UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

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

For the quarterly period ended MARCH 31, 2014

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

For the transition period from _________________ TO _________________

Commission file number: 000-52158

Smoky Market Foods, Inc.

(Exact name of registrant as specified in its charter)

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

1511 E. 2nd St.

Webster City, IA 50595

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (515) 724-7976

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

[ ] Yes [X] No

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

[ ] Yes [X] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller reporting company [X]

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

[ ] Yes [X] No

As of December 1^st, the registrant had 191,233,345 shares of common stock outstanding.

TABLE OF CONTENTS

	PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	8
Item 4.	Controls and Procedures	8

	PART II — OTHER INFORMATION

Item 1A.	Risk Factors	8
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14
Item 6.	Exhibits	14

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SMOKY MARKET FOODS, INC.

Balance Sheets

(UNAUDITED)

	March 31, 2014			December 31, 2013
ASSETS:
Current Assets
Cash	$	1,273		$	1,128

Total Assets	$	1,273		$	1,128

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT):
Liabilities
Current Liabilities
Accounts payable	$	539,616		$	538,677
Accounts payable - related parties		190,738			186,638
Accrued payroll costs		1,026,184			975,309
Short-term advances		112,655			108,805
Derivative liability		201,270			201,270
Convertible debt, including accrued interest, less amortized discount		71,301			68,695
Total Current Liabilities		2,141,764			2,079,394
Long-term Liabilities
Convertible debt to a related party, less amortized discount		210,528			209,512
Promissory note payable, including accrued interest, less amortized discount		3,154,798			3,076,731
Total Long-term Liabilities		3,365,326			3,286,243
Total Liabilities		5,507,090			5,365,637

Stockholders’ Equity (Deficit)
Preferred Stock, par value $.001, 10,000,000 shares authorized; no shares issued and outstanding		-			-
Common Stock, par value $.001, 200,000,000 shares authorized: issued and outstanding 157,849,844 at both March 31, 2014 and December 31, 2013		157,850			157,850
Other paid-in capital		8,226,309			8,226,309
Accumulated deficit		(13,889,976	)		(13,748,668	)
Total Stockholders’ Equity (Deficit)		(5,505,817	)		(5,364,509	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	1,273		$	1,128

See Notes to Financial Statements.

F-1

SMOKY MARKET FOODS, INC.

Statements of Operations

(UNAUDITED)

	For the Three Months Ended March 31:
	2014			2013
Sales
Wholesale	$	2,207		$	3,071
Internet		-			151
Total Sales		2,207			3,222

Cost of Sales
Wholesale and internet		959			-
Total Cost of Sales		959			-

Gross Profit (loss)		1,248			3,222

General & Administrative Expenses
Salaries, wages & benefits		50,875			45,999
Depreciation and amortization		14,860			40,088
Professional fees		4,100			625
Rent		900			1,387
Other		4,935			7,008
Total General and Administrative Expenses		75,671			95,107

Operating Loss		(74,423	)		(91,885	)

Other Income (Expense)
Interest expense to non-related parties		(66,885	)		(65,750	)

Other Income (Expense) - Net		(66,885	)		(65,750	)

Loss before Income Taxes		(141,308	)		(157,635	)

Income Taxes		-			-

Net Income (Loss)	$	(141,308	)	$	(157,635	)

Earnings (Loss) per Share:
Basic and Diluted		(0.001	)		(0.001	)

Weighted Average Number of Shares		157,839,764			134,072,719

See Notes to Financial Statements.

F-2

SMOKY MARKET FOODS, INC.

Statement of Stockholder’s Equity (Deficit)

(UNAUDITED)

	Common Stock				Deferred Stock-Based			Other Paid-in		Accumulated			Total
	Shares		Amount		Compensation			Capital		Deficit			(Deficit)
Balance, January 1, 2013		122,189,276	$	122,189	$	(1,915	)	$	8,201,001	$	(13,452,033	)	$	(5,130,758	)
Common stock issued for:
Conversion of debt to common stock		35,660,568		35,661					23,339					59,000
Convertible debt financing														-
Warrants issued for financing and professional services									1,969					1,969
Amortization of stock-based compensation						1,915								1,915
Net (Loss) for the Year Ended December 31, 2013											(296,635	)		(296,635	)
Balance, December 31, 2013		157,849,844		157,850		-			8,226,309		(13,748,668	)		(5,364,509	)
Net (Loss) for the three months ended March 31, 2014											(141,308	)		(141,308	)
Balance, March 31, 2014		157,849,844	$	157,850	$	-		$	8,226,309	$	(13,889,976	)	$	(5,505,817	)

See Notes to Financial Statements.

F-3

SMOKY MARKET FOODS, INC.

Statements of Cash Flows

(UNAUDITED)

	Three Months Ended			Three Months Ended
	March 31, 2014			March 31, 2013
Cash Flows from Operating Activities
Net Income (Loss)	$	(141,308	)	$	(157,636	)
Depreciation and amortization		14,860			42,003
Current year interest capitalized as debt		66,829			65,608
Adjustments to reconcile net loss to cash used in operating activities:
Increase (decrease) in accounts payable		5,039			2,884
Increase (decrease) in due to employees		50,875			46,000

Net Cash Provided (Used) by Operating Activities		(3,705	)		(1,141	)

Cash Flows from Investing Activities
None		-			0

Net Cash Provided (Used) by Investing Activities		-			-

Cash Flows from Financing Activities
Proceeds from (payments on) short term advances - net		3,850			1,305

Net Cash Provided (Used) by Financing Activities		3,850			1,305

Net Increase (Decrease) in Cash		145			164

Cash, Beginning of Period		1,128			380

Cash, End of Period	$	1,273		$	544

See Notes to Financial Statements.

F-4

SMOKY MARKET FOODS, INC.

Notes to Financial Statements

(UNAUDITED)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

The Company engages in the manufacture and sale of smoked meat products using a proprietary cooking technology which enables preservative-free production. Sales and distribution are presently accommodated through retail (internet) and wholesale distribution strategies intended to exploit the Smoky Market brand.

Use of Estimates

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

Cash and Cash Equivalents

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

Accounts Receivable

Management monitors the liquidity and creditworthiness of accounts receivable due from customers on an ongoing basis, considering industry and economic conditions and other factors. These factors form the basis for calculating and recording an allowance for doubtful accounts, which is an estimate of future credit losses. The Company writes off individual accounts receivable against the bad debt allowance when the Company determines a balance is uncollectible. Management has determined that the bad debt allowance is appropriately established at $-0- as of both March 31, 2014 and December 31, 2013, respectively.

Inventory

Inventory consists of Smoky Market food items and branded packaging. It is valued at the lower of cost or market using the average cost method. The Company had no inventory value as of March 31, 2014 and December 31, 2013.

Property and Equipment

Property and equipment are stated at cost and are being depreciated using the straight-line method over the assets’ estimated economic lives, which range from 3 to 25 years. Leasehold improvements are capitalized and amortized over the remaining term of the leased facility.

The Company had no property and equipment as of March 31, 2014 and December 31, 2013.

Advances

As of March 31, 2014 and December 31, 2013, the Company was indebted to several individuals for non-interest bearing, unsecured advances in the amounts of $112,655 and $108,805, respectively. Management intends to repay the advances upon the realization of additional debt/equity financing, when available. Accordingly, the advances have been classified as current obligations. Alternatively, some of the advances may be converted to common stock by mutual agreement.

F-5

Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2014 and December 31, 2013. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values are assumed to approximate carrying values for these financial instruments because they are short term in nature, or are receivable or payable on demand, and their carrying amounts approximate fair value.

Impairment of Long-Lived Assets

The Company periodically reviews the carrying amount of property and equipment and its identifiable intangible assets to determine whether current events or circumstances warrant adjustments to such carrying amounts. If an impairment adjustment is deemed necessary, such loss is measured by the amount that the carrying value of such assets exceeds their fair value. Considerable management judgment is necessary to estimate the fair value of assets; accordingly, actual results could vary significantly from such estimates.

Revenue Recognition

Sales are recognized upon shipment.

Shipping and Handling (Internet Sales)

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

Advertising Costs

All advertising costs are charged to expense as incurred or the first time the advertising takes place, unless it is direct-response advertising that results in probable future economic benefits. Advertising expenses were $-0- for both the three-months ended March 31, 2014 and 2013, respectively.

Segment Information

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

Net (Loss) Per Common Share

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

Stock-Based Compensation

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

Occasionally, the Company sells shares below market value to raise cash to fund operations. The discounts from market are treated as compensation for officers and directors. For non-officers and directors, the discounts are netted against proceeds as a “cost of issue.”

F-6

Income Taxes

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

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

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

NOTE 2. GOING CONCERN

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern. Management believes that there is substantial doubt about the company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is contingent upon its ability to commence profitable operations and/or obtain additional debt and/or capital financing. Management is attempting to obtain additional financing with various parties, but the eventual success of such efforts cannot be assured. The Company has experienced $13,889,976 in losses since inception. The Company has had minimal revenue generating operations since inception. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

NOTE 3. NOTE PAYABLE

The Company is obligated under a promissory note payable to an LLC. The note accrues interest at a 10% annual rate until repaid on or before its maturity date of August 18, 2020.

The net promissory note obligation was as follows as of:

	March 31, 2014			December 31, 2013
Face amount of note	$	2,568,900		$	2,568,900
Accrued interest		932,006			867,783
Less unamortized loan discount		(346,108	)		(359,952	)
	$	3,154,798		$	3,076,731

F-7

NOTE 4. CONVERTIBLE DEBT – RELATED PARTY

The Company entered into a Purchase and Lease Agreement in June 2011 with SMKY Asset Fund LLC (the “Lender,” a related party) relating to the Company’s smoker-oven system. The substance of the transaction more closely resembles a convertible debt instrument and for that reason the Company has recorded this transaction as a convertible debt borrowing. Pursuant to the agreement, the Company has received $240,000 to date under this arrangement, with a maximum borrowing of $500,000.

In addition, Smoky Market was required to issue warrants to the Lender to purchase a share of common stock for each $1.00 in debt provided. The warrants have an exercise price of $0.50 per share, a five-year term and include net exercise provisions. The warrants were valued using the Black-Scholes method assuming a risk-free annual rate of return of .02%, volatility of 317%, an exercise price of $.50 and a current stock price of $.24. The resulting value is reflected in the financial statements as a discount on the convertible debt and is being amortized over the ten-year life of the debt. Payments due on the debt are equal to the lesser of (a) $0.20 per pound of product produced using the smoker-oven, or (b) the amount necessary to generate a 30% return on the sum of the purchase price and $5,000.

The agreement has a 10-year term, provided that the Company must repay the debt at any time after July 25, 2014 that the market price for the Company’s common stock has exceeded $0.50 for thirty trading days. The repurchase price is a number of shares of common stock with a fair market value equal to 20 times the sum of (a) the purchase price, plus (b) $5,000. The conversion feature of the note was valued based on the same criteria as the warrant described above, and resulted in a calculation of $2,063,114. Since the conversion is contingent, the conversion feature was not recognized in the calculation of the debt discount.

The debt was as follows as of:

	March 31, 2014			December 31, 2013
Face amount of debt	$	240,000		$	240,000
Less unamortized loan discount		(29,472	)		(30,488	)
	$	210,528		$	209,512

As discussed above, the Lender is considered a related party. Related party expenses relative to this loan was as follows for the years ended December 31:

	Three Months Ended March 31:
	2014		2013
Amortization of loan discount	$	1,016	$	1,016

NOTE 5. CONVERTIBLE DEBT – UNRELATED PARTY

The Company entered into a series of convertible debt arrangements with an unrelated financier (“Financier”). The promissory notes carry interest at an 8% annual rate and are due nine months from the transaction date. The notes have a conversion option which allows the Financier to convert the principal and accrued interest into common shares based on the average of the lowest three closing prices of the Companies stock over the prior ten to fifteen days. That price is then discounted by 42% to arrive at the conversion price. The Company has the right to repurchase the notes during the first 180 days at a price which includes accrued interest plus the original principal amount multiplied by 150%.

The Company has calculated and recorded “Beneficial Conversion Options” on the notes, and reflects them as loan discounts which are amortized over the life of the notes. The calculation of the discounts is based on the difference between the note balance and the value of the common stock conversion. The conversion is calculated based on the three lowest closing prices during the ten to fifteen days preceding the loan transaction, discounted by 42%.

F-8

The outstanding combined debt was as follows as of December 31:

	March 31, 2014		December 31, 2013
Face amount of debt	$	57,800	$	115,500
Accrued interest		13,501		3,295
Less unamortized loan discounts		-		(32,581	)
	$	71,301	$	86,214

NOTE 6. CAPITAL STOCK

Common Stock

On April 18, 2006, the State of Nevada authorized the Company to issue a maximum of 200,000,000 shares of the Company’s common stock. The assigned par value was $0.001. On the same day, the Company issued 40,000,000 common shares to Smoky Systems, LLC, a Nevada LLC and related party, in exchange for certain assets. Smoky Systems, LLC has since been liquidated and the common shares of Smoky Market Foods, Inc. were distributed to the members of Smoky Systems, LLC

Preferred Stock

In June 2006, the State of Nevada authorized the Company to issue a maximum of 10,000,000 shares of the Company’s preferred stock with a $.001 par value. Shares of Preferred Stock may be issued from time to time in one or more series as may from time to time be determined by the Board of Directors. Each series shall be distinctly designated. All shares of any one series of the Preferred Stock shall be alike in every particular, except that there may be different dates from which dividends thereon, if any, shall be cumulative, if made cumulative. The powers, preferences and relative, participating, optional and other rights of each such series, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. No preferred shares had been issued as of March 31, 2014.

Stock Transactions:

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

NOTE 7. RELATED PARTY TRANSACTIONS

As of March 31, 2014 and December 31, 2013, the Company owed $190,738 and $186,638, respectively, to a related party for professional services. Such debt was reflected as related party trade payables on the balance sheets, bears no interest and has no formal repayment terms.

NOTE 8. COMMITMENTS AND CONTINGENCIES

Operating Lease Commitment

The Company has defaulted on a long-term operating lease of real property previously used as a restaurant operation in Los Gatos, California. All amounts due under the lease have been recognized as a liability and included in accounts payable. The liability is reflected at $187,307 as of both March 31, 2014 and December 31, 2013.

F-9

Employment Contracts

Chief Executive Officer

Effective May 1, 2007, the Company entered into a three-year employment contract with the Chief Executive Officer (“CEO”). Terms of the agreement included annual compensation of $175,000, a potential 80% bonus, a stock award of 1,500,000 common shares, 425,000 options to purchase common stock at $.10 per share, and an additional contingent 1,000,000 shares assuming that certain operating performance metrics are achieved. The employment contract expired and has not yet been renewed as of the date of these financial statements. The CEO and the Company have continued the same compensation structure subsequent to the expiration of the employment contract.

Real Estate Option and Consulting Agreement

The Company entered into an agreement with Mary Anne’s Specialty Foods, Inc. (“Supplier”) in October 2009. Under the terms of the agreement, the Company issued the Supplier 1,500,000 warrants to purchase the Company’s common stock at a $.15 exercise price, expiring in five years, in exchange for certain real property rights to purchase and build production facilities located on property presently owned by the Supplier. The transaction was valued at $75,000 using the Black-Scholes Method. The Company also issued 1,000,000 common shares to the Supplier in exchange for a three-year real estate related consulting contract that the Company may require in subsequent years in order to build the new facility described above. The transaction was valued at $50,000, and based on the $.05 per share fair value of the Company’s common shares on the date of the agreement. The values of the assets were considered impaired by Management and written off as an impairment loss at December 31, 2010.

Dispute with Contractor

Smoky Market previously retained the services of an independent financial consultant contractor (the “Contractor”). The Contractor was terminated in 2009 and Company Management believes that a settlement was agreed to between the parties. The Contractor now disputes the agreement, claiming additional amounts are owed. The Company plans to contest the Contractor’s claim, but has recognized and recorded a liability in these financial statements equal to the full amount claimed by the Contractor. The amount in dispute was $206,220 as of March 31, 2014 and December 31, 2013.

NOTE 9. COMMON STOCK OPTIONS AND WARRANTS

Common Stock Option Plan

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

						Weighted
	Options and					Average
	Stock Awards					Option
	Available		Number of			Exercise
	for Grant		Shares			Price
Outstanding as of January 1, 2013		742,500		5,757,500		$	0.10
Shares Reserved		-		-			-
Options Granted		-		-			-
Stock Awards Granted		-		-			-
Options Exercised		-		-			-
Options Canceled		-		-			-
Outstanding as of December 31, 2013		742,500		5,757,500		$	0.10
Shares Reserved		-		-			-
Options Granted		-		-			-
Stock Awards Granted		-		-			-
Options Exercised		-		-			-
Options Canceled		1,462,500		(1,462,500	)		0.10
Outstanding as of March 31, 2014		2,205,000		4,295,000		$	0.10

The following table summarizes information about stock options outstanding and exercisable at March 31, 2014:

Stock Options Outstanding
		Weighted-
		Average		Weighted-
Number of		Remaining		Average
Options		Contractual		Exercise
Outstanding		Life in Years		Price
	425,000		0.16	$	0.10

Stock Options Exercisable
		Weighted-
		Average		Weighted-
Number of		Remaining		Average
Options		Contractual		Exercise
Exercisable		Life in Years		Price
	425,000		0.16	$	0.10

F-10

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

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

Common Stock Warrants

The following is a summary of the status of all the Company’s stock warrants as of March 31, 2014:

				Weighted
	Number			Average
	of			Exercise
	Warrants			Price
Outstanding, January 1, 2013		18,949,334			0.11
Granted		4,405,000
Exercised		-
Cancelled		-
Outstanding, December 31, 2013		23,354,334		$	0.11
Granted		-
Exercised		-
Cancelled		(5,750,000	)
Outstanding, March 31, 2014		17,604,334		$	0.11

The following table summarizes information about stock warrants outstanding and exercisable at March 31, 2014:

Stock Warrants Outstanding
Number of Warrants		Weighted- Average Remaining Contractual
Outstanding		Life in Years		Exercise Price
	215,000		2.44	$	0.50
	1,771,834		2.09	$	0.25
	5,515,000		0.26	$	0.15
	10,102,500		3.66	$	0.05
	17,604,334

Stock Warrants Exercisable
Number of Warrants		Weighted- Average Remaining Contractual
Exercisable		Life in Years		Exercise Price
	215,000		2.44	$	0.50
	1,771,834		2.09	$	0.25
	5,515,000		0.26	$	0.15
	10,102,500		3.66	$	0.05
	17,604,334

Warrants were valued and recorded pursuant to the Black-Scholes Method, using risk-free average rates of return of less than 1%, stock price volatility over 300%, and a weighted average expected term of 3.5 years.

NOTE 10. SUBSEQUENT EVENTS

Management has evaluated the period subsequent to March 31, 2014 up to and including the date of the issuance of the financial statements for material subsequent events to disclose, and has determined that no such subsequent events exist.

F-11

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

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

Overview

We use proprietary, custom-engineered, USDA-approved wood-burning oven technology to produce a complete line of fully-cooked Smoke-BakedTM fish and meat, and special recipe dishes. From a 15-acre food production campus located in central Iowa and owned by our exclusive meat processor, Mary Ann’s Specialty Foods, Inc. (“Specialty Foods”), we plan to sell our line of smoked foods through multiple channels of distribution under the Smoky Market brand.

Within the value-added, prepared food marketplace, we see a significant lack of artisan smoked fish and meat products that are truly wholesome, naturally wood-smoked by burning wood, and free of additives and chemical preservatives. We believe this specialized marketplace to be virtually untapped and without any major smoked food brand comparable in quality. We believe our two packaged food brand concepts, “Smoky Market” and “Smoky Kosher”, will enable us to penetrate national markets for sales to wholesale and retail customers in the value-added packaged food sector. We believe our business model to be a niche market opportunity to produce and distribute artisan quality smoked foods, at competitive prices, within a highly processed, commercial prepared food marketplace.

We produce our smoked foods under an agreement with Specialty Foods, a commercial meat processor in whose USDA facility we placed out first wood-burning oven system, which is capable of producing approximately 100,000 pounds of our smoked salmon per month and a slightly lesser amount of smoked meat items.

We have generated net losses in each fiscal year since our inception in the development of our business model. In October 2009, we generated a small amount of revenue from food sales at a prototype Los Gatos, CA restaurant where we were testing our foodservice system, but subsequently closed the restaurant due principally to poor economic conditions in the area. As discussed in “Liquidity and Capital Resources” below, in June 2009 we received $1.5 million in capital financing, which we used toward debt repayment, the opening of the Los Gatos restaurant to test our foodservice system, and for our website to launch a test with Internet sales. We estimate that we will need a minimum of $500,000 of additional financing in order to accomplish the initial launch of our regional sales and fulfillment plan. Because of the $650,000 of inventory and receivable financing being provided by Specialty Foods in connection with our development agreement, we believe a minimum of $500,000 will enable us to grow our sales revenue to a point where we generating a positive cash flow. We expect such proceeds to be provided through a private transaction of sales of either our available common or preferred stock.

Liquidity and Capital Resources

As of March 31, 2014, we had cash and cash equivalents of $1,273 and a working capital deficit of $2,140,491, as compared to cash and cash equivalents of $1,128 and a working capital deficit of $2,078,266 as of December 31, 2013.

To finance the expansion of our wholesale, distribution, and Internet retail operations, we intend to seek additional financing in 2014. Given that we are not yet in a positive cash flow or earnings position, the options available to us are fewer than to a positive cash flow company and generally do not include bank financing. To raise additional capital, we expect to issue equity securities, including preferred stock, common stock, warrants and/or convertible securities. We do not have any commitments from any party to provide required capital and may, or may not, be able to obtain such capital on reasonable terms or at all.

In a March 2010 transaction with 70 Limited LLC, we received $150,000 in cash for a promissory note in the amount of $150,000 together with a warrant to purchase up to 450,000 shares of our common stock. Under the terms of the promissory note, we were obligated to make payment on the full principal amount, plus interest accruing at 10% per year, by March 5, 2011, and we could prepay any amount of principal or interest at any time without penalty.

In August 2010, the Company and 70 Limited LLC agreed to refinance the note. Pursuant to the agreement, both loans were combined, along with accrued interest, forming a new loan with a maturity date of August 18, 2020. The note will accrue interest at a 10% annual rate until repaid. Prior warrants were revised to allow for exercise at $.05 per warrant as opposed to the previous $.15. The new warrants were valued based on the Black-Scholes method using a risk-free rate of return of .15% and volatility of 347%.

In July 2011, we entered into a Purchase and Lease Agreement (the “Sale/Lease Agreement”) with SMKY Asset Fund LLC (the “Lessor”) related to our smoker-oven system. Pursuant to the Sale/Lease Agreement, we sold the smoker-oven system to the Lessor for a purchase price equal of $240,000 (the “Sale Price”). In addition, we are required to issue to Lessor a warrant to purchase a share of common stock for each $1.00 of the Lease Price. The warrants have an exercise price of $0.50 per share, a five-year term and include net exercise provisions. We leased back the smoker-oven system for rent equal to $0.20 per pound of product produced using the smoker-oven up to a maximum annual return of 30% on the sum of the Sale Price ($240,000) or $72,000. The Sale/Lease Agreement has a 10-year term and includes a provision that we must repurchase the smoker-oven system at any time after July 25, 2014 providing that the market price for our common stock has exceeded $0.50 for thirty trading days. The repurchase price is a number of shares of common stock with a fair market value equal to 20 times the Sale Price, plus $5,000.

The Company received funding from Asher Enterprises, Inc. in return for promissory notes. Aggregate principal outstanding on the notes was $57,800 and $115,000 as of December 31, 2013 and 2012, respectively The notes accrue interest at an annual rate of 8% until repaid and are due 180 days after inception. The notes are convertible into shares of our common stock at conversion prices equal to a discount of 45% to the then current market price. As of December 31, 2013, two of the notes, aggregating $68,695 in principal and accrued interest, were in default as they had not been converted nor retired before coming due and therefore began accruing interest at 22%. Both of these remaining notes were retired in the third quarter of 2014 and the total amount of accrued interest was waived and not paid.

During 2013, principal uses of cash were approximately $15,000 to finance operations.

There are no major expected capital expenditures during the 2014.

Assuming the success of our wholesale foodservice distribution and development of our retail channels through display merchandising and Internet operations, which are expected to utilize a substantial portion of our existing production capacity, we anticipate the need to invest as much as $1,500,000 to create additional production capacity at Specialty Food’s production facility to support our expanded marketing operations. This will most likely require the construction of an additional building adjacent to Specialty Food’s existing production space for more ovens and packaging equipment. We have entered into agreements with Specialty Foods under which we were granted an option to construct an up to 80 thousand square foot building on its property to accommodate additional smoker ovens and equipment and an option to purchase the 15-acre campus on which Specialty Foods operates if needed to accommodate growth of the Company’s business (subject to an obligation to lease back to Specialty Foods its processing facility). We anticipate that the financing to pay for the proposed building addition will be generated from a combination of our sales and additional financing transactions involving debt or equity securities. If we are unable to obtain financing to construct the building addition as planned, we will be forced to significantly curtail our proposed expansion, and our ability to grow revenue will be halted until increased capacity can be created.

Results of Operations

We experienced increases in sales, operating costs and general and administrative expenses during the three-month period ending March 31, 2012 as compared to the comparable period ending March 31, 2011. The changes in revenues and expenses are summarized and discussed in the table below and in the discussion that follows.

Revenues and Expenses. Our operating results for the quarterly period ended March 31, 2014 and the comparable period in 2013 are summarized as follows:

	For the three-month period ended
	March 31, 2014			March 31, 2013
Sales	$	2,207		$	3,222
Cost of Sales	$	959			-
Gross Profit (Loss)	$	1,248		$	3,222
General & Administrative Expenses
Salaries, Wages & Benefits	$	50,875		$	45,999
Depreciation/amortization	$	14,860		$	40,088
Professional Fees	$	4,100		$	625
Marketing		-		$	(937	)
Rent	$	900		$	1,387
Other	$	4,935		$	7,008
Operating Loss	$	(74,423	)	$	(91,885	)
Other Expense – Net	$	(66,885	)	$	(65,750	)
Net (Loss)	$	(141,308	)	$	(157,636	)

Sales decreased by $1,015, from $3,222 in 2013 to $2,207 in 2014. Cost of sales in 2014 was $959, as compared to $0 in 2013. We had no cost of sales is 2013 because we had previously written off the inventory as impaired due to slow sales. Our general and administrative expenses decreased by $19,438, from $95,108 in 2013 to $75,670. Our operating loss decreased by $17,464, from $91,886 in 2013 to $75,670

Our general and administrative expenses decreased by $19,438, from $95,108 in the quarterly period ended March 31, 2013 to $75,670 in the same period in 2014. The decrease in general and administrative expenses was due primarily to decreases in depreciation and amortization expenses and stock based compensation, all as described below.

Depreciation and amortization expenses decreased by $25,228, from $40,088 in the quarterly period ended March 31, 2013 to $14,860 in the same period in 2014, due primarily to a reduction in loan cost amortization as the much of the loan costs had become fully amortized prior the March 31, 2014 quarterly period.

Working Capital. Our working capital as of March 31, 2014 and as of December 31, 2013 are summarized in the table below.

	As of
	March 31, 2014			December 31, 2013
Current Assets
Cash	$	1,273		$	1,128
Total Current Assets	$	1,273		$	1,128

Current Liabilities
Accounts payable	$	539,616		$	538,677
Accounts payable – related parties	$	190,738		$	186,638
Accrued payroll costs	$	1,026,184		$	975,309
Short-term advances	$	112,655		$	108,805
Derivative liability	$	201,270		$	201,270
Convertible debt, including accrued interest, less amortized discount	$	71,301		$	68,695
Total Current Liabilities	$	2,141,764		$	2,079,394

Working Capital	$	(2,140,491	)	$	(2,078,266	)

Our working capital deficiency increased by $62,225, from $2,078,266 at fiscal-year end 2013 to $2,140,491 as of March 31, 2014. The increase in our working capital deficiency was primarily due to an increase in accrued payroll costs of $50,875, from $975,309 at year end 2013 to $1,026,184 as of March 31, 2014.

Cash Flows. Our cash flows for the quarterly period ended March 31, 2014 and the comparable period in 2013 are summarized as follows:

	For the quarterly period ended
	March 31, 2014			March 31, 2013
Net Cash Provided (Used) in Operating Activities	$	(3,705	)	$	(1,141	)
Net Cash Provided (Used) by Investing Activities		-			-
Cash Provided (Used) by Financing Activities	$	3,850		$	1,305
Net Increase (Decrease) in Cash	$	145		$	164

Cash, Beginning of Period	$	1,128		$	380
Cash, End of Period	$	1,273		$	544

We utilized more cash in our operating activities in the three-month period ended March 31, 2014, from $1,141 in the three-month period ended March 31, 2013 to $3,705 in the same period in 2014, primarily due to a higher net loss, after adding back non-cash depreciation/amortization. Our investing activities provided no cash during the three-month period ended March 31, 2014 or 2013.

Critical Accounting Policies and Estimates

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

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

Impairment of Long-Lived Assets

Revenue Recognition

Sales are recognized upon shipment.

Net (Loss) Per Common Share

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

Stock-Based Compensation

Income Taxes

Off-Balance Sheet Arrangements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Item 4. Controls and Procedures

(a) Under the supervision and with the participation of the Company’s management, including the Company’s principal executive officer and principal financial officer, the Company conducted an evaluation of its disclosure controls and procedures, as such term is defined under Rule 13a-14(c) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of March 31, 2014. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are not effective in ensuring that information required to be disclosed by the Company in its reports that it files or submits under the Securities Exchange Act of 1934 (as amended) is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. This conclusion is based in part on the fact that, other than with respect to this Report, the Company has not in the recent past completed its annual or quarterly reports and related audits within required time periods.

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

PART II

OTHER INFORMATION

Item 1A. Risk Factors

Material Changes in Risk Factors

The Risk Factors set forth below do not reflect any material changes from the “Risk Factors” identified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013. We have made immaterial edits and updated the financial and other data referenced in the risk factors as of a recent practicable date.

Risk Factors

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

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

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

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

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

	●	implement our business plan (which may be based upon faulty assumptions and expectations arising from our limited experience);

	●	obtain capital necessary to continue operations and implement our business plan;

	●	comply with SEC rules and regulations and manage market expectations;

	●	differentiate ourselves from our competitors; and

	●	establish a significant retail and restaurant customer base.

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

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

As of March 31, 2014, we had $1,273 in cash and cash equivalents. We need to obtain a significant amount of additional capital to implement our business plan and meet our financial obligations as they become due. We may not be able to raise the additional capital needed or may be required to pay a high price for capital. Factors affecting the availability and price of capital may include the following:

	●	the availability and cost of capital generally;

	●	our financial results, including our liquidity situation;

	●	the market price of our common stock;

	●	the experience and reputation of our management team;

	●	market interest, or lack of interest, in our industry and business plan;

	●	the trading volume of, and volatility in, the market for our common stock;

	●	our ongoing success, or failure, in executing our business plan;

	●	the amount of our capital needs; and

	●	the amount of debt, options, warrants and convertible securities we have outstanding.

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

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

Our audited financial statements included in this prospectus were prepared on the assumption that we will continue as a going concern. Our independent registered public accounting firm has stated that it substantially doubts our ability to continue as a going concern in a report dated October 30, 2014. This doubt is based on the fact that we have had minimal revenues, have had negative working capital at December 31, 2012 and 2013, have incurred recurring losses and recurring negative cash flow from operating activities, and have an accumulated deficit.

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

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

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

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

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

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

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

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

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

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

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

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

We have entered into a sale/leaseback transaction with respect to our smoker-oven, which creates risk of loss if we default and may inhibit our cash flow.

In July 2011, we entered into a Purchase and Lease Agreement with SMKY Asset Fund LLC, or the Lessor, related to our smoker-oven system. Pursuant to this Purchase and Lease Agreement we sold the smoker-oven system to the Lessor and are required to pay rent equal of $0.20 per pound of product produced using the smoker-oven up to a maximum amount of annual rent equal to a 30% return on the sum of the purchase price and $5,000. This rent will diminish our cash flow as we begin to generate revenue, and there is some risk that we may default under the lease and forfeit any right to use the smoker-ovens, which is the foundation of our business.

We cannot repurchase the smoker-oven system until the first date after July 25, 2014 that the market price of our common stock has remained at $0.50 for thirty trading days. The repurchase price is a number of shares of common stock with a fair market value equal to 20 times the sum of the purchase price ($240,000) , plus (b) $5,000. If our market price does not exceed $0.50 for thirty trading days we will be unable to repurchase our smoker-oven system (and will be required to continue to pay rent). Any repurchase of the smoker-oven system will be dilutive to our shareholders.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

	●	intentional manipulation of our stock price by existing or future stockholders;

	●	short selling of our common stock or related derivative securities;

	●	a single acquisition or disposition, or several related acquisitions or dispositions, of a large number of our shares;

	●	the interest, or lack of interest, of the market in our business sector, without regard to our financial condition or results of operations;

	●	the adoption of governmental regulations and similar developments in the United States or abroad that may affect our ability to offer our products and services or affect our cost structure;

	●	developments in the businesses of companies that purchase our products; or

	●	economic and other external market factors, such as a general decline in market prices due to poor economic indicators or investor distrust.

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

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

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

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

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

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

	●	Is priced under five dollars;

	●	Is not traded on a national stock exchange;

	●	Is issued by a company that has less than $5 million in net tangible assets (if it has been in business less than three years) or has less than $2 million in net tangible assets (if it has been in business for at least three years); and

	●	Is issued by a company that has average revenues of less than $6 million for the past three years.

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

	●	Certain broker-dealers who recommend penny stock to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to a transaction prior to sale.

	●	Prior to executing any transaction involving a penny stock, certain broker-dealers must deliver to certain purchasers a disclosure schedule explaining the risks involved in owning penny stock, the broker-dealer’s duties to the customer, a toll-free telephone number for inquiries about the broker-dealer’s disciplinary history and the customer’s rights and remedies in case of fraud or abuse in the sale.

	●	In connection with the execution of any transaction involving a penny stock, certain broker-dealers must deliver to certain purchasers the following:

	●	bid and offer price quotes and volume information;

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

	●	the compensation received by certain salespersons for the trade;

	●	monthly accounts statements; and

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

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

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

Item 6. Exhibits

See the Exhibit Index attached hereto following the signature page.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Smoky Market Foods, Inc.

December 01, 2014	By:	/s/ Edward C. Feintech
Date		Edward C. Feintech, President & Chief Executive Officer

December 01, 2014	By:	/s/ Shane Campbell
Date		Shane Campbell Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Exhibit	Incorporated by Reference/ Filed Herewith

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

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

32.1	Section 1350 Certification of Chief Executive Officer	Filed herewith

32.2	Section 1350 Certification of Chief Financial Officer	Filed herewith

101.INS	XBRL Instance Document	Filed herewith

101.SCH	XBRL Taxonomy Extension Schema	Filed herewith

101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed herewith

101.DEF	XBRL Taxonomy Extension Definition Linkbase	Filed herewith

101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed herewith

101.PRE	XBRL Taxonomy Presentation Linkbase	Filed herewith

SMOKY MARKET FOODS INC 10-Q