UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~December~~March 31, ~~2009~~2010

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

For the Transition Period from _______ to _______

Commission file number 0-3338

ORGANIC SALES AND MARKETING, INC.

(Exact Name of small business issuer as specified in its Charter)

Delaware	33-1069593
(State or other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

114 Broadway, Raynham, MA 02767

(Address of Principal Executive Office)

(508) 823-1117

(Registrant’s telephone number including area code)

Check whether the issuer (1) 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 x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller public company.

x Smaller Reporting Company

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

Yes o No x

The number of shares of outstanding of each of the issuer’s classes of common equity, as of the latest practicable date was 1012,~~290~~790,~~072~~722 shares of common stock, par value $.0001, issued and outstanding as of ~~February~~May 109, 2010.

Organic Sales and Marketing, Inc.

Form 10-Q

TABLE OF CONTENTS

	~~PAGE~~	PAGE
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements	3
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3. Quantitative and Qualitative Disclosures About Market Risk	19
Item 4. Controls and Procedures
Item 4. Controls and Procedures	19
PART II- OTHER INFORMATION
PART II- OTHER INFORMATION
Item 1A. Risk Factors
Item 1A. Risk Factors	20
Item 6. Exhibits
Item 6. Exhibits	21
SIGNATURES
SIGNATURES	22

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements.

The accompanying financial statements are unaudited for the interim periods, but include all adjustments (consisting only of normal recurring adjustments), which we consider necessary for the fair presentation of results for the ~~three~~six months ended ~~December~~March 31, ~~2009~~2010 and ~~December~~ March 31, ~~2008~~2009.

Moreover, these financial statements do not purport to contain complete disclosure in conformity with the U.S. generally accepted accounting principles and should be read in conjunction with our audited financial statements at, and for the fiscal year ended September 30, 2009 as contained in Registrant’s Form 10-K filing.

Organic Sales and Marketing, Inc.

Financial Statements for the ~~Three~~Six Months Ended

~~December~~ March 31, 2010 ~~2009~~ (unaudited) and ~~2008~~2009 (unaudited)

CONTENTS

Balance Sheets			3

Statements of Operations			5

Statements of Stockholders’ (Deficit)			6

Statements of Cash Flows			7

Notes to the Financial Statements			8

ORGANIC SALES AND MARKETING, INC. ~~Balance Sheets~~

Balance Sheets

ASSETS

	December 31,		September 30,
	March 31,		September 30,
	2009		2009
	2010		2009
	(Unaudited)
CURRENT ASSETS
Cash and cash equivalents	$	2729,~~318~~810	$	24,547
Accounts receivable, net		1738,~~645~~720		8,090
Inventories		9098,~~489~~261		109,581
Prepaid Expense		209,~~946~~765		7,479
Total Current Assets		~~156~~176,~~398~~556		149,697
PROPERTY AND EQUIPMENT, NET		86,~~157~~932		9,383
OTHER ASSETS
Deposits		200		200
Total Other Assets		200		200
TOTAL ASSETS	$	~~164~~183,~~755~~688	$	159,280

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

ORGANIC SALES AND MARKETING, INC.

~~ORGANIC SALES AND MARKETING, INC.~~ Balance Sheets (Continued)

LIABILITIES AND STOCKHOLDERS' (DEFICIT)

	December 31,			September 30,
	March 31,			September 30,
	2009			2009
	2010			2009
	(Unaudited)
CURRENT LIABILITIES
Accounts payable-trade	$	~~544~~566,~~963~~109		$	581,215
Accounts payable-related party		13,~~858~~345			3,986
Cash Overdraft		31,929			-
Accrued expenses		33,099			33,807
Accrued expenses		34,125			33,807
Accrued interest payable		64,500			61,620
Accrued interest payable		74,511			61,620
Line of Credit		74,847			72,054
Line of Credit		68,374			72,054
Notes payable - related parties		385,334			495,736
Notes payable - related parties		605,736			495,736
Total Current Liabilities		1,137,234			1,248,418
Total Current Liabilities		1,373,496			1,248,418
Total Liabilities		1,137,234			1,248,418
Total Liabilities		1,373,496			1,248,418
COMMITMENTS		-			-
STOCKHOLDERS' (DEFICIT)
Common stock, $0.0001 par value; 100,000,000 shares
authorized, 10,288,794 and 10,088,794 shares issued and
authorized, 12,789,444 and 10,088,794 shares issued and
outstanding, respectively		1,~~029~~279			1,009
Additional paid-in capital		56,~~755~~195,~~832~~279			5,669,969
Accumulated (Deficit)		(67,~~965~~150,~~602~~104	)		(6,760,116	)
Total Stockholders' (Deficit)		(1953,~~208,741~~546	)		(1,089,138	)
TOTAL LIABILITIES AND
STOCKHOLDERS' (DEFICIT)	$	~~164~~183,~~755~~688		$	159,280

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

ORGANIC SALES AND MARKETING, INC. ~~Statements of Operations (Unaudited)~~

Statements of Operations

	For the Three Months
	Ended December 31,
	2009			2008
REVENUES
Product sales, net	$	42,974		$	44,632
Radio Advertising		4,845			-
Total Revenues		47,819			44,632
COST OF SALES		39,257			33,474
GROSS PROFIT		8,562			11,158
OPERATING EXPENSES
Advertising Expense		19,190			101,956
Payroll and Compensation Expense		59,589			109,484
Selling Expense		21,161			40,552
General and Administrative		43,390			65,878
Legal and Accounting		53,962			66,904
Total Operating Expenses		197,292			384,774
LOSS FROM OPERATIONS		(188,730	)		(373,616	)
OTHER INCOME (EXPENSE)
Interest income		277			475
Interest expense		(17,033	)		(11,521	)
Valuation of Warrants granted for Financing Costs		-			(593,484	)
Total Other Income (Expense)		(16,756	)		(604,530	)
NET LOSS BEFORE INCOME TAXES		(205,486	)		(978,146	)
INCOME TAX EXPENSE		-			-
NET LOSS	$	(205,486	)	$	(978,146	)
LOSS PER SHARE-
Basic and Diluted	$	(0.02	)	$	(0.13	)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING-
Basic and Diluted		10,117,055			7,776,450

(Unaudited)

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

	For the Three Months						For the Six Months
	Ended March 31,						Ended March 31,
	2010			2009			2010			2009
REVENUES

Product sales, net	$	43,613		$	35,637		$	86,587		$	80,269
Radio Advertising		22,460			21,370			27,305			21,370

Total Revenues		66,073			57,007			113,892			101,639

COST OF SALES		35,757			29,886			75,014			63,360

GROSS PROFIT		30,316			27,121			38,878			38,279

OPERATING EXPENSES

Advertising Expense		29,325			75,802			48,515			177,758
Payroll and Compensation Expense		51,302			95,952			110,891			205,436
Selling Expense		26,129			39,340			47,290			79,892
General and Administrative		55,587			72,802			98,977			138,680
Legal and Accounting		37,371			42,996			91,333			109,900

Total Operating Expenses		199,714			326,892			397,006			711,666

LOSS FROM OPERATIONS		(169,398	)		(299,771	)		(358,128	)		(673,387	)

OTHER INCOME (EXPENSE)

Interest income		280			282			557			757
Interest expense		(15,384	)		(10,703	)		(32,417	)		(22,224	)
Valuation of Warrants granted for Financing Costs		-			(361,353	)		-			(954,837	)

Total Other Income (Expense)		(15,104	)		(371,774	)		(31,860	)		(976,304	)

NET LOSS BEFORE INCOME TAXES		(184,502	)		(671,545	)		(389,988	)		(1,649,691	)

INCOME TAX EXPENSE		-			-			-			-

NET LOSS	$	(184,502	)	$	(671,545	)	$	(389,988	)	$	(1,649,691	)

LOSS PER SHARE-
Basic and Diluted	$	(0.02	)	$	(0.08	)	$	(0.03	)	$	(0.20	)

WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING-
Basic and Diluted		12,207,624			8,598,056			11,150,852			8,111,642

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

ORGANIC SALES AND MARKETING, INC.

Statements of Stockholders' (Deficit)

~~ORGANIC SALES AND MARKETING, INC. Statements of Stockholders' (Deficit)~~ For the period October 1, 2007 through ~~December~~March 31, ~~2009~~2010

										Total
					Additional					Stockholders'
	Common Stock				Paid-In		Accumulated			Equity
	Shares		Amount		Capital		(Deficit)			(Deficit)
Balance, October 1, 2007		5,388,569	$	539	$	1,898,410	$	(2,104,520	)	$	(205,571	)
Shares issued for cash at $.50/share		870,000		87		434,913		-			435,000
Shares issued for cash at $1.00/share		33,123		3		33,120					33,123
Shares issued for debt and payables at $1.00/share		139,562		14		139,548					139,562
Shares issued for conversion of debt at $.50/share		368,240		37		184,083					184,120
Debt Settlement Expense related to issuance of stock at a discount						685,420					685,420
Valuation of Options and Warrants Granted						363,465					363,465
Net loss for the year ended September 30, 2008								(2,248,268	)		(2,248,268	)
Balance, September 30, 2008		6,799,494	$	680	$	3,738,959	$	(4,352,789	)	$	(613,150	)
Shares issued for cash at $.25/share		1,440,000		144		359,856					360,000
Shares issued for cash at $.15/share		1,296,800		130		194,390					194,520
Shares issued for services rendered at $.40/share		450,000		45		179,955					180,000
Shares issued for services rendered at $.10/share		50,000		5		4,995					5,000
Shares issued for services rendered at $.18/share		50,000		5		8,995					9,000
Shares issued for services rendered at $.14/share		2,500		-		350					350
Valuation of Options and Warrants Granted		-		-		1,182,470					1,182,470
Net loss for the year ended September 30, 2009		-		-		-		(2,407,327	)		(2,407,327	)
Balance, September 30, 2009		10,088,794	$	1,009	$	5,669,969	$	(6,760,116	)	$	(1,089,138	)
Shares issued for cash at $.15/share		~~200~~247,~~000~~317		2025		2937,~~980~~073					3037,~~000~~097
Valuation of Options and Warrants Granted		-		-		55,883					55,883
Shares issued for conversion of debt at $.15/share		2,453,333		245		367,755					368,000
Net loss for the three months ended December 31, 2009 (Unaudited)		-		-		-		(205,486	)		(205,486	)
Valuation of Options and Warrants Granted		-		-		120,482					120,482
Balance, December 31, 2009 (Unaudited)		10,288,794	$	1,029	$	5,755,832	$	(6,965,602	)	$	(1,208,741	)
Net loss for the six months ended March 31, 2010 (Unaudited)		-		-		-		(389,988	)		(389,988	)
Balance, March 31, 2010 (Unaudited)		12,789,444	$	1,279	$	6,195,279	$	(7,150,104	)	$	(953,546	)

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

ORGANIC SALES AND MARKETING, INC.

Statements of Cash Flows

~~ORGANIC SALES AND MARKETING, INC. Statements of Cash Flows~~ (Unaudited)

	For the Three Months
	For the Six Months
	Ended December 31,
	Ended March 31,
	2009			2008
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(~~205~~389,~~486~~988	)	$	(~~978~~1,~~146~~649,691	)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation expense		12,~~225~~451			12,~~225~~451
Valuation of options and warrants granted		55120,~~883~~482			~~650~~1,~~195~~068,258
Stock Issued for Accrued Interest		18,000			-
Change in operating assets and liabilities:
Accounts receivable-trade		(930,~~555~~630	)		2015,~~199~~461
Inventories		1911,~~092~~320			(3027,~~755~~544	)
Prepaid Expense		(132,~~467~~286	)		(72,~~310~~933	)
Accounts payable-trade		(3615,~~252~~106	)		831,~~044~~525
Accounts payable-related party		9,~~872~~359			-3,922
Cash Overdraft		31,929			-
Accrued expenses		(708	)		23,570
Accrued expenses		318			10,998
Accrued interest payable		4,618			15,525
Accrued interest payable		12,891			7,431
Net Cash Used in Operating Activities	$	(272,488	)	$	(513,590	)
Net Cash Used in Operating Activities	$	(133,549	)	$	(318,119	)
CASH FLOWS FROM INVESTING ACTIVITIES		-			-
CASH FLOWS FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Net Cash Used in Investing Activities	$	-		$	-
Proceeds from issuance of common stock		37,097			554,520
Proceeds from issuance of common stock		30,000			360,000
Proceeds from Line of Credit		10,000			9,727
Proceeds from Line of Credit		-			1,000
Payments on Line of Credit		(7,207	)		(10,853	)
Payments on Line of Credit		(3,680	)		(7,110	)
Proceeds from notes payable - related party		240,800			27,500
Proceeds from notes payable - related party		110,000			27,499
Payments on notes payable - related party		(2,939	)		-
Net Cash Provided by Financing Activities	$	~~136~~277,~~320~~751		$	~~381~~580,~~389~~894
NET INCREASE (DECREASE) IN CASH	$	25,~~771~~263		$	6367,~~270~~304
CASH, BEGINNING OF PERIOD	$	24,547		$	27,838
CASH, END OF PERIOD	$	2729,~~318~~810		$	9195,~~108~~142
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	47,~~142~~776		$	35,~~201~~616
Cash paid for taxes	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Valuation of Options and Warrants Granted	$	55120,~~883~~482		$	~~650~~1,~~195~~068,258
Stock issued for related party notes payable		350,000
Stock issued for interest on related party notes payable		18,000

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

ORGANIC SALES AND MARKETING, INC.

Notes to the Financial Statements

~~December~~March 31, ~~2009~~2010 (unaudited)

Note 1 – Basis of Financial Statement Presentation

The accompanying unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim financial statements include normal recurring adjustments and reflects all adjustments, which in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim financial statements be read in conjunction with the Company’s audited financial statements and notes thereto included in its September 30, 2009 Form ~~10-K~~10K filing on January 14, 2010. Operating results for the ~~three~~six months ended ~~December~~ March 31, ~~2009~~2010 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2010.

Note 2 – Net Income/(Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding and dilutive potential common shares, which includes the dilutive effect of stock options and warrants granted. Dilutive potential common shares for all periods presented are computed utilizing the treasury stock method. Common stock options of 12,~~140~~295,145 were considered, but ~~were~~ not included in the computation of loss per share because ~~their~~ their effect is anti-dilutive. Common stock warrants of 2,920,920 were considered, but not included in the computation of loss per share because their effect is also anti-dilutive.

	For the Three Months						For the Six Months
	Ended December 31,
	Ended March 31,						Ended March 31,
	2009			2008
	2010			2009			2010			2009
Basic and Diluted
Net Loss - Numerator	$	(~~205~~184,~~486~~502	)	$	(~~978~~671,~~146~~545	)	$	(389,988	)	$	(1,649,691	)
Weighted Average Shares - Denominator		1012,~~117~~207,~~055~~624			78,~~776~~598,~~450~~056			11,150,852			8,111,642
Per Share Amount	$	(0.02	)	$	(0.1308	)	$	(0.03	)	$	(0.20	)

Note 3 – Inventories

Inventories consisted of the following as of:

	December 31,		September 30,
	March 31,		September 30,
	2009		2009
	2010		2009
	(Unaudited)
Raw materials	$	7168,~~487~~785	$	~~105~~70,~~107~~179
Finished goods		1929,~~002~~476		4439,~~279~~402
Totals	$	9098,~~489~~261	$	~~149~~109,~~386~~581

At ~~December~~ March 31, ~~2009~~2010 and September 30, 2009, no provision for obsolete ~~inventory~~ inventory was recorded by the Company.

ORGANIC SALES AND MARKETING, INC.

Notes to the Financial Statements

~~December~~March 31, ~~2009~~2010 (unaudited)

Note 4 – Stock Options

On February 28, 2008, our Board of Directors approved the 2008 Stock Option and Purchase Plan. Under the terms of this plan, options may be granted to officers, directors, employees, consultants and independent contractors to purchase up to an aggregate of 1,350,000 shares of common stock at an exercise price of $1.00 per share. Options are exercisable and vest over a four year period at a rate of 25% per year.

~~As of~~On ~~December~~January 3121, ~~2009~~2010, ~~there~~the ~~were~~Board ~~1,140,145~~of ~~options~~Directors ~~outstanding~~approved ~~under this plan at~~ the ~~exercise~~granting ~~price~~ of $1~~.00~~,155,000 common ~~per~~stock ~~share.~~option ~~The~~shares ~~issuance~~to ofofficers, ~~these~~directors, ~~options~~employees ~~was~~and independent ~~approved~~contractors. byUnder ~~holders of~~ the ~~majority~~terms of the ~~Company’s~~grants ~~outstanding~~approved, ~~common~~shares ~~stock. The~~carry ~~total~~an ~~amount~~exercise price of ~~option~~$.15 ~~expense~~per ~~recorded~~share, ~~for~~vest ~~the~~over ~~three~~a ~~months~~four ~~ended~~year ~~December 31,~~period ~~2009~~at ~~was~~a ~~$55,884,~~rate of ~~which,~~25% ~~$23,465~~per ~~was recorded as payroll and compensation~~year ~~expense~~ and ~~$32,419~~only ~~was~~vested ~~recorded~~options ascan ~~legal and accounting expense. The amount of option expense to~~ be ~~charged~~exercised over ~~the~~a ~~remainder~~ten ofyear ~~the exercise~~ period ~~is $493,817~~.

~~The~~As of ~~Company~~March ~~has~~31, ~~determined~~2010, ~~the~~under ~~estimated~~this ~~value~~plan, ofthere ~~the~~were ~~stock~~1,140,145 options ~~granted~~outstanding byat ~~using~~ the exercise ~~Black-Scholes~~price ~~pricing~~of ~~model~~$1.00 ~~using~~per ~~the~~share ~~following~~and ~~assumptions:~~1,155,000 ~~expected~~options ~~life~~outstanding at the exercise price of 10$.15 ~~years,~~per ashare. The ~~risk~~issuance ~~free~~of ~~interest~~these ~~rate~~options was approved by holders of 1the majority of the Company’s outstanding common stock.~~66-3.71%~~ The total amount of option expense recorded for the six months ended March 31, a2010 ~~dividend~~was ~~yield~~$120,482, of 0%which, $55,379 was recorded as payroll and ~~volatility~~compensation ~~ranging~~expense ~~from~~and ~~75%~~$65,103 inwas ~~2008~~recorded as legal and accounting expense. The amount of option expense to ~~192%~~be incharged ~~2009~~over the remainder of the exercise period is $580,847.

~~Outstanding~~The ~~common~~Company has determined the estimated value of the stock options asgranted by using the Black-Scholes pricing model with the following assumptions: expected life of 10 ~~December~~years, 31a risk free interest rate of 2.46-3.71%, a dividend yield of 0% and volatility ranging from 75% in 2008, 154% to 192% in 2009 ~~are~~and ~~summarized~~190% ~~below:~~in 2010.

	Number of Shares			Weighted Average Exercise Price
Stock Options Outstanding, October 1, 2007		-		$	-
Options Granted		1,126,250		$	1.00
Options Exercised		-		$	-
Options Canceled		-		$	-
Stock Options Outstanding, September 30, 2008		1,126,250		$	1.00
Stock Options Exercisable, September 30, 2008		148,619		$	1.00
Options Granted		29,000		$	1.00
Options Exercised		-		$	-
Options Canceled		(15,105	)	$	1.00
Stock Options Outstanding, September 30, 2009		1,140,145		$	1.00
Stock Options Exercisable, September 30, 2009		438,057		$	1.00
Options Granted		-		$	-
Options Exercised		-		$	-
Options Canceled		-		$	-
Stock Options Outstanding, December 31, 2009 (unaudited)		1,140,145		$	1.00
Stock Options Exercisable, December 31, 2009 (unaudited)		509,317		$	1.00

Outstanding common stock options as of March 31, 2010 are summarized below:

	Number of Shares			Weighted Average Exercise Price
Stock Options Outstanding, October 1, 2007		-		$	-

Options Granted		1,126,250		$	1.00
Options Exercised		-		$	-
Options Canceled		-		$	-

Stock Options Outstanding, September 30, 2008		1,126,250		$	1.00

Stock Options Exercisable, September 30, 2008		148,619		$	1.00

Options Granted		29,000		$	1.00
Options Exercised		-		$	-
Options Canceled		(15,105	)	$	1.00

Stock Options Outstanding, September 30, 2009		1,140,145		$	1.00

Stock Options Exercisable, September 30, 2009		438,057		$	1.00

Options Granted		1,155,000		$	0.15
Options Exercised		-			.
Options Canceled		-		$	-

Stock Options Outstanding, March 31, 2010 (unaudited)		2,295,145		$	0.57

Stock Options Exercisable, March 31, 2010 (unaudited)		634,682		$	0.94

ORGANIC SALES AND MARKETING, INC.

Notes to the Financial Statements

~~December~~March 31, ~~2009~~2010 (unaudited)

Note 4 – Stock Options (Continued)

The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock options issued to both employees and non-employees of the Company.

	Options Outstanding						Options Exercisable
					Weighted
			Number		Average				Weighted
	Exercise		Shares		Contractual		Number		Average
Year	Price		Outstanding		Life (Years)		Exercisable		Exercise Price
February 2008	$	1.00		861,145		8.17		400,670	$	1.00
February-08	$	1.00		861,145		7.92		453,254	$	1.00
May 2008	$	1.00		250,000		8.42		104,167	$	1.00
May-08	$	1.00		250,000		8.17		119,792	$	1.00
January 2009	$	1.00		5,000		10.00		1,251	$	1.00
January-09	$	1.00		5,000		8.84		1,563	$	1.00
April 2009	$	1.00		10,000		8.17		1,771	$	1.00
April-09	$	1.00		10,000		9.08		2,396	$	1.00
August 2009	$	1.00		14,000		9.58		1,458	$	1.00
August-09	$	1.00		14,000		9.42		2,333	$	1.00
				1,140,145				509,317
January-10	$	0.15		1,155,000		9.84		55,344	$	0.15
				2,295,145				634,682

Note 5 – Common Stock Purchase Warrants

On October 3, 2008, the Company commenced a private stock offering, whereby it authorized the issuance of 1,440,000 units consisting of one share of its common stock and one common stock purchase warrant for a total raise of $360,000. The common stock purchase warrants are exercisable at $1.00 per share and carrying a five year exercise period. The offering was closed as of November 30, 2008. All 1,440,000 units were issued and $360,000 in cash was received.

~~Warrant~~The amount of warrant expense related to this offering for the ~~three~~six months ending March ~~December~~ 31, ~~2008~~ 2009 was $593,484.

~~Total~~On ~~warrant~~January ~~expense~~28, ~~charged~~2009, asthe ~~financing~~Company ~~costs~~commenced ~~for~~a private stock offering, whereby it authorized the ~~three~~issuance ~~months~~of ~~ended~~1,750,000 ~~December~~units, each consisting of one share of its 31common stock and one common stock purchase warrant for a total raise of $262,500. ~~2009~~The common stock purchase warrants are exercisable at $1.00 per share and ~~2008~~carry a five year exercise period. The offering was ~~$-0-~~closed on March 31, 2009, at which time 1,296,800 unit shares were issued and $~~593~~194,~~484~~520 in cash was received. The amount of warrant expense related to this offering for the six months ending March 31, ~~respectively~~2009 was $361,353.

Total warrant expense charged as financing costs for the six months ended March 31, 2010 and 2009 was $-0- and $954,837, respectively.

The Company has determined the estimated value of warrants granted during the ~~three~~six months ended ~~December~~March 31, ~~2008~~2009 using the Black-Scholes pricing model with the following assumptions: expected life of 5 years; a risk free interest rate of 1.66%-2.71%; a dividend yield of 0% and volatility of 149.62%-172.61%.

ORGANIC SALES AND MARKETING, INC.

Notes to the Financial Statements

~~December~~March 31, ~~2009~~2010 (unaudited)

Note 5 – Common Stock Purchase Warrants (Continued)

Outstanding common stock purchase warrants as of ~~December~~March 31, ~~2009~~2010 are summarized below:

	Number of Warrants		Weighted Average Exercise Price
Warrants Outstanding, October 1, 2007		-	$	-
Warrants Granted		184,120	$	2.00
Warrants Exercised		-	$	-
Warrants Canceled		-	$	-
Warrants Outstanding and Exercisable, September 30, 2008		184,120	$	2.00
Warrants Granted		2,736,800	$	1.00
Warrants Exercised		-	$	-
Warrants Canceled		-	$	-
Warrants Outstanding and Exercisable, September 30, 2009		2,920,920	$	1.06
Warrants Granted		-	$	-
Warrants Exercised		-	$	-
Warrants Canceled		-	$	-
Warrants Outstanding and Exercisable, December 31, 2009 (unaudited)		2,920,920	$	1.06
Warrants Outstanding and Exercisable, March 31, 2010 (unaudited)		2,920,920	$	1.06

The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Company’s common stock issued to the note holders referenced above.

	Warrants Outstanding						Warrants Exercisable
					Weighted
			Number		Average				Weighted
	Exercise		Shares		Contractual		Number		Average
Year	Price		Outstanding		Life (Years)		Exercisable		Exercise Price
June 2008	$	2.00		184,120		0.50		184,120	$	2.00
Jun-08	$	2.00		184,120		0.25		184,120	$	2.00
October 2008	$	1.00		40,000		3.75		40,000	$	1.00
Oct-08	$	1.00		40,000		3.59		40,000	$	1.00
November 2008	$	1.00		1,400,000		3.83		1,400,000	$	1.00
Nov-08	$	1.00		1,400,000		3.67		1,400,000	$	1.00
February 2009	$	1.00		666,667		4.08		666,667	$	1.00
Feb-09	$	1.00		666,667		3.92		666,667	$	1.00
March 2009	$	1.00		630,133		4.17		630,133	$	1.00
Mar-09	$	1.00		630,133		4.00		630,133	$	1.00
				2,920,920				2,920,920

ORGANIC SALES AND MARKETING, INC.

Notes to the Financial Statements

~~December~~March 31, ~~2009~~2010 (unaudited)

Note 76 – Equity Transactions

On December 16, 2009, the Company commenced a private stock offering, whereby it authorized the issuance of 3,333,334 shares of its common stock for a total raise of $500,000. The offering iswas ~~expected~~closed toon ~~be completed by~~ March 31, 2010 and ~~the company expects that all shares will be sold. There can be no~~ ~~assurance, however, that this will happen. As of December 31, 2009,~~ $3037,~~000~~097 of the $500,000 ~~has~~was ~~been~~ raised and ~~200~~247,~~000~~317 shares ~~have~~of ~~been~~common stock were issued.

On January 21, 2010, the Board of Directors approved the issuance of 1,773,333 shares of common stock in satisfaction of $260,000 in related party notes payable and $6,000 in accrued interest to a director of the Company. As part of the agreement, the remaining balance of the related party note of $100,000 (See Note 87) –will ~~Notes~~be ~~Payable-~~due and payable over the next 7 years at an interest rate of 8% ~~Related~~per ~~Parties~~annum.

~~Through~~On ~~September~~January 3021, ~~2007~~2010, athe ~~director~~Board of ~~the~~Directors ~~company~~approved ~~loaned~~ the ~~Company~~issuance ~~a total~~ of ~~$32,026~~ ~~at a interest rate of 6%. During the fiscal year ended September 30~~680,000 ~~2008 the Company issued 30,779~~ shares of common stock in ~~relief~~satisfaction of $3090,~~779~~000 in ~~debt. This~~related ~~director~~party ~~advanced~~notes payable and $7512,000 ~~during~~in ~~fiscal~~accrued ~~year 2008. During~~interest ~~the~~to ~~fiscal~~a ~~year~~director ~~ended~~of ~~September 30, 2009~~ the ~~director advance the~~ Company. anAs ~~additional~~part ~~$27~~of the agreement,~~499~~ ~~bringing~~ the ~~total~~remaining ~~principal~~ balance ~~due~~ as of ~~September~~the ~~30,~~related ~~2009~~party ~~to $103,747. This~~ note ~~is payable monthly by the Company in the amount~~ of $114,000 ~~with~~(See ~~interest. During the three months ending~~Note ~~December~~7) ~~31,~~will ~~2009,~~be nodue ~~scheduled~~and ~~payments~~payable ~~were~~over ~~made and~~ the ~~note~~next ~~was~~2 ~~considered in~~years ~~default.~~at Asan ~~of December 31, 2009, accrued~~ interest ~~owed~~rate onof ~~the~~8% ~~Note was~~per ~~$12,069~~annum.

~~Through September~~Note ~~30,~~7 ~~2008,~~– aNotes ~~director of the company advanced a total of $12,772 in the~~Payable- ~~form~~Related of a demand note dated March 15, 2008. During the 2008 fiscal year end 1,917 shares of common stock were issued in satisfaction of $1,917 in debt, resulting in a principal balance due as of September 30, 2009 and 2008, of $10,855. This note is payable monthly by the Company in the amount of $1,020 with interest at the rate of 6% per annum. During the three months ending December 31, 2009, no scheduled payments were made and the note was considered in default. As of December 31, 2009, accrued interest owed on the Note was $1,138.Parties

Through September 30, ~~2008~~2007, a director of the company loaned the Company a total of $32,026 at an interest rate of 6% per annum. During the fiscal year ended September 30, 2008 the Company issued 30,779 shares of common stock in relief of $30,779 in debt. This director advanced $~~175~~75,000 toduring ~~the~~fiscal ~~Company~~year 2008. During ~~Interest~~the ~~accrues~~fiscal atyear ~~12%~~ended ~~per~~September ~~annum.~~30, ~~Accrued~~2009, ~~interest~~the ~~and~~director advanced the Company an additional $27,499, bringing the total principal ~~was~~balance due atas of January 20, ~~maturity~~2010 to $103,747. ~~December~~This note was payable monthly in the amount of $1,000 ~~2008~~plus interest, however, ~~the~~no ~~note~~scheduled ~~holder~~payments ~~agreed~~were tomade ~~extend~~through ~~the~~January 20, 2010 by ~~maturity~~the ~~date~~Company. ~~for~~On anJanuary ~~additional~~21, ~~twelve~~2010, ~~months~~the ~~given~~Company’s Board authorized the ~~same~~conversion of ~~terms~~$102,000 of principal and accrued interest to common stock and issued a new ~~conditions~~promissory asnote for balance in the ~~original~~amount ~~note~~of $14,000. ~~Through~~The ~~the~~new ~~period~~promissory ~~ending~~note ~~December~~of $14,000 31carries an interest rate of 8% per annum, ~~2009~~is payable monthly at $1,000 per nomonth beginning February 21, 2010, matures March, 2012 and is unsecured. No scheduled payments ~~had~~were ~~been~~ made ~~and~~on the new note through March 31, 2010 and the note was considered in default. As of ~~December~~ March 31, ~~2009~~2010, accrued interest owed on the new promissory note was $~~54,366~~219..

Through September 30, 2007, the CEO and Chairman of the Board of ~~Directors of~~ the ~~company~~ ~~advanced~~Company advanced the Company $20,000. During the fiscal year ended September 30, 2008 the Company issued a total of 20,000 shares of common stock in satisfaction of $20,000 in debt. As of ~~December~~January 3120, ~~2009~~2010 ~~this individual~~total ~~has~~principal ~~advanced~~owed anon ~~aggregate~~the ofnote was $~~316~~356,~~134~~068. Monthly payments ~~are~~were not required and interest ~~accrues~~accrued at 6% per annum. On January 21, 2010, the Company’s Board authorized the conversion of $266,000 of principal and accrued interest to common stock and issued a new promissory note for the balance in the amount of $100,000. The new promissory note of $100,000 carries an interest rate of 8% per annum, is payable monthly at $1,558 per month beginning February 21, 2010, matures January, 2017 and is unsecured. Scheduled payments were made on the new note through March 31, 2010. Since January 3021, 2010, ~~but~~additional funds of $89,800 have been advanced by the ~~possibility~~CEO ~~exists~~to ~~that~~the itCompany and ~~could~~added beto ~~extended~~the $100,000 promissory note, subject to final Board approval at the May 6, 2010 Board of Directors meeting. As of ~~December~~March 31, ~~2009~~ 2010, accrued interest owed on the new promissory note was $61,~~626~~397.

Through September 30, 2008, a director of the company advanced a total of $12,772 in the form of a demand note dated March 15, 2008. During the 2008 fiscal year end 1,917 shares of common stock were issued in satisfaction of $1,917 in debt, resulting in a principal balance due as of September 30, 2009 and 2008, of $10,855. This note is payable monthly by the Company in the amount of $1,020 with interest at the rate of 6% per annum. During the six months ending March 31, 2010, no scheduled payments were made and the note was considered in default. As of March 31, 2010, accrued interest owed on the Note was $1,319.

ORGANIC SALES AND MARKETING, INC.

Notes to the Financial Statements

~~December~~March 31, ~~2009~~2010 (unaudited)

Note 87 – Notes Payable- Related Parties (Continued)

Through September 30, 2008, a director of the company, advanced $175,000 to the Company. Interest accrues at 12% per annum. Accrued interest and principal was due at maturity, December 1, 2008, however, the note holder agreed to extend the maturity date for an additional twelve months given the same terms and conditions as the original note. Through the period March 31, 2010, no payments were made and the note was considered in default. As of March 31, 2010, accrued interest owed on the Note was $61,252.

Notes payable-related parties consisted of the following at:

	December 31,			September 30,
	March 31,			September 30,
	2009			2009
	2010			2009
	(Unaudited)
Note payable with a director of the Company,
interest at 6% per annum, payments of
interest at 8% per annum, payments of $1,000 is
$1,000 due monthly beginning April 1, 2007,
due monthly beginning February 21, 2010, matures
matures March 2010, unsecured.	$	103,747		$	103,747
January, 2012, unsecured.	$	14,197		$	103,747
Note payable with a director of the Company,
interest at 8% per annum, payments of $1,558.62
is due monthly beginning January 21, 2010,
matures January, 2017, unsecured		185,282			206,133
Note payable with a director of the Company,
interest at 6% per annum, payments of
$1,020 due monthly beginning April 15, 2008,
matures April, 2009, unsecured.		10,855			10,855
Note payable with a director of the Company,
interest at 12% per annum. No monthly payments
are required. All accrued interest and principal is
paid at maturity, December 1, 2009		175,000			175,000
Note payable with a director of the Company,
Total Notes Payable - Related Parties	$	385,334		$	495,736
interest at 6% per annum, No monthly payments
Less: Current Portion		(385,334	)		(495,736	)
are required. All accrued interest and principal is
paid at maturity, January 30, 2010.		316,134			206,133
Total Notes Payable - Related Parties	$	605,736		$	495,735
Less: Current Portion		(605,736	)		(495,735	)
Long-Term Notes Payable - Related Parties	$	-		$	-

Total accrued interest at ~~December~~March 31, ~~2009~~2010 and September 30, 2009 was $7464,~~511~~500 and $61,~~298~~620, respectively.

ORGANIC SALES AND MARKETING, INC.

Notes to the Financial Statements

~~December~~March 31, ~~2009~~2010 (unaudited)

Note 98 – Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company is poorly capitalized and has had recurring operating losses, negative cash flows from operations and recurring negative working capital for the past several years and is dependent upon financing to continue operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management's plan to continue to implement their strategy of acquiring new customers and accepting reorders from existing customers. As the Company's revenues become more established, management expects to report net income. With the expansion of sales, management believes that the Company will eventually generate positive cash flow from operations. In the interim, management believes that shortfalls in cash flow will be satisfied with funds raised from bridge loans, convertible debt and additional private stock offerings that are in compliance with Securities and Exchange Commission rules and regulations governing the same.

Note 109 – Subsequent Events

Subsequent to ~~December~~March 31, ~~2009~~2010 and through ~~February~~May 189, 2010, the Company’s CEO and Chairman of the Board advanced an additional $8026,000 to the Company as operating ~~capital~~ capital bringing the total amount advanced, not including debt converted to stock to $~~396~~115,~~131~~800.

On ~~January~~ ~~21,~~May 6, 2010, the Board of Directors voted to ~~accept~~approve ~~the~~Keith ~~resignation~~Lowey, ofCPA ~~CFO~~as the Company’s new Chief Financial Officer replacing Mark McEvoy ~~due~~who toresigned ~~continuing~~from the position for health ~~issues~~reasons.

OnOrganic ~~January~~Sales ~~21,~~and ~~2010~~Marketing, ~~the~~Inc. ~~Board~~has ofevaluated ~~Directors~~subsequent ~~approved~~events for the ~~issuance~~period ~~of 1,773,333~~March ~~shares~~31, of2010 ~~common~~through ~~stock~~the indate ~~satisfaction~~its offinancial ~~$260,000~~statements inwere ~~related~~issued, ~~party~~and ~~notes~~concluded ~~payable~~there ~~and~~were ~~$6,000~~no inother ~~accrued~~events ~~interest~~or totransactions aoccurring ~~director~~during ofthis ~~the~~period ~~Company. As part of~~that ~~the~~required ~~agreement,~~recognition ~~the remaining balance~~ of ~~the~~disclosure ~~related~~in ~~party~~its ~~note~~financial ~~of $100,000 will be due and payable over the next 7 years at an interest rate of 8% per annum~~statements.

On January 21, 2010, the Board of Directors approved the issuance of 680,000 shares of common stock in satisfaction of $90,000 in related party notes payable and $12,000 in accrued interest to a director of the Company. As part of the agreement, the remaining balance of the related party note of $14,000 will be due and payable over the next 2 years at an interest rate of 8% per annum.

On January 21, 2010, the Board of Directors voted to approve the grant of an aggregate of 1,135,000 Stock Options, at an exercise price of $.15 per share with full vesting in 2011 and expiring in 2020 to employees and independent consultants who performed at high levels over the course of 2009. The options will be valued using the Black-Scholes option pricing model and expensed accordingly.

Organic Sales and Marketing, Inc. has evaluated subsequent events for the period September 30, 2009 through February 18, 2010, the date its financial statements were issued, and concluded there were no other events or transactions occurring during this period that required recognition or disclosure in its financial statements.

Item 2. Management’s Discussion and Analysis or Plan of Operation.

Forward Looking Statements

The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition, which are based upon our financial statements. The discussion should be read in conjunction with our financial statements and notes thereto, appearing in this Report.

The preparation of these financial statements requires us to make estimates and judgments that may affect the reported amount of assets and liabilities, revenues and expenses, and the related disclosure of such contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions and conditions.

This Report also contains forward-looking statements that involve risks and uncertainties, which may include statements about our:

·	Business strategy

·	Expansion of our manufacturing capabilities

·	Plans for entering into collaborative agreements

·	Anticipated sources of funds to finance our operations following the date of this Report

·	Plans, objectives, expectations and intentions contained in this prospectus that are not historical fact

The following words and financial projections contain figures related to plans, expectations, future results, performance, events or other matters that are “forward-looking statements”. When used in the Plan of Operations, words such as “estimate”, “project”, “intend”, “expect”, “anticipate”, and other similar expressions are intended to identify forward-looking statements. Such statements involve numerous risks and uncertainties, including, but not limited to, the science of organics, the development of the Company’s products, markets for those products, timing and level of customer orders, competitive products and pricing, changes in economic conditions and other risks and uncertainties. Actual results, performance and events are likely to differ and may differ materially and adversely. Investors are cautioned not to place undue reliance on these forward looking statements which speak only as of the date of the Plan of Operations. The Company undertakes no obligation to release or deliver to investors revisions to these forward-looking statements to reflect events or circumstances after the date of the Plan of Operations, the occurrence of unanticipated events or other matters that may occur.

A. PLAN OF OPERATIONS

~~Since~~OSM, ~~inception in August~~Inc., ~~2003,~~is ~~the~~a ~~Company~~sales ~~has~~and ~~principally~~marketing ~~financed~~company ~~its~~that ~~operations through~~specializes ~~private~~in ~~placement~~the ~~offerings~~sales asand marketing ~~noted~~of innon-food ~~PART II~~natural, ~~Item~~organically ~~5(d)~~certified ofand ~~the~~USDA ~~Form~~BioPreferred ~~10-K~~products. Primarily cleaners, ~~dated~~hand ~~September~~sanitizers 30and fertilizers, that ~~2009~~are ~~and~~developed ~~has~~through ~~been~~much ~~involved~~of inits ~~the~~own ~~development and~~licensed ~~acquisition~~technology, ofthe Company uses a ~~wide~~contract ~~variety~~manufacturer located in Massachusetts for much of ~~non-food~~its ~~organic~~production. The ~~and~~Company ~~naturally~~is ~~based~~now ~~products~~focusing its efforts for sales opportunities to beFederal ~~initially~~government ~~sold~~agencies, military branches, small to mid-sized retail supermarkets, ~~convenience~~hotel ~~stores~~and hospitality facilities, colleges, universities, and laboratories, local, and regional ~~and national~~ government agencies, ~~lawn~~ and ~~garden~~lawn ~~centers~~ and ~~the~~garden ~~funeral industry~~centers. In addition, new ~~markets~~ markets continue to be pursued that include ~~costume~~on ~~jewelry,~~line ~~sporting~~retail ~~goods~~operations, ~~sports~~some of ~~teams,~~whom ~~hobby~~carry their own inventory and ~~craft,~~others ~~health,~~who ~~beauty~~may rely on the Company to fulfill their orders. The Company also recently began fulfilling orders under the customers own private label for a national catalog company which also has brick and ~~wellness,~~mortar ~~footwear~~retail locations. Essentially, ~~automotive~~OSM, ~~cigar~~Inc. has become ~~catalog~~a ~~houses,~~sales ~~wine~~and ~~industry,~~marketing ~~international~~company ~~cocoa~~of ~~industry~~branded organic and ~~multi-level~~natural products which ~~marketing~~markets into many different industries throughout the world.

The Company ~~recently~~has ~~began~~a ~~fulfilling~~licensing ~~orders~~agreement ~~under~~with ~~its own private label offering program for~~ a ~~multi-level~~British ~~marketing~~based company ~~located~~and inhas the ~~Midwest. Based~~rights onto ~~recent~~several ~~discussions~~proprietary ~~the~~formulas ~~Company~~used ~~believes that incremental sales will be forthcoming based on their continued interest~~ in ~~OSM proprietary blends and capabilities,~~ its ~~current~~extensive ~~speed~~line ~~to market and their continued development~~ of ~~a distribution network. The~~cleaning ~~Company~~products. ~~recently~~Through ~~contracted with, sold and shipped a well-known national catalog company~~ its ~~USDA~~own ~~BioPreferred certified hand sanitizer through a private label deal. Headquartered in Freeport~~brands, ~~ME.,~~these ~~this~~excellent ~~customer~~non-food generates 1.5 billion in annual sales and is duly recognized for more than 95 years as a trusted source for quality apparel, accessories, and reliable outdoor equipment. This customer also has several brick mortar retail locations. Essentially, OSM, Inc. has become a sales and marketing company of branded organic and /or natural products ~~which~~are ~~markets~~then marketed to ~~many~~such ~~different industries throughout the world~~entities.

The Company has a licensing agreement with a British based company and has the rights to several proprietary formulas used in its extensive line of cleaning products. Through its own brands, these excellent non-food organic and/or natural products are then marketed at retail, wholesale or through the internet.15

~~The~~While the Company continues to develop its operating history onand ~~which~~bring toon ~~evaluate~~new ~~its~~customers, ~~prospects.~~the ~~The~~ risks, expenses and difficulties encountered by an expanding company must be considered when evaluating the Company’s prospects. Management believes that existing funds, in conjunction with minimum funds sought to be raised during ~~2009-~~ 2010 and projected revenues from operations will be sufficient to reach self-sufficiency by the end of 2010 or early 2011. Expansion of the business into 2010 and beyond will likely require additional investment through private placement offers or the ability of the Company to secure funding elsewhere. There can be no guarantee, however, that the Company will be able to ~~raise~~ raise either the minimum capital it needs to sustain its 2010 operations or the ~~larger~~ larger amount of capital it will need to expand and grow the business well into ~~2010~~ 2010 and beyond. Failure to do so would likely have an adverse effect on the Company’s ability to continue its operations. Most recently, the Company has been loaned money by its’ CEO and President & ~~CEO~~, Sam Jeffries.

The Company believes it is equipped with the necessary products to go to market and has developed strategic alliances with several distributors in various industries,; however, given the existing economic climate, and lack of sales to date, operating expenses cannot be predicted with any real degree of certainty. ~~They~~ They will depend on several factors, including, but not limited to, marketing expenses, continued acceptance of the Company’s products, competition for such products and the current economic environment.

Management has no firm basis for projecting the increase in revenue required to sustain operations, as anticipated above. Such assumptions are based almost entirely on the strategic relationships the Company has forged which it believes will ultimately translate into operating revenues. It is important to stress, however, that these assumptions are not at all based on firm commitments from customers or on other tangible evidence.

The Company ~~currently~~recently ~~has~~entered ininto ~~excess~~a ofSupplier ~~100~~Agreement ~~SKU’s~~with inW.W. ~~its~~Grainger, ~~product line offering and it~~Lake ~~continues~~Forest, toIL ~~develop~~for ~~and~~a ~~introduce~~one ~~new~~year ~~and~~term ~~better~~beginning ~~non-food~~May ~~organic and/or natural products as they present themselves. For instance~~15, ~~its~~2010. The Agreement’s ~~Dragonfly OrganixTM~~term ~~cleaner~~will ~~product line~~automatically isrenew ~~currently~~for ~~sold~~successive inOne ~~such~~(1) ~~large chains as Stop & Shop and many other~~year ~~smaller independent supermarkets~~periods.

The Company ~~continues~~currently tohas ~~maintain~~in ~~strong,~~excess ~~strategic~~of ~~relationships~~100 ~~with~~SKU’s ~~United Natural~~in ~~Foods~~its ~~(UNFI),~~product ~~a leading natural food distributor based in Chesterfield,~~line NHoffering. Should ~~servicing~~other ~~over~~opportunities ~~17,000~~present ~~customers~~themselves ~~nationwide~~whereby ~~and Kehe Foods, another leading~~the ~~natural~~Company ~~food~~can ~~distributor~~capitalize ~~based~~on inimmediate ~~Romeoville,~~sales ILgrowth ~~which~~then ~~services~~the ~~over~~Company ~~9,000~~will carefully ~~customers~~evaluate ~~nationwide~~such opportunities.

The Company launched its organic fertilizer products in the spring of 2008 under its Mother Natures CuisineTM with Shaw’s Supermarkets and many Agway Stores. The current economic pressures in addition to an extremely wet and cool weather season in the northeast in 2009 had adverse effects on the overall sales. Commitments to carry the fertilizer products still remain from Shaw’s, Whole Foods, Hardware, Rocky’s Ace Hardware, Aubuchon Hardware, Agway, Kehe Foods and many independent garden centers. In addition, the Company contracted with Arett Sales, a $150 million lawn, garden and home improvement distributor of 54 years based in Cherry Hill, NJ, servicing 20 states and Washington, D.C. to sell its products. The Company’s organically certified insecticide/fungicide product, Garden Guys Garden NEEM, which was first introduced in the spring of 2007, is continually shipping to many of the above named customers in conjunction with the fertilizer products. Sales of Garden Guys Garden NEEM in 2010 should continue to grow with the additional distribution outlets, increased exposure due to advertising and brand recognition and on-going discussions with government entities through the Company’s affiliation with the USDA BioPreferred program.16

5The Company continues to maintain strong, strategic relationships with several other distributors including Fisher Scientific, a leading global provider of laboratory equipment, chemicals, supplies and services for their Research, Safety, Healthcare and Science Education divisions serving over 350,000 customers and United Natural Foods (UNFI), a leading natural food distributor based in Chesterfield, NH servicing over 17,000 customers nationwide. And, as previously mentioned, the Company recently signed contract with W.W. Grainger based in Lake Forest, IL. W.W. Grainger has over 1 million business and institutional customers in 153 countries with a diverse customer base, comprised of facilities maintenance professionals from businesses and institutions of all sizes. The Company’s current agreement is non-exclusive for sales in the United States only.

~~The~~To date, ~~Company’s~~W.W. ~~President~~Grainger, ~~Sam~~Inc., ~~Jeffries~~ has ~~been~~only ~~recently~~sold ~~asked by~~ the ~~folks~~Company’s atOSM ~~USDA BioPreferred~~line toof ~~act~~cleaning asproducts and ahand ~~spokesperson~~sanitizers, onbut ~~behalf~~will ofbe ~~small~~adding ~~businesses~~the onCompany’s ~~how~~entire toaccoutrement doof ~~business~~branded ~~with~~Mother ~~the~~Nature’s ~~Federal~~Cuisine ~~government~~products ~~through~~which ~~participation~~includes, inOh ~~the~~No ~~USDA~~Deer repellant, ~~BioPreferred~~Fish ~~program. He~~& ~~will~~Seaweed beliquid ~~lecturing~~concentrate infertilizer ~~Riverside,~~& CAGarden atGuys ~~the~~Garden Neem. ~~end~~In ofaddition, ~~February~~W.W. ~~2010~~Grainger ~~and~~will ~~later~~also ~~this~~be ~~year~~adding inthe ~~Ames,~~co-branded IAOSM/Bradfield Organics ~~and~~fertilizers onin ~~the~~both ~~east~~40 ~~coast~~lb atretail ~~a yet~~and to50 belb ~~disclosed~~Pro ~~location~~Turf formulations. ~~All~~Many of these ~~programs~~products are ~~being~~USDA ~~hosted~~BioPreferred certified byand ~~the~~according ~~USDA~~to ~~BioPreferred~~Federal ~~management~~Executive ~~team. The~~Order ~~Company~~#13514, ~~believes~~which ~~this~~states “Federal ~~will~~government ~~further~~agencies, ~~enhance~~military ~~its~~branches ~~relationships~~and inFederal ~~various~~contractors ~~other~~must ~~sectors~~give preferred ofpurchasing ~~the~~preference ~~Federal~~for BioPreferred biobased ~~government~~products.” The ~~and~~Company ~~open~~anticipates ~~additional~~that ~~opportunities~~this ~~for~~may ~~its~~have ~~products~~an ~~either~~impact ~~through~~on ~~current~~its ~~distribution~~future ~~channels~~sales orwithin onmarkets anot ~~direct~~currently ~~sales~~being ~~basis~~sold by the Company and through its existing distributor relationships.

~~To date,~~The ~~Kehe~~Company ~~Distributors,~~launched ~~Inc.,~~its ~~has~~organic ~~only~~fertilizer ~~sold~~products in the ~~Company’s~~spring ~~Dragonfly~~of ~~Organix~~2008 ~~line~~under ofits ~~cleaning~~Mother ~~products,~~Natures CuisineTM brand. The current economic pressures in addition to the season just beginning in the northeast have yet ~~has~~to ~~added~~dramatically impact sales. Commitments to carry the products ~~Company~~still remain from Shaw’s, ~~entire~~Whole ~~line~~Foods, ofAubuchon ~~branded~~Hardware, ~~Mother~~and many independent garden ~~Nature’s~~centers. While ~~Cuisine~~the ~~line~~Company ofhad ~~products~~verbally ~~which~~contracted ~~includes,~~with ~~All-Purpose~~Arett Sales, a ~~Flower~~$150 million lawn, garden and ~~Veggie~~ &home ~~Herb~~improvement ~~five~~distributor ~~pound~~of ~~bagged~~54 ~~granular~~years ~~fertilizers~~based in Cherry Hill, OhNJ, Noservicing ~~Deer~~20 ~~repellant~~states and Washington, D.C. to sell its ~~Fish~~products, &sales ~~Seaweed~~still ~~liquid~~have ~~concentrate~~yet ~~fertilizer,~~to ~~four~~materialize ~~varieties~~for ofthe ~~suet~~2010 season. The ~~cakes,~~Company’s organically certified insecticide/fungicide &product, Garden Guys Garden NEEM~~. Kehe Distributors~~, ~~Inc.,~~which ~~recently~~was ~~reached~~first ~~an agreement~~introduced toin ~~purchase~~the ~~Tree~~spring of ~~Life~~ 2007, ~~Inc~~is ~~(exhibit~~continually ~~10.23~~shipping to many of the ~~September~~above ~~30,~~named ~~2009~~customers in ~~Form~~conjunction ~~10K)~~with the fertilizer products. ~~Tree~~Sales of ~~Life,~~Garden ~~Inc.~~Guys isGarden aNEEM ~~distributor,~~in 2010 ~~which~~should ~~may~~continue ~~have~~to angrow ~~impact~~with on the additional distribution outlets, increased ~~Company’s~~exposure ~~future~~due ~~sales~~to inadvertising, ~~markets~~better ~~that~~brand ~~some~~name ofrecognition and on-going discussions with government entities through the ~~above~~Company’s ~~mentioned~~affiliation ~~products~~with ~~are~~the ~~not~~USDA ~~currently~~BioPreferred ~~being~~program. ~~sold~~(See Exhibit 10.24)

~~In the~~The Company ~~structured~~continues ~~deal~~to ~~between~~develop ~~Northeast~~relationships ~~Garden~~where ~~Group,~~there ~~Agway,~~is ~~and~~an ~~Land~~increasing demand ~~O’Lakes/Purina~~for ~~Feeds~~consistent ~~with~~performance ~~the~~and ~~Company~~safe isenvironmental ~~acting~~acceptability asof eco-products. Should athe ~~representative~~present ~~for~~“green ~~all sales~~movement” ofcontinue, ~~Agway’s~~the Company ~~newly~~may ~~launched~~be ~~All-Natural~~well ~~4-Stage~~positioned ~~lawn~~capitalize ~~fertilizer,~~in ~~the~~these ~~Company~~sales. Together, ~~received~~and ain ~~total~~conjunction ~~compensation~~with ofits ~~$5,000~~recent ~~thousand~~USDA ~~dollars.~~BioPreferred ~~This~~status, is the ~~first time~~Company believes that ~~Agway~~it ~~has~~can ~~ever~~provide ~~launched~~simple, asafe ~~4-Stage~~solutions ~~natural~~for ~~lawn~~replacing ~~fertilizer offering. This~~harmful ~~could~~chemicals ~~also~~increasingly ~~have~~being ~~long~~found ~~term~~in ~~positive~~various ~~implications~~work ~~given~~places ~~that~~through ~~Agway continues to~~its’ ~~participate~~associations inwith such ~~the~~entities ~~Company’s~~as ~~media~~W.W. ~~component~~Grainger, ~~the~~Fisher ~~Garden Guys radio~~Scientific ~~show~~and others.

The Company iscontinues into maintain an ~~agreement~~e-commerce ~~with~~internet ~~Land~~presence ~~O’Lakes/Purina~~hosting ~~Feeds to act as a~~five ~~distributor~~different ofsites, ~~its~~www.garden-guys.com ~~Bradfield Organics brand of fertilizers to some of the~~, ~~Company’s customers~~www. ~~This will enable the Company to immediately sell~~mothernaturescuisine.com ~~larger bag sizes~~, ~~quantities~~www.osm-inc.com ~~and formulations without having to fulfill its own~~, ~~regulatory obligations under its Mother Nature’s Cuisine brand~~www. ~~This~~naturalnevrdull.com ~~will~~, ~~enable the Company the additional flexibility in speed to market in addition to maximizing the manufacturing~~ and ~~distribution capabilities of Land O’Lakes Purina~~www. ~~Discussions are on-going to further the existing~~dragonflyorganix.com ~~relationship~~.

The Company ~~has~~will ~~started~~continue toits ~~generate~~active ~~initial~~participation ~~sales~~in ofvarious ~~its~~related ~~Nev’r~~trade publications ~~Dull~~and ~~commercial~~trade ~~brand~~shows. Most recent completed shows were; the New England ofGrows ~~cleaning~~Lawn ~~products~~& ~~and~~Garden ~~anticipates~~Show, ~~more~~Fisher ~~significant~~Scientific ~~sales~~National toSales ~~follow~~Meeting, Massachusetts inBiotech ~~the~~Council, NH Hotel & Hospitality, MA Women’s Expo, RI ~~boating~~Women’s Expo, ~~automotive~~Cape Cod Spring Home Show, and ~~janitorial~~the ~~industries~~Company’s ~~through~~President ~~2010~~recently attended the GSA (General Services Administration) show on behalf of Grainger, Fisher Scientific and ~~beyond.~~the USDA BioPreferred program. The Company ~~continues~~will also toparticipate ~~receive~~in ~~orders~~the ~~from~~New J.England ~~Racenstein~~Hotel ~~Company,~~& aHospitality ~~well~~Convention ~~known~~and the ~~national~~Natural ~~distributor~~Products ofExpo, ~~window~~Boston, ~~cleaning~~MA, ~~supplies~~later ~~and~~this isyear. Each of these markets are either currently incarrying ~~discussions~~the Company’s products or have expressed ~~with~~interest ~~other~~in ~~distributors~~them.

~~The~~Since its ~~Company~~participation ~~continues~~in tothe ~~develop~~USDA ~~relationships~~BioPreferred ~~where~~show ~~there~~in isJune anof ~~increasing~~2009, ~~demand~~the Company has attained USDA BioPreferred status for ~~consistent~~many ~~performance~~of ~~and~~its ~~safe~~commercial ~~environmental~~cleaning ~~acceptability~~and ofhand sanitizer ~~eco-~~products. ~~Should~~ ~~the~~(see ~~present~~Exhibit ~~“green~~10.26). This ~~movement”~~distinction continues ~~continue,~~to open doors for the Company ~~may~~into bethose ~~well~~distributors ~~positioned~~ who sell to ~~capitalize~~ onthe Federal government ~~these~~through ~~sales.~~GSA ~~Together~~(General Services Administration), state and inlocal ~~conjunction~~contracts ~~with~~and ~~receiving~~other contracts where ~~its~~there ~~recent~~may be an increased interest for USDA BioPreferred ~~status,~~approved products. The ~~the~~ Company ~~believes~~continues ~~that~~to itship ~~could~~orders ~~provide~~to various sectors of ~~simple,~~the ~~safe~~Federal ~~solutions~~Government. Many ~~for~~of the ~~replacement~~Company’s ofproducts ~~harmful~~were ~~chemicals~~added ~~increasingly~~to ~~being~~the ~~found~~GSA inschedule by one of the ~~various~~Company’s ~~work~~distributors ~~places~~and ~~encountered~~the ~~daily~~Company byis ~~such~~in continued discussions with other entities aswithin the United States government ~~Grainger,~~through ~~Fisher~~some ~~Scientific~~of ~~and~~its ~~others~~distributors currently holding GSA contracts.

The Company recently updated its OSM corporate website to include a “Government and Commercial Purchasers” section hi-lighting USDA BioPreferred. This includes but not limited to information about the USDA BioPreferred program, product brochures and bulletins, MSDS sheets, a Q&A product section and hand sanitizer studies. The Company continues to maintain its’ e-commerce internet presence by hosting five different web sites, www.garden-guys.com , www.mothernaturescuisine.com , www.osm-inc.com , www.naturalnevrdull.com , and www.dragonflyorganix.com . The latter is also under the direction of Eye Level Solutions, a division of Kehe Distributors, Inc., which offers the Dragonfly Organix products for sale in over 12,000 e-commerce capable grocery stores nationwide. Acting as a distributor, Kehe continues to process and fulfill orders placed. This enables the Company’s products to gain shelf presence, without slotting fees, within stores which otherwise may not currently stock these items.17

~~The~~For the ~~Company~~current ~~will~~fiscal ~~continue~~year, ~~its~~second ~~active~~quarter ~~participation~~sales inand ~~various~~gross profit increased ~~related~~by ~~trade publications~~38% and ~~trade~~254% ~~shows.~~respectively ~~Most~~over ~~recent~~sales ~~completed shows were; the~~and ~~Massachusetts~~gross ~~Conference~~profit for ~~Women,~~the ~~Natural~~first ~~Products~~quarter. ~~Expo,~~This ~~Kehe~~is ~~Holiday~~due ~~Trade Show,~~in ~~Insalon~~part ~~2009~~to ~~Salon~~driving &down ~~Spa~~such costs ~~Trade~~as ~~Show,~~slotting ~~Arett Seasonal Showcase~~fees, ~~Fisher Scientific~~radio ~~regional show at University of Iowa~~expenditures, ~~Agway~~and ~~retail~~salary ~~buyers~~cutbacks. ~~show,~~The ~~New~~Company ~~Hampshire~~chose ~~Hospitality,~~to ~~the~~maintain ~~Fisher~~its ~~Science~~largest ~~Education~~network ~~show~~station ~~the~~while ~~New~~eliminating ~~England~~all ~~Grows Lawn~~of &its ~~Garden Show~~other stations, ~~and~~thereby ~~the~~eliminating ~~Fisher~~cost ~~Scientific~~and ~~National Sales Meeting~~ redundancy. The Company continually islooks ~~already~~for ~~committed~~opportunities to ~~the~~cut ~~Natural Products~~costs ~~Expo later this season and anticipates~~ that itwon’t ~~will~~have ~~participate~~an ~~in other~~impact ~~regional shows throughout the year. Each of these markets are either~~on ~~currently~~customer ~~carrying~~service ~~the Company’s products~~ or ~~have~~product ~~expressed interest in them~~quality.

6 In 2010, the Company projects a loss, however, if sales come in stronger than anticipated, a small profit and positive cash flow from operations are a possibility. If, however, the Company is unsuccessful in raising additional capital by the summer of 2010, the probability of hitting its short term financial goals may be seriously impacted.

~~Since its~~The ~~participation~~Company inwill continue to use the ~~USDA~~radio ~~BioPreferred~~as ~~show~~the inprimary ~~June~~source for marketing and creating brand awareness of ~~2009~~its non-food, ~~the~~natural product offerings. The Company’s ~~has attained~~commercials ~~USDA~~are ~~BioPreferred~~currently ~~status~~being ~~for~~aired ~~many~~a minimum of ~~its~~fifteen ~~commercial~~times ~~cleaning~~per ~~and~~week ~~hand sanitizer~~on ~~products.~~a ~~(exhibit~~Boston 10based FM talk station.24 ofSam Jeffries, the ~~September~~Company’s 30President, ~~2009 Form 10K)~~hosts ~~This~~a ~~distinction~~live, weekly three hour Sunday ~~continues~~morning togarden ~~open~~talk ~~doors~~radio ~~for~~show ~~those~~which ~~distributors~~is ~~who~~currently ~~sell~~heard on Greater Media radio 96.9 FM WTKK and is also available on the ~~national~~internet ~~government~~via streaming or Podcasts through ~~GSA~~one ~~(General~~of ~~Services~~the ~~Administration)~~Company’s websites, orwww.garden-guys.com . Using ~~state~~this ~~and~~allows ~~local~~it ~~contracts~~to ~~and~~keep listeners informed about the ~~other~~importance ~~contracts~~of considering natural, organic, chemical-free alternatives, how they should use these products and where ~~there~~they ~~may~~can bebuy anthem. ~~increased~~This ~~interest~~helps ~~for~~forge relationships ~~USDA~~with ~~BioPreferred~~key people in various scopes of business, politics and the ~~approved~~general ~~products~~public. Since ~~The~~the Company ~~has~~pays ~~shipped~~for ~~orders~~the toair time, it receives an inventory of commercials which are used as a follow up during the ~~CDC~~work ~~(Center~~week to ~~for~~educate ~~Disease~~consumers about its organic and natural products, hand sanitizers, ~~Control)~~etc. and ~~Homeland~~where ~~Security~~they can purchase these products. ~~The~~This also creates a medium for the Company isto inoffset ~~further~~some ~~discussions~~of ~~with~~its ~~other~~radio and related expenses by selling the air ~~entities~~time ~~within~~to potential sponsors and or advertisers of the ~~United~~radio ~~States~~show. The Company ~~government~~has ~~through~~yet ~~some~~to sell all of its’ ~~distributors~~allotted inventory or enough to cover the ~~currently~~current ~~holding~~costs ~~GSA~~of ~~contracts~~the radio. WTKK, 96.9 FM, based in Boston, MA, is owned by Greater Media and is the radio shows flag ship station and is part of one of the largest markets in the country.

~~The~~As ~~Company~~previously ~~continues~~noted, tothe ~~receive~~Company ~~orders~~has ~~from~~strategic ~~Fisher~~relationships ~~Scientific,~~established ~~its~~with ~~National~~key ~~Laboratory~~sales ~~Distributor~~representative ~~that~~and ~~sells~~distributor ~~into~~organizations in the ~~colleges~~markets ~~and~~that ~~universities, Hospital~~it services and ~~Healthcare~~has ~~Laboratory~~developed ~~industries,~~very ~~Educational~~strong ~~K-12~~relationships ~~and~~with ~~Government~~several ~~services,~~vendors for the ~~Company’s~~fulfillment ~~OSM branded line~~ of ~~all~~its ~~natural~~organic ~~products~~liquid toand ~~their~~granular ~~customer~~fertilizer ~~base~~product lines. ~~The~~ The Company ~~recently~~plans ~~added its products~~ to ~~the~~vigorously ~~Fisher~~pursue ~~Scientific~~all ~~Safety division,~~strategic ~~which~~relationships ~~focuses~~that ~~heavily~~enhance ~~on municipal and government sales. The Company~~its ~~and~~ability ~~Fisher~~to ~~are~~deliver ~~also~~quality ~~finalizing~~non-food, ~~the~~all ~~additions~~natural ofproducts ~~its~~at ~~fertilizer and other garden~~reasonable ~~related items~~prices.

The Company ~~is currently in preliminary discussions with a recognized, top-quality, 75 year safety manufacturer to potentially private label some of the Company~~’s ~~USDA~~projected ~~BioPreferred~~Plan ~~certified~~of ~~products.~~Operations ~~The~~for ~~opportunity~~2010 ~~exists~~consist ~~to potentially position these private label items in their line~~ of ~~personal protective equipment sold throughout~~ the ~~world.~~following: (000’s omitted)

In 2010, the Company projects a loss, however, if sales come in stronger than anticipated, a small profit and positive cash flow from operations are a real possibility. If, however, the Company is unsuccessful in raising additional capital by the late spring of 2010, the probability of hitting its short term financial goals will be seriously impacted.

	CALENDAR
	Year 2010

Revenues	$	2500
Margin		500
Selling, General and Administrative Expense		540
Net Profit/ (Loss) from Operations	$	( 40	)

The Company ~~will~~continues ~~continue~~ to ~~use~~rely ~~the~~on invested ~~radio~~capital ~~as the primary source for marketing~~ and ~~creating~~ ~~brand awareness of our non~~short-~~food,~~term ~~and natural product offerings~~debt. ~~Sam Jeffries,~~It ~~the~~also ~~Company’s~~continues ~~President,~~to ~~hosts~~seek ~~a live, weekly three hour Sunday~~additional ~~morning~~minimum ~~garden~~financing ~~talk~~of ~~radio~~$500,000 ~~show~~to ~~which~~maintain isoperations ~~currently~~in ~~heard~~2010. onIf ~~two radio stations in~~operating ~~the~~revenues ~~Northeast~~increase and ~~also available on~~ the ~~internet~~Company ~~via~~is ~~streaming~~able ~~or Podcasts. The radio show allows us~~ to ~~keep~~attain ~~listeners~~close ~~informed about why it is important~~ to ~~consider~~ ~~using~~break ~~natural,~~even ~~organic,~~in ~~chemical-free alternatives~~2010, ~~how~~operations ~~they~~may ~~should~~become ~~use~~self-sustaining ~~these products and where they can buy them. Relationships are also forged with key people~~ in ~~various~~2011; ~~scopes of business~~however, ~~politics~~additional ~~and the~~investor ~~general~~funds ~~public.~~would ~~Since~~still ~~the~~be ~~Company~~needed ~~pays for the air time, it also receives an inventory of commercials which are used as a follow up during the work week~~ to ~~educate~~ ~~consumers~~continue ~~about its organic and natural products, hand sanitizers, etc. and where they can purchase these products. This also creates a vehicle for the Company~~ to ~~help~~expand ~~offset~~in ~~some~~2010 ~~of its radio~~ and ~~related expenses by selling the air time to potential sponsors and or advertisers of the radio show~~beyond. ~~Essentially, the~~On ~~Company has created its own media network, The Garden Guys, within~~ the ~~New~~ ~~England~~other ~~region. Owned by Greater Media~~hand, ~~WTKK~~if ~~96.9 FM is~~ the ~~flagship station for the radio show. Based in Boston, MA, it is part of one of the largest markets in the country. Through discussions with 96.9 FM WTKK, the~~ Company is ~~currently~~ ~~producing~~unable ~~its~~to ~~own~~raise ~~“Garden Guys Garden Minute” which will air ten (10) times during~~ the ~~week~~minimum atfinancing noneeded ~~cost to the Company. Each week will offer~~in ~~a different tip whereby sponsors will be able to tag their store~~2010, ~~product or event. The Company believes~~ it ~~has~~would ~~sponsors~~likely ~~that~~exhaust ~~will~~its ~~pay~~resources ~~to participate~~ in ~~this weekly opportunity. This further develops brand recognition for the station and Garden Guys in addition~~ mid-to-late ~~generating ad revenues to offset existing radio expenditures~~2010.

As previously noted, the Company has strategic relationships established with key sales representative and distributor organizations in the markets that it services and has developed very strong relationships with several vendors for the fulfillment of its organic liquid and fertilizer product lines. The Company plans to vigorously pursue all strategic relationships that enhance its ability to deliver quality non-food, all natural products at reasonable prices. Through an agreement with management at 96.9 FM WTKK, the Company is running a brief ad campaign searching for additional independent representatives willing to sell the Company’s products in to various markets. The Company has thus far been the recipient of numerous resumes’ and will review these respondents as potential independent representatives.18

71. Revenue Projections

The Company’s projected Plan of Operations for CALENDAR YEAR 2010 is as follows: (000’s omitted)

	CALENDAR 2010
Revenues	$	3,000
Margin		600
Selling, General and Administrative Expense		700
Net Profit/(Loss) from Operations	$	(100	)

In 2010, the Company will likely continue to rely on invested capital and short-term debt to fund operations. The Company continues to seek additional minimum financing of $500,000 to maintain and grow operations in 2010. If operating revenues increase as expected and we attain close to break even in 2010, operations could be self-sustaining in 2011; however, additional investor funds would still be needed to continue to expand in 2010 and beyond. If we are unable to raise the minimum financing needed in 2010, the Company would likely exhaust its resources in mid-2010.

Revenue Projections

Despite its heavy financial commitment to continually advertise and promote its products to enhance brand awareness, foster customer loyalty and encourage reorders, there can be no guarantee that the products will sell as the Company believes they will, or that the consumer will reorder the products once they have used them.

Given the most recent unprecedented economic market, the Company did not reach and, ~~fell~~in fact, fell well short of its 2009 projections. Although the Company has been able to strategically align itself with a multitude of distributors in various retail, wholesale and commercial sectors, it did not anticipate the length of time to go to market. The 2010 projections have been made on an industry-by-industry basis with 2580% of projected revenues coming from a combination ofnational ~~Grocery~~distributors in the Federal government, ~~Convenience~~military, laboratory, commercial and ~~College~~industrial ~~Book~~sectors, ~~Stores~~from ; 6515% from ~~commercial~~grocery, ~~sales~~private label, ~~including~~hotel ~~our~~& ~~National Laboratory~~hospitality, ~~Distributor~~lawn & garden, ~~Fisher~~convenience ~~Scientific~~and college book stores and the remaining 105% from a combination of website, and radio ad sales ~~and private label sales~~. In ~~preparing~~ preparing these projections, customers were identified as those currently being shipped, those to whom we are about to start shipping and those who have indicated a desire to carry the products at some point during 2010. To date the Company has added ten (10) new distributors in the New England region willing to carry many of its products. These companies primarily specialize in industrial, municipal and governmental sales.

~~Sales for the first quarter of the current fiscal year, October-December, 2009, while below the Company’s forecasted amount, were up 7% from the same three month period of the prior fiscal year~~2. ~~The two primary reasons~~ ~~for this were due to the launch of OSM branded alcohol-free hand sanitizer in an~~Expense H1N1 environment, further differentiated by having USDA BioPreferred certification status. With ten (10) additional distributors and/or distributor channels most recently added, and many more in the pipeline, the Company anticipates it will meet its year-end goals however, it can not be certain that these additional markets will sustain or accept new product entries as compared to existing similar type products and pricing.Projections

~~Sales~~Costs toof ~~date~~sales ~~for~~were ~~the~~projected ~~second~~based ~~quarter~~upon of the ~~current~~products ~~fiscal~~being ~~year,~~sold ~~while~~using ~~still~~the ~~below~~extensive by ~~initial~~product ~~projections~~cost ~~set~~analysis ~~forth~~we inhave ~~the~~developed ~~September~~for ~~30,~~each ~~2009~~of ~~10K,~~our ~~have~~products. ~~the~~As ~~potential~~volume toincreases, beit ~~10%-15%~~is ~~higher~~expected ~~than~~that ~~sales~~costs ~~for~~will ~~the~~go ~~same~~down ~~time~~as ~~frame~~a infunction ~~the~~of ~~previous fiscal~~better ~~year~~quantity ~~due~~purchases. toOur anprojections ~~influx~~do ofnot, ~~new~~however, ~~customer~~take ~~sales~~these ~~and~~cost ~~verbal commitments that have~~reductions ~~been~~into ~~received by the Company~~consideration.

~~Expense~~General ~~Projections~~and Administrative costs were projected at 8% of revenues, in line with our corporate objective of keeping G&A expenses level as sales increase.

~~Costs of~~Selling ~~sales~~expenses were projected ~~based~~at ~~upon~~14% ~~the amount~~ of ~~product~~revenues. ~~being~~If ~~sold~~revenues ~~using~~are ~~the~~higher than ~~extensive~~projected, bymore ~~product~~of ~~costs~~the weadditional ~~had~~revenues ~~developed~~will ~~for~~be ~~each~~reinvested ofin ~~our~~further marketing ~~products~~and selling activities. AsIf ~~volume increases~~revenues itcome isin ~~expected~~lower ~~that~~than ~~costs~~projected, analysis will gobe ~~down~~done asto adetermine ~~function~~why ofand, ~~better~~if appropriate, marketing and ~~quantity~~selling ~~purchases~~expenses will be reduced or redirected. ~~Our~~These ~~projections~~expenses doinclude, but are not limited to, ~~however~~radio show costs, ~~take~~display ~~these~~cases, ~~cost~~trade ~~reductions~~shows, commissions, ~~into~~samples, ~~consideration~~payroll and print media advertising.

~~General~~The ~~and~~Company ~~Administrative~~believes ~~costs~~that ~~were~~it ~~projected~~has atdeveloped 5%a ofwell-thought ~~revenues~~out business plan based upon educated assumptions using the most current data available. There is, inof course, ~~line~~no ~~with~~guarantee ~~our~~as to how much or how often existing or new customers will ~~corporate~~buy The ~~objective~~Company also believes that its business plan contains enough flexibility to weather unforeseen delays in the generation of ~~keeping~~revenues ~~G&A~~by being able to modify expenses ~~level~~and other spending, as ~~sales~~required, assuming minimum ~~increase~~financing is obtained by mid 2010.

Selling expenses were projected at 15% of revenues. If revenues are higher than projected, more of the additional revenues will be reinvested in further marketing and selling activities. If revenues come in lower than projected, analysis will be done to determine why and, if appropriate, marketing and selling expenses will be reduced or redirected. These expenses include, but are not limited to, radio show costs, display cases, trade shows, commissions, samples, payroll and print media advertising.

The Company believes that it has developed a careful, well-thought out business plan based upon educated assumptions using the most current data available. There is, of course, no guarantee as to how much or how often new or existing customers will buy. The Company also believes that its business plan contains enough flexibility to weather unforeseen delays in the generation of revenues by being able to modify expenses and other spending, as required, assuming minimum financing is obtained by mid-2010.

There can be no assurance that the Company’s actual operations will reflect the above projections. Market conditions, competition, supplier delays, the ability to raise capital and all other risks associated with the operation of a business could adversely impact the Company’s ability to reach the above projections.

The Company anticipates that in order to fulfill its plan of operations, it will need to attract additional key markets to sell its natural cleaning and gardening products, and continue to leverage its other business relationships. The Company continues to receive orders and re-orders from the various outlets in which it is positioned. In addition, the recent ~~H1N1~~emphasis ~~concern~~on Federal ~~across~~Executive ~~the country~~Order ~~has~~#13514 ~~created~~(referenced earlier in this section) may create additional sales opportunities for the Company’s products.

To fulfill orders in a timely fashion, the Company must have the capability of producing and delivering its cleaning and gardening products in sufficient volume and quantity to achieve its projections. To satisfy this requirement, for the past two plus years the Company has outsourced its fulfillment operation to Webco Chemical Co., located in Dudley, Massachusetts. It believes that Webco has the capacity and ability to handle any and all requirements that the Company may have and more, over the next five years. As a backup to Webco, however, the Company also has made arrangements with JNJ Industries, located in Franklin, MA. The Company ishas also ~~continuing~~ ~~its~~made ~~discussions~~arrangements with LOL/Purina to ~~potentially~~fulfill ~~satisfy~~its ~~all~~dry ~~of its~~fertilizer ~~registration,~~product ~~distribution~~manufacturing and ~~manufacturing~~distribution needs for potential orders that ~~may~~might require larger sizes and ~~quantity~~quantities ofthan ~~product~~those incurrently ~~the~~being UShandled ~~and~~by ~~overseas~~our ~~markets. While~~fulfillment the Company is under a verbal agreement to act as a distributor of its Bradfield Organics brand fertilizers, discussions are on-going as to how both companies may work together in order to maximize bottom line profitscompany.

In addition to the minimum financing needed by mid- 2010, the Company will need to continue to seek financing from outside sources to expand the business ininto 2010 and beyond. In order to provide this necessary additional financing, the Company intends to offer ~~additional~~ private placement opportunities to investors in an as yet undetermined amount. The Company ~~is currently participating in a private offering to raise $500,000 dollars. The Company~~ has no basis, however, ~~for~~ for predicting the success of such ~~an offering~~other offerings.

919

B. SELECTED FINANCIAL DATA

Detailed information regarding the Company’s operations is contained in the Financial Statements section of this Report. The following table sets forth, for the periods indicated, certain key information about the Company.

Selected Financial Data

Organic Sales and Marketing, Inc.

For the Three Months Ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009

Statements of Operations

	Three Months Ended			Three Months Ended
	December 30, 2009			December 30, 2008
	March 31, 2010			March 31, 2009
	(Unaudited)			(Unaudited)
Revenues (Net)	$	4766,~~819~~073		$	4457,~~632~~007
Margin		830,~~562~~316			1127,~~158~~121
Selling, General and Administrative Expenses (Note 1)		~~197~~199,~~292~~714			~~384~~326,~~774~~892
Interest Income/(Expense)		( 16,756	)		(11,046	)
(Loss) from Operations		(169,398	)		(299,771	)
(Loss) from Operations	$	( 205,486	)	$	(384,662	)
Other Income/(Expense):
Valuation of Warrants granted for Financing costs (Note 2)		-0-			(~~593~~361,~~484~~353	)
Net (Loss)	$	( 205,486	)	$	(978,146	)
Interest Income/(Expense)		(15,104	)		(10,421	)
Loss per share-Basic and Diluted	$	(0.02	)	$	(0.13	)
Net (Loss)	$	(184,502	)	$	(671,545	)
Weighted Average Number of Shares		10,117,055			7,776,450
Loss per share-Basic and Diluted	$	(0.02	)	$	(0.08	)
Weighted Average Number of Shares		12,207,624			8,598,056

Balance Sheets

	Three Months Ended			Three Months Ended
	March 31, 2010			March 31, 2009
	December 30, 2009			December 30, 2008
	(Unaudited)			(Unaudited)
Cash	$	2729,~~318~~810		$	9195,~~107~~142
Accounts Receivable, net		1738,~~645~~720			611,~~511~~249
Inventories		9098,~~489~~261			~~180~~176,~~141~~930
Fixed Assets		8,157			13,059
Fixed Assets (Net)		6,932			11,833
Other Assets		200			200
Prepaid Expense		209,~~946~~765			6150,~~242~~998
TOTAL ASSETS	$	~~164~~183,~~755~~688		$	~~352~~346,~~260~~352
LIABILITIES
Accounts Payable-Trade	$	~~544~~566,~~963~~109		$	~~488~~512,~~527~~008
Accounts Payable-Related Party		13,~~858~~345			~~-0-~~3,922
Accrued Expenses		~~140~~97,~~565~~599			86107,~~537~~203
Notes Payable-Current		674,110			358,298
Line of Credit		74,847			73,681
Note Payable-Long Term		-0-			-0-
Notes Payable-Current		385,334			289,602
TOTAL LIABILITIES	$	1,~~373~~137,~~496~~234		$	~~933~~986,~~362~~416
STOCKHOLDERS (DEFICIT)
Common Stock (Note 3)	$	1,~~029~~279		$	~~824~~954
Additional Paid in Capital		56,~~755~~195,~~832~~279			45,~~749~~361,~~009~~462
Accumulated (Deficit)		(67,~~965~~150,~~602~~104	)		(5 6,~~330~~002,~~935~~480	)
TOTAL STOCKHOLDERS (DEFICIT)	$	(1 953,~~208,741~~546	)	$	(~~581~~ 640,~~102~~064	)
TOTAL LIABILITIES AND STOCKHOLDERS (DEFICIT)	$	~~164~~183,~~755~~688		$	~~352~~346,~~260~~352

1020

Note 1:

Selling, General and Administrative expense includes $5564,~~884~~599 and $56,710 of Stock Option Expense for the three months ending ~~December~~March 31, ~~2009~~2010 and ~~December 31~~2009, ~~2008,~~ respectively.

Stock Option Expense is a non-cash accounting entry made for disclosure purposes. The offset to this entry is an increase in Additional Paid-In Capital.

Note 2:

On ~~October~~January 328, ~~2008~~2009, the Company commenced a private stock offering, whereby it authorized the issuance of 1,~~440~~750,000 units, each consisting of one share of its ~~common~~ common stock and one common stock purchase warrant for a total raise of $~~360~~262,~~000~~500. The common stock purchase warrants are exercisable at $1.00 per share and ~~carrying~~carry a five year exercise period. The offering was closed ason ofMarch ~~November 30~~31, 2009, ~~2008.~~at ~~All~~ which time 1,~~440~~296,~~000~~800 ~~units~~unit shares were issued and $~~360~~194,~~000~~520 in cash was received. ~~Warrant~~The amount of warrant expense related to this offering for the three months ending ~~December~~March 31, ~~2008~~2009 was $~~593~~361,~~484~~353.

Warrant Expense is a non-cash accounting entry made for disclosure purposes. The offset to this entry is an increase in Additional Paid-In Capital.

Note 3:

Common Stock, $.0001 par value,; 100,000,000 shares authorized; 1012,~~288~~789,~~794;~~444 8and 9,~~239~~536,~~494~~294 shares issued and outstanding respectively.

The Company ~~has~~is ~~incurred~~continuing ~~costs~~to ~~associated~~focus ~~with~~its ~~the~~efforts ~~establishment~~on ofimproving and expanding its cleaning, ~~business~~gardening and hand sanitizer product lines, while simultaneously ~~the~~establishing ~~development~~a ~~and~~large ~~launching~~viable national network for the distribution of these products. At considerable cost and through its ~~products~~very ~~line.~~popular Itradio show, private labeling, trade show participation and the internet, it has developed established brand names, consumer recognition and interest in organics. ~~through~~While there ~~private~~can ~~labels,~~be ~~the internet~~no assurances, the ~~radio~~Company ~~show~~expects ~~and~~that anthese ~~established~~efforts ~~regional~~will ~~distribution network~~position ~~and started~~itself ~~generating~~to receive meaningful revenues ~~during~~in the ~~second half of calendar~~not-too-distant ~~2007~~future.

Significant resources have been allocated to growing and expanding the Company from October 1, ~~2007~~2008 through ~~December~~March 31, ~~2009~~2010. These costs include, but are not limited to $~~185~~426,~~817~~386 for Legal, Accounting and ~~Accounting~~Other Professional Fees, $~~598~~293,~~152~~771 for Payroll and ~~payroll~~Payroll ~~taxes~~Taxes, $~~231~~57,~~902~~857 for Advertising, $~~508~~242,~~737~~615 for brokered time purchased for our radio shows and $~~124~~80,~~555~~322 for Interest Expense. To help absorb these costs, the Company has financed its operations during this period primarily through ~~convertible promissory notes of $184,120,~~ common stock issued in lieu of debt and payables for $~~333~~562,~~912,~~300; notes payable from related parties of $~~573~~385,~~710~~334; and private placement stock offerings totaling $1591,~~052,643~~617.

~~The~~Approximately ~~Company~~73% will continue to focus its efforts on improving and expanding its all natural cleaning, gardening and hand sanitizer product lines and establishing a large viable national distribution network for the distribution of ~~these products. While there can be no assurances,~~ the Company’s ~~anticipates~~outstanding ~~that~~common ~~these efforts~~shares ~~will~~were ~~position~~restricted ~~itself~~as toof ~~receive~~March ~~meaningful revenues in the~~31, ~~not-too-distant future~~2010.

The Company has issued shares directly to accredited investors and through the conversion of the 6% convertible debentures and convertible promissory notes previously issued. All such shares have been issued in reliance upon exemptions from registration with the Securities and Exchange Commission. An approximate total of 69% of the Company’s outstanding common shares were restricted as of December 31, 2009.

For a more complete list of sales of unregistered securities by the Company, please refer to Part II, Item 5 of Form 10K for the year ended September 30, 2009, which is incorporated by reference herein.

Results of Operations

Three Months Ended ~~December~~March 31, ~~2009~~2010 Compared to the Three Months Ended ~~December~~March 31, ~~2008~~2009

Revenue for the three months ended ~~December~~March 31, ~~2009~~2010 totaled $4766,~~819~~073 compared to $4457,~~632~~007 for the three months ended ~~December~~March 31, ~~2008~~2009. This represented a 7%$9,000 or 16% increase for the quarter ~~and~~which iswas due inprimarily ~~large part~~ to ~~the~~tremendous ~~newly~~growth ~~introduced~~in the Hand Sanitizer product line ~~and~~offset ~~commissions~~by ~~from~~slower ~~Agway~~than onusual ~~their~~NEEM ~~new~~and 4fertilizer sales ~~Step~~of ~~organic~~$5,000 ~~fertilizer program~~due to heavy early spring rains.

Gross profit was 1845.9% for the three months ended ~~December~~March 31, ~~2009~~2010 compared to 2547.6% for the three months ended ~~December~~March 31, ~~2008~~2009. The drop in gross margin ~~can~~is ~~be attributed~~primarily due to temporarily decreased prices offered to introduce the Hand Sanitizer product line to customers, ~~the increased cost of raw materials~~ and ~~increased~~ ~~shipping and receiving costs. All of~~ the ~~changes were directly related to declining economic conditions and the~~ need to be competitive in ~~the marketplace~~this market.

Operating expenses decreased by 49% for the three months ending December 31, 2009 vs. the three months ending December 31, 2008, due primarily to the non-renewal of certain radio station agreements, a cutback in office personnel, a reduction in non-effective print media advertising and more selective trade show participation.21

~~Other~~Operating ~~Income/(Expense)~~expenses decreased by 39% or ($~~587~~127,~~774~~178) for the three months ending ~~December~~March 31, ~~2009~~2010 versus ~~vs.~~ the three months ending ~~December~~March 31, ~~2008. Warrants valued at $593~~2009,~~484 were~~ ~~granted~~due ~~during~~primarily ~~the~~to ~~three months ending December 31, 2008 for financing~~a ~~costs,~~cutback ~~while warrants were not granted during the three months ending December 31, 2009 resulting~~ in aradio ~~decrease~~stations ofwith ~~$593,484.~~overlapping ~~This decrease was offset~~coverage, ~~however, by~~ a ~~48%~~cutback ~~increase~~ in ~~interest expense as a result of related party operational~~office ~~funding~~personnel ~~received over the course of calendar 2009. See footnotes for Notes Payable-Related Party~~ and ~~Subsequent~~more ~~Events~~selective ~~contained~~trade inshow ~~the Financials for more detailed information~~participation.

Other Income/(Expense) decreased by ($356,670) for the three months ending March 31, 2010 versus the three months ending March 31, 2009. This was primarily due to no warrants being offered for the three months ended March 31, 2010 versus three months ended March 31, 2009, where warrant valuations totaled $361,353.

Liquidity and Capital Resources

Cash was $2729,~~318~~810 at ~~December~~March 31, ~~2009~~2010 compared to $9195,~~107~~142 at ~~December~~March 31, ~~2008~~2009 or a decrease of ($6365,~~789~~332). Net Cash Used in Operating Activities decreased by 5847% or $~~184~~241,~~570~~ 102 for the three months ending ~~December~~March 31, ~~2009~~2010 versus ~~vs.~~ the three months ending March ~~December~~ 31, ~~2008~~2009, ~~due~~because toless ~~the~~cash ~~reduced~~was needed to fund Operating Expenses ~~noted~~as noted above and cost of sales due to a significant reduction in inventory. The Company’s operating loss for the three months ending ~~December~~March 31, ~~2009~~2010 was ($~~188~~169,~~730~~398) compared to ($~~373~~299,~~616~~771) for the three months ending ~~December~~March 31, ~~2008 or~~2009 or an improvement of $~~184~~130,~~886~~403. Net Cash Provided by Financing Activities was $~~136~~277,~~320~~751 for the three months ended ~~December~~March 31, ~~2009~~2010 compared to $~~381~~580,~~389~~894 for the three months ended ~~December~~March 31, ~~2008~~2009 or a decrease of $~~245~~303,~~069 which~~143. This was due to a net decrease in cash received in private placement ~~raises~~offerings of $~~330~~517,~~000~~423, offset by ~~increases~~a net increase in related party notes payable of $82210,~~501~~361 and ~~decreases~~a ~~payments~~net ~~and borrowings~~ increase on the Line of Credit of $32,~~430~~793.

Significant Accounting Policies

Significant accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions and are incorporated in these financial statements. We believe that our significant accounting policies are limited to those described below.

Principles of Accounting

The Company employs the accrual method of accounting for both financial statements and tax purposes. Using the accrual method, revenues and related assets are recognized when earned, and expenses and the related obligations are recognized when incurred. The Company has elected a September 30 year end.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

We earn our revenues from the distribution of garden and cleaning products to retailers and directly to consumers via our internet site and from advertising contracts. Four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services rendered; (3) the fee is fixed and determinable; and (4) collectibility is reasonably assured.

Revenue from garden and cleaning products is recognized upon shipment of the product. The distribution of products is governed by purchase orders or direct sale agreements which fix the price and delivery date. The Company records a provision for product returns and price markdowns as a reduction of gross sales at the time the product passes to these retailers or consumers. The provision for anticipated product returns and price markdowns is primarily based upon the analysis of the Company’s historical product returns and price markdowns. Should product sell-through results at retail store locations fall significantly below anticipated levels this allowance may be insufficient. The Company will review the adequacy of its allowance for product returns and price markdowns and if necessary will make adjustments to this allowance on a quarterly basis. In accordance with GAAP, "Accounting for Shipping and Handling Fees and Costs," distribution costs charged to customers are recognized as revenue when the related product is shipped. Advance payments are recorded on the balance sheet as deferred revenue until revenue recognition criteria is met.

Revenue from radio advertising is derived from three sources, the sale of commercial spots on the Garden Guys radio talk show, the sponsorship of informative show segments and hosting live remote broadcasts. Revenue from radio advertising is recognized after the commercial has been aired and/or a remote broadcast has taken place. Customers will prepay for radio spots or remote broadcasts at the time they contract with the Company to air their commercials or host a remote broadcast. The Company will carry this prepayment as a liability, until such time as economic performance takes place. Money received is refundable prior to the airing of commercials or the airing of the remote broadcast, adjusted by any production or other direct costs incurred up to that point in time. Radio advertising for the three months ended December 31, 2009 and 2008 were $4,845 and $-0-, respectively.22

Revenue from radio advertising is derived from three sources, the sale of commercial spots on the Garden Guys radio talk show, the sponsorship of informative show segments and hosting live remote broadcasts. Revenue from radio advertising is recognized after the commercial has been aired and/or a remote broadcast has taken place. Customers will prepay for radio spots or remote broadcasts at the time they contract with the Company to air their commercials or host a remote broadcast. The Company will carry this prepayment as a liability, until such time as economic performance takes place. Money received is refundable prior to the airing of commercials or the airing of the remote broadcast, adjusted by any production or other direct costs incurred up to that point in time. Radio advertising for the three months ended March 31, 2010 and 2009 were $22,460 and $21,370, respectively.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. During the past twelve months the Company maintained cash in bank accounts which, at times, exceeded Federal Deposit Insurance Corporation insured limits. The Company has not experienced, nor does it anticipate, any losses on these accounts and believes their risk to be minimal.

Accounts Receivable

The Company carries its accounts receivable at cost less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts, based on a history of past write-offs and collections and current credit conditions. The Company feels that all of its accounts receivable as of ~~December~~March 31, ~~2009~~2010 and September 30, 2009 ~~are~~ are collectable and therefore no allowance has been taken. The full value of accounts receivable is held as collateral for the Company’s Line of Credit.

Inventory

The inventory is stated at the lower of cost (first-in-first-out method) or market. Inventory items consist of raw material and finished goods. Raw materials consist of labels, bottles, sprayers and shipping materials. Finished goods consist of fertilizer bags and bottles of organic cleaning products ready for shipment. The inventory consists of newly purchased items; therefore, there is currently no allowance for excess or obsolete inventory. The full value of inventory is held as collateral for the Company’s Line of Credit.

Prepaid Expense

Business expenses, including consulting expenses, that are paid for in advance of services being rendered are treated as prepaid. The Company occasionally pays for these expenses with its common stock. When this occurs the offset is shown as a negative component of stockholders' equity.

Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. The Company has elected to capitalize and depreciate any fixed asset item costing in excess of $1,000. Expenditures for minor replacements, maintenance and repairs which do not increase the useful lives of the property and equipment are charged to operations as incurred. Major additions and improvements are capitalized. Depreciation and amortization are computed using the straight-line method over estimated useful lives of five to seven years. The full value of fixed assets is held as collateral for the Company’s Line of Credit.

Advertising

The Company charges advertising costs to expense as incurred. Advertising expenses primarily consist of the Company's three hour weekly Garden Talk radio call in program with Citadel (WBSM) and Greater Media (WTKK). Advertising expense for the radio contracts was $16,500 and $8962,~~583~~401for ~~for~~ the three months ended ~~December~~March 31, ~~2009~~ 2010 and ~~2008~~2009, respectively. Total advertising, including radio contracts, for ~~the~~ the three months years ended ~~December~~March 31, ~~2009~~2010 and ~~2008~~2009 was $1929,~~190~~325 and $~~101~~75,~~956~~802, respectively. Advertising expense also includes display rack costs, slotting fees, samples, trade show participation and print media advertising.

Fair Value of Financial Instruments

On January 1, 2008, the Company adopted FASB ASC 820-10-50, “Fair Value Measurements. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

•· Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•· Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•· Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.

The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of related party notes payable approximates fair value because negotiated terms and conditions are consistent with current market rates as of ~~December~~March 31, ~~2009~~2010 and September 30, 2009.

Stock-Based Compensation

In December 2004, FASB issued FASB ASC 718 (Prior authoritative literature: SFAS No. 123R, “Share-Based Payment”). FASB ASC 718 establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. FASB ASC 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. FASB ASC 718 requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued.

The Company’s accounting policy for equity instruments issued to consultants and vendors in exchange for goods and services follows the provisions of FASB ASC 505-50 (Prior authoritative literature: EITF 96-18, “Accounting for Equity Instruments That are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services” and EITF 00-18,“Accounting Recognition for Certain Transactions Involving Equity Instruments Granted to Other Than Employees”). The measurement date for the fair value of the equity instruments issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached or (ii) the date at which the consultant or vendor’s performance is complete. In the case of equity instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. Stock-based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the fair value of the services, whichever is more readily determinable in accordance with FASB ASC 718.

Net Income (Loss) per Share

Basic net Income (loss) per share is computed by dividing net income {loss) by the weighted average number of common shares outstanding. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding and dilutive potential common shares, which includes the dilutive effect of stock options and warrants granted. Dilutive potential common shares for all periods presented are computed utilizing the treasury stock method. Common stock options of 12,~~140~~295,145 were considered, but not included in the computation of loss per share because their effect is anti-dilutive. Common stock warrants of 2,920,920 were considered, but not included in the computation of loss per share, because their effect is anti-dilutive, as well.

Recently Issued Accounting Standards

In June 2006, FASB issued FASB ASC 740-10 (Prior authoritative literature: FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109”). This Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with FASB No. 109, “Accounting for Income Taxes”. FASB ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. FASB ASC 740-10 is effective for fiscal years beginning after December 15, 2006. The adoption of FASB ASC 740-10 did not have a material impact on the Company’s financial position, results of operations, or cash flows.

In September 2006, the FASB issued FASB ASC 820-10 (Prior authoritative literature: FASB Statement 157, “Fair Value Measurements”). FASB ASC 820-10 defines fair value, establishes a framework for measuring fair value under GAAP and expands disclosures about fair value measurements. FASB ASC 820-10 applies under other accounting pronouncements that require or permit fair value measurements. Accordingly, FASB ASC 820-10 does not require any new fair value measurements. However, for some entities, the application of FASB ASC 820-10 will change current practice. The changes to current practice resulting from the application of FASB ASC 820-10 relate to the definition of fair value, the methods used to measure fair value and the expanded disclosures about fair value measurements. The provisions of FASB ASC 820-10 are effective as of January 1, 2008, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. However, delayed application of this statement is permitted for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The adoption of FASB ASC 820-10 did not have a material impact on the Company’s financial position, results of operations, or cash flows.

In February 2007, FASB ASC 825-10 (Prior authoritative literature: Statement of Financial Accounting Standards No. 159, “ The Fair Value Option for Financial Assets and Financial Liabilities-Including an Amendment of FASB Statement No. 115 ,”) was issued. This standard allows a company too irrevocably elect fair value as the initial and subsequent measurement attribute for certain financial assets and financial liabilities on a contract-by-contract basis, with changes in fair value recognized in earnings. The provisions of this standard were effective as of the beginning of fiscal year 2008, with early adoption permitted. The adoption of FASB ASC 825-10 did not have a material impact on the Company’s financial position, results of operations, or cash flows.

In March 2007, FASB ASC 715-60 (Prior authoritative literature: EITF Issue No. 06-10, "Accounting for Collateral Assignment Split-Dollar Life Insurance Agreements”). FASB ASC 715-60 provides guidance for determining a liability for the postretirement benefit obligation as well as recognition and measurement of the associated asset on the basis of the terms of the collateral assignment agreement. FASB ASC 715-60 is effective for fiscal years beginning after December 15, 2007. The adoption of FASB ASC 715-60 did not have a material impact on the Company’s financial position, results of operations, or cash flows.

In December, 2007, the FASB issued FASB ASC 805 (Prior authoritative literature: SFAS No. 141(R), “Business Combinations”), which established the principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired. FASB ASC 805 also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. FASB ASC 805 is effective the first annual reporting period beginning on or after December 15, 2008 and is not expected to have any impact on the Company’s financial statements.

In December, 2007, the FASB issued FASB ASC 810-10-65 (Prior authoritative literature: SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements”, an amendment of ARB No. 51). FASB ASC 810-10-65 will change the accounting and reporting for minority interests which will be characterized as noncontrolling interests and classified as a component of equity. This new consolidation method will significantly change the accounting for transactions with minority interest shareholders. This standard is effective for fiscal years and interim periods within those fiscal years beginning on or after December 15, 2008.and is not expected to have an impact on the Company’s financial statements.

In March 2008, the FASB issued FASB ASC 815-10 (Prior authoritative literature: SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities”), which is effective January 1, 2009. FASB ASC 815-10 requires enhanced disclosures about derivative instruments and hedging activities to allow for a better understanding of their effects on an entity’s financial position, financial performance, and cash flows. Among other things, this standard requires disclosures of the fair values of derivative instruments and associated gains and losses in a tabular formant. This standard is not currently applicable to the Company since we do not have derivative instruments or engage in hedging activity.

In May 2008, the FASB issued FASB ASC 944 (Prior authoritative literature: SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts – an interpretation of FASB Statement No. 60"). FASB ASC 944 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement. This standard is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended March 31, 2009. The Company does not believe this standard will have any impact on the financial statements.

In April, 2009, the FASB issued FASB ASC 810-10-65 (Prior authoritative literature: SFAS No. 164, “Not-for-Profit Entities: Mergers and Acquisitions”) which governs the information that a not-for-profit entity should provide in its financial reports about a combination with one or more other not-for-profit entities, businesses or nonprofit activities and sets out the principles and requirements for how a not-for-profit entity should determine whether a combination is in fact a merger or an acquisition. This standard is effective for mergers occurring on or after Dec. 15, 2009 and for acquisitions where the acquisition date is on or after the beginning of the first annual reporting period, beginning on or after Dec. 15, 2009. This standard does not apply to the Company since the Company is considered a for-profit entity

In May 2009, FASB issued FASB ASC 855-10 (Prior authoritative literature: SFAS No. 165, "Subsequent Events"). FASB ASC 855-10 establishes principles and requirements for the reporting of events or transactions that occur after the balance sheet date, but before financial statements are issued or are available to be issued. FASB ASC 855-10 is effective for financial statements issued for fiscal years and interim periods ending after June 15, 2009. As such, the Company adopted these provisions at the beginning of the interim period ended June 30, 2009. Adoption of FASB ASC 855-10 did not have a material effect on our financial statements.

In June 2009, the FASB ASC 860-10 (Prior authoritative literature: issued SFAS No. 166, “Accounting for Transfers of Financial Assets, an Amendment of FASB Statement No. 140”), which eliminates the concept of a qualifying special-purpose entity (“QSPE”), clarifies and amends the de-recognition criteria for a transfer to be accounted for as a sale, amends and clarifies the unit of account eligible for sale accounting and requires that a transferor initially measure at fair value and recognize all assets obtained and liabilities incurred as a result of a transfer of an entire financial asset or group of financial assets accounted for as a sale. This standard is effective for fiscal years beginning after November 15, 2009. The Company is currently evaluating the potential impact of this standard on its financial statements, but does not expect it to have a material effect.

In June 2009, the FASB issued FASB ASC 810-10-65 (Prior authoritative literature: SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”) which amends the consolidation guidance applicable to a variable interest entity (“VIE”). This standard also amends the guidance governing the determination of whether an enterprise is the primary beneficiary of a VIE, and is therefore required to consolidate an entity, by requiring a qualitative analysis rather than a quantitative analysis. Previously, the standard required reconsideration of whether an enterprise was the primary beneficiary of a VIE only when specific events had occurred. This standard is effective for fiscal years beginning after November 15, 2009, and for interim periods within those fiscal years. Early adoption is prohibited. The Company is currently evaluating the potential impact of the adoption of this standard on its financial statements, but does not expect it to have a material effect.

In June 2009, FASB issued ASC 105-10 (Prior authoritative literature: SFAS No. 168, "The FASB Accounting Standards Codification TM and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162").FASB ASC 105-10 establishes the FASB Accounting Standards Codification TM (Codification) as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with GAAP. FASB ASC 105-10 is effective for financial statements issued for fiscal years and interim periods ending after September 15, 2009. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ending September 30, 2009. Adoption of FASB ASC 105-10 did not have a material effect on the Company’s financial statements.

In October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2009-13, Revenue Recognition (Topic 605): Multiple-Deliverable Revenue Arrangements—a consensus of the FASB Emerging Issues Task Force (“ASU 2009-13”). ASU 2009-13 changes accounting for certain multiple deliverable arrangements. ASU 2009-13 addresses the separation of deliverables and how to measure and allocate the arrangement consideration to one or more units of accounting in multiple deliverable arrangements. Currently, under the residual method of allocation, we use objective and reliable evidence of the fair value of the undelivered elements to separate deliverables in multiple deliverable arrangements. ASU 2009-13 eliminates the residual method and requires that consideration from the arrangement be allocated to all deliverables using the relative selling price method. ASU 2009-13 requires additional disclosures related to multiple deliverable revenue arrangements upon adoption and is effective for fiscal years beginning after June 15, 2010. In addition, ASU 2009-13 may be early adopted. It may be implemented with either prospective or retrospective application; however, if early adoption is chosen, the entity must either adopt at the beginning of its fiscal year, or adopt using retrospective application. We are currently evaluating the impact ASU 2009-13 will have on our financial position and results of operations, whether to early adopt and which implementation method to use upon adoption if not prescribed.

In October 2009, the FASB issued ASU 2009-14, Software (Topic 985): Certain Revenue Arrangements That Include Software Elements—a consensus of the FASB Emerging Issues Task Force (“ASU 2009-14”). ASU 2009-14 changes the accounting for revenue arrangements that include both tangible products and software elements. Tangible products containing software components and non-software components that function together to deliver the tangible product’s essential functionality is no longer within the scope of the software revenue guidance. Under prior guidance such arrangements were accounted for as software if the software was determined to be more than incidental. ASU 2009-14 requires that any hardware components of such arrangements be excluded from software revenue guidance and that any essential software that is sold with or embedded within the product also be excluded from software revenue guidance. This ASU is effective for fiscal years beginning after June 15, 2010. In addition, ASU 2009-14 may be early adopted. ASU 2009-14 may be implemented with either prospective or retrospective application; however, if early adoption is chosen, the entity must either adopt at the beginning of its fiscal year, or adopt using retrospective application. Further, ASU 2009-14 must be adopted in the same period and with the same implementation method as ASU 2009-13. We are currently evaluating the impact ASU 2009-14 will have on our financial position and results of operations, whether to early adopt and which implementation method to use upon adoption if not prescribed.

Income Taxes

The Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10 (Prior authoritative literature: Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - An Interpretation of FASB Statement No. 109 (FIN 48)). FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained will be sustained upon examination based upon the technical merits of the position. If the more-likely-than- not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10.

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The Company has adopted FASB ASC 740-10 to account for income taxes. The Company currently has no issues creating timing differences that would mandate deferred tax expense. Net operating losses would create possible tax assets in future years. Due to the uncertainty of the utilization of net operating loss carry forwards, an evaluation allowance has been made to the extent of any tax benefit that net operating losses may generate. A provision for income taxes has not been made due to net operating loss carry-forwards of $4,189,293 and $2,964,435 as of September 30, 2009 and September 30, 2008, respectively, which may be offset against future taxable income through 2029. No tax benefit has been reported in the financial statements.

The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.

The Company includes interest and penalties arising from the underpayment of income taxes in the consolidated statements of operations in the provision for income taxes. As of September 30, 2009 and 2008, the Company had no accrued interest or penalties related to uncertain tax positions.

The tax years that remain subject to examination by major taxing jurisdictions are for the years ended September 30, ~~2009~~2008, ~~2008~~2007 and ~~2007~~2006.

Subsequent Events

OnOrganic ~~January~~Sales ~~21,~~and ~~2010~~Marketing, ~~the~~Inc. ~~Board~~has ofevaluated ~~Directors~~subsequent ~~approved~~events for the ~~issuance~~period ~~of 1,773,333~~March ~~shares of common stock in satisfaction of $260~~31,~~000~~ in2010 ~~related~~through ~~party~~May ~~notes payable and $6~~9,~~000~~ ~~in accrued interest to a director of the Company. As part of the agreement~~2010, the ~~remaining~~date ~~balance~~its offinancial ~~the~~statements ~~related~~were ~~party note of $100~~issued,~~000~~ ~~will~~and beconcluded ~~due~~there ~~and~~were ~~payable~~no ~~over~~other ~~the~~events ~~next~~or 7transactions ~~years~~occurring atduring anthis period ~~interest~~that ~~rate~~required recognition of 8%disclosure ~~per~~in its financial ~~annum~~statements.

OnItem January 21, 2010, the Board of Directors approved the issuance of 680,000 shares of common stock in satisfaction of $90,000 in related party notes payable and $12,000 in accrued interest to a director of the Company4. AsControls ~~part of the agreement, the remaining balance of the related party note of $14,000 will be due~~ and ~~payable over the next 2 years at an interest rate of 8% per~~ ~~annum.~~Procedures

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company, as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, and accordingly we are not required to provide the information required by this item.

Item 4T. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required financial disclosures. Because of inherent limitations, our disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of such disclosure controls and procedures are met.

As of the end of the period covered by this Report we conducted an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2009.25

19As of the end of the period covered by this Report we conducted an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2010.

Changes in Internal Control

~~There~~As ~~was~~noted noin ~~change~~the inreport ~~our~~10-K ~~internal~~of ~~control~~the ~~over~~Company, ~~financial~~we ~~reporting~~commented ~~during~~on ~~the~~a ~~three months~~material ~~ended~~weakness ~~December~~regarding the ~~31,~~capturing ~~2009,~~and ~~that~~reporting ~~materially~~certain ~~affected,~~transactions orinvolving ispayment ~~reasonably~~through ~~likely~~issuance toof ~~materially~~stock. Current ~~affect,~~changes to our internal control procedures included having management implement additional sign-offs and review procedures over ~~financial~~contracts paid in cash or stock. Management believes that these ~~reporting~~additional controls help mitigate the material weakness noted in the form 10-K from recurring in future periods.

PART II — – OTHER INFORMATION

Item 1A. Risk Factors.

.Risks Related To Our Business And Operations

· Economic or industry-wide factors relevant to the Company:

Should consumer interest in “organic” or “natural” products diminish or discontinue; should there be a natural disaster that adversely impacts garden center product sales such as extreme weather conditions throughout the United States; should there be a shortage of suppliers in the enzyme technology that is used in some of our products or should there be a slower than anticipated roll-out of products to customers due to such external factors, the Company’s ability to realize a profit and yield a positive cash flow from operations as quickly as we anticipate could be adversely impacted.

· Material opportunities, challenges:

Should our suppliers not be able to deliver in the quantities the Company needs at any given time in order to fulfill orders; should our contract manufacturer not be able to deliver finished goods in a timely manner or suffer any type of physical plant disaster, labor strike or shortage, it would adversely impact the Company’s’ business. Difficult challenges may be incurred as more competitors, who are more heavily financed than we are, enter into the market and create pricing issues which could adversely impact the Company’s operations.

· Risks in short and long term and the actions we are taking to address them:

Undercapitalization could impose growth restraints on the Company preventing us from entering other markets and regions, as planned. The Company will continue to actively pursue private placement investor funding as allowed by SEC regulations and to satisfy debt and payables with stock, stock options and/or warrants as a means of capitalizing the Company until operations are sufficient enough to be self-sustaining. There can be no assurance, however, that these activities will be successful.

If Sam Jeffries were unable to host and produce the weekly talk show, this could have an adverse impact on the show’s educational and promotional programming, which is considered an essential part of our advertising and marketing plan. The present co-hosts, Jim Zoppo and Layanee DeMerchant, could produce and conduct the show in Sam Jeffries absence. In addition, Jim Zoppo is a well respected, well known horticulturist and radio talk show host in his own right.

Although unlikely, interest in organics could diminish which would have an adverse effect on the popularity of the radio show. To mitigate this possibility, “home remedy”, “how to” and “natural and organic health-care alternative segments are being added to the shows programming to expand listener interest and extend the seasonality of the show. The Company also has plans to ultimately reach a national audience by franchising the Garden Guys concept throughout the country by having local talk shows discuss organics and lawn and gardening techniques and problems indigenous to each of those regions.

2026

· Reliance on Investment Funds

We just recently started to receive meaningful cash flow from customer sales. We expect that for the short term future, we will still rely on external funding sources, primarily equity capital, to finance our operations. While we believe that increasing cash flow from customer sales will ultimately provide adequate funds to permit us to become self-sufficient, possibly, by the end of 2010; until then, we will continue to require additional capital from investors. If we were unable to obtain such funding from outside sources, we would likely be forced to reduce the level of our operations and business failure could become a real possibility.

· Reliance on Management Team

As stated above, the Company relies heavily upon a small team of full-time officers and consultants. It has “key man” life insurance on the CEO, Samuel Jeffries that would compensate us in the event of his demise. Sam Jeffries continued involvement is deemed especially critical to our marketing efforts. The loss of Sam Jeffries or one of several key officers or consultants could have an adverse impact on the Company’s chances for success. At present, “key man” insurance coverage is not being pursued on the other full-time officers due to cost.

Risks Related to Ownership of Our Stock

· Trading Market

Our stock officially began trading on Monday, May 5, 2008 on the Over The Counter Electronic Bulletin Board under the trading symbol; OGSM. Even with our shares being traded publicly, there is a substantial “overhang” of outstanding shares that would be eligible for sale under Rule 144. Such sales, if they were to occur, could tend to suppress the market value of our shares for some time.

· No Dividends in Foreseeable Future

Our Board of Directors determines whether to pay cash dividends on our issued and outstanding shares. Such determination will depend upon our future earnings, our capital requirements, our financial condition and other relevant factors. At present, our board is not intending to declare any dividends in the foreseeable future. Earnings, once achieved, are expected to be retained to help finance the growth of our business and for general corporate purposes.

· Provisions of our Certificate of Incorporation, By-laws and Delaware Law

Provisions of our Certificate of Incorporation, By-laws and Delaware law may make it more difficult for someone to acquire control of us or for our stockholders to remove existing management, and might discourage a third party from offering to acquire us, even if a change in control or in management would be beneficial to our stockholders. For example, our Certificate of Incorporation allows us to issue different series of shares of common stock without any vote or further action by our stockholders and our Board of Directors has the authority to fix and determine the relative rights and preferences of such series of common stock. As a result, our Board of Directors could authorize the issuance of a series of common stock that would grant to holders the preferred right to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of other common stock and the right to the redemption of the shares, together with a premium, prior to the redemption of other series of our common stock.

Item 6. Exhibits

10.24

USDA letter notifying OSM that we are Bio-Preferred program participants.

10.26

USDA Bio-Preferred Press Release.

31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Executive Officer.

31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Financial Officer.

32.1	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Executive Officer.

32.2	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 from the Company’s Chief Financial Officer.

2127

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant)

	(Registrant)

May 20, 2010		/s/
Date		SAMUEL F.H. JEFFRIES
		CEO AND CHAIRMAN


May 20, 2010		SAMUEL F.H. JEFFRIES,
Date		INTERIM CHIEF FINANCIAL OFFICER

February 19, 2010	/s/
Date	SAMUEL F.H. JEFFRIES
	CEO AND CHAIRMAN
February 19, 2010	/s/
Date	SAMUEL F.H. JEFFRIES,
	INTERIM CHIEF FINANCIAL OFFICER

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