
Common Stock in Escrow									25,000
Note Payable		851,329	851,329		406,740	406,740	283,993	27,981										21,068	19,942	22,744	21,845		109,789	109,789	53,934	59,974	55,253		57,500		57,500		57,500			28,411	27,472	28,865		851,421					70,588	70,588	57,879	56,304		9,043	8,683	231,514	672,068		672,068		593,247
Conversion price								$ 0.50			$ 0.045	$ 0.0252	$ 0.14	$ 0.099		$ 0.0405				$ 1.00							$ 0.50											$ 0.50										$ 0.50	$ 0.05				$ 0.01		$ 0.01
Fair Market Value	789,073			105,363					52,380													95,497						50,000												482,861					60,000				8,000			68,824
Convertible Note											20,000	5,000	7,500	7,500		12,380
Common stock, issued											444,444	198,413	53,419	75,758		305,679						1,098,220						575,500			1,265,000													705,882
Debt Discount Interest Expense		$ 443,655	$ 789,073		$ 0	$ 85,342		$ 2,019							$ 6,548	$ 13,095	$ 9,526						$ 95,497				$ 4,748		$ 12,500	$ 0	$ 22,917	$ 14,583		$ 2,935				$ 2,271		$ 64,116	$ 7,997	$ 2,592	$ 7,997		$ 60,000			$ 7,392		$ 1,333			$ 21,038	$ 15,300	$ 63,114	$ 59,289

[1] advanced to the Company $10,000 and $15,000, respectively

[2] The note can be converted into the Company's common stock by the holder based on a variable conversion price. The variable conversion price is defined in the note as 45% multiplied by the average of the five lowest intraday prices for the Company's stock during the previous 20 trading days prior to the date of conversion. The total conversion may not exceed 4.99% of the Company's common stock issued and outstanding.

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Commitments and Contingencies Agreements(Details Narrative) (USD $)	0 Months Ended	13 Months Ended		1 Months Ended		3 Months Ended	9 Months Ended	13 Months Ended
	Nov. 02, 2010 Attorney	Aug. 31, 2012 Attorney	Aug. 31, 2011 Attorney	Sep. 30, 2011 Investment Banking Services	Sep. 27, 2010 Investment Banking Services	Sep. 30, 2012 Investment Banking Services	Sep. 30, 2012 Investment Banking Services	Aug. 31, 2012 Investment Banking Services	Aug. 31, 2011 Investment Banking Services	Sep. 30, 2011 Investment Banking Services Additional
Warrants Issued	460,821	692,802		195,291	74,850			899,672
Exercise Price	0.01		0.10		0.001				0.10	0.001
Warrants Issued, Value					19,443
Stock Based compensation charge						$ 4,700	$ 14,422

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Due to Factor

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Due to Factor

4 . DUE TO FACTOR

On November 1, 2010, the Company entered into a new one year accounts receivable factoring facility with a financial services company with maximum borrowings of $1,800,000. The financial services company commenced funding during February 2011. The contract expired on October 31, 2011, and the Company has been operating on a month to month basis since then. The financial services company advances up to 80% of qualified customer invoices, less applicable discount fees, and holds the remaining 20% as a reserve until the customer pays the financial services company. The released reserves are used to fund other vendor purchases or returned to the Company. The Company is charged 3% for the first 30 days outstanding plus 1/10 of 1% daily for funds outstanding over 30 days. Uncollectable customer invoices are charged back to us. At September 30, 2012 the advances from the factor, inclusive of fees, amounted to $227,757 which was offset against due from factor of $78,915. Advances from the factor are collateralized by substantially all assets of the Company.

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Stock options and Warrants - Options Summary (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Common Stock Warrants
Stock Options
Granted	5,241,936	5,787,290
Exercised	899,672
Forfeited/cancelled		(320,008)
Weighted Average Exercise Price
Outstanding	$ 0.12	$ 15.20
Granted	$ 0.27	$ 0.12
Exercised	$ 0.10
Forfeited/cancelled		$ 18.81
Balance	$ 0.21	$ 0.12
Exercisable at September 30, 2012	$ 0.21	$ 0.12
Weighted Remaining Contractual Life (Years)
Exercisable at September 30, 2012	2 years 6 months 7 days
Intrinsic Value
Balance	$ 4,465,814
Exercisable at September 30, 2012	4,465,814
Options
Stock Options
Common Stock Options, Outstanding	2,983,750	33,750
Granted	2,721,427	2,950,000
Exercised
Forfeited/cancelled	(1,250,000)
Common Stock Options, Outstanding	4,455,177	2,983,750
Exercisable at September 30, 2012	2,389,464
Weighted Average Exercise Price
Outstanding	$ 0.31	$ 10.20
Granted	$ 0.24	$ 0.20
Exercised
Forfeited/cancelled	$ 0.20
Balance	$ 0.030	$ 0.31
Exercisable at September 30, 2012	$ 0.030	$ 0.31
Weighted Remaining Contractual Life (Years)
Balance outstanding	4 years	3 years 8 months 8 days
Granted	3 years 0 months 9 days	7 years
Balance outsanding	3 years 2 months 1 day	4 years
Exercisable at September 30, 2012	3 years 2 months 1 day
Intrinsic Value
Balance	1,888,928
Exercisable at September 30, 2012	1,029,714
Stock Based Compensation Balance	$ 329,000

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Summary of Significant Accounting Policies Net Loss Per Share (Details Narrative) (Earnings Per Share, USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Earnings Per Share
Options	4,455,177	2,983,750
Warrants	9,104,403	2,701,120
Convertible notes	4,938,403	5,343,449
Common Stock Equivalents	18,497,983	11,028,319
Warrants Issued	1,000,000	2,795,538
Exercise Price	$ 0.01	$ 0.01
Shares earned, not issued	56,189	3,529,897

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Summary of Significant Accounting Policies Concentration (Details Narrative)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Customers
Number of Customers	4	2	3	2
Major Customers	57.00%	26.00%	41.00%	24.00%
Customers | Customer D
Major Customers	13.00%
Customers | Customer C
Major Customers	13.00%
Customers | Customer B
Major Customers	15.00%
Customers | Customer A
Major Customers	16.00%		10.00%
Customers | Customer H
Major Customers		10.00%		13.00%
Customers | Customer G
Major Customers		16.00%		11.00%
Customers | Customer F
Major Customers			12.00%
Customers | Customer E
Major Customers			19.00%
Receivables
Number of Customers	4	2	4	2
Receivables | Customer C
Major Customers			19.00%
Receivables | Customer B
Major Customers			23.00%
Receivables | Customer H
Major Customers				10.00%
Receivables | Customer J
Major Customers				30.00%
Receivables | Customer I
Major Customers			12.00%
Suppliers
Number of Customers	4	4	4	3
Major Customers	85.00%	80.00%	55.00%	67.00%

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Stock options and Warrants - Common Stock Warrant Summary (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Common Stock Warrants
Warrant Activity
Balance outstanding, Number of Warrants	5,862,140	394,858
Granted	5,241,936	5,787,290
Exercised	899,672
Forfeited/cancelled		(320,008)
Balance outstanding and exercisable, Number of Warrants	10,204,404	5,862,140
Weighted Average Exericse Price
Outstanding	$ 0.12	$ 15.20
Granted	$ 0.27	$ 0.12
Exercised	$ 0.10
Forfeited/cancelled		$ 18.81
Balance	$ 0.21	$ 0.12
Weighted Remaining Contractual Life (Years)
Exercisable at September 30, 2012	2 years 6 months 7 days
Intrinsic Value
Balance	$ 4,465,814
Exercisable at September 30, 2012	4,465,814
Intinsic value per share	$ 0.65
Options
Warrant Activity
Granted	2,721,427	2,950,000
Exercised
Forfeited/cancelled	(1,250,000)
Weighted Average Exericse Price
Outstanding	$ 0.31	$ 10.20
Granted	$ 0.24	$ 0.20
Exercised
Forfeited/cancelled	$ 0.20
Balance	$ 0.030	$ 0.31
Weighted Remaining Contractual Life (Years)
Balance outstanding	4 years	3 years 8 months 8 days
Granted	3 years 0 months 9 days	7 years
Balance outsanding	3 years 2 months 1 day	4 years
Exercisable at September 30, 2012	3 years 2 months 1 day
Intrinsic Value
Balance	1,888,928
Exercisable at September 30, 2012	$ 1,029,714

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Going Concern (Details Narrative) (USD $) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Going Concern Details Narrative Usd
Working Capital Deficit	$ 9,103,000
Accumulated Losses	21,334,000
Payroll tax liability	$ 220,300	$ 153,009

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Due to Factor (Details Narrative) (USD $)	9 Months Ended
	Sep. 30, 2012
Notes to Financial Statements
Accounts receivable factoring, maixmum borrowings	$ 1,800,000
Factor, Accounts Receivable percentage	80.00%
Collateral, Accounts Receivable percentage	20.00%	[1]
Advances from Accounts Receivable	227,757
Factor Fees	$ 78,915

[1] The released reserves are used to fund other vendor purchases or returned to the Company. The Company is charged 3% for the first 30 days outstanding plus 1/10 of 1% for funds outstanding over 30 days.

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Going Concern

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern

3 . GOING CONCERN

The condensed consolidated financial statements have been prepared using US GAAP 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 September 30, 2012, the Company had limited cash, a working capital deficit of approximately $9,103,000, accumulated losses of approximately $21,334,000 since its inception, and has $220,300 of payroll tax liabilities inclusive of penalties and interest, from wages paid which have yet to be remitted to the taxing authorities and are delinquent. The Company currently is delinquent with its payroll tax filings since December 31, 2008; however, since April 1, 2012 the Company has been remitting payroll tax on a current basis. 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 increasing its revenue in order to achieve 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 condensed 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 growing high margin revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company anticipate 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 do 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 or may require that the Company relinquish valuable rights.

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Preferred Stock (Details Narrative) (USD $)	1 Months Ended				6 Months Ended
	Jul. 23, 2012	Mar. 30, 2011	Aug. 31, 2010		Jun. 30, 2012	Sep. 30, 2012	Dec. 31, 2011
Notes to Financial Statements
Preferred stock, par value
Preferred stock, shares authorized						10,000,000	10,000,000
Terms of consulting agreement			25%	[1]
Fair Value of Award		$ 694,742	$ 868,724		$ 399,854
Common Stock Award		3,473,708	4,169,638		3,473,708
Stock Based Compensation	52,106
Price per share	$ 0.33				$ 0.315
Accrued services							506,680
Common Stock issued for services , shares	3,473,708	695,930
Common Stock issued for services ,value		$ 173,982

[1] The consultant's compensation includes convertible preferred stock which, at the final determination date, will be converted into shares of common stock of the Company equivalent to 25% of outstanding common shares, as defined in the agreement.

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FAIR VALUE MEASUREMENTS - Liability measured at fair value on a recurring basis (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011	Dec. 31, 2010
Warrant derivative liability	$ 3,948,060	$ 155,813	$ 84,819
Level 2
Warrant derivative liability
Level 1
Warrant derivative liability
Level 3
Warrant derivative liability	$ 3,948,060	$ 155,813

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Condensed Consolidated Balance Sheet (USD $)	Sep. 30, 2012	Dec. 31, 2011
Assets
Cash	$ 72,643	$ 5,852
Accounts receivable, net	209,065	128,886
Inventory	244,630	0
Prepaid expenses and other current assets	61,482	23,527
Total current assets	587,820	158,265
Total Assets	587,820	158,265
Current liabilities:
Accounts payable	1,080,193	1,179,753
Due to factor	148,842	82,087
Accrued expenses and other current liabilities	1,549,313	2,001,427
Derivative liabilities	3,948,060	155,813
Notes payable to related parties and others, net of discounts	2,964,633	1,128,549
Total current liabilities	9,691,041	4,547,629
Stockholders' Deficiency:
Preferred stock, no stated value; 10,000,000 shares authorized; -0- shares issued and outstanding as of September 30, 2012 and December 31, 2011
Common stock, $.0001 par value, 100,000,000 shares authorized, 15,709,165 and 11,032,593 shares issued and outstanding as of September 30, 2012 and December 31, 2011, respectively	1,571	1,103	[1]
Additional paid-in capital	12,229,191	9,064,265
Accumulated deficit	(21,333,983)	(13,454,732)
Total stockholders' deficiency	(9,103,221)	(4,389,364)
Total Liabilities and Stockholders' Deficiency	$ 587,820	$ 158,265

[1] The common stock shares authorized, issued and outstanding have been adjusted to reflect a 20 to 1 reverse split, which was effective in February 2011.

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Stock options and Warrants - Warrants (Details)	9 Months Ended
	Sep. 30, 2012
0.001
Exercise Price	0.001
Number of Warrants Outstanding and Exercisable	195,291
Weighted Average Remaining Life in years	2 years
0.01
Exercise Price	0.01
Number of Warrants Outstanding and Exercisable	452,354
Weighted Average Remaining Life in years	1 year 3 months 3 days
0.01/
Exercise Price	0.01
Number of Warrants Outstanding and Exercisable	452,355
Weighted Average Remaining Life in years	3 years 7 months 5 days
0.25
Exercise Price	0.25
Number of Warrants Outstanding and Exercisable	705,882
Weighted Average Remaining Life in years	3 years 5 months 8 days
0.25/
Exercise Price	0.25
Number of Warrants Outstanding and Exercisable	575,000
Weighted Average Remaining Life in years	3 years 7 months 1 day
0.25//
Exercise Price	0.25
Number of Warrants Outstanding and Exercisable	1,098,220
Weighted Average Remaining Life in years	3 years 7 months 9 days
EightMember
Exercise Price	0.001
Number of Warrants Outstanding and Exercisable	1,020,113
Weighted Average Remaining Life in years	2 years 2 months 5 days
0.10
Exercise Price	0.10
Number of Warrants Outstanding and Exercisable	692,802
Weighted Average Remaining Life in years	3 years 3 months 8 days
0.10/
Exercise Price	0.10
Number of Warrants Outstanding and Exercisable	1,000,000
Weighted Average Remaining Life in years	2 years 1 month 3 days
0.25///
Exercise Price	0.25
Number of Warrants Outstanding and Exercisable	300,000
Weighted Average Remaining Life in years	2 years 4 months 2 days
0.10//
Exercise Price	0.10
Number of Warrants Outstanding and Exercisable	125,000
Weighted Average Remaining Life in years	2 years 4 months 2 days
0.10///
Exercise Price	0.10
Number of Warrants Outstanding and Exercisable	2,337,500
Weighted Average Remaining Life in years	2 years 4 months 6 days
0.50
Exercise Price	0.50
Number of Warrants Outstanding and Exercisable	50,000
Weighted Average Remaining Life in years	2 years 8 months 3 days
0.50/
Exercise Price	0.50
Number of Warrants Outstanding and Exercisable	25,000
Weighted Average Remaining Life in years	2 years 8 months 3 days
0.50//
Exercise Price	0.50
Number of Warrants Outstanding and Exercisable	50,000
Weighted Average Remaining Life in years	2 years 9 months 2 days
0.50///
Exercise Price	0.50
Number of Warrants Outstanding and Exercisable	25,000
Weighted Average Remaining Life in years	2 years 9 months 2 days
0.25////
Exercise Price	0.25
Number of Warrants Outstanding and Exercisable	250,000
Weighted Average Remaining Life in years	2 years 7 months 5 days
0.50/////
Exercise Price	0.50
Number of Warrants Outstanding and Exercisable	1,870,000
Weighted Average Remaining Life in years	2 years 9 months 2 days
Total Warrants
Number of Warrants Outstanding and Exercisable	10,204,404
Weighted Average Remaining Life in years	2 years 6 months 7 days

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Nature of Business

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business

1.  NATURE OF BUSINESS

Organic Alliance, Inc. is a global grower and marketer of organic, Fair Trade and conventional fresh fruits and vegetables. By establishing collaborative relationships with key growers, the Company has built a vertically integrated supply chain that enables it to support its customers with an increasing variety of certified sustainable products, sensible pricing, steady supply and inspiring multi-media stories from our many producing communities.

History - NB Design & Licensing, Inc. (“NB Design”), a Nevada corporation, was organized in September 2001. Its former parent, New Bridge Products, Inc., incorporated in August 1995 as a manufacturer of minivans, 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. During the second quarter of 2009, it ceased being a development stage company when it commenced its operations.

On April 29, 2008, NB Design acquired all 10,916,917 issued and outstanding shares of common stock of Organic Texas for 464,999 shares of the NB Design’s 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. The Company operates in California.

The acquisition of Organic Texas, a private operating company, by NB Design, a non-operating public shell corporation with nominal net assets, 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”. As such, the acquisition was treated as a capital transaction rather than a business combination, and no goodwill was recorded. NB Design was the legal acquirer because it issued its equity interests, and Organic Texas was the legal acquiree because its equity interests were acquired. However, NB Design was the acquiree and Organic Texas was 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.

On June 2, 2008, NB Design changed its name to Organic Alliance, Inc. On August 29, 2008, Organic Texas changed its name to Organic Texas, Inc. All references throughout this report to “Organic Alliance, Inc.” or the “Company” refers to Organic Alliance, Inc. and its wholly-owned subsidiary, Organic Texas, except where the context makes clear that the reference is only to Organic Alliance, Inc.

During November 2010, the Company increased the number of authorized shares of common stock from 60 million shares to 2 billion shares.

On February 14, 2011, the Company executed a 20:1 reverse split and decreased the number of authorized shares of common stock from 2 billion shares to 100 million shares.

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Notes payable, Loans and Derivative Liabilities:Notes Payable(Details Narrative) (USD $)	0 Months Ended	3 Months Ended	9 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended	3 Months Ended	0 Months Ended	3 Months Ended		9 Months Ended					9 Months Ended		9 Months Ended		0 Months Ended	12 Months Ended		9 Months Ended		3 Months Ended	0 Months Ended	3 Months Ended		9 Months Ended			1 Months Ended				3 Months Ended	1 Months Ended	9 Months Ended		1 Months Ended	3 Months Ended	1 Months Ended	9 Months Ended		1 Months Ended	3 Months Ended		9 Months Ended			1 Months Ended	9 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended
	Mar. 02, 2012 Note 6 Convertible Note Payable	Sep. 30, 2012 Note 6 Convertible Note Payable	Sep. 30, 2012 Note 6 Convertible Note Payable	Oct. 17, 2011 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Note Payable Related Party	Dec. 31, 2011 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Notes Payable	Jul. 14, 2010 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Convertible Note Payable	Mar. 31, 2012 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Convertible Note Payable	Sep. 30, 2011 Note 1 Convertible Note Payable	Mar. 31, 2011 Note 1 Convertible Note Payable	Dec. 31, 2010 Note 1 Convertible Note Payable	Sep. 30, 2010 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Note Payable Related Party	Dec. 31, 2011 Note 1 Note Payable Related Party	Sep. 30, 2012 Note 1 Notes Payable	Dec. 31, 2011 Note 1 Notes Payable	Jun. 15, 2011 Note 5 Convertible Note Payable	Dec. 31, 2011 Note 5 Convertible Note Payable	Sep. 30, 2012 Note 5 Convertible Note Payable	Sep. 30, 2012 Note 5 Note Payable Related Party	Dec. 31, 2011 Note 5 Note Payable Related Party	Sep. 30, 2012 Note 5 Notes Payable	Jun. 15, 2011 Note 4 Convertible Note Payable	Sep. 30, 2012 Note 4 Convertible Note Payable	Sep. 30, 2011 Note 4 Convertible Note Payable	Sep. 30, 2012 Note 4 Convertible Note Payable	Sep. 30, 2011 Note 4 Convertible Note Payable	Dec. 31, 2011 Note 4 Convertible Note Payable	Feb. 28, 2010 Note 4 Note Payable Related Party		Sep. 30, 2012 Note 4 Note Payable Related Party	Dec. 31, 2011 Note 4 Note Payable Related Party	Sep. 30, 2012 Note 4 Notes Payable	Apr. 28, 2011 Note 3 Convertible Note Payable	Sep. 30, 2012 Note 3 Convertible Note Payable	Dec. 31, 2011 Note 3 Convertible Note Payable	Feb. 18, 2011 Note 3 Note Payable Related Party	Sep. 30, 2012 Note 3 Notes Payable	Jul. 30, 2010 Note 2 Convertible Note Payable	Sep. 30, 2012 Note 2 Convertible Note Payable	Dec. 31, 2011 Note 2 Convertible Note Payable	Feb. 18, 2011 Note 2 Note Payable Related Party	Sep. 30, 2012 Note 2 Notes Payable	Sep. 30, 2011 Note 2 Notes Payable	Sep. 30, 2012 Note 2 Notes Payable	Sep. 30, 2011 Note 2 Notes Payable	Dec. 31, 2011 Note 2 Notes Payable	Aug. 31, 2012 Note 7 Convertible Note Payable	Sep. 30, 2012 Note 7 Convertible Note Payable	Feb. 28, 2012 Note 7 Note Payable Related Party	Sep. 30, 2012 Note 7 Note Payable Related Party	Sep. 30, 2012 Note 7 Note Payable Related Party
Date Issued																	2008-09		2010-05					2011-10									2010-02																2011-02
Date Issued				Oct. 17, 2011				Aug. 23, 2012																		Aug. 22, 2012											Aug. 07, 2012				Feb. 18, 2011	Aug. 01, 2012				Feb. 18, 2011										Feb. 28, 2012
Note Payable Issued	$ 1,000,000		$ 850,000	$ 400,000		$ 125,000	$ 275,000	$ 30,000	$ 52,380			$ 0					$ 15,000		$ 20,000		$ 109,822			$ 65,958		$ 60,000	$ 57,500						$ 25,000	[1]			$ 30,000	$ 70,588				$ 60,000	$ 8,000						$ 500,000			$ 3,000,000				$ 50,000
Discount rate								20.00%																		20.00%											20.00%					20.00%
Interest Rate	18.00%			21.00%					20.00%								10.00%		6.00%					5.00%									5.00%										6.00%						15.00%							21.00%
Warrants Issued								25,000											20,000							50,000											25,000					50,000							452,354
Conversion Price								$ 0.50			$ 0.0405		$ 0.045	$ 0.0252	$ 0.14	$ 0.099			$ 1.00							$ 0.50											$ 0.50					$ 0.50	$ 0.05				$ 0.01		$ 0.01
Expiration date																			2011-11
Maturity date	Sep. 02, 2012			Apr. 17, 2012				Nov. 21, 2012	Sep. 13, 2012								Sep. 13, 2009									Nov. 20, 2012											Nov. 05, 2012	May 31, 2011				Oct. 29, 2012	Mar. 02, 2011													Aug. 28, 2012
Debt Discount								4,038											9,200							9,495											3,406					11,088					137,703		137,703
Debt Discount Interest Expense		443,655	789,073		0	85,342		2,019		6,548	13,095	9,526										95,497				4,748		12,500	0	22,917	14,583		2,935				2,271		60,000			7,392		1,333			21,038	15,300	63,114	59,289			64,116	7,997	2,592	7,997
Vesting Terms								3 years																		3 years											3 years					3 years							3 years and 5 years
Note Payable		$ 851,329	$ 851,329		$ 406,740	$ 406,740	$ 283,993	$ 27,981									$ 21,068	$ 19,942	$ 22,744	$ 21,845		$ 109,789	$ 109,789	$ 53,934	$ 59,974	$ 55,253		$ 57,500		$ 57,500		$ 57,500			$ 28,411	$ 27,472	$ 28,865		$ 70,588	$ 70,588	$ 57,879	$ 56,304		$ 9,043	$ 8,683	$ 231,514	$ 672,068		$ 672,068		$ 593,247		$ 851,421
Default																																																	21% interest rate

[1] advanced to the Company $10,000 and $15,000, respectively

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Stock options and Warrants (Tables)

9 Months Ended

Sep. 30, 2012

Temporary Equity Disclosure [Abstract]

Options Summary

						Weighted
				Weighted		Average
				Average		Remaining
				Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
Balance at December 31, 2010		33,750		$	10.20		3.88	$	—
Granted		2,950,000			0.20		7.00		—
Exercised		—			—		—		—
Forfeited		—			—		—		—
Balance at December 31, 2011		2,983,750			0.31		4.00		—
Granted		2,721,427			0.24		3.09		—
Exercised		—			—		—		—
Forfeited		(1,250,000	)		0.20		—		—
Balance at September 30, 2012		4,455,177		$	0.30		3.21	$	1,888,928
Exercisable at September 30, 2012		2,389,464		$	0.30		3.21	$	1,029,714

Common Stock Warrant Summary

				Weighted		Average
				Average		Remaining
	Number of			Exercise		Life		Intrinsic
	Warrants			Price		In Years		Value
Balance, December 31, 2010		394,858		$	15.2
Granted		5,787,290			0.12
Exercised		—			—
Forfeited		(320,008	)		18.81
Balance, December 31, 2011		5,862,140		$	0.12
Granted		5,241,936			0.27
Exercised		899,672			.10
Forfeited		—			—
Balance, September 30, 2012		10,204,404		$	0.21		2.67	$	4,465,814
Exercisable, September 30, 2012		10,204,404		$	0.21		2.67	$	4,465,814

Warrants

Warrants Outstanding				Warrants Exercisable
				Weighted
				Average		Exercisable
Exercise		Number of		Remaining Life		Number of
Price		Warrants		In Years		Warrants
	0.01		452,354		1.33		452,354
	0.10		692,802		3.38		692,802
	0.25		705,882		3.58		705,882
	0.25		575,000		3.71		575,000
	0.01		452,355		3.75		452,355
	0.25		1,098,220		3.79		1,098,220
	0.001		195,291		2.00		195,291
	0.10		1,000,000		2.13		1,000,000
	0.10		125,000		2.42		125,000
	0.25		300,000		2.42		300,000
	0.10		2,337,500		2.46		2,337,500
	0.50		50,000		2.83		50,000
	0.50		25,000		2.83		25,000
	0.50		50,000		2.92		50,000
	0.50		25,000		2.92		25,000
	0.25		250,000		2.75		250,000
	0.50		1,870,000		2.92		1,870,000
			10,204,404		2.67		10,204,404

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Notes payable, Loans and Derivative Liabilities:Notes Payable-Related Party(Details Narrative) (USD $) (USD $)	9 Months Ended		0 Months Ended	3 Months Ended	9 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended	3 Months Ended	0 Months Ended	3 Months Ended		9 Months Ended			9 Months Ended		0 Months Ended	3 Months Ended		9 Months Ended			1 Months Ended				3 Months Ended	0 Months Ended	12 Months Ended		1 Months Ended	9 Months Ended	12 Months Ended		3 Months Ended	1 Months Ended	9 Months Ended		1 Months Ended		3 Months Ended		9 Months Ended			1 Months Ended	9 Months Ended		1 Months Ended		3 Months Ended	1 Months Ended	9 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Mar. 02, 2012 Note 6 Convertible Note Payable	Sep. 30, 2012 Note 6 Convertible Note Payable	Sep. 30, 2012 Note 6 Convertible Note Payable	Oct. 17, 2011 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Note Payable Related Party	Dec. 31, 2011 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Notes Payable	Jul. 14, 2010 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Convertible Note Payable	Mar. 31, 2012 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Note Payable Related Party	Dec. 31, 2011 Note 1 Note Payable Related Party	Sep. 30, 2012 Note 1 Notes Payable	Dec. 31, 2011 Note 1 Notes Payable	Jun. 15, 2011 Note 4 Convertible Note Payable	Sep. 30, 2012 Note 4 Convertible Note Payable	Sep. 30, 2011 Note 4 Convertible Note Payable	Sep. 30, 2012 Note 4 Convertible Note Payable	Sep. 30, 2011 Note 4 Convertible Note Payable	Dec. 31, 2011 Note 4 Convertible Note Payable	Feb. 28, 2010 Note 4 Note Payable Related Party		Sep. 30, 2012 Note 4 Note Payable Related Party	Dec. 31, 2011 Note 4 Note Payable Related Party	Sep. 30, 2012 Note 4 Notes Payable	Jun. 15, 2011 Note 5 Convertible Note Payable	Dec. 31, 2011 Note 5 Convertible Note Payable	Sep. 30, 2012 Note 5 Convertible Note Payable	Apr. 30, 2012 Note 5 Note Payable Related Party	Sep. 30, 2012 Note 5 Note Payable Related Party	Dec. 31, 2010 Note 5 Note Payable Related Party	Dec. 31, 2011 Note 5 Note Payable Related Party	Sep. 30, 2012 Note 5 Notes Payable	Jul. 30, 2010 Note 2 Convertible Note Payable	Sep. 30, 2012 Note 2 Convertible Note Payable	Dec. 31, 2011 Note 2 Convertible Note Payable	Feb. 18, 2011 Note 2 Note Payable Related Party	Sep. 30, 2012 Note 2 Note Payable Related Party	Sep. 30, 2012 Note 2 Notes Payable	Sep. 30, 2011 Note 2 Notes Payable	Sep. 30, 2012 Note 2 Notes Payable	Sep. 30, 2011 Note 2 Notes Payable	Dec. 31, 2011 Note 2 Notes Payable	Apr. 28, 2011 Note 3 Convertible Note Payable	Sep. 30, 2012 Note 3 Convertible Note Payable	Dec. 31, 2011 Note 3 Convertible Note Payable	Feb. 18, 2011 Note 3 Note Payable Related Party	Sep. 30, 2012 Note 3 Note Payable Related Party	Sep. 30, 2012 Note 3 Notes Payable	Aug. 31, 2012 Note 7 Convertible Note Payable	Sep. 30, 2012 Note 7 Convertible Note Payable	Feb. 28, 2012 Note 7 Note Payable Related Party	Sep. 30, 2012 Note 7 Note Payable Related Party	Sep. 30, 2012 Note 7 Note Payable Related Party
Date															2008-09		2010-05								2010-02									2011-10											2011-02
Date						Oct. 17, 2011				Aug. 23, 2012																			Aug. 07, 2012								Aug. 22, 2012				Feb. 18, 2011										Feb. 18, 2011		Aug. 01, 2012					Feb. 28, 2012
Note Payable Issued			$ 1,000,000		$ 850,000	$ 400,000		$ 125,000	$ 275,000	$ 30,000	$ 52,380			$ 0	$ 15,000		$ 20,000		$ 57,500						$ 25,000	[1]			$ 30,000	$ 109,822				$ 65,958			$ 60,000	$ 8,000							$ 500,000			$ 70,588					$ 60,000	$ 3,000,000				$ 50,000
Interest Rate			18.00%			21.00%					20.00%				10.00%		6.00%								5.00%									5.00%				6.00%							15.00%													21.00%
Common Stock for debt conversion, shares						1,000,000		312,500	687,500																2,770									47,690							3,858,574										964,643							125,000
Payments on notes payable	8,000	44,262																															8,000		9,000
Warrants Issued						2.5
Conversion Price						$ 0.10																																																				$ 0.10
Expiration date			Sep. 02, 2012			Apr. 17, 2012				Nov. 21, 2012	Sep. 13, 2012				Sep. 13, 2009														Nov. 05, 2012								Nov. 20, 2012	Mar. 02, 2011										May 31, 2011					Oct. 29, 2012					Aug. 28, 2012
Debt Discount				443,655	789,073		0	85,342		2,019		6,548	13,095	9,526						12,500	0	22,917	14,583		2,935				2,271		95,497						4,748		1,333				21,038	15,300	63,114	59,289			60,000				7,392		64,116	7,997	2,592	7,997
Vesting Terms										3 years																			3 years								3 years								3 years and 5 years								3 years
Warrants Fair Market Value			789,073			105,363					52,380								50,000											95,497								8,000			68,824								60,000						482,861
Maturity date			Sep. 02, 2012			Apr. 17, 2012				Nov. 21, 2012	Sep. 13, 2012				Sep. 13, 2009														Nov. 05, 2012								Nov. 20, 2012	Mar. 02, 2011										May 31, 2011					Oct. 29, 2012					Aug. 28, 2012
Note Payable				851,329	851,329		406,740	406,740	283,993	27,981					21,068	19,942	22,744	21,845		57,500		57,500		57,500			28,411	27,472	28,865		109,789	109,789		53,934		59,974	55,253		9,043	8,683	231,514		672,068		672,068		593,247		70,588	70,588	57,879		56,304		851,421
Accured interest																																									$ 5,996	$ 6,803									$ 7,091	$ 31,092					$ 53,538	$ 53,538
Default																																													21% interest rate

[1] advanced to the Company $10,000 and $15,000, respectively

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Nature of Business (Details Narrative)	0 Months Ended
	Feb. 14, 2011	Apr. 29, 2008	Sep. 30, 2012	Dec. 31, 2011	Nov. 10, 2010
Notes to Financial Statements
Common Stock, Shares for Mergers		10,916,917
Common Stock, shares acquired		464,999
Prior Common Stock, Authorized	2,000,000,000				60,000,000
Common Stock, Authorized			100,000,000	100,000,000	2,000,000,000
Reverse Stock Split	20:1
Common Stock, Issued After Reverse Split	100,000,000

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - The Company's unaudited condensed 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 (US GAAP) for interim financial information applicable for a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of the business, and in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended. Certain information and disclosures included in the financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of management, the condensed consolidated 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 nine months ended September 30, 2012 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 consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission on June 18, 2012.

Use of Estimates - The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Significant estimates that are particularly sensitive to change in the near term include, but are not limited to, realization of deferred tax assets, allowance for doubtful accounts, and assumptions used in derivative valuations and share based payment transactions. Actual results could differ from those estimates.

Principles of Consolidation - The condensed consolidated financial statements include the accounts of 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.

Allowance for Doubtful Accounts - An allowance for uncollectible accounts receivable is recorded based on a combination of aging analysis, past practices and any specific troubled accounts. The Company’s produce is sold to the Company’s 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. The allowance for doubtful accounts amounted to $0 and $77,969 at September 30, 2012 and December 31, 2011, respectively.

In addition, the Company also factors its receivables with full recourse and, as a result, accounts for the factoring akin to a secured borrowing, maintaining the gross receivable asset and due to factor liability on its books and records. In connection with the factoring of its receivables, the Company estimates an allowance for factoring fees associated with the collections. These fees range from 3% to 5% depending on the actual timing of the collection. The actual recognition of such fees may differ from the estimates depending upon the timing of collections.

Inventory - Inventory is stated at the lower of cost (first-in, first-out) or market, and includes principally produce the Company purchases from growers and packaging materials. The Company held $244,630 and $0 of inventory as of September 30, 2012 and December 31, 2011, respectively 

Fair Value of Financial Instruments - The carrying amounts of financial instruments, including cash, receivables, accounts payable and accrued expenses approximated fair value as of the balance sheet date presented, because of the relatively short maturity dates on these instruments. The carrying amounts of the notes payable issued approximate fair value as of the balance sheet date presented, because interest rates and other terms on these instruments approximate terms currently available on similar instruments.

Derivative Financial Instruments - The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the instrument could be required within 12 months of the balance sheet date.

The accounting treatment of derivative financial instruments requires that the Company record the conversion option and related warrants at their fair values as of the inception date of the agreements, and at fair value as of each subsequent balance sheet date. As a result of entering into the convertible notes, the Company is required to classify all other non-employee warrants as derivative liabilities and record them at their fair values at each balance sheet date. Any change in fair value was recorded as a change in the fair value of derivative liabilities for each reporting period at each balance sheet date.

The Company reassesses the classification at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

 The fair value of conversion options at a fixed number of shares are recorded using the intrinsic value method. Conversion options at variable rates and any options and warrants with ratchet provisions are deemed to contain a “down-round protection”. Accordingly, they do not meet the scope exception for treatment as a derivative under ASC 815 since “down-round protection” is not an input into the calculation of the fair value of the equity instruments and cannot be considered “indexed to the Company’s own stock”, which is a requirement for the scope exception as outlined under ASC 815. The Company determined the fair value of the Binomial Lattice Model and the Black-Scholes Method to be materially the same. Warrants that had been reclassified to derivative liability that did not contain “down-round protection” were valued using the black-scholes model.

For the Black-Scholes pricing model, which approximates the binomial lattice model, the Company used the following assumptions and weighted average fair value ranges for the nine months ended September 30:

	2012	2011
Risk-free interest rate	0.17% - 0.71%	0.06% - 0.30%
Dividend yield	N/A	N/A
Expected volatility	37.1%-54.7%	32.4% – 41.1%
Expected life in months and years	3 months - 48 months	9 months – 2 years

For the binomial lattice options pricing model, the Company used the following assumptions and weighted average fair value ranges for the nine months ended September 30:

	2012	2011
Risk-free interest rate	0.14% - 0.31%	0.96%-2.00%
Dividend yield	N/A	N/A
Expected volatility	31.6%-56.0%	54.2% - 56.3%
Expected life in months and years	3 months – 4.3 years	5 years

Revenue Recognition - Revenue is recorded when (1) the customer accepts delivery of the product, 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.

 Share Based Compensation – The Company accounts for share-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 718. For employees and directors, the fair value of the award is measured on the grant date, and for non-employees the fair value of the award is generally re-measured on interim financial reporting dates until the service period is complete.

 Option valuation models require the input of highly subjective assumptions, including the expected life of the option, and such assumptions can materially affect the fair value estimate. The fair value of share-based payment awards was estimated using the Black-Scholes option pricing model. 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.

 For the Black-Scholes pricing model, the Company used the following assumptions and weighted average fair value ranges for the nine months ended September 30:

		2012	2011
Risk-free interest rate	0.32% - 2.54%		0.39% - 2.54%
Dividend yield	N/A		N/A
Expected volatility	36.4% - 50.2%		50.2% - 57.7%
Expected life in years	2.5 - 7		5 – 7

Concentrations

· Credit Risk – The Company maintains cash balances at various high quality federally insured financial institutions, with balances at times in excess of federally insured limits. Management believes that the financial institutions that hold the Company’s deposits are financially sound and therefore pose a minimum credit risk. The Company has not experienced any losses in such accounts.

· Major customers – The Company has four and two major customers, which accounted for approximately 57% and 26% of the sales during the three months ended September 30, 2012 and 2011, respectively. For the three months ended September 30, 2012, the total sales comprised of customer A 16%, customer B 15%, customer C 13%, and customer D 13% compared to the three months ended September 30, 2011, comprised of customer G 16% and customer H 10%. The Company has three and two major customers which accounted for approximately 41% and 24% of sales during nine months ended September 30, 2012 and 2011, respectively. For the nine months ended September 30, 2012, the total sales comprised of customer E 19% and customer F 12% and customer A 10% compared to the nine months ended September 30, 2011, comprised of customer H 13% and customer G 11%. The loss of any of these customers could adversely affect operations.

· Major receivables – The Company has four major receivables at September 30, 2012 comprised of customer B 23%, customer C 19%, customer I 12% and customer D 10%, compared to two major receivables at September 30, 2011 comprised of customer J 30% and customer H 10%.

· Major suppliers – The Company has four major suppliers which accounted for approximately 85% and 80% of purchases during three months ended September 30, 2012 and 2011, respectively. The Company has four major suppliers which accounted for approximately 55% and 67% of purchases during nine months ended September 30, 2012 and 2011, respectively. The loss of any of these suppliers could adversely affect operations.

Net Loss Per Share - Basic loss per share was computed using the weighted average number of outstanding common shares. Diluted loss per share includes the effect of dilutive common stock equivalents from the assumed exercise of options, warrants and convertible notes. Common stock equivalents were excluded in the computation of diluted loss per share since their inclusion would be anti-dilutive.

In accordance with ASC 260 “Earnings per Share”, the Company has given effect to the issuance of warrants to purchase 1,100,000 and 2,795,538 shares of the Company’s common stock as of September 30, 2012 and 2011, respectively, exercisable at $0.01. These warrants have been included in computing the basic net loss per share for the three and nine months ended September 30, 2012 and 2011. Additionally, included in the Company’s weighted average shares outstanding are 56,189 and 3,529,897 shares earned, but not issued, as at September 30, 2012 and 2011, respectively.

Total common stock equivalents which were excluded (since their inclusion would be anti-dilutive) are those shares issuable upon the exercise of warrants, options and the conversion of convertible notes, as of September 30, 2012 and 2011 were as follows:

	September 30,
	2012		2011
Options		4,455,177		2,983,750
Warrants		9,104,403		2,701,120
Convertible notes		4,938,403		5,343,449
Total Common stock equivalents		18,497,983		11,028,319

Recently Issued Accounting Standards

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs." This ASU addresses fair value measurement and disclosure requirements within Accounting Standards Codification ("ASC") Topic 820 for the purpose of providing consistency and common meaning between U.S. GAAP and IFRSs. Generally, this ASU is not intended to change the application of the requirements in Topic 820. Rather, this ASU primarily changes the wording to describe many of the requirements in U.S. GAAP for measuring fair value or for disclosing information about fair value measurements. This ASU is effective for periods beginning after December 15, 2011 and did not have a material impact on the Company’s condensed consolidated financial statements or disclosures.

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. This guidance improves the comparability, consistency and transparency of financial reporting and increases the prominence of items reported in other comprehensive income. The guidance provided by this update becomes effective for interim and annual periods beginning on or after December 15, 2011. The adoption of this standard did not have a material impact on the Company’s financial position or results of operations.

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Condensed Consolidated Balance Sheet (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Statement of Financial Position [Abstract]
Preferred stock, par value
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	15,709,165	11,032,593
Common stock, shares outstanding	15,709,165	11,032,593

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

12. SUBSEQUENT EVENTS

On October 10, 2012, a lender converted a promissory note in the principal amount of $57,500 into 1,265,000 shares of the Company’s common stock at $0.05 per share. The transaction paid off the promissory note.

On October 12, 2012, an investor loaned the Company $25,000 as part of the August 20, 2012 convertible promissory note offering (see Note 6). As part of the agreement, the investor was granted a three year warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.50 per share which approximates fair value at date of the grant.

The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required further adjustment to or disclosure in the condensed consolidated financial statements.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 14, 2012
Document And Entity Information
Entity Registrant Name	Organic Alliance, Inc.
Entity Central Index Key	0001442634
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		16,974,165
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2012

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation - The Company's unaudited condensed 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 (US GAAP) for interim financial information applicable for a going concern, which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of the business, and in accordance with the instructions for Form 10-Q and Article 10 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended. Certain information and disclosures included in the financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations.

In the opinion of management, the condensed consolidated 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 nine months ended September 30, 2012 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 consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission on June 18, 2012.

Use of estimates

Use of Estimates - The preparation of condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Significant estimates that are particularly sensitive to change in the near term include, but are not limited to, realization of deferred tax assets, allowance for doubtful accounts, and assumptions used in derivative valuations and share based payment transactions. Actual results could differ from those estimates.

Principles of Consolidation

Principles of Consolidation - The condensed consolidated financial statements include the accounts of 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.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts - An allowance for uncollectible accounts receivable is recorded based on a combination of aging analysis, past practices and any specific troubled accounts. The Company’s produce is sold to the Company’s 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. The allowance for doubtful accounts amounted to $0 and $77,969 at September 30, 2012 and December 31, 2011, respectively.

In addition, the Company also factors its receivables with full recourse and, as a result, accounts for the factoring akin to a secured borrowing, maintaining the gross receivable asset and due to factor liability on its books and records. In connection with the factoring of its receivables, the Company estimates an allowance for factoring fees associated with the collections. These fees range from 3% to 5% depending on the actual timing of the collection. The actual recognition of such fees may differ from the estimates depending upon the timing of collections.

Inventory

Inventory -Inventory is stated at the lower of cost (first-in, first-out) or market, and includes principally produce the Company purchases from growers and packaging materials. The Company held $244,630 and $0 of inventory as of September 30, 2012 and December 31, 2011, respectively 

Fair Value of Financial Instruments

Fair Value of Financial Instruments - The carrying amounts of financial instruments, including cash, receivables, accounts payable and accrued expenses approximated fair value as of the balance sheet date presented, because of the relatively short maturity dates on these instruments. The carrying amounts of the notes payable issued approximate fair value as of the balance sheet date presented, because interest rates and other terms on these instruments approximate terms currently available on similar instruments.

Derivative Financial Instruments

Derivative Financial Instruments - The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the instrument could be required within 12 months of the balance sheet date.

The accounting treatment of derivative financial instruments requires that the Company record the conversion option and related warrants at their fair values as of the inception date of the agreements, and at fair value as of each subsequent balance sheet date. As a result of entering into the convertible notes, the Company is required to classify all other non-employee warrants as derivative liabilities and record them at their fair values at each balance sheet date. Any change in fair value was recorded as a change in the fair value of derivative liabilities for each reporting period at each balance sheet date.

The Company reassesses the classification at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

 The fair value of conversion options at a fixed number of shares are recorded using the intrinsic value method. Conversion options at variable rates and any options and warrants with ratchet provisions are deemed to contain a “down-round protection”. Accordingly, they do not meet the scope exception for treatment as a derivative under ASC 815 since “down-round protection” is not an input into the calculation of the fair value of the equity instruments and cannot be considered “indexed to the Company’s own stock”, which is a requirement for the scope exception as outlined under ASC 815. The Company determined the fair value of the Binomial Lattice Model and the Black-Scholes Method to be materially the same. Warrants that had been reclassified to derivative liability that did not contain “down-round protection” were valued using the black-scholes model.

For the Black-Scholes pricing model, which approximates the binomial lattice model, the Company used the following assumptions and weighted average fair value ranges for the nine months ended September 30:

	2012	2011
Risk-free interest rate	0.17% - 0.71%	0.06% - 0.30%
Dividend yield	N/A	N/A
Expected volatility	37.1%-54.7%	32.4% – 41.1%
Expected life in months and years	3 months - 48 months	9 months – 2 years

For the binomial lattice options pricing model, the Company used the following assumptions and weighted average fair value ranges for the nine months ended September 30:

	2012	2011
Risk-free interest rate	0.14% - 0.31%	0.96%-2.00%
Dividend yield	N/A	N/A
Expected volatility	31.6%-56.0%	54.2% - 56.3%
Expected life in months and years	3 months – 4.3 years	5 years

Revenue Recognition

Revenue Recognition - Revenue is recorded when (1) the customer accepts delivery of the product, 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.

Share Based Compensation

 Share Based Compensation – The Company accounts for share-based compensation in accordance with the fair value recognition provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) No. 718. For employees and directors, the fair value of the award is measured on the grant date, and for non-employees the fair value of the award is generally re-measured on interim financial reporting dates until the service period is complete.

 Option valuation models require the input of highly subjective assumptions, including the expected life of the option, and such assumptions can materially affect the fair value estimate. The fair value of share-based payment awards was estimated using the Black-Scholes option pricing model. 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.

 For the Black-Scholes pricing model, the Company used the following assumptions and weighted average fair value ranges for the nine months ended September 30:

		2012	2011
Risk-free interest rate	0.32% - 2.54%		0.39% - 2.54%
Dividend yield	N/A		N/A
Expected volatility	36.4% - 50.2%		50.2% - 57.7%
Expected life in years	2.5 - 7		5 – 7

Concentrations

· Credit Risk – The Company maintains cash balances at various high quality federally insured financial institutions, with balances at times in excess of federally insured limits. Management believes that the financial institutions that hold the Company’s deposits are financially sound and therefore pose a minimum credit risk. The Company has not experienced any losses in such accounts.

· Major customers – The Company has four and two major customers, which accounted for approximately 57% and 26% of the sales during the three months ended September 30, 2012 and 2011, respectively. For the three months ended September 30, 2012, the total sales comprised of customer A 16%, customer B 15%, customer C 13%, and customer D 13% compared to the three months ended September 30, 2011, comprised of customer G 16% and customer H 10%. The Company has three and two major customers which accounted for approximately 41% and 24% of sales during nine months ended September 30, 2012 and 2011, respectively. For the nine months ended September 30, 2012, the total sales comprised of customer E 19% and customer F 12% and customer A 10% compared to the nine months ended September 30, 2011, comprised of customer H 13% and customer G 11%. The loss of any of these customers could adversely affect operations.

· Major receivables – The Company has four major receivables at September 30, 2012 comprised of customer B 23%, customer C 19%, customer I 12% and customer D 10%, compared to two major receivables at September 30, 2011 comprised of customer J 30% and customer H 10%.

· Major suppliers – The Company has four major suppliers which accounted for approximately 85% and 80% of purchases during three months ended September 30, 2012 and 2011, respectively. The Company has four major suppliers which accounted for approximately 55% and 67% of purchases during nine months ended September 30, 2012 and 2011, respectively. The loss of any of these suppliers could adversely affect operations.

Net Loss Per Share

Net Loss Per Share - Basic loss per share was computed using the weighted average number of outstanding common shares. Diluted loss per share includes the effect of dilutive common stock equivalents from the assumed exercise of options, warrants and convertible notes. Common stock equivalents were excluded in the computation of diluted loss per share since their inclusion would be anti-dilutive.

In accordance with ASC 260 “Earnings per Share”, the Company has given effect to the issuance of warrants to purchase 1,100,000 and 2,795,538 shares of the Company’s common stock as of September 30, 2012 and 2011, respectively, exercisable at $0.01. These warrants have been included in computing the basic net loss per share for the three and nine months ended September 30, 2012 and 2011. Additionally, included in the Company’s weighted average shares outstanding are 56,189 and 3,529,897 shares earned, but not issued, as at September 30, 2012 and 2011, respectively.

Total common stock equivalents which were excluded (since their inclusion would be anti-dilutive) are those shares issuable upon the exercise of warrants, options and the conversion of convertible notes, as of September 30, 2012 and 2011 were as follows:

	September 30,
	2012		2011
Options		4,455,177		2,983,750
Warrants		9,104,403		2,701,120
Convertible notes		4,938,403		5,343,449
Total Common stock equivalents		18,497,983		11,028,319

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurement (Topic 820) - Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs." This ASU addresses fair value measurement and disclosure requirements within Accounting Standards Codification ("ASC") Topic 820 for the purpose of providing consistency and common meaning between U.S. GAAP and IFRSs. Generally, this ASU is not intended to change the application of the requirements in Topic 820. Rather, this ASU primarily changes the wording to describe many of the requirements in U.S. GAAP for measuring fair value or for disclosing information about fair value measurements. This ASU is effective for periods beginning after December 15, 2011 and did not have a material impact on the Company’s condensed consolidated financial statements or disclosures.

In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. This guidance improves the comparability, consistency and transparency of financial reporting and increases the prominence of items reported in other comprehensive income. The guidance provided by this update becomes effective for interim and annual periods beginning on or after December 15, 2011. The adoption of this standard did not have a material impact on the Company’s financial position or results of operations.

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Condensed Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Statement [Abstract]
Revenue	$ 335,456	$ 366,809	$ 1,301,757	$ 752,967
Cost of sales	304,274	394,903	1,177,694	764,706
Gross margin	31,182	(28,094)	124,063	(11,739)
General and administrative expenses	564,486	540,573	2,118,500	2,234,040
Operating loss	(533,304)	(568,667)	(1,994,437)	(2,245,779)
Other (income) expense:
Interest expense	806,428	290,426	1,612,249	488,421
Change in fair value of derivative liability	2,274,621	(238,398)	4,272,565	(75,531)
Total net other expenses	3,081,049	52,028	5,884,814	412,890
Net loss	$ (3,614,353)	$ (620,695)	$ (7,879,251)	$ (2,658,669)
Basic and diluted loss per share	$ (0.21)	$ (0.04)	$ (0.46)	$ (0.25)
Weighted average number of common shares outstanding - basic and diluted	16,971,814	14,804,237	17,228,350	10,552,064

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Fair Value Measures

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measures

7. FAIR VALUE MEASURES

ASC 820 “Fair Value Measurements and Disclosures” defines fair value, establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. As defined in ASC 820, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Standard clarifies that the exchange price is the price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date, and emphasizes that fair value is a market-based measurement and not an entity-specific measurement.

ASC 820 establishes the following hierarchy used in fair value measurements and expands the required disclosures of assets and liabilities measured at fair value:

· Level 1 – Inputs use quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

· Level 2 – Inputs use other inputs that are observable, either directly or indirectly. These inputs include quoted prices for similar assets and liabilities in active markets as well as other inputs such as interest rates and yield curves that are observable at commonly quoted intervals.

· Level 3 – Inputs are unobservable inputs, including inputs that are available in situations where there is little, if any, market activity for the related asset or liability.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Company’s assessment of the significance of particular inputs to these fair measurements requires judgment and considers factors specific to each asset or liability.

The following table provides the assets and liabilities carried at fair value measured on a recurring basis as of September 30, 2012 and December 31, 2011, respectively:

	Fair Value Measurements
		Level 1		Level 2		Level 3		Total
Derivative liabilities:
September 30, 2012	$	—	$	—	$	3,948,060	$	3,948,060
December 31, 2011	$	—	$	—	$	155,813	$	155,813

The 2010 derivative liabilities are measured at fair value using the Black-Scholes options pricing model, which approximates the binomial lattice options pricing model, and are classified within Level 3 of the valuation hierarchy. The 2012 and 2011 derivative liabilities are measured at fair value using the binomial lattice options pricing model, and are classified within Level 3 of the valuation hierarchy. The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities that are measured at fair value on a recurring basis:

	Nine months Ended September 30, 2012			Year Ended December 31, 2011
Fair value, beginning of period		$              155,813	$ 84,819
Derivative liabilities recorded during the period		1,307,223	357,040
Reclassification to equity upon conversion of note		(1,787,541)	(66,836)
Net unrealized (gain) loss on derivative financial instruments		4,272,565	(219,210)
Fair value, end of period		$          3,948,060	$ 155,813

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Notes payable, Loans and Derivative Liabilities

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Notes payable, Loans and Derivative Liabilities

6.  NOTES PAYABLE, LOANS AND DERIVATIVE LIABILITES

Notes payable to related parties and others, net of discounts consists of the following:

	September 30,		December 31,
	2012		2011
	(unaudited)
Notes Payable (net of debt discount of $11,597 at September 30, 2012 and $63,114 at December 31, 2011) (A)	$	863,214	$	551,978
Notes Payable – Related Parties (net of debt discount of $50,053 at December 31, 2011) (B)		570,494		348,130
Convertible Notes Payable (net of debt discount of $418,745 at September 30, 2012 and $41,469 at December 31, 2011) (C)		1,530,925		228,441
Total	$	2,964,633	$	1,128,549

(A) Notes Payable

i. In May 2010, an individual advanced to the Company $20,000 bearing interest at 6% per annum. As a financing incentive, the individual received a warrant to purchase 20,000 shares of the Company’s common stock at $1.00 per share. The warrants expired in November 2011. The gross proceeds of the note were recorded net of a debt discount of $9,200. The debt discount consisted of the relative fair value of the warrant of $9,200 and is accreted to interest expense ratably over the term of the note. The promissory note matured on November 17, 2011. The unpaid balance, including accrued interest, was $22,744 and $21,845 at September 30, 2012 and December 31, 2011, respectively. The Company is not compliant with the repayment terms of the note.

ii. On February 3, 2011, the Company signed a $500,000 promissory note with a maturity date of August 2, 2012, and has a stated interest rate of 15% per annum. As a financing incentive, the lender received a three-year warrant vesting on January 31, 2011, to purchase 452,354 shares of common stock at an exercise price of $0.01 per share, and also received a five-year warrant, vesting on June 30, 2011, to purchase 452,354 shares at an exercise price of $0.01 per share. The gross proceeds from the sale of the note of $500,000 were recorded net of a discount of $137,703. The debt discount consisted of $137,703 related to the fair value of the warrants and is accreted to interest expense ratably over the term of the note which amounted to $21,038 and $15,300 for the three months ended September 30, 2012 and 2011, respectively, and $63,114 and $59,289 for the nine months ended September 30, 2012 and 2011, respectively, and is included as a component of interest expense in the accompanying condensed consolidated statement of operations. The Company has not made any note payments and received a waiver from the lender on September 1, 2011 that deferred payment until September 1, 2012 and increased the interest rate to 21% beginning April 4, 2011, the date of the first event of default. The unpaid balance, including accrued interest, was $672,068 and $593,247 at September 30, 2012 and December 31, 2011, respectively. The Company is not compliant with the repayment terms of the note. The Company is currently renegotiating the terms of the promissory note.

iii. On August 1, 2012, the Company issued a $60,000 promissory note with an original issue discount of 20%. The promissory note has a maturity date of October 29, 2012. As a financing incentive, the lender received a three-year warrant, vesting immediately, to purchase 50,000 shares of common stock at an exercise price of $0.50 per share. The gross proceeds from the sale of the note of $60,000 were recorded net of a discount of $11,088. The debt discount consisted of $11,088 related to the fair value of the warrant and is accreted to interest expense ratably over the term of the note which amounted to $7,392 for the three and nine months ended September 30, 2012, and is included as a component of interest expense in the accompanying condensed consolidated statement of operations. The carrying value of the unpaid balance was $56,304 at September 30, 2012. The Company is not compliant with the repayment terms of the note.

iv. On August 7, 2012, the Company issued a $30,000 promissory note with an original issue discount of 20%. The promissory note has a maturity date of November 5, 2012. As a financing incentive, the lender received a three-year warrant, vesting immediately, to purchase 25,000 shares of common stock at an exercise price of $0.50 per share. The gross proceeds from the sale of the note of $30,000 were recorded net of a discount of $3,406. The debt discount consisted of $3,406 related to the fair value of the warrant and is accreted to interest expense ratably over the term of the note which amounted to $2,271 for the three and nine months ended September 30, 2012, and is included as a component of interest expense in the accompanying condensed consolidated statement of operations. The carrying value of the unpaid balance was $28,865 at September 30, 2012. The Company is not compliant with the repayment terms of the note.

v. On August 22, 2012, the Company issued a $60,000 promissory note with an original issue discount of 20%. The promissory note has a maturity date of November 20, 2012. As a financing incentive, the lender received a three-year warrant, vesting immediately, to purchase 50,000 shares of common stock at an exercise price of $0.50 per share. The gross proceeds from the sale of the note of $60,000 were recorded net of a discount of $9,495. The debt discount consisted of $9,495 related to the fair value of the warrant and is accreted to interest expense ratably over the term of the note which amounted to $4,748 for the three and nine months ended September 30, 2012, and is included as a component of interest expense in the accompanying condensed consolidated statement of operations. The carrying value of the unpaid balance was $55,253 at September 30, 2012.

vi. On August 23, 2012, the Company issued a $30,000 promissory note with an original issue discount of 20%. The promissory note has a maturity date of November 21, 2012. As a financing incentive, the lender received a three-year warrant, vesting immediately, to purchase 25,000 shares of common stock at an exercise price of $0.50 per share. The gross proceeds from the sale of the note of $30,000 were recorded net of a discount of $4,038. The debt discount consisted of $4,038 related to the fair value of the warrant and is accreted to interest expense ratably over the term of the note which amounted to $2,019 for the three and nine months ended September 30, 2012, and is included as a component of interest expense in the accompanying condensed consolidated statement of operations. The carrying value of the unpaid balance was $27,981 at September 30, 2012.

B) Notes Payable – Related Parties

i. In September 2008, Earnest Mathis, a former shareholder, advanced to the Company $15,000. The advance is evidenced by a promissory note bearing interest at 10% per annum. The promissory note matured on September 13, 2009. The unpaid balance, including accrued interest, was $21,068 and $19,942 at September 30, 2012 and December 31, 2011, respectively. The Company is not compliant with the repayment terms of the note.

ii. On February 18, 2011, the Company issued 3,858,574 shares of common stock to Parker Booth, Chief Executive Officer, for the settlement of $231,514 of principal and $5,996 of the accrued interest due to him under certain promissory notes. The fair value of the common stock issued exceeded the fair value of the promissory notes and accrued interest by $64,824, which the Company recorded a charge to stock-based compensation expense during the nine months ended September 30, 2011 in the accompanying condensed consolidated statement of operations. The unpaid balance for accrued interest was $6,803 at September 30, 2012 and December 31, 2011. The Company is not compliant with the repayment terms of the note.

iii. On February 18, 2011, the Company issued 964,643 shares of common stock to Michael Rosenthal; the Chairman of the Company’s Board of Directors, for the settlement of $57,879 of the remaining principal and accrued interest of $7,091 due to him under certain promissory notes. The fair value of the common stock issued exceeded the remaining portion of promissory notes plus accrued interest by $31,092 and is included as a component of stock-based compensation expense during the nine months ended September 30, 2011 in the accompanying condensed consolidated statement of operations.

iv. In November 2009 and February 2010, Morrison Partners, LLC (an affiliate of Thomas Morrison, former CEO and Chairman of the Board of Directors of the Company), advanced to the Company $10,000 and $15,000, respectively. The advances are evidenced by promissory notes bearing interest at 5% per annum. The November advance provides for the issuance of 2,770 shares of the Company’s common stock as a financing incentive. The Company recorded a debt discount of $2,935 for the relative fair value of the common stock. The discount was accreted over the life of the note.

The November 2009 and February 2010 notes were due on June 30, 2010 and September 30, 2010, respectively. The unpaid balance, including accrued interest, was $28,411 and $27,472 at September 30, 2012 and December 31, 2011, respectively. The shares have not been issued to Morrison Partners, LLC, and the Company is not in compliance with the repayment terms of the notes.

v. During March, 2010 through October 2011, an employee of the Company loaned to us $65,958, of which $16,000 and $49,958 was advanced during 2011 and 2010, respectively. The loans are evidenced by promissory notes payable with interest at 5% and are due on demand. The Company repaid $9,000 during 2010 and $8,000 during April 2012. In addition, the employee will be issued 47,690 shares of the Company’s common stock upon repayment of the promissory notes as additional consideration. The Company will record a fair value for these shares on the measurement date as a charge to interest expense. The unpaid balance, including accrued interest, was $53,934 and $59,974 at September 30, 2012 and December 31, 2011, respectively.

vi. On October 17, 2011, the Company entered into a $400,000 convertible multi-draw term loan facility with an entity owned by a related party. The loan bears interest at 21% and has a maturity date of the earlier of an event of default or April 17, 2012. The Company has not made a note payment and is currently negotiating an extension of such loan. At the time of any new debt or equity financing of the Company, the loan balance, including principal and interest, may be converted into the number of fully paid and non-assessable debt instruments, shares/or units to be issued in the financing. In addition, with each drawdown the related party received a three-year warrant to purchase 2.5 shares of the Company’s common stock for each $1.00 of principal loaned at such time, up to 1,000,000 shares in the aggregate for all drawdowns. Each warrant has an exercise price of $.10 per share, is vested upon issuance, and expires on October 17, 2014. The Company received $125,000 and $275,000 in gross proceeds during the nine months ended September 30, 2012 and during year ended December 31, 2011, respectively. The Company issued warrants to purchase an aggregate of 312,500 and 687,500 shares of the Company’s common stock during the nine months ended September 30, 2012 and the year ended December 31, 2011, respectively. The unpaid balance of the loan, including accrued interest, was $406,740 and $283,993 at September 30, 2012 and December 31, 2011, respectively.

The conversion price of the outstanding loan amounts was not fixed and determinable on the date of issuance and, as such in accordance with ASC Topic 815 “Derivatives and Hedging” (“ASC 815”), the embedded conversion option on the date of issuance was valued using the binomial lattice options pricing model and recorded as derivative liabilities. The fair value of the three-year warrants on the date of issuance aggregated $105,363, and was recorded as debt discount. The debt discount was fully amortized through the term of the loan and amounted to $0 and $85,342 for the three and nine months ended September 30, 2012, respectively.

vii. On February 28, 2012, Michael Rosenthal, Chairman of the Company’s Board of Directors, advanced the Company $50,000. The advance is evidenced by promissory notes bearing interest at 21% and has a maturity date of the earlier of an event of default or August 28, 2012. In addition, Mr. Rosenthal received a three-year warrant to purchase 125,000 shares of the Company’s common stock at an exercise price of $0.10 per share. The Company recorded a debt discount of $7,997 to the face value of the note based upon the relative fair values of the note and the common stock. The discount was being accreted over the life of the note which amounted to $2,592 and $7,997 for the three and nine months ended September 30, 2012, respectively, and is included as a component of interest expense in the accompanying condensed consolidated statement of operations. The unpaid balance, including accrued interest, was $53,538 at September 30, 2012. The Company is not compliant with the repayment terms of the note.

(C) Convertible Notes Payable

i. On July 14, 2010, the Company issued a $52,380 convertible promissory note with a maturity date of September 13, 2012, and with an interest rate of 20% per annum. The note can be converted into the Company’s common stock by the holder based on a variable conversion price. The variable conversion price is defined in the note as 45% multiplied by the average of the five lowest intraday prices for the Company’s stock during the 20 trading days prior to the date of conversion. The total conversion may not exceed 4.99% of the Company’s common stock issued and outstanding. In addition, the Company placed 250,000 shares of the Company’s common stock in escrow to secure our conversion obligations under the note. During September 2010, the lender converted $7,500 of the debt into 75,758 shares of the Company’s common stock for $.099 per share. During December 2010, the lender converted $7,500 of the debt into 53,419 shares of the Company’s common stock for $.14 per share. During March 2011, the lender converted $5,000 of the debt to 198,413 shares of the Company’s common stock for $.0252 per share. During September 2011, the lender converted $20,000 of the debt to 444,444 shares of the Company’s common stock for $.045 per share. During March 2012, the lender converted the remaining principle $12,380 to 305,679 shares of the Company’s common stock for $.0405 per share. On September 28, 2012, the Company paid the remaining outstanding interest of $9,526 to fully satisfy the promissory note.

ii. On July 30, 2010, an individual advanced the Company $8,000. The advance is evidenced by a promissory note bearing interest at 6% per annum and maturing on March 2, 2011. The holder, at any time, may convert the promissory note into shares of the Company’s common stock at $0.05 per share. The Company calculated the fair value of the beneficial conversion feature using the Black-Scholes pricing model on the date of issuance. The fair value of the conversion option in connection with the note on the date of issuance aggregated $8,000, and was recorded as debt discount. The debt discount was amortized through the term of the note and amounted to $1,333 for the nine months ended September 30, 2011. The unpaid balance, including accrued interest, was $9,043 and $8,683 at September 30, 2012 and December 31, 2011, respectively. The Company is not compliant with the repayment terms of the note.

iii. On April 28, 2011, the Company issued a $70,588 convertible promissory note with an original issue discount of 15%. The convertible promissory note has a maturity date of the earlier of (i) the Company raising debt or equity financing of $600,000 or more, or (ii) May 31, 2011. The note may be converted into the Company’s common stock by the holder at $0.05 per share. The Company has not made a note payment, and the Company received a waiver from the lender on September 1, 2011 that defers payment until May 31, 2012 and waives the provision for payment upon the Company’s closing a debt or equity financing of $600,000 or more. The Company currently is negotiating an extension of such loan. As a financing incentive, the lender received a five-year warrant, vesting April 28, 2011, to purchase 705,882 shares of the Company’s common stock at an exercise price of $0.25 per share. The unpaid balance on the note was $70,588 at September 30, 2012 and December 31, 2011. The Company is not compliant with the repayment terms of the note.

The conversion price of the note and five-year warrants was not fixed and determinable on the date of issuance and as such in accordance with ASC Topic 815 “Derivatives and Hedging” (“ASC 815”), the embedded conversion options of the note and warrants on the date of issuance were valued using the binomial lattice options pricing model and recorded as derivative liabilities. The fair value of the conversion option and five-year warrants issued in connection with the note on the date of issuance aggregated $60,000, and were recorded as debt discount. The debt discount was amortized through the term of the notes and amounted to $60,000 for the nine months ended September 30, 2011.

iv. On June 15, 2011, the Company issued a $57,500 convertible promissory note with an original issue discount of 15%. The convertible promissory note has a maturity date of the earlier of (i) the Company raising debt or equity financing of $600,000 or more, or (ii) June 14, 2012. The note may be converted into the Company’s common stock by the holder at $0.05 per share. The Company received a waiver from the lender on September 1, 2011 that waives the provision for payment upon the Company’s closing a debt or equity financing of $600,000 or more. As a financing incentive, the lender received a five-year warrant, vesting June 15, 2011, to purchase 575,000 shares of the Company’s common stock at an exercise price of $0.25 per share. The unpaid balance was $57,500 at September 30, 2012 and December 31, 2011. On October 10, 2012, the note was converted into 1,265,000 shares of the Company’s common stock to fully pay off the promissory note.

The conversion price of the note and five-year warrants were not fixed and determinable on the date of issuance and as such in accordance with ASC Topic 815 “Derivatives and Hedging” (“ASC 815”), the embedded conversion options of the note and warrants on the date of issuance were valued using the binomial lattice options pricing model and recorded as derivative liabilities. The fair value of the conversion option and five-year warrants issued in connection with the note on the date of issuance aggregated $50,000, and were recorded as debt discount. The debt discount was amortized through the term of the notes and amounted to $0 and $12,500 for the three months ended September 30, 2012 and 2011, respectively, and $22,917 and $14,583 for the nine months ended September 30, 2012 and 2011, respectively.

v. On July 15, 2011, the Company issued a $109,822 convertible promissory note with an original issue discount of 15% that consolidated various demand notes from September 2010 through July 2011. The convertible promissory note has a maturity date of the earlier of (i) the Company raising debt or equity financing of $600,000 or more, or (ii) August 31, 2011. The note may be converted into the Company’s common stock by the holder at $0.05 per share. As a financing incentive, the lender received a five-year warrant, vesting July 15, 2011, to purchase 1,098,220 shares of the Company’s common stock at an exercise price of $0.25 per share. The unpaid balance was $109,789 at September 30, 2012 and December 31, 2011. The Company has not made a note payment and currently is negotiating an extension of the note.

The conversion price of the note and five-year warrants were not fixed and determinable on the date of issuance and as such in accordance with ASC Topic 815 “Derivatives and Hedging” (“ASC 815”), the embedded conversion options of the note and warrants on the date of issuance were valued using the binomial lattice options pricing model and recorded as derivative liabilities. The fair value of the conversion option and five-year warrants issued in connection with the note on the date of issuance aggregated $95,497, and were recorded as debt discount. The debt discount was amortized through the term of the notes and amounted to $95,497 for the year ended December 31, 2011.

vi. In March 2012, the Company commenced an offering of secured promissory notes for an aggregate principal amount of $1,000,000 with three-year warrants to purchase an aggregate of 2,500,000 shares the Company’s common stock (2.5 shares for each $1 of the principal amount of the notes purchased) exercisable at $0.10 per share. The notes bear interest at 18% and have various maturity dates beginning September 2, 2012. At the time of any new debt or equity financing by the Company, the principal and interest then due under the notes may be converted into the number of fully paid and non-assessable debt instruments, shares/or units issued in the financing. Notes in the aggregate principal amount of 850,000 and warrants to purchase an aggregate of 2,125,000 were sold in the offering. In addition, the investment banker who facilitated the sale of the notes and warrants received a three-year warrant to purchase 212,500 shares of the Company’s common stock equal (10% of the number of shares of common stock issuable upon exercise of the warrants sold in the offering) exercisable at $0.10 per share. The unpaid balance on the notes, including accrued interest, was $851,329 at September 30, 2012.

The Company currently is seeking to amend the notes to remove the conversion right and extend the due date to June 30, 2013, and to amend the warrants to remove certain anti-dilution provisions. Each holder of notes and warrants who agrees to such amendments will be granted a warrant to purchase that number of shares of the Company’s common stock equal to two times the principal amount of the note amended, exercisable at $0.50 per share (1.7 million shares in the aggregate if all of the note holders agree to such amendments).

The conversion price of the note and three-year warrants were not fixed and determinable on the date of issuance and as such in accordance with ASC Topic 815 “Derivatives and Hedging” (“ASC 815”), the embedded conversion options of the note and warrants on the date of issuance were valued using the binomial lattice options pricing model and recorded as derivative liabilities. The fair value of the conversion option and three-year warrants issued in connection with the note on the date of issuance aggregated $789,073, and were recorded as debt discount. The debt discount was fully amortized through the term of the notes and amounted to $443,655 and $789,073for the three and nine months ended September 30, 2012, respectively.

vii. In August 2012, the Company commenced an offering of secured promissory notes for an aggregate principal amount of $3,000,000 with three-year warrants to purchase an aggregate of 6,000,000 shares the Company’s common stock (two shares for each $1 of the principal amount of the notes purchased) exercisable at $0.50 per share. The notes bear interest at 18% and have various maturity dates beginning March 13, 2013. At the time of any new debt or equity financing by the Company, the principal and interest then due under the notes may be converted into the number of fully paid and non-assessable debt instruments, shares/or units issued in the financing. During the three months ended September 30, 2012, notes in the aggregate principal amount of $850,000 and warrants to purchase an aggregate of 1,700,000 shares of the Company’s common stock were sold in the offering. In addition, the investment banker who facilitated the sale of the notes and warrants received a three-year warrant to purchase 170,000 shares of the Company’s common stock equal (10% of the number of shares of common stock issuable upon exercise of the warrants sold in the offering) exercisable at $0.50 per share. The unpaid balance on the notes, including accrued interest, was $851,421 at September 30, 2012. Thereafter, additional notes in the aggregate principal amount of $22,500 ($872,500 for the entire offering) and additional warrants to purchase an aggregate of 45,000 shares of the Company’s common stock (1,745,000 for the entire offering) were sold in the offering, and the investment banker received a warrant to purchase an additional 4,500 shares of the Company’s common stock in connection therewith.

The Company currently is seeking to amend the notes to remove the conversion right and extend the due date to June 30, 2013, and to amend the warrants to remove certain anti-dilution provisions. Each holder of notes and warrants who agrees to such amendments will be granted a warrant to purchase that number of shares of the Company’s common stock equal to 0.5 times the principal amount of the note amended, exercisable at $0.50 per share (437,500 shares in the aggregate if all of the note holders agree to such amendments).

The conversion price of the note and three-year warrants were not fixed and determinable on the date of issuance and as such in accordance with ASC Topic 815 “Derivatives and Hedging” (“ASC 815”), the embedded conversion options of the note and warrants on the date of issuance were valued using the binomial lattice options pricing model and recorded as derivative liabilities. The fair value of the conversion option and three-year warrants issued in connection with the note on the date of issuance aggregated $482,861, and were recorded as debt discount. The debt discount was amortized through the term of the notes and amounted to $64,116 for the three and nine months ended September 30, 2012, respectively.

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Accrued Expenses and other Liabilities (Tables)

9 Months Ended

Sep. 30, 2012

Payables and Accruals [Abstract]

Accrued Liabilities

	September 30,2012		December 31, 2011
Due to consultant (Note 9)	$	100,000	$	100,000
Accrued consulting fees (Note 5)		-0-		694,742
Payroll and payroll taxes payable (A)		1,380,996		1,131,572
Other accrued liabilities		68,317		75,113
	$	1,549,313	$	2,001,427

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2012

Accounting Policies [Abstract]

Weighted average Assumptions

	2012	2011
Risk-free interest rate	0.17% - 0.71%	0.06% - 0.30%
Dividend yield	N/A	N/A
Expected volatility	37.1%-54.7%	32.4% – 41.1%
Expected life in months and years	3 months - 48 months	9 months – 2 years

Binomial lattice options pricing model

	2012	2011
Risk-free interest rate	0.14% - 0.31%	0.96%-2.00%
Dividend yield	N/A	N/A
Expected volatility	31.6%-56.0%	54.2% - 56.3%
Expected life in months and years	3 months – 4.3 years	5 years

Share Based Compensation Assumptions

		2012	2011
Risk-free interest rate	0.32% - 2.54%		0.39% - 2.54%
Dividend yield	N/A		N/A
Expected volatility	36.4% - 50.2%		50.2% - 57.7%
Expected life in years	2.5 - 7		5 – 7

Common Stock Equivalents

	September 30,
	2012		2011
Options		4,455,177		2,983,750
Warrants		9,104,403		2,701,120
Convertible notes		4,938,403		5,343,449
Total Common stock equivalents		18,497,983		11,028,319

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

10 . COMMITMENTS AND CONTINGENCIES

Agreements

On September 27, 2010 the Company signed an agreement for investment banking services, including financings and business combinations. The compensation to the banker includes a flat fee plus other compensation as defined in the agreement. The agreement included a grant of a three-year warrant to purchase 74,850 shares of the Company’s common stock at an exercise price of $0.001 per share. The fair value of the award was $19,443 and is amortized over the term of the agreement. Accordingly, the Company recorded a stock based compensation charge of $4,700 and $14,422 for the three and nine months ended September 30, 2011. In August, 2011, the warrant was cancelled and replaced with a new warrant for 899,672 shares of the Company’s common stock, at an exercise price of $0.10 per share. This warrant was fully exercised during July 2012. In September 2011, the Company issued to the banker an additional three-year warrant to purchase 195,291 shares of the Company’s common stock, exercisable at $0.001 per share.

In 2010, the Company granted its corporate law firm a warrant to purchase 460,821 shares of the Company’s common stock, exercisable at $.01 per share. That warrant was cancelled and, in August, 2011, the Company granted its corporate law firm a five-year warrant to purchase 692,802 shares of the Company’s common stock at an exercise price of $0.10 per share. 

Legal matters

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, the Company may pursue litigation against third parties to enforce or protect the Company’s rights under the Company’s trademarks, trade secrets and intellectual property rights generally.

During 2010, the Company were served with three lawsuits for past due liabilities. The first lawsuit was Peri & Sons, plaintiff, vs. Organic Alliance, Inc. and Parker Booth, defendants, seeking past due monies for produce purchases. A settlement was reached pursuant to which the Company signed a confession of judgment and has been making payments to the plaintiff. Over half of the past due amount has been paid with a balance of approximately $21,000 remaining. The second lawsuit, filed in the US. District Court, Northern California District, is captioned Full Circle Sales, Inc., Growers Express LLC, Steinbeck County Produce Inc., Steve Almquist Sales and Brokerage, Dan Andrews Farms, Fresh Networks, LLC and Quebec Distributing Co., Inc. vs. Organic Alliance, Inc., defendant, and sought approximately $97,000 in monies past due for produce purchases plus attorney fees and interest. A settlement was reached pursuant to which the plaintiffs are to receive $97,000, $31,000 of which has been paid to date. The third lawsuit, filed in Monterey County Superior Court, is captioned RE Transportation, plaintiff, vs. Organic Alliance, Inc., defendant, and seeks approximately $34,000 in payment of transportation services provided plus interest at 18% per annum and attorney’s fees. A settlement was reached with the plaintiff receiving $30,000. This amount has been paid in full.

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Stock options and Warrants

9 Months Ended

Sep. 30, 2012

Temporary Equity Disclosure [Abstract]

Stock options and Warrants

8. STOCK OPTIONS AND WARRANTS

Stock Options – Employment Letter Agreement:

On July 3, 2011, in conjunction with Chris White’s employment as the Company’s Vice President of Global Supply Chain, the Company granted Mr. White a seven-year option to purchase 2,950,000 shares of the Company’s common stock at $0.20 per share. The option vested as to 1,180,000 shares on the date of grant, and vests as to 295,000 on each of the first six semi-annual anniversaries of the grant date. The fair value of the option was approximately $317,400.

On January 6, 2012, in conjunction with Mark Zeller’s employment as the Company’s North American Director of Sales, the Company granted Mr. Zeller a five-year option to purchase 1,500,000 shares of the Company’s common stock at $0.20 per share. The option vested as to 250,000 on the date of grant, and vested as to 416,667 on each of the first three anniversaries of the grant date. The fair value of the option was approximately $44,000. On May 1, 2012, Mr. Zeller resigned from the Company and the option terminated in accordance with its terms.

On April 24, 2012, in conjunction with Roger Zardo’s employment as the Company’s Director of National Procurement, the Company granted Mr. Zardo a three-year option to purchase 325,000 shares of the Company’s common stock at $0.25 per share. The option vested as to 100,000 on the date of grant, vested as to 75,000 shares on each of the first two anniversaries of the grant date, and vested as to 75,000 shares on November 28, 2014. The fair value of the option was approximately $18,400.

On May 18, 2012, in conjunction with Jack Connelly’s employment as the Company’s Director of National Sales, the Company granted Mr. Connelly a three-year option to purchase 500,000 shares of the Company’s common stock at $0.25 per share. The option vested as to 100,000 on the date of grant, vested as to 134,000 shares on each of the first two anniversaries of the grant date, and vested as to the final 132,000 shares on November 29, 2014. The fair value of the option was approximately $33,900.

On August 31, 2012, in conjunction with George Borzilleri’s employment as the Company’s Manager, National Retail Sales, the Company granted Mr. Borzilleri a three-year option to purchase 396,427 shares of the Company’s common stock at $0.35 per share. The option vested as to 135,714 shares on the date of grant, vested as to 86,904 shares on each of the first two anniversaries of the grant date, and vested as to the final 86,905 shares on March 6, 2015. The fair value of the option was approximately $102,524.

The Company recognized stock based compensation expense included in general and administrative expenses on the consolidated statement of operations of $35,099 and $97,722 for the three and nine months ended September 30, 2012, respectively for these awards.

Options Summary:

A summary of option activity during the nine months ended September 30, 2012 and the year ended December 31, 2011 is presented below:

						Weighted
				Weighted		Average
				Average		Remaining
				Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
Balance at December 31, 2010		33,750		$	10.20		3.88	$	—
Granted		2,950,000			0.20		7.00		—
Exercised		—			—		—		—
Forfeited		—			—		—		—
Balance at December 31, 2011		2,983,750			0.31		4.00		—
Granted		2,721,427			0.24		3.09		—
Exercised		—			—		—		—
Forfeited		(1,250,000	)		0.20		—		—
Balance at September 30, 2012		4,455,177		$	0.30		3.21	$	1,888,928
Exercisable at September 30, 2012		2,389,464		$	0.30		3.21	$	1,029,714

The Company expects to amortize the remaining stock based compensation expense of approximately $329,000 over the life of the options.

Common Stock Warrants Summary:

Warrant transactions during the nine months ended September 30, 2012 and the year ended December 31, 2011 were as follows:

				Weighted		Average
				Average		Remaining
	Number of			Exercise		Life		Intrinsic
	Warrants			Price		In Years		Value
Balance, December 31, 2010		394,858		$	15.2
Granted		5,787,290			0.12
Exercised		—			—
Forfeited		(320,008	)		18.81
Balance, December 31, 2011		5,862,140		$	0.12
Granted		5,241,936			0.27
Exercised		899,672			.10
Forfeited		—			—
Balance, September 30, 2012		10,204,404		$	0.21		2.67	$	4,465,814
Exercisable, September 30, 2012		10,204,404		$	0.21		2.67	$	4,465,814

The intrinsic value is calculated on the difference between the fair market value of the Company’s restricted stock, which was $0.65 per share as of September 30, 2012, and the exercise price of the warrants.

The following table presents information related to warrants at September 30, 2012:

Warrants Outstanding				Warrants Exercisable
				Weighted
				Average		Exercisable
Exercise		Number of		Remaining Life		Number of
Price		Warrants		In Years		Warrants
	0.01		452,354		1.33		452,354
	0.10		692,802		3.38		692,802
	0.25		705,882		3.58		705,882
	0.25		575,000		3.71		575,000
	0.01		452,355		3.75		452,355
	0.25		1,098,220		3.79		1,098,220
	0.001		195,291		2.00		195,291
	0.10		1,000,000		2.13		1,000,000
	0.10		125,000		2.42		125,000
	0.25		300,000		2.42		300,000
	0.10		2,337,500		2.46		2,337,500
	0.50		50,000		2.83		50,000
	0.50		25,000		2.83		25,000
	0.50		50,000		2.92		50,000
	0.50		25,000		2.92		25,000
	0.25		250,000		2.75		250,000
	0.50		1,870,000		2.92		1,870,000
			10,204,404		2.67		10,204,404

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Related Party Transactions

9 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions

9. RELATED PARTY TRANSACTIONS

Consulting Agreement

On July 1, 2008, the Company signed a 16-month consulting agreement with a related party. The consulting services include financial advisory, investment relations and certain administrative and other services for $6,250 monthly fees. At September 30, 2012 and December 31, 2011, the Company owed $100,000 related to above consulting services, which is included in accrued expenses and other current liabilities in the condensed consolidated balance sheets.

Employee Warrants

On February 29, 2012, an employee was granted a three year warrant to purchase 300,000 shares of the Company’s common stock for services rendered. The warrant vested upon grant, and was exercisable at $0.25 per share. The Company recorded a charge for $6,149 to stock based compensation for the nine months ended September 30, 2012.

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Accrued Expenses and other Liabilities

9 Months Ended

Sep. 30, 2012

Payables and Accruals [Abstract]

Accrued Expenses and other Liabilities

11. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following:

	September 30,2012		December 31, 2011
Due to consultant (Note 9)	$	100,000	$	100,000
Accrued consulting fees (Note 5)		-0-		694,742
Payroll and payroll taxes payable (A)		1,380,996		1,131,572
Other accrued liabilities		68,317		75,113
	$	1,549,313	$	2,001,427

(A) As of September 30, 2012 and December 31, 2011, the Company has unpaid payroll taxes including penalties and interest of  $220,300 and $153,009, respectively, which have yet to be remitted to the taxing authorities.

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Notes payable, Loans and Derivative Liabilities - Notes payable (Details) (Parenthetical) (USD $)	Sep. 30, 2012	Dec. 30, 2011
Convertible Note Payable
Debt Discount	$ 418,745	$ 41,469
Notes Payable
Debt Discount	11,597	63,114
Note Payable Related Party
Debt Discount		$ 50,053

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Fair Value Measures (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measures on a recurring basis

	Fair Value Measurements
		Level 1		Level 2		Level 3		Total
Derivative liabilities:
September 30, 2012	$	—	$	—	$	3,948,060	$	3,948,060
December 31, 2011	$	—	$	—	$	155,813	$	155,813

Fair value liability on recurring basis

	Nine months Ended September 30, 2012			Year Ended December 31, 2011
Fair value, beginning of period		$              155,813	$ 84,819
Derivative liabilities recorded during the period		1,307,223	357,040
Reclassification to equity upon conversion of note		(1,787,541)	(66,836)
Net unrealized (gain) loss on derivative financial instruments		4,272,565	(219,210)
Fair value, end of period		$          3,948,060	$ 155,813

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Summary of Significant Accounting Policies Fair Value Assumptions (Details Narrative)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Black-Scholes pricing model | Minimum
Risk-free rate interest rate	0.17%	0.06%
Dividend yield
Expected volatility	37.10%	32.40%
Expected life in months and years	0 years 3 months 0 days	0 years 9 months 0 days
Black-Scholes pricing model | Maximum
Risk-free rate interest rate	0.71%	0.30%
Dividend yield
Expected volatility	54.70%	41.10%
Expected life in months and years	0 years 48 months 0 days	2 years 0 months 0 days
Binomial Lattice options | Minimum
Risk-free rate interest rate	0.14%	0.96%
Dividend yield
Expected volatility	31.60%	54.20%
Expected life in months and years	0 years 3 months 0 days	5 years 0 months 0 days
Binomial Lattice options | Maximum
Risk-free rate interest rate	0.31%	2.00%
Dividend yield
Expected volatility	56.00%	56.30%
Expected life in months and years	4 years 3 months 0 days	5 years 0 months 0 days

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Accrued Expenses and other Liabilities - Accrued Liabilities (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Accrued expenses and other current liabilities	$ 1,549,313	$ 2,001,427
Payroll tax liabilities	220,300	153,009
Other Accrued Liabilites
Accrued expenses and other current liabilities	68,317	75,113
Consultants
Accrued expenses and other current liabilities	100,000	100,000
Payroll and payroll taxes payable
Accrued expenses and other current liabilities	1,380,996	1,131,572
Accrued Consulting Fees
Accrued expenses and other current liabilities	$ 0	$ 694,742

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Fair Value Measures - Fair value liability on recurring basis (Details) (USD $)	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Notes to Financial Statements
Fair value, beginning of period	$ 155,813	$ 84,819
Derivative liabilities recorded during the period	1,307,223	357,040
Fair value of warrants reclassified to equity	(1,787,541)	(66,836)
Total net realized and unrealized gains included in other expenses	4,272,565	(219,210)
Balance of warrant derivative liability	$ 3,948,060	$ 155,813

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Condensed Consolidated Statements of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net loss	$ (7,879,251)	$ (2,658,669)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for services	47,250	50,224
Share-based compensation	587,456	444,145
Non-cash interest	77,172	106,707
Provision for doubtful accounts	(500)
Change in fair value of derivative liability	4,272,565	(75,530)
Amortization on discount of note payable	1,067,539	249,195
Changes in operating assets and liabilities:
Accounts receivable	(79,679)	(101,686)
Inventory	(244,630)
Prepaid expenses and other current assets	(37,955)	(13,747)
Accounts payable	(99,560)	(384,645)
Accrued expenses and other current liabilities	242,629	879,424
Net cash used in operating activities	(2,046,964)	(804,582)
Cash flows from financing activities
Proceeds from notes and loans payable	2,055,000	739,705
Principal payments on note payable	(8,000)	(44,262)
Due to factor - net of repayment	66,755	108,535
Net cash provided by financing activities	2,113,755	803,978
Net increase (decrease) in cash	66,791	(604)
Cash - beginning of the period	5,852	1,461
Cash - end of the period	72,643	857
Supplemental disclosures:
Interest paid	467,538	66,859
Supplemental disclosure for non-cash financing activities:
Discount on notes payable	1,343,248	343,200
Reclassification of derivative liabilities upon conversion of note	1,787,541	66,836
Issuance of common stock to settle notes payable		274,507
Issuance of common stock to convert notes payable	12,380	25,000
Issuance of common stock to settle liability	$ 1,146,702

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Preferred Stock

9 Months Ended

Sep. 30, 2012

Equity [Abstract]

Preferred Stock

5 . PREFERRED STOCK

The Company’s articles of incorporation authorize its Board of Directors to issue up to 10,000,000 shares of preferred stock in one or more series without stockholder approval. Each such series of preferred stock may have such number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as are determined by The Company’s Board of Directors. At September 30, 2012 and December 31 2011, no shares of preferred stock were issued or outstanding.

In August 2010, the Company signed a one year consulting agreement with a consultant to provide investor and public relation services. The consultant’s compensation includes convertible preferred stock which, at the final determination date, will be converted into shares of the Company’s common stock equivalent to 25% of outstanding common shares, as defined in the agreement. The consultant elected to receive the common stock equivalent directly as compensation. The Company calculated the fair value of the award to be $868,724 or 4,169,638 shares of common stock. The Company accrued $506,680 of stock-based compensation for these services during the year ended December 31, 2011, which has been included in accrued expenses and other current liabilities. During March 2011, 695,930 shares of common stock valued at $173,982 were issued to the consultant for the settlement of a portion of the accrued compensation, with the remaining 3,473,708 shares of common stock valued at $694,742. On June 30, 2012, the Company revalued the unissued 3,473,708 shares of common stock at $.315 per share according to the closing price from NASDAQ.com.

The revaluation resulted in $399,854 recorded as an additional component of stock-based compensation expense in the accompanying condensed consolidated statement of operations The 3,473,708 shares of common stock were issued to the consultant on July 23, 2012 and valued at $0.33. The final valuation resulted in $52,106 recorded as an additional component of stock-based compensation expense in the accompanying condensed consolidated statement of operations.

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Summary of Significant Accounting Policies Share Based Compensation (Details Narrative)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Minimum
Risk -free interest rates	0.32%	0.39%
Dividend yield
Expected Volatility	36.40%	50.20%
Expected life in years	2 years 5 months 0 days	5 years 0 months 0 days
Maximum
Risk -free interest rates	2.54%	2.54%
Dividend yield
Expected Volatility	50.20%	57.70%
Expected life in years	7 years 0 months 0 days	7 years 0 months 0 days

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Notes payable, Loans and Derivative Liabilities:Notes Payable-Convertible Notes Payable(Details Narrative) (USD $) (USD $)	0 Months Ended	3 Months Ended	9 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended	3 Months Ended	0 Months Ended		1 Months Ended				3 Months Ended		9 Months Ended			9 Months Ended		0 Months Ended	12 Months Ended		9 Months Ended		3 Months Ended	0 Months Ended	3 Months Ended		9 Months Ended			1 Months Ended				3 Months Ended	1 Months Ended	9 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended	1 Months Ended	9 Months Ended			3 Months Ended	1 Months Ended	9 Months Ended			3 Months Ended		9 Months Ended
	Mar. 02, 2012 Note 6 Convertible Note Payable	Sep. 30, 2012 Note 6 Convertible Note Payable	Sep. 30, 2012 Note 6 Convertible Note Payable	Oct. 17, 2011 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Note Payable Related Party	Dec. 31, 2011 Note 6 Note Payable Related Party	Sep. 30, 2012 Note 6 Notes Payable	Jul. 14, 2010 Note 1 Convertible Note Payable		Sep. 30, 2011 Note 1 Convertible Note Payable	Mar. 31, 2011 Note 1 Convertible Note Payable	Dec. 31, 2010 Note 1 Convertible Note Payable	Sep. 30, 2010 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Convertible Note Payable	Mar. 31, 2012 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Convertible Note Payable	Sep. 30, 2012 Note 1 Note Payable Related Party	Dec. 31, 2011 Note 1 Note Payable Related Party	Sep. 30, 2012 Note 1 Notes Payable	Dec. 31, 2011 Note 1 Notes Payable	Jun. 15, 2011 Note 5 Convertible Note Payable	Dec. 31, 2011 Note 5 Convertible Note Payable	Sep. 30, 2012 Note 5 Convertible Note Payable	Sep. 30, 2012 Note 5 Note Payable Related Party	Dec. 31, 2011 Note 5 Note Payable Related Party	Sep. 30, 2012 Note 5 Notes Payable	Jun. 15, 2011 Note 4 Convertible Note Payable	Sep. 30, 2012 Note 4 Convertible Note Payable	Sep. 30, 2011 Note 4 Convertible Note Payable	Sep. 30, 2012 Note 4 Convertible Note Payable	Sep. 30, 2011 Note 4 Convertible Note Payable	Dec. 31, 2011 Note 4 Convertible Note Payable	Feb. 28, 2010 Note 4 Note Payable Related Party		Sep. 30, 2012 Note 4 Note Payable Related Party	Dec. 31, 2011 Note 4 Note Payable Related Party	Sep. 30, 2012 Note 4 Notes Payable	Aug. 31, 2012 Note 7 Convertible Note Payable	Sep. 30, 2012 Note 7 Convertible Note Payable	Feb. 28, 2012 Note 7 Note Payable Related Party	Sep. 30, 2012 Note 7 Note Payable Related Party	Sep. 30, 2012 Note 7 Note Payable Related Party	Apr. 28, 2011 Note 3 Convertible Note Payable	Sep. 30, 2012 Note 3 Convertible Note Payable	Dec. 31, 2011 Note 3 Convertible Note Payable	Feb. 18, 2011 Note 3 Note Payable Related Party	Sep. 30, 2012 Note 3 Notes Payable	Jul. 30, 2010 Note 2 Convertible Note Payable	Sep. 30, 2012 Note 2 Convertible Note Payable	Dec. 31, 2011 Note 2 Convertible Note Payable	Feb. 18, 2011 Note 2 Note Payable Related Party	Sep. 30, 2012 Note 2 Notes Payable	Sep. 30, 2011 Note 2 Notes Payable	Sep. 30, 2012 Note 2 Notes Payable	Sep. 30, 2011 Note 2 Notes Payable	Dec. 31, 2011 Note 2 Notes Payable
Convertible Promissory Note	$ 1,000,000		$ 850,000	$ 400,000		$ 125,000	$ 275,000	$ 30,000	$ 52,380								$ 0	$ 15,000		$ 20,000		$ 109,822			$ 65,958		$ 60,000	$ 57,500						$ 25,000	[1]			$ 30,000	$ 3,000,000				$ 50,000	$ 70,588				$ 60,000	$ 8,000						$ 500,000
Interest rate	18.00%			21.00%					20.00%									10.00%		6.00%					5.00%									5.00%									21.00%						6.00%						15.00%
Maturity date	Sep. 02, 2012			Apr. 17, 2012				Nov. 21, 2012	Sep. 13, 2012									Sep. 13, 2009									Nov. 20, 2012											Nov. 05, 2012					Aug. 28, 2012	May 31, 2011				Oct. 29, 2012	Mar. 02, 2011
Terms	Three-year warrants to purchase an aggregate of 2,500,000 shares the Company’s common stock (2.5 shares for each $1 of the principal amount of the notes purchased) exercisable at $0.10 per share. The notes bear interest at 18% and have various maturity dates beginning September 2, 2012. At the time of any new debt or equity financing by the Company, the principal and interest then due under the notes may be converted into the number of fully paid and non-assessable debt instruments, shares/or units issued in the financing. Notes in the aggregate principal amount of 850,000 and warrants to purchase an aggregate of 2,125,000 were sold in the offering. In addition, the investment banker who facilitated the sale of the notes and warrants received a three-year warrant to purchase 212,500 shares of the Company’s common stock equal (10% of the number of shares of common stock issuable upon exercise of the warrants sold in the offering) exercisable at $0.10 per share.								Note	[2]												an original issue discount of 15%. The convertible promissory note has a maturity date of the earlier of (i) the Company raising debt or equity financing of $600,000 or more, or (ii) June 14, 2012. The note may be converted into the Company's common stock by the holder at $0.05 per share. The Company received a waiver from the lender on September 1, 2011 that waives the provision for payment upon the Company closing a debt or equity financing of $600,000 or more. As a financing incentive, the lender received five-year warrants vesting June 15, 2011, to purchase 575,000 shares of Company’s common stock at an exercise price of $0.25 per share.						an original issue discount of 15%. The convertible promissory note has a maturity date of the earlier of (i) the Company raising debt or equity financing of $600,000 or more, or (ii) June 14, 2012. The note may be converted into the Company's common stock by the holder at $0.05 per share. The Company received a waiver from the lender on September 1, 2011 that waives the provision for payment upon the Company closing a debt or equity financing of $600,000 or more. As a financing incentive, the lender received five-year warrants vesting June 15, 2011, to purchase 575,000 shares of Company’s common stock at an exercise price of $0.25 per share.											Three-year warrants to purchase an aggregate of 6,000,000 shares the Company’s common stock (two shares for each $1 of the principal amount of the notes purchased) exercisable at $0.50 per share. The notes bear interest at 18% and have various maturity dates beginning March 13, 2013. At the time of any new debt or equity financing by the Company, the principal and interest then due under the notes may be converted into the number of fully paid and non-assessable debt instruments, shares/or units issued in the financing. During the three months ended September 30, 2012, notes in the aggregate principal amount of $850,000 and warrants to purchase an aggregate of 1,700,000 shares of the Company’s common stock were sold in the offering. In addition, the investment banker who facilitated the sale of the notes and warrants received a three-year warrant to purchase 170,000 shares of the Company’s common stock equal (10% of the number of shares of common stock issuable upon exercise of the warrants sold in the offering) exercisable at $0.50 per share.	Thereafter, additional notes in the aggregate principal amount of $22,500 ($872,500 for the entire offering) and additional warrants to purchase an aggregate of 45,000 shares of the Company’s common stock (1,745,000 for the entire offering) were sold in the offering, and the investment banker received a warrant to purchase an additional 4,500 shares of the Company’s common stock in connection therewith. The Company currently is seeking to amend the notes to remove the conversion right and extend the due date to June 30, 2013, and to amend the warrants to remove certain anti-dilution provisions. Each holder of notes and warrants who agrees to such amendments will be granted a warrant to purchase that number of shares of the Company’s common stock equal to 0.5 times the principal amount of the note amended, exercisable at $0.50 per share (437,500 shares in the aggregate if all of the note holders agree to such amendments).				an original issue discount of 15%. The convertible promissory note has a maturity date of the earlier of (i) the Company raising debt or equity financing of $600,000 or more, or (ii) May 31, 2011. The note may be converted into the Company's common stock by the holder at $0.05 per share. The Company has not made a note payment and received a waiver from the lender on September 1, 2011 that defers payment until May 31, 2012 and waives the provision for payment upon the Company closing a debt or equity financing of $600,000 or more. The Company is currently negotiating an extension of such loan. As a financing incentive, the lender received five-year warrants vesting April 28, 2011, to purchase 705,882 shares of Company’s common stock at an exercise price of $0.25 per share.
Note Payable		851,329	851,329		406,740	406,740	283,993	27,981										21,068	19,942	22,744	21,845		109,789	109,789	53,934	59,974	55,253		57,500		57,500		57,500			28,411	27,472	28,865		851,421					70,588	70,588	57,879	56,304		9,043	8,683	231,514	672,068		672,068		593,247
Debt Discount		443,655	789,073		0	85,342		2,019							6,548	13,095	9,526						95,497				4,748		12,500	0	22,917	14,583		2,935				2,271		64,116	7,997	2,592	7,997		60,000			7,392		1,333			21,038	15,300	63,114	59,289
Conversion price								$ 0.50			$ 0.045	$ 0.0252	$ 0.14	$ 0.099		$ 0.0405				$ 1.00							$ 0.50											$ 0.50										$ 0.50	$ 0.05				$ 0.01		$ 0.01
Fair Market Value	789,073			105,363					52,380													95,497						50,000												482,861					60,000				8,000			68,824
Convertible Note											$ 20,000	$ 5,000	$ 7,500	$ 7,500		$ 12,380
Common stock, issued											444,444	198,413	53,419	75,758		305,679						1,098,220						575,500			1,265,000													705,882

[1] advanced to the Company $10,000 and $15,000, respectively

[2] The note can be converted into the Company's common stock by the holder based on a variable conversion price. The variable conversion price is defined in the note as 45% multiplied by the average of the five lowest intraday prices for the Company's stock during the previous 20 trading days prior to the date of conversion. The total conversion may not exceed 4.99% of the Company's common stock issued and outstanding.

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Notes payable, Loans and Derivative Liabilities (Tables)

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Notes payable

	September 30,		December 31,
	2012		2011
	(unaudited)
Notes Payable (net of debt discount of $11,597 at September 30, 2012 and $63,114 at December 31, 2011) (A)	$	863,214	$	551,978
Notes Payable – Related Parties (net of debt discount of $50,053 at December 31, 2011) (B)		570,494		348,130
Convertible Notes Payable (net of debt discount of $418,745 at September 30, 2012 and $41,469 at December 31, 2011) (C)		1,530,925		228,441
Total	$	2,964,633	$	1,128,549