<PAGE>

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

                                   FORM 10-KSB

[x]  Annual report under section 13 or 15(d) of the Securities Exchange Act of
     1934 for the fiscal year ended December 31, 2007

[ ]  Transition report under 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.
                 (Name of Small Business Issuer in its Charter)


                   NEVADA                                  20-4748589
     (State or Other Jurisdiction of           (IRS Employer Identification No.)
      Incorporation or Organization)


                           804 ESTATES DR., SUITE 100
                             APTOS, CALIFORNIA 95003
              (Address of Principal Executive Offices and Zip Code)

                    Issuer's Telephone Number: (866) 851-7787


<TABLE>
<S>  <C>
Securities registered under to Section 12(b) of the Act: None     Name of exchange on which registered: N/A

Securities registered under to Section 12(g) of the Act:          Name of exchange on which registered: OTC Bulletin Board
     Common Stock, par value $.001
</TABLE>

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act [ ]

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act during the past 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 [ ]


Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act) Yes [ ] No [X]

          ISSUER'S REVENUES FOR ITS MOST RECENT FISCAL YEAR WERE $6,947

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 31, 2008 was $ 3,702,486 based upon the a price of $0.25
per share, the closing price on March 27, 2008 (the last day the Company's
common stock traded prior to March 31, 2008). The number of shares outstanding
of the issuer's common stock, par value $.001 per share, as of March 31, 2008
was 59,056,988 shares, of which 14,809,944 were held by non-affiliates.

                       DOCUMENTS INCORPORATED BY REFERENCE

None.

Transitional Small Business Disclosure Format (Check one):  Yes [ ]  No  [X]

<PAGE>

                                TABLE OF CONTENTS

PART I........................................................................1

Item 1.      Description Of Business..........................................1

Item 2.      Description of Property..........................................17

Item 3.      Legal Proceedings................................................17

Item 4.      Submission of Matters to a Vote of Security Holders..............17

PART II.......................................................................17

Item 5.      Market for Common Equity and Related Stockholder Matters.........17

Item 6.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations........................................19

Item 7.      Financial Statements.............................................23

Item 8.      Changes In and Disagreements with Accountants on Accounting
             and Financial Disclosure.........................................23

Item 8A(T).  Controls and Procedures..........................................23

Item 8B.     Other Information................................................23

PART III......................................................................24

Item 9.      Directors, Executive Officers, Promoters and Control Persons;
             Compliance with Section 16(a) of the Exchange Act................24

Item 10.     Executive Compensation...........................................26

Item 11.     Security Ownership of Certain Beneficial Owners and Management
             and Related Stockholder Matters..................................28

Item 12.     Certain Relationships and Related Transactions, and
             Director Independence............................................29

Item 13.     Exhibits.........................................................32

Item 14.     Principal Accountant Fees and Services...........................34


                                       i
<PAGE>

                           FORWARD LOOKING STATEMENTS

         This Annual Report on Form 10-KSB (this "Report") contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such
statements can be identified by the use of forward-looking words such as
"anticipate," "estimate," "project," "likely," "believe," "intend," "expect" or
similar words. These statements relate to our, and, in some cases, our clients'
or business partners' future plans, objectives, expectations, intentions and
financial performance and the assumptions that underlie these statements. All
forward-looking statements included in this Report are made as of the date
hereof, based on information available to us as of such date, and we assume no
obligation to update any forward-looking statements. It is important to note
that such statements may not prove to be accurate and that our actual results
and future events will differ, and could differ materially, from those
anticipated in such statements. Among the factors that could cause actual
results to differ materially from our expectations are those described under
"Item 1. Description of Business - Risk Factors." You are also encouraged to
review our other filings with the Securities and Exchange Commission (the "SEC")
describing other factors that may affect our future results. All subsequent
written and oral forward-looking statements attributable to us or persons acting
on our behalf are expressly qualified in their entirety by this section and
other factors included elsewhere in this Report.

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

OVERVIEW

         ORGANIZATION & BUSINESS MODEL

         We are a Nevada corporation incorporated in April 2006, with our
principal office at 804 Estates Dr., Suite 100, Aptos, CA 95003. Our telephone
number is (866) 851-7787. We are a development stage company that is in the
process of securing capital to start revenue-producing operations.

         We use USDA-approved, custom-engineered, proprietary wood-burning oven
technology to produce a complete line of Smoke-BakedTM meat and fish. We plan to
sell smoked foods through the development of a national chain of stand-alone
Smoky Market restaurant-stores and numerous self-contained kiosks that operate
inside qualified high-traffic venues such as sports arenas, college campuses,
corporate dining areas and airports. We plan to produce principal menu items in
bulk at a centralized location. We expect to be able to deliver food of
consistent size, taste and quality without the need to construct expensive ovens
or to train skilled cooks to handle raw product at numerous locations. We
believe this will permit our development of a national chain operation while
keeping our in-store costs down.

         Assuming that we are successful in expanding our retail operations into
all regions of the U.S., we plan to begin directly marketing and selling of our
smoke-baked products on the Internet. In addition to offering customers at our
Smoky Market restaurant-stores access to on-line ordering for gifts and event
catering, we plan to create marketing operations with selected eCommerce
affiliates that are large Internet retail companies with substantial numbers of
customer visits and certain consumer goods organizations such as the RV
industry.

                                       1
<PAGE>

         We have developed the core smoked-meat recipes for our proposed
business, entered into an agreement with a commercial meat processor at which we
have placed a proprietary oven capable of producing approximately 100,000 pounds
of smoked meat per month, tested the re-heating process for our menu items and
completed concept designs for our proposed restaurant-stores and kiosks. We do
not yet have any restaurant-stores or kiosks in service, but we successfully
tested our applications for preparation of our food products in a restaurant
located in Los Gatos, California for three months from October through December
2006. We have entered into an agreement to acquire the assets and leasehold
rights of this Los Gatos restaurant and expect to remodel the site into a
prototype Smoky Market restaurant-store in 2008. Beginning in late 2008, and
assuming the availability of capital, we plan to open additional stores in the
Western region toward our goal of opening three stores in each of our five
regional operating territories. We expect this plan for development will enable
us to maximize the operating and financial efficiencies of our production
capacity.

         MARKET OPPORTUNITY

         Our goal is to build a national chain of Smoky Market restaurant-stores
and kiosks featuring one-dish meat and fish recipes that are prepared by our
proprietary Smoke-Baking technique without the use of sodium, sugar, and
chemical preservatives. Unlike other popular restaurant categories, the
smoked-food/barbecue segment in which we compete does not include a widely
recognized national chain. Where foodservice categories like pizza, subs,
chicken, Mexican, Chinese, and burgers have total chain brand units numbering
into the thousands, the largest barbecue restaurant chain in the country,
Sonny's Barbecue, has approximately 150 stores. We believe that there is no
large national chain in the smoked-food/barbecue restaurant segment primarily
for two reasons: first, barbecue remains highly regionalized with respective
regions having demographic preferences for barbecue flavor, and second, quality
consistency within chain brands is a serious obstacle.

         We believe that we can succeed where others have not because of our
plans to address these two issues. We plan to address the regionalization of
tastes by creating different recipes, with different sauces and flavors, for
each of five regions within the United States. As we expand, each region will be
headed by a regional officer charged with customizing the recipes, marketing
program and other aspects of our business in order to meet the tastes of that
region. We plan to address issues of quality and consistency by having all of
our meat prepared in our smoker-over system at a centralized location and also
centralizing, or regionalizing, the preparation of side dishes and other
offerings. Food handlers at local restaurant-stores and kiosks will merely need
to unpackage and heat most items on the menu, resulting in a consistently
healthful and tasty offering throughout the country.

FOOD PRODUCTION & DISTRIBUTION

         PROPRIETARY SMOKING TECHNOLOGY

         The wood-burning smoker-oven system used to produce Smoky Market brand
foods Smoke-BakesTM meat and fish with a smoke-heat-vapor that is generated by
the slow burning of hickory and apple timber, after which the fully-cooked
smoked foods are portion-cut and vacuum-packaged for freshness. The
smoke-heat-vapor infuses the meat and fish with an authentic smoked taste. No
additives (water, sugar, high amounts of sodium, liquid smoke, etc.) and no
preservatives are used in the process; only garlic, natural spices, and very
little sea salt are applied as seasoning.

         USDA-INSPECTED MEAT PRODUCTION AND AVAILABILITY OF RAW MATERIALS

         We presently outsource, and for the foreseeable future, expect to
continue to outsource, our commercial smoked food processing to Mary Ann's
Specialty Foods ("Specialty Foods"). Specialty Foods is a USDA-approved contract
food processing company located in Webster City, Iowa and operates an 80,000
square foot processing facility, which sits on 10 acres of family-owned land and
is expected to be responsible for our food production and distribution
requirements. In order to establish production capability and complete the
development of our smoked food products, we entered into an Amended and Restated
Processing Agreement dated July 1, 2006 with Specialty Foods.

                                       2
<PAGE>

         Pursuant to the processing agreement, Specialty Foods has agreed to
process the smoked meats for our business in return for a processing fee equal
to its actual costs of production, including allocable overhead, plus a fixed
fee designed to give Specialty Foods a net profit of not less than $35,000 per
month from the operation of two 10-hour shifts of processing for us. The
agreement is based upon a single oven capable of producing at least 100,000
pounds of smoked meat per month or more depending upon the production item mix.
The term of the agreement is ten years, with an option to extend the agreement
for three additional 10-year periods (subject to early termination in the event
of default).

         As we expand and need to add additional smoker ovens, we will be
required to expand our relationship with Specialty Foods (or other processors)
on such terms as are mutually agreed upon by the parties. Considering the size
of Specialty Food's surrounding 10-acre area, we believe that it would be in our
best interests to enter into agreements with Specialty Foods with respect to the
expansion of production at this location.

         With respect to meat, fish and other raw materials used to make our
products, we require that all of our raw beef, pork, lamb and poultry be raised
without growth hormones, steroids and antibiotics, and our salmon is
net-harvested naturally from Canadian rivers. Market prices for fish and other
food items are subject to constant fluctuation and frequent shortages of item
availability, which we expect to mitigate through contract purchasing. We have
established strategic supply relationships with Special Foods and LandLock Sea
Foods that we believe will enable lower market prices as we grow and achieve
economies-of-scale.

         CO-PACK PRODUCTION

         We plan to use co-packing affiliates to produce a selection of
specialty gourmet items, including one-dish meals of smoked meat/fish pasta,
casseroles, quiches, and pizzas. We have not entered into agreements with any
co-packing facilities, but have entered into discussions with several and
believe that suitable arrangements can be reached when we commence operations.
Our plan is to cause Specialty Foods to bulk-ship smoked meat and fish
ingredients to the co-packers. There, the various menu items will be packaged,
and shipped to our planned regional distribution centers.

         PROCESS & PRICE VALUE

         Our wood-smoking process is expensive. Costs include obtaining freshly
cut timber, smoking labor, and having to absorb a 25% to 30% cook shrinkage loss
in the process. Consequently, Smoky Market brand smoked foods cost more to
produce and have higher price points than many competing smoked food products.
However, the existence of a market for higher-priced organic foods and other
prepared foods that are advertised as 100% natural, low-sodium and/or free of
additives suggests that customers will pay slightly more for products they know
to be premium quality, especially prepared foods that are natural, tasty, and
convenient. Based upon our review of the nutritional labels of our competitors,
we believe that the absence of any preservatives, brining solutions, liquid
smoke and similar additives in Smoky Market brand smoked meats foods
distinguishes our product from smoked meat products currently on the market.

                                       3
<PAGE>


         SMOKED FOOD PRODUCTS

         Below is our line of smoked foods that we expect to produce under the
Smoky Market brand. We expect that certain of these items will be featured on
the menus at Smoky Market restaurant-stores, with a selection of these items to
be retail packaged and featured for take-home consumption.

         Our line of wood-smoked foods presently includes the follow:

         ENTREE ITEMS (Individual serving portions that are ready to
         "heat'n serve".)

         o        Pork Loin Baby Back Ribs
         o        Pork Country-Style Ribs
         o        Pork Loin Chop
         o        Carved Boneless Chicken Breast
         o        Jumbo Chicken Thigh
         o        Cornish Game Hen
         o        Turkey Breast, Thigh & Leg
         o        Rack Of Lamb & Lamb Chops
         o        Duck
         o        Salmon & Trout

         SLICED, PULLED OR CUT SMOKED FOODS (Sliced, pulled or cut from the bone
         and packaged in portion servings for sandwiches, or to add to salads,
         tacos, casseroles & soups)

         o        Beef Sirloin Tri-Tip
         o        Beef Brisket
         o        Corned Beef Brisket
         o        Pork Loin Roast
         o        Pork Shoulder
         o        Boneless Pork Leg
         o        Carved Chicken Strips
         o        Turkey Breast

         SMOKED FINGER FOODS (Delicate smoky treats for snacking fun
         & entertainment)

         o        Beef & Pork Meatballs
         o        Pork Country Rib Strips
         o        Pork Ribletts
         o        Carved Chicken Strips
         o        Chicken Drummies (Regular & Teriyaki)
         o        Lamb Ribletts Teriyaki

         SIDE ORDER FOODS

         o        Hickory Smoke-BakedTM Beans
         o        Sweet Butter-Creamed Corn
         o        Creamy-Garlic Coleslaw Dressing & Veggie Dip
         o        Southern-Style Barbecue Dipping Sauce
         o        Cornbread Muffins

                                       4
<PAGE>

         Our Smoky Market restaurant-stores and kiosks will feature a selection
of the items listed above and include sandwiches, quesadillas, quiches and
recipe dishes. Items will be available for menu foodservice and for packaged
sales. In time, as our brand concept develops, we expect that the complete line
of our smoked foods will be available for purchase from our Internet website at
www.smokymarket.com.

MARKETING & OPERATIONS

         SMOKY MARKET RESTAURANT-STORES

         The Smoky Market "restaurant-store" concept falls under the category of
fast-casual, a relatively new and fast-growing segment in the restaurant
industry. Our theme concept is a rustic, old-style - but sophisticated - motif
of warm, light-colored wood with an inviting decor and designed to accommodate a
full-service restaurant operation, seating 40 to 90 customers. We also plan to
have each Smoky Market restaurant-store include an area of refrigerated and
frozen display cases that feature our packaged foods, including entrees,
finger-foods, and recipe dish items for take-home sales.

         The larger Smoky Market restaurant-stores will also feature an Internet
ordering station for spontaneous on-line ordering by customers of our foods for
gifts. The distinguishing feature and key operating advantage of our Smoky
Market restaurant-store concept is the absence of handling or cooking of raw
products on site; our entire menu will be fully cooked and portion-packaged for
quick and easy heating. We believe this operating aspect to be unique in the
restaurant industry and will provide an assurance of quality consistency with
substantially decreased reliance upon the need for heavily trained and skilled
cooks.

         The principal heating equipment for all menu items to be served hot
will be special ovens that incorporate functional elements of infra-red heating,
impinged air velocity and microwave. These ovens require no exhaust hood system
in 48 out of 50 states, which substantially reduces typical investment costs,
and the speed of their heating application will enable Smoky Market entrees to
be served as if the restaurant-market were a quick-service business. We expect
the entire preparation process for a Smoky Market meal will require only minutes
to heat for serving.

         FRANSHIPTM PROGRAM

         The franchise industry is successful largely because of the dedicated
managers and assistant managers who work much longer than typical 40-hour weeks,
at fixed salary pay scales that yield in most cases an amount of net pay
effectively not much greater than the hourly pay of general employees. The
franchise industry is also successful largely because many franchisees are
full-time owner-operators of their franchise.

         We plan to create a relationship with our local managers we call
"Franship." At this time, the structure and application for our Franship program
are still being formalized and research is being conducted relative to certain
legal definitions and federal/state filing requirements. However, the basic
opportunity being proposed for a Franship candidate is a unique blend of the
concepts of franchising and employment. We would retain majority ownership and
control of each restaurant-store and kiosk and the Franship manager would, in
most cases, be an employee of our company or a joint venture. The Franship
candidate would make a cash investment for the right to share in 20% of his or
her respective Smoky Market concept (either a restaurant-store or kiosk). This
profit-sharing right will become vested and transferable as the Franship income
right appreciates in value. We expect that this will provide substantial
motivation for the local manager to maximize profitability but permit us to
retain ownership and ultimate control.

                                       5
<PAGE>

         DISTRIBUTION

         Processed smoked foods will be bulk-packaged at our processing facility
and shipped initially to smaller localized food distributors that will service
our Smoky Market restaurant-stores within respective market areas; as we grow
nationally, we may also consider placing our distribution needs with a large
national foodservice distributor. In northern California, we have an informal
commitment from InterState Refrigerated Distributing Company for fee-based order
drops and if this program is successful, we intend to offer this distribution
plan to local distributors in markets throughout all regional territories.

         DESIGN, MARKETING, HUMAN RESOURCES AND OPERATIONS ASSISTANCE

         We engaged Quantified Marketing Group, Inc., or QMG, whose Founder and
CEO is Aaron Allen, an expert in the foodservice industry who has developed and
expanded the operations of some of the best-known restaurant companies, both
domestically and internationally (see www.quantifiedmarketing.com for a list of
clients). Based in Central Florida, QMG is among the country's largest
full-service strategic marketing and Public Relations firms focused exclusively
on the restaurant industry. As we execute our business plan, QMG will complete
the designs of our restaurant-store and kiosk concepts, develop programs for
recruitment of key management employees and Franship candidates, coordinate our
program for site acquisitions on a national scale, assist in the formation and
implementation of operating systems, and create our media and public relations
campaign for brand development in each region to be penetrated.

GENERAL INFORMATION

         INTELLECTUAL PROPERTY

         We do not own any intellectual property that is material to our
business.

         We license the recipes for substantially all of our products, certain
trademarks and tradenames, including Smoky Market(R) and Smoke-Baked(TM), and
design features related to the ovens used for smoking our products from Smoky
Systems, LLC, pursuant to an exclusive license agreement. Under the license
agreement, we issued Smoky Systems 40,000,000 shares of our common stock as
consideration for the licensed rights. The license agreement is for a fixed term
of 10 years, with renewal options for four additional 10-year terms, but is
terminable 90 days following breach or in connection with a bankruptcy or
similar event. In addition, our license to such rights ceases to be exclusive if
our annual revenues from licensed products does not equal or exceed $30 million
by 2011.

         Neither we nor Smoky Systems have registered any patents or copyrights.

         GOVERNMENT REGULATION

         As a distributor of food products and planned restaurant operator, we
are subject to regulation by the U.S. Food and Drug Administration, or FDA, the
U.S. Department of Agriculture, or USDA, and to licensing and regulation by
state and local health, sanitation, building, zoning, safety, fire and other
authorities. In addition, the operations of our food processor are subject to
regulation under the Federal Food, Drug and Cosmetic Act, the Federal Meat
Inspection Act, the Poultry Products Inspection Act, the Perishable Agricultural
Commodities Act, the Nutrition Labeling and Education Act of 1990, and the rules
issued under these laws. The FDA regulates standards of identity for specified
foods and prescribes the format and content of information on food product
labels. The USDA imposes standards for product quality and sanitation including
the inspection, labeling and compliance of meat and poultry products and the
grading and commercial acceptance of shipments from our suppliers.

                                       6
<PAGE>

         Costs of compliance with such laws and regulations are presently
insignificant. If we or our food processor were to be found to be out of
compliance with such laws, particularly those related to the production,
labeling and handling of food, we could be subject to significant fines and
forced to discontinue our operations until all material violations were
addressed. Were our relationship with our food processor to terminate, we would
have to find another USDA-approved meat processor or qualify as such ourselves.
There are a limited number of USDA-approved meat processors and barriers to
entry are significant (with an estimated cost of not less than $2 million
dollars and required time of one year).

         ENVIRONMENTAL LAWS

         We are not required to obtain any environmental permits and do not use
any hazardous materials in connection with the operation of our business.
Accordingly, we have not incurred, and do not expect to incur, any material
expenses associated with environmental compliance.

         COMPETITION

         Generally, most smoked-food or barbeque restaurants use burning wood in
a barbeque pit or smoker to cook their meat, which does yield a natural,
penetrating smoky flavor to varying degrees, depending on smoking technique and
wood quality. The moisture content of the smoked meats will also vary from
concept to concept, and even from unit to unit within the same concept brand,
depending on a number of variables. For these reasons, the vast majority of
smoked-food or restaurants have remained single to small multi-unit concepts,
and the largest barbecue chain in the country, Sonny's Barbeque, has only
approximately 150 stores. However, more barbeque or smoked-food concepts are
opening, and we believe that existing concepts are planning aggressive
expansions as they acquire improved smoking equipment and devise improved
foodservice systems.

         We plan to compete principally in the retail packaged food industry and
in the fast-casual and quick-service segment of the restaurant industry. In the
retail packaged food segment, we expect that our principal competitors will
include well known retails chains such as Costco Club Stores, specialty foods
stores such as Barney Greengrass or Dean & DeLuca, commercial smokehouses, and
numerous other packaged food enterprises. We expect to compete based upon
quality, flavor, healthfulness, variety and price. As a new entrant into the
market, we are uncertain how we will compare to our competitors on most of those
factors, but expect that our additive-free naturally-smoked foods will compete
in terms of quality, flavor and healthfulness. As a new market entrant, our
variety is limited, and we expect that our price will be below that of specialty
stores and Internet sellers, but above that of major retail chains.

         The fast-casual segment of the restaurant industry is characterized by
a large number of participants, both individual stores and large chains, and is
extremely competitive. Because of the localized nature of the business, we will
be competing with different restaurants in each geographic market. We expect to
compete based upon quality of food and service, ambience, flavor, variety and
price. As a new entrant into the market, we are uncertain how we will compare to
our competitors on most of those factors. Many of our existing and potential
competitors have longer operating histories, a large existing customer base,
greater financial strength, and more recognized brands than we do. These
competitors may be able to attract and retain customers more easily because of
their brand names and their larger marketing budgets and sales forces. Our
larger competitors can also devote substantially more resources to product
development and may adopt more aggressive pricing policies.

                                       7
<PAGE>

         RESEARCH AND DEVELOPMENT

         We are recently formed and do not have any historical research and
development expenses. We plan to add products to our lines as our business
develops and expect that research, developing and testing of new or improved
recipes and products will be an ongoing part of our business.

EMPLOYEES

         We currently have a total of two paid fulltime employees and one
part-time employee, which includes two officers (Edward C. Feintech and Toni L.
Adams), and a customer service/warehouse representative. We also have two
executives, our Chief Financial Officer and our Chief Information Officer,
providing services on a part time basis as consultants.

         Execution of our business plan as set forth above would, we believe,
require the hiring of approximately 30 people over the next three years to staff
our corporate management team, our regional offices and those responsible for
overseeing the process of procuring real estate (fee simple or lease) and
arranging for the construction or placements of our Smoky Market outlets, and
the hiring of initial management. This number excludes management and staffing
at the Smoky Market restaurant-markets and kiosks. The actual number of
employees we will hire in the next 12 months depends upon our success in
obtaining capital and how rapidly we can expand our operations.

                                  RISK FACTORS

         INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW, AND ALL OF THE OTHER
INFORMATION SET FORTH IN THIS PROSPECTUS BEFORE DECIDING TO INVEST IN SHARES OF
OUR COMMON STOCK. IN ADDITION TO HISTORICAL INFORMATION, THE INFORMATION IN THIS
PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS ABOUT OUR FUTURE BUSINESS AND
PERFORMANCE. OUR ACTUAL OPERATING RESULTS AND FINANCIAL PERFORMANCE MAY BE
DIFFERENT FROM WHAT WE EXPECT AS OF THE DATE OF THIS PROSPECTUS. THE RISKS
DESCRIBED IN THIS PROSPECTUS REPRESENT THE RISKS THAT MANAGEMENT HAS IDENTIFIED
AND DETERMINED TO BE MATERIAL TO OUR COMPANY. ADDITIONAL RISKS AND UNCERTAINTIES
NOT CURRENTLY KNOWN TO US, OR THAT WE CURRENTLY DEEM TO BE IMMATERIAL, MAY ALSO
MATERIALLY HARM OUR BUSINESS OPERATIONS AND FINANCIAL CONDITION.

         WE HAVE GENERATED ONLY A NOMINAL AMOUNT OF REVENUE AND MAY BE UNABLE TO
GENERATE SIGNIFICANT REVENUE IN THE FUTURE.

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

         OUR PREDECESSOR AND AFFILIATE, SMOKY SYSTEMS WAS UNABLE TO GENERATE
SIGNIFICANT REVENUES OR PROFITS FROM ITS EFFORTS TO FOLLOW A SIMILAR BUSINESS
PLAN TO OURS.

         Smoky Systems, LLC was established in 2000 and attempted to create a
national smoked good business similar to that which we are attempting to
establish. Smoky Systems was unable to generate significant revenues or profits,
principally because it was not able to secure financing as a private company to
formally launch operations. We have licensed our recipes, trademarks, basic
modular restaurant design, and other intellectual property for our smoked-foods
processing, marketing, branding and operations from Smoky Systems and are
attempting to successfully implement a similar business plan under the same
management team. We are subject to the same risks, including risks related to
the raising of capital and the attractiveness of our business plan, as Smoky
Systems, and may similarly be unable to generate significant revenues or
profits.

                                       8
<PAGE>

         THE INEXPERIENCE OF OUR KEY MANAGEMENT, AND OUR LIMITED OPERATING
HISTORY AND EVOLVING BUSINESS PLAN, MAKE IT DIFFICULT TO EVALUATE OUR
PERFORMANCE AND FORECAST OUR FUTURE.

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

         o    implement our business plan (which may be based upon faulty
              assumptions and expectations arising from our limited experience);
         o    obtain capital necessary to continue operations and implement our
              business plan;
         o    comply with SEC rules and regulations and manage market
              expectations;
         o    differentiate ourselves from our competitors; and
         o    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 December 31, 2007, we had $16,235 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:

         o    the availability and cost of capital generally;
         o    our financial results;
         o    the experience and reputation of our management team;
         o    market interest, or lack of interest, in our industry and business
              plan;
         o    the trading volume of, and volatility in, the market for our
              common stock;
         o    our ongoing success, or failure, in executing our business plan;
         o    the amount of our capital needs; and
         o    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 consolidated 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 April 14, 2008. This doubt is based on the fact that we have had losses
since inception, have a working capital deficit and have had no material revenue
generating operations since inception.

                                       9
<PAGE>

         IF WE FAIL TO DEVELOP OUR BRAND RECOGNITION, OUR ABILITY TO COMPETE IN
A HIGHLY FUNGIBLE RESTAURANT MARKET WILL BE IMPAIRED.

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

         THE PACKAGED FOOD MARKET IS COMPETITIVE, AND WE MAY BE UNABLE TO
SUCCESSFULLY CAPTURE RETAIL CUSTOMERS.

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

         WE MAY BE UNABLE TO ESTABLISH A SIGNIFICANT NUMBER OF RESTAURANT-STORES
OR KIOSKS.

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

         o    identification and availability of suitable locations;
         o    negotiation of favorable lease or purchase arrangements;
         o    management of the costs of construction and development;
         o    securing required governmental approvals and permits and complying
              with governmental regulations;
         o    recruitment of qualified operating personnel;
         o    labor disputes;
         o    shortages of materials and skilled labor;
         o    environmental concerns; and
         o    other increases in costs, any of which could give rise to delays
              or cost overruns.

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

                                       10
<PAGE>

         WE ARE DEPENDENT UPON RECIPES AND OTHER PROPRIETARY INFORMATION
LICENSED TO US BY SMOKY SYSTEMS, LLC AND MAY NOT BE ABLE TO CONTINUE OUR CURRENT
OPERATIONS WITHOUT SUCH INTELLECTUAL PROPERTY.

         We rely on Smoky Systems, LLC to provide the recipes, trademarks, basic
modular restaurant-market design, and other intellectual property for our
smoked-foods processing, marketing, branding and operations. The agreement under
which we license this intellectual property is effective for the term of the
license agreement, which has limited terms and may be terminated early following
an uncured material breach or may not be renewed upon expiration. The license
agreement is for a fixed term of 10 years with renewal options for four
additional 10-year terms, but is terminable 90 days following any uncured breach
or in connection with a bankruptcy or similar event. In addition, our license to
such rights ceases to be exclusive if our annual revenues from licensed products
does not equal or exceed $30 million by 2011. A termination or nonrenewal of the
license agreement, or even a loss of our exclusivity, would result in a
substantial decrease in revenue, cause significant harm to our business, and
possibly force us to discontinue operations. In the future, irrespective of our
license with Smoky Systems, we may be unable to continue to obtain needed
services or licenses for needed intellectual property on commercially reasonable
terms, or at all, which would harm our ability to continue production, our cost
structure and the quality of our products or services.

         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 AND FISH 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 and fish required for our products are
subject to constant fluctuations and frequent shortages of item availability.
Adequate supplies of raw meat and fish may not always be available, and the
price of raw meat and fish 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 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.

                                       11
<PAGE>

         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., or
Specialty Foods, and upon a single oven-system located at Specialty Foods, to
produce our smoked foods in order to operate the business and generate revenue.
If our oven systems break down, become contaminated or are removed from
Specialty Foods' facility, we would experience an interruption in our ability to
supply products to customers. This would harm our relationships with our
customers and Internet affiliates, and harm our revenues in the short run. Any
long-term interruptions in our ability to produce smoked foods would
significantly limit our ability to continue operations.

         WE ARE DEPENDENT UPON KEY PERSONNEL TO MANAGE BUSINESS, AND THE LOSS OF
SUCH PERSONNEL COULD SIGNIFICANTLY IMPAIR OUR ABILITY TO IMPLEMENT OUR BUSINESS
PLAN.

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

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

         CERTAIN DIRECTORS OF OUR COMPANY ARE ALSO EXECUTIVES OF OUR AFFILIATE,
SMOKY SYSTEMS, WHICH MAY LEAD TO A CONFLICT OF INTEREST.

         Our Chairman, President and Chief Executive Officer, Edward C.
Feintech, our Chief Information Officer, Dennis Harrison, and our Chief
Financial Officer, Shane Campbell, are all affiliated with our majority
shareholder, Smoky Systems, LLC. Mr. Feintech is the current manager of Smoky
Systems. In addition, Scott Bargfrede and Daniel Brune, our "independent"
directors, hold minor interests (less than 1%) in Smoky Systems. We may be
required to renegotiate our relationship with Smoky Systems, may experience
disputes and litigation with Smoky Systems or otherwise have the interests of
our shareholders generally be adverse to the interests of Smoky Systems. If a
conflict arises, the overlap in management and conflicts may inhibit fair and
equitable resolution of any issues and leave our company vulnerable to
shareholders derivative suits.

                                       12
<PAGE>

         WE EXPECT TO BE DEPENDENT ON A THIRD PARTY TO PROVIDE DESIGN AND
MARKETING MATERIALS IN RELATION TO OUR RESTAURANT-MARKETS AND KIOSKS AND TO
ASSIST IN DEVELOPMENT OF OUR GENERAL OPERATING AND MARKETING PLAN.

         We have engaged Quantified Marketing Group or QMG, to assist with the
design of our restaurant-stores and with the creation and execution of a formal
business plan. As we roll out our business plan, we will rely upon QMG to assist
in our development and execution of operating and marketing plans to launch and
grow the Smoky Market foodservice brand on a national scale. We expect to rely
upon QMG for development of internal and external operating system control and
reporting, real estate selection, our human resource program, senior and
executive level management recruitment and expansion strategy planning and
implementation. If we are unable to sustain a long-term agreement with QMG, or
if QMG fails to fulfill its obligations under specific project agreements that
are signed, our ability to generate revenue will be delayed or reduced, and we
will incur substantial costs in obtaining the necessary services to execute the
roll out for our restaurant-stores and kiosks.

         LABOR DISPUTES AFFECTING COMMON CARRIERS AND FOODSERVICE DISTRIBUTORS
MAY HAMPER OUR ABILITY TO DELIVER OUR PRODUCT TO CUSTOMERS AND HARM OUR
BUSINESS.

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

         OUR BUSINESS MAY BE AFFECTED BY INCREASED COMPENSATION AND BENEFITS
COSTS.

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

         CHANGES IN GENERAL ECONOMIC AND POLITICAL CONDITIONS AFFECT CONSUMER
SPENDING AND MAY HARM OUR REVENUES AND OPERATING RESULTS.

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

         FAILURE TO COMPLY WITH GOVERNMENTAL REGULATIONS COULD HARM OUR BUSINESS
AND OUR REPUTATION.

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

         o    the environment;
         o    building construction;


                                       13
<PAGE>

         o    zoning requirements;
         o    worker safety;
         o    the preparation and sale of food and alcoholic beverages; and
         o    employment.

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

         Various federal and state labor laws will govern our operations and our
relationship with our employees, including minimum wage, overtime, working
conditions, fringe benefit, and work authorization or immigration requirements.

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

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

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

         COMPLIANCE WITH EXISTING AND NEW REGULATIONS OF CORPORATE GOVERNANCE
AND PUBLIC DISCLOSURE MAY RESULT IN ADDITIONAL EXPENSES.

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

         OUR DIRECTORS, EXECUTIVE OFFICERS AND PRINCIPAL STOCKHOLDERS HAVE
EFFECTIVE CONTROL OF THE COMPANY, PREVENTING NON-AFFILIATE STOCKHOLDERS FROM
SIGNIFICANTLY INFLUENCING OUR DIRECTION AND FUTURE.

         Our directors, officers, and 5% stockholders and their affiliates
control in excess of 75% of our outstanding shares of common stock and are
expected to continue to control a majority of our outstanding common stock
following any financing transactions projected for the foreseeable future. These
directors, officers and affiliates effectively control all matters requiring


                                       14
<PAGE>

approval by the stockholders, including any determination with respect to the
acquisition or disposition of assets, future issuances of securities,
declarations of dividends and the election of directors. This concentration of
ownership may also delay, defer, or prevent a change in control and otherwise
prevent stockholders other than our affiliates from influencing our direction
and future.

         THERE IS A PUBLIC MARKET FOR OUR STOCK, BUT IT IS THIN AND SUBJECT TO
MANIPULATION.

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

         THE MARKET PRICE OF OUR COMMON STOCK MAY BE HARMED BY OUR NEED TO RAISE
CAPITAL.

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

         THE MARKET PRICE FOR OUR COMMON STOCK IS VOLATILE AND MAY CHANGE
DRAMATICALLY AT ANY TIME.

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

         o    intentional manipulation of our stock price by existing or future
              stockholders;
         o    short selling of our common stock or related derivative
              securities;
         o    a single acquisition or disposition, or several related
              acquisitions or dispositions, of a large number of our shares;
         o    the interest, or lack of interest, of the market in our business
              sector, without regard to our financial condition or results of
              operations;
         o    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;
         o    developments in the businesses of companies that purchase our
              products; and
         o    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.

                                       15
<PAGE>

         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:

         o    Is priced under five dollars;
         o    Is not traded on a national stock exchange, the Nasdaq Global
              Market or the Nasdaq Capital Market;
         o    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
         o    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:

         o    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.
         o    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.
         o    In connection with the execution of any transaction involving a
              penny stock, certain broker-dealers must deliver to certain
              purchasers the following:
              o    bid and offer price quotes and volume information;
              o    the broker-dealer's compensation for the trade;
              o    the compensation received by certain salespersons for the
                   trade;
              o    monthly accounts statements; and
              o    a written statement of the customer's financial situation and
                   investment goals.


                                       16
<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

         We do not currently have fee ownership of any property. We lease a
5,000 square foot warehouse and office located in Aptos, California. The term of
the lease is month-to-month, and our monthly rent under the lease is $2,800. We
use office and cold storage warehouse space in the facility of Specialty Foods
for free. We have no lease with respect to such space, and our informal
arrangement could be terminated at any time. When and if financing is secured
and formal operations begin, we expect to formalize our arrangements with
Specialty Foods and begin paying rent.

         On November 7, 2007, we entered into a Binding Term Sheet for Purchase
Agreement relating to the purchase of the 29 East Main Cafe, located at 29 East
Main Street, Los Gatos, California 95030. Under the agreement, we agreed to
purchase all rights to the equipment, leasehold improvements, and existing lease
of the restaurant, including a minimum five-year option extension, for an
aggregate purchase price of $150,000 (paid in cash and shares of common stock).
The agreement contemplates that we will enter into a more comprehensive purchase
agreement with the seller incorporating the terms of the term sheet. We expect
to complete the purchase and remodeling of such restaurant in 2008.

         Subject to the availability of capital, we intend to enter into leases
for cold storage and warehouse fulfillment of our Internet orders and for
additional office space in northern California and in Georgia

ITEM 3.  LEGAL PROCEEDINGS

         We are not engaged in any legal proceedings, nor are we aware of any
pending or threatened legal proceedings that, singly or in the aggregate, would
reasonably be expected to have a material adverse effect on our business,
financial condition or results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matter was submitted to a vote of the security holders during the
fourth quarter of the fiscal year covered by this report.


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET PRICE

         The table below sets forth the high and low bid quotations for our
common stock as reported on the OTC Bulletin Board for the periods indicated.
Our common stock is quoted on the OTC Bulletin Board under the symbol SMKY.

                                                           HIGH         LOW
         FISCAL YEAR ENDED DECEMBER 31, 2007
            Quarter ended December 31, 2007                $0.97       $0.24
            Quarter ended Sept. 30, 2007                   $1.10       $0.07

         -------------------------------------------------------------------

                                       17
<PAGE>

         The quotations set forth above reflect inter-dealer prices, without
retail mark-up, mark-down or commission, and may not represent actual
transactions. Our common stock began quotation on the OTC Bulletin Board on
September 11, 2007.

OUTSTANDING SHARES AND NUMBER OF STOCKHOLDERS

         As of March 31, 2008, there were 59,056,988 shares of common stock
issued and outstanding, which were held by approximately 102 holders of record
and no shares of preferred stock outstanding.

DIVIDENDS

         We have never declared or paid dividends on any class of equity
securities, and we currently intend to retain any future earnings for use in our
business and do not anticipate paying any dividends on our outstanding common
stock in the foreseeable future.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth information with respect to compensation plans
(including individual compensation arrangements) under which equity securities
of the company are authorized for issuance as of December 31, 2007:

<TABLE>
<S>     <C>
------------------------------------------ --------------------- --------------------- ----------------------
                                           Number of securities  Weighted-average      Number of securities
                                           to be issued upon     exercise price of     remaining available
                                           exercise of           outstanding options,  for future issuance
                                           outstanding options,  warrants and rights   under equity
                                           warrants and rights                         compensation plans
                                                                                       (excluding securities
                                                                                       reflected in column
                                                                                       (a))
------------------------------------------ --------------------- --------------------- ----------------------
Equity compensation plans approved by
security holders                                  1,887,500              $0.10              2,837,500
------------------------------------------ --------------------- --------------------- ----------------------
Equity compensation plans not approved
by security holders                                 N/A                   N/A                  N/A
------------------------------------------ --------------------- --------------------- ----------------------
                                    TOTAL         1,887,500               0.10              2,837,500
------------------------------------------ --------------------- --------------------- ----------------------
</TABLE>

RECENT SALES OF UNREGISTERED SECURITIES

         Other than transactions previously reported in our Form 10, on Form
10-QSB or Form 8-K, there were no securities sold during the year ended December
31, 2007 without being registered under the Securities Act.

         In December 2008, we issued 10,173 shares to an individual creditor of
the Company, in exchange for cancellation of $1,577 in indebtedness. The offer
and sale of such shares of our common stock were effected in reliance upon the
exemptions for sales of securities not involving a public offering, as set forth
in Section 4(2) of the Securities Act, based upon the following: (a) the
investor, confirmed to us that the investor was an "accredited investor," as
defined in Rule 501 of Regulation D promulgated under the Securities Act and had
such background, education and experience in financial and business matters as
to be able to evaluate the merits and risks of an investment in the securities;
(b) there was no public offering or general solicitation with respect to each
offering; (c) the investor was provided with certain disclosure materials and
all other information requested with respect to our company; (d) the investor
acknowledged that all securities being purchased were "restricted securities"
for purposes of the Securities Act, and agreed to transfer such securities only
in a transaction registered under the Securities Act or exempt from registration
under the Securities Act; and (e) a legend was placed on the certificates
representing each such security stating that it was restricted and could only be
transferred if subsequently registered under the Securities Act or transferred
in a transaction exempt from registration under the Securities Act.

                                       18
<PAGE>

         During the first quarter of 2008, the Company issued an aggregate of
673,332 shares of common stock to five individual investors in exchange for
$101,000 in cash (at the rate of approximately $0.15 per share). The common
stock issued to these investors was offered and sold in reliance upon the
exemption from securities registration afforded by the provisions of Section
4(2), and/or Regulation D, as promulgated by the SEC under the Securities Act,
based upon the following: (a) each investor confirmed to us that he/she/it is an
"accredited investor," as defined in Rule 501 of Regulation D promulgated under
the Securities Act and has such background, education and experience in
financial and business matters as to be able to evaluate the merits and risks of
an investment in the securities; (b) there was no public offering or general
solicitation with respect to the offering; (c) each investor was provided with
certain disclosure materials and all other information requested with respect to
the company; (d) each investor acknowledged that all securities being purchased
were being purchased for investment intent and were "restricted securities" for
purposes of the Securities Act, and agreed to transfer such securities only in a
transaction registered under the Securities Act or exempt from registration
under the Securities Act; and (e) restrictive legends were placed on
certificates representing the shares of common stock; and (f) a Form D was filed
with the SEC with respect to the transaction.

         In March 2008, we issued 2,013,332 shares to one creditor and two
service providers of the Company in exchange for $40,000 in debt and an
aggregate of $262,000 in professional services (at the rate of approximately
$0.15 per share). The offer and sale of such shares of our common stock were
effected in reliance upon the exemptions for sales of securities not involving a
public offering, as set forth in Section 4(2) of the Securities Act, based upon
the following: (a) each investors confirmed to us that the investor was an
"accredited investor," as defined in Rule 501 of Regulation D promulgated under
the Securities Act and had such background, education and experience in
financial and business matters as to be able to evaluate the merits and risks of
an investment in the securities; (b) there was no public offering or general
solicitation with respect to each offering; (c) the investors were provided with
certain disclosure materials and all other information requested with respect to
our company; (d) the investors acknowledged that all securities being purchased
were "restricted securities" for purposes of the Securities Act, and agreed to
transfer such securities only in a transaction registered under the Securities
Act or exempt from registration under the Securities Act; and (e) a legend was
placed on the certificates representing each such security stating that it was
restricted and could only be transferred if subsequently registered under the
Securities Act or transferred in a transaction exempt from registration under
the Securities Act.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         This section may include projections and other forward-looking
statements regarding management's expectations regarding our performance. You
should not place undue reliance on such projections and forward looking
statements, and, when considering such projections and forward-looking
statements, you should keep in mind the risk factors noted throughout this
prospectus. You should also keep in mind that all projections and
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. See the "Risk Factors" section.

GENERAL BUSINESS MODEL AND EXPANSION

         Our general business model is to commercially produce and market a
healthful product line of wood-smoked protein foods including beef, pork,
poultry, lamb and fish, and related recipe products that are fully cooked and
packaged for convenient preparation by consumers and commercial end-users. We
plan to market and sell such food products under the Smoky Market(R) brand
principally through company-owned restaurant-stores & kiosks, and in time,
through Internet sales.

                                       19
<PAGE>

         COMPANY-OWNED RESTAURANT-STORES AND KIOSKS. Our Smoky Market
restaurant-stores will range in size from 1,200 square feet to 3,600 square feet
and consist of two building types; modular pre-fabricated buildings that are
installed on-site and buildings of leased space in shopping centers or
free-standing. The Smoky Market restaurant-stores will also be constructed in
the form of modular, self-contained kiosks that are approximately 150 square
feet for placement inside high-traffic venues. The Smoky Market
restaurant-stores will feature selections of the smoked foods and recipe dishes
for foodservice, and customers will also be able to purchase Smoky Market brand
packaged products through refrigerated display merchandisers or buy individual
portions through old-style, personalized deli-case service.

         We successfully tested our applications for preparation of our food
products in a restaurant located in Los Gatos, California for three months from
October through December 2006. We have entered into an agreement to acquire the
assets and leasehold rights of this Los Gatos restaurant and expect to remodel
the site into a prototype Smoky Market restaurant-store. Beginning in mid-2008,
and assuming the availability of capital, we plan to open additional stores in
the Western region toward our goal of opening three stores in each of our five
regional operating territories. We expect this plan for development will enable
us to maximize the operating and financial efficiencies of our production
capacity.

         We intend to introduce a new form of franchising to grow and operate
our chain, which we expect will involve the integration of typical employment
relationship with certain of the short-term and long-term incentive compensation
benefits of a franchise relationship. We are calling it a "Franship." We are
exploring all the dynamics of the program at this time, but in general, we
expect the Franship program to provide a transferable incentive pay structure
and possible equity-based incentives using company equity; however, we expect to
retain actual ownership of Smoky Market restaurant-store locations.

         For inside placement of our modular kiosks, we are seeking to negotiate
rollout agreements with venues such as large retail stores, airports, sports
arenas, and convenience stores and other venues with high customer traffic
counts. The structure of our transactions with prospective venues would involve
either our renting space for the kiosk and paying a fixed amount of rent plus a
percentage of sales, or licensing usage of the kiosk in which case the venue
owner would purchase and operate the kiosk paying us a license fee, and we would
also supply our smoked food product for which we would generate profit.

         To launch and grow our chain of Smoky Market foodservice concepts, we
plan to engage the professional services of contractors for operating and
management functions that include commercial real estate selection, advertising
and public relations, personnel and operating systems development and strategic
planning. Our plan is to promote and grow in the manner of franchise companies
that tap the growing entrepreneurial marketplace of individuals seeking to own
their own business. We hope to employ our Franship program in the promotion and
recruitment of experienced, assistant level and manager level individuals from
the foodservice industry who have the desire to operate their own business, but
lack the substantial capital resource requirements to ever acquire their own
franchise.

         We believe that we have the potential to expand very rapidly because of
the Franship concept and the menu item systemization (i.e. the use of
pre-packaged, sliced and cut portions of menu items that are ready to heat and
serve), which reduces required kitchen space and the amount of training required
for Franship orientation.

                                       20
<PAGE>

         INTERNET SALES. Assuming that we are successful in expanding our retail
operations into all regions of the U.S., we plan to initiate a limited scope of
operation to develop Internet sales. In addition to offering customers at our
Smoky Market restaurant-stores access to on-line ordering for gifts and event
catering, we plan to create marketing operations with selected eCommerce
affiliates that are large Internet retail companies with substantial numbers of
customer visits and certain consumer goods organizations such as the RV
industry.

         CO-BRAND MENU SYSTEM FOODSERVICE. We have explored arrangements with
complimentary food chains under which we would place self-contained kiosks or
the equivalent within theirs stores as part of a co-branding relationship. The
focus of our efforts, is on the establishment of our Smoky Market
restaurant-stores in multiple regions in the U.S. in order to establish our
brand. As a result, until we have opened a number of Smoky Market
restaurant-stores in a number of regions, we do not expect to actively seek
cobranding relationships.

     FOOD PRODUCTION & DISTRIBUTION

         We presently outsource, and for the foreseeable future, expect to
continue to outsource, our commercial smoked food processing to Mary Ann's
Specialty Foods ("Specialty Foods"). Specialty Foods is a USDA-approved contract
food processing company located in Webster City, Iowa. It operates an 80,000
square foot processing facility located on 10 acres of family-owned land and is
responsible for our food production and distribution requirements. In order to
establish production capability and complete the development of our smoked food
products, we entered into an Amended and Restated Processing Agreement dated
July 1, 2006 with Specialty Foods.


         Pursuant to the processing agreement, Specialty Foods has agreed to
process the smoked meats for our business in return for a processing fee equal
to its actual costs of production, including allocable overhead, plus a fixed
fee designed to give Specialty Foods a net profit of not less than $35,000 per
month from the operation of two 10-hour shifts of processing for us. The
agreement is based upon a single oven capable of producing at least 100,000
pounds of smoked meat per month or more depending upon the production item mix.
The term of the agreement is ten years, with an option to extend the agreement
for an additional 10-year period (subject to early termination in the event of
default).

         We plan to enter into arrangements with co-packing companies to produce
our selection of gourmet recipe items including one-dish meals of smoked
meat/fish pasta, casseroles, quiches, and pizzas but have not yet entered into
any related agreements. Our production plan with co-packers for recipe items is
to have Specialty Foods produce and ship required products in bulk cases direct
to the respective co-packer for the item being produced, and the co-packer will
incorporate the smoked meat or fish into the recipe as the primary ingredient
and then ship the co-packed products directly to our designated distribution
centers.

         As we expand and need to add additional smoker ovens, we will be
required to expand our relationship with Specialty Foods (or other processors)
on such terms as are mutually agreed upon by the parties. Considering the size
of Specialty Food's surrounding 10 acre area, we believe that it would be in our
best interests to expand production at this location, which may require our
acquisition of the property and buildings owned by Specialty Foods.

EMPLOYEES

         Execution of our business plan as set forth above would, we believe,
require the hiring of approximately 30 people over the next year to staff our
corporate management team, our regional offices and those responsible for
overseeing the process of procuring real estate (fee simple or lease) and
arranging for the construction or placements of our Smoky Market
restaurant-stores and kiosks, and the hiring of initial management. This number
excludes management and staffing at the Smoky Market restaurant-stores and
kiosks. The actual number of employees we will hire in the next 12 months
depends upon our success in obtaining capital and how rapidly we can expand our
operations.

                                       21
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         As of December 31, 2007, we had cash and cash equivalents of $16,235
and a working capital deficit of $302,190. Given the working capital deficit, we
need to additional cash in order to continue our limited day-to-day operations
in the immediate term. To finance the launch foodservice concept operations, we
will be required to raise additional capital, which we expect to raise through
the issuance of debt, equity securities and/or warrants during the second
quarter of 2008. We believe that a minimum of approximately $1.5 million of
financing would be required to commence our business plan and begin to generate
revenue. We believe that it will require a minimum of $5 million of additional
financing in order to execute the initial expansion phase of our business plan.

         Expected capital expenditures during the remainder of 2007 and early
2008 include principally the acquisition of at least one restaurant site for
remodeling for an investment of approximately $250,000 and brand development
costs related to restaurant design, marketing and collateral materials of
approximately $200,000. Depending upon the level of capital available, we plan
to open additional stores in the Western region toward our goal of opening three
stores in each of our five regional operating territories.

         In addition, if our initial expansion plans are successful, we may need
to make investments in additional production capacity; this will likely require
the purchase of an existing food processing facility (possibly with a leaseback
arrangement with the operator) in order that we may add additional space, ovens
and/or buildings. We expect that this would require approximately $3 million in
cash. We would expect to be able to fund a significant portion of such purchase
price with secured debt, but would be required to raise capital through the
issuance of equity securities for at least twenty-five percent, and possibly a
larger percentage, of the purchase price.

         During the fourth quarter of 2007, we entered into an investment
agreement under which we have the right (referred to as a "put") to require the
investor to purchase up to $10 million of our common stock at a 7% discount to
the market price in increments of up to the greater of (i) $250,000, and (ii)
200% of the average daily volume of the common stock for the ten trading days
preceding the put notice multiplied by the average of the best bid prices for
the three trading days immediately preceding the after receipt of the put
notice. The investor's obligations under the investment agreement were
conditioned upon the satisfaction of certain conditions precedent, including the
effectiveness of a registration statement related to the resale of the
securities. Although we filed such registration statement in December 2007, we
elected to withdraw it before effectiveness because it came apparent that the
SEC review of the registration statement would continue through the second
quarter of 2008.

         We were anticipating being able to raise capital through private
placements during the late first quarter of 2007. We were unable to raise such
capital in the first quarter of 2007 and do not presently have any binding
commitments to provide financing. We are in late-stage discussions with various
potential investors regarding private financings and are evaluating a placement
agent-assisted private offering. In light of our absence of revenue and the
early stage of development of our business plan, it is uncertain that we will be
able to raise significant capital through the sale of our securities, and it is
unlikely that we would qualify for commercial debt financing. If we are unable
to obtain additional equity financing, we will be forced to significantly
curtail our operations and proposed expansion, and our ability to continue as a
going concern will be uncertain.

                                       22
<PAGE>

ITEM 7.  FINANCIAL STATEMENTS

         Our financial statements and associated notes are set forth following
the signature page beginning on Page F-1.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

         None.

ITEM 8A(T). CONTROLS AND PROCEDURES.

         Disclosure Controls and Procedures
         ----------------------------------

         Under the supervision and with the participation of our management,
including our principal executive officer and principal financial officer, we
conducted an evaluation of our disclosure controls and procedures, as such term
is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of
1934 as of December 31, 2007. Based on this evaluation, our principal executive
officer and principal financial officer concluded that our disclosure controls
and procedures are effective in ensuring that information required to be
disclosed by the Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission's rules and forms.

         Internal Controls
         -----------------

         This annual report does not include a report on management's assessment
regarding internal control over financial reporting or an attestation report of
the Company's registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for newly public
companies

         Changes in Internal Controls
         ----------------------------

         During the last fiscal quarter ended December 31, 2007, there has been
no change in internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect our internal control over
financial reporting.

ITEM 8B. OTHER INFORMATION.

         On March 10, 2008, the Company entered into an Independent Contractor
Agreement with Michael Harris. Pursuant to the agreement, Mr. Harris has agreed
to provide business development services for a term of one year in exchange for
an aggregate of 2,000,000 shares of common stock of the Company (with a value of
$300,000 at $0.15 per share). A copy of the Agreement is filed herewith as
Exhibit 10.12.

                                       23
<PAGE>

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

         Certain information regarding our executive officers and directors is
set forth below. Our executive officers are appointed by, and continue to serve
at the will of, our board of directors. Our directors are elected or appointed
for terms that continue, absent resignation, death or removal by our
stockholders, until the later of the next annual meeting of stockholders or
until a replacement is duly appointed or elected and qualified. Among our
officers, Edward C. Feintech devotes substantially all of his time to our
business, Shane A. Campbell devotes approximately 10% of his time to our
business, and Dennis Harrison currently devotes less than 5% of his time to our
business. Although Edward C. Feintech and Shane A. Campbell are still affiliated
with Smoky Systems in management capacities, because Smoky Systems has no
current operations, neither devotes any significant amount of time to the
business of Smoky Systems.

              NAME                  AGE   POSITION
              ----                  ---   --------
              Edward C. Feintech    60    Founder, Promoter, President, Chief
                                          Executive Officer and Chairman of the
                                          Board
              Scott L. Bargfrede    50    Director
              Daniel Brune          55    Director
              Shane A. Campbell     49    Chief Financial Officer*
              Dennis A. Harrison    59    Chief Information Officer*
                  * Such officer is not a full time employee of our company.

         EDWARD C. FEINTECH has been the Chairman of our Board of Directors, and
our President and Chief Executive Officer since our incorporation in April 2006.
Mr. Feintech operated full-service barbecue restaurants and tested quick-service
barbecue operations in Des Moines, Iowa (1977-1984) before closing his
enterprise and moving on toward development of our custom-engineered,
USDA-approved wood-burning oven system technology. Since organizing Smoky
Systems in December 2000, Mr. Feintech has been its Manager and directed the
development phase of the intellectual property that we license from Smoky
Systems.

         SCOTT L. BARGFREDE has served as a director of our company since May
2006. Mr. Bargfrede has been the President and CEO of First American Bank in
Webster City, Iowa since October 18, 1999. First American Bank is our primary
bank. Mr. Bargfrede graduated from the University of Minnesota in 1979 with a BA
degree in Ag-Business Finance and in 1992, he graduated from the University of
Wisconsin Graduate School of Banking.

         DANIEL L. BRUNE has served as a director of our company since October
2006. A former Major and Senior pilot in the US Air Force, Mr. Brune has been a
pilot for American Airlines since 1989. He received his real estate license in
1991 and was affiliated with Coldwell Banker from January 2001 to January 2006,
and relocated his affiliation to David Lyng & Associates in January 2006. He is
presently developing a resort community project in the Highlands of Western
Panama. Mr. Brune graduated from Washburn University with a Bachelor of Business
Administration degree in 1974.

                                       24
<PAGE>

         SHANE A. CAMPBELL has been our Chief Financial Officer (acting as a
consultant) since our incorporation in April 2006. Mr. Campbell has served as a
business advisor to numerous small and medium sized businesses over his
twenty-two years of public and private practice. From April 2004 though the
present, Mr. Campbell has functioned as the chief financial officer of Smoky
Systems and other small companies as a CFO consultant contractor. Mr. Campbell
worked from January 2001 to April 2004 as CFO for MarketLive, Inc. (previously
Multimedia Live, Inc.), an eCommerce software company located in Petaluma,
California. Prior to that time, from January 1990 through January 2002, Mr.
Campbell was an employee and then a partner at Jones, Schiller & Company, LLC,
an accounting firm located in San Francisco. Mr. Campbell earned a Bachelor of
Science degree from California State University, Chico in December 1981.

         DENNIS A. HARRISON, PHD, has been our Chief Information Officer (acting
as a consultant) since our inception in April 2006; however, he is expected to
become a full-time employee when and as our financial situation permits. Since
January 2000, Dr. Harrison has held senior level management positions as
VP/Business Development for CSF-Telequest (2000-2003), VP/Business Development
for CallTech Communications (April 2003-April 2004), and VP/Business Development
for Effective Teleservices (April 2004-present). Dr. Harrison received a
Bachelor of Arts in Philosophy & Classical Languages from the Seminary of St.
Pius X (an affiliate of Catholic University), a Master of Arts in Counseling
from Loyola College, and a Ph.D. in Human Development from the University of
Maryland.

MEETINGS AND COMMITTEES
         During the fiscal year ended December 31, 2007, our Board of Directors
held an aggregate of four formal meetings (in person or by telephone) and also
met informally on numerous occasions to approve relevant matters by written
consent. All incumbent directors attended at least 75% of all board meetings and
applicable committee meetings.

AUDIT COMMITTEE

         Our entire Board of Directors presently serves as our audit committee.
None of the members of the audit committee satisfy the independence requirements
applicable to audit committees of listed companies. In addition, the Board of
Directors has determined that the audit committee does not have a member
qualifying as an audit committee financial expert, as defined in Item 401(e) of
Regulation S-B. To save limited capital over the last several years, we have
chosen not to expand the size of our Board of Directors or to offer cash
compensation to our directors. The absence of cash compensation makes recruiting
persons who are not otherwise interested in our company more difficult. For
these reasons, we do not have on our Board of Directors a person who would
qualify as an audit committee financial expert.

         We do not presently have a standing nominating committee or
compensation committee, and we do not have a nominating committee charter or a
compensation committee charter.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the Exchange Act requires the Company's officers and
directors to file reports concerning their ownership of Common Shares with the
SEC and to furnish the Company with copies of such reports. Based solely upon
the Company's review of the reports required by Section 16 and amendments
thereto furnished to the Company, the Company believes that all reports required
to be filed pursuant to Section 16(a) of the Exchange Act during 2007, were
filed with the SEC on a timely basis except as follows: (a) Form 4's for Edward
Feintech, officer and director and Toni Adams, an officer, were due on May 14,
2007, but were filed on May 17, 2007, (b) a Form 4 for Smoky Systems, LLC, a 10%
beneficial owner, was due on May 11, 2007 but was filed on May 18, 2007, (c) a
Form 4 for Toni Adams, an officer, was due on October 17, 2007 but was filed on
October 22, 2007, (d) Form 3's for Smoky Systems, LLC, a 10% beneficial owner,
Scott Bargfred, a director, and Dennis Harrison, and officer, were due on April
19, 2007 but were filed on May 18, 2007, (e) Form 3's for Shane Campbell, an
officer, Daniel Brune, a director, Toni Adams and Edward Feintech, were due on
April 19, 2007 but were filed on May 17, 2007.

                                       25
<PAGE>

CODE OF ETHICS

         We have not adopted a code of ethics. Although we expect to adopt a
code of ethics during 2008, we have not done so to date because we believe that,
in light of our limited capital and operations, expending the resources on
developing a formal code of ethics would not be in the best interest of
shareholders. As we obtain the capital to establish a retail store and commence
operations, we expect to begin developing more comprehensive policies and
procedures appropriate to our size and stage.

ITEM 10. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         The following table summarizes the compensation for the fiscal years
ended December 31, 2006 and December 31, 2007 paid or accrued by us to or on
behalf of our Chief Executive Officer, as well as our two most highly
compensated executive officers, if any, whose aggregate compensation for fiscal
year 2007 exceeded $100,000 (collectively, the "Named Executive Officers").

<TABLE>
<S> <C>
                                                                              NON-EQUITY   NONQUALIFIED      ALL
                                                                              INCENTIVE     DEFERRED        OTHER
                                                         STOCK     OPTION       PLAN       COMPENSATION    COMPENSA-
        NAME AND                     SALARY   BONUS      AWARDS    AWARDS   COMPENSATION    EARNINGS       TION ($)    TOTAL ($)
   PRINCIPAL POSITION        YEAR      ($)     ($)       ($)         ($)        ($)           ($)

Edward C. Feintech, CEO,     2007   152,000          150,000(1)   30,983(2)                                            332,983
President and Director     2006(3)   54,500    --      5,000(4)   23,693(5)     --            --              --        83,193
</TABLE>

         (1) Value determined based upon the fair market value of 1,500,000
         shares of common stock issued on May 31, 2007, which was $0.10 per
         share.

         (2) Value determined using the Black-Scholes option valuation model.
         The grant date for such options was May 31, 2007, and the options are
         exercisable during a seven year term at an exercise price of $0.10 per
         share, which was the fair market value of the stock on the date of
         grant. Assumptions used for the valuation model are set forth below:

             Expected Life                   7 years
             Risk-Free Interest Rate         4.7%
             Expected Volatility Factor      75%
             Weighted average fair market
             value of stock options
             granted                         0.073

         (3) From inception in April 2006 through December 31, 2006.

         (4) Value determined by multiplying the number of shares by $0.10,
         which we believe was the fair market value of its common stock during
         the period surrounding the date of grant, based upon the conversion
         price of convertible equity securities and sale price of securities
         sold during that period.

         (5) Value determined using the Black-Scholes option valuation model.
         The grant date for such options was May 1, 2006, and the options are
         exercisable during a seven year term at an exercise price of $0.10 per
         share, which was the fair market value of the stock on the date of
         grant. Assumptions used for the valuation model are set forth below:

                                       26
<PAGE>

             Expected Life                   7 years
             Risk-Free Interest Rate         4.65%
             Expected Volatility Factor      75%
             Expected Dividend Yield         0

         On May 10, 2007, Mr. Feintech signed an executive employment agreement.
The agreement is for a three-year term and calls for him to receive a minimum
base salary of $175,000 per year. The employment agreement also grants to him:
(i) a one-time stock issuance of 1,500,000 shares of common stock upon execution
of the agreement; (ii) an award of non-statutory stock options of 425,000 shares
of common stock at an exercise price of $0.10 per share; and (iii) a bonus equal
to an additional 1,000,000 shares of common stock upon the achievement of each
incremental level of $50,000,000 in revenue, provided that cumulative net
after-tax income is being maintained at a level not less than 7.5% on total
revenue.

         In addition, in May 2006, Mr. Feintech was issued 50,000 shares of
common stock in exchange for the assignment of any intellectual property rights
related to our business and granted an option to purchase 325,000 shares of
common stock pursuant to our stock incentive plan at an exercise price of $0.10
at any time prior to May 13, 2013. The options vest 25% on May 31, 2007 and 1/48
each month thereafter until fully vested.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

         The following table provides information regarding equity awards held
by the named executive officers as of December 31, 2007:

<TABLE>
<S>     <C>
--------------- ----------------------------------------------------------------- --------------------------------------------------
                                         OPTION AWARDS                                               STOCK AWARDS
--------------- ------------ ------------- ------------ ------------ ----------- ------------ ---------- ------------- ------------
     NAME        Number of    Number of      Equity       Option       Option     Number of     Market      Equity       Equity
                Securities    Securities    Incentive    Exercise    Expiration   Shares or    Value of   Incentive     Incentive
                Underlying    Underlying      Plan         Price        Date      Units of     Shares or Plan Awards:     Plan
                Unexercised  Unexercised     Awards:        ($)                  Stock That    Units of   Number of      Awards:
                  Options      Options      Number of                             Have Not    Stock That   Unearned     Market or
                    (#)          (#)       Securities                              Vested      Have Not    Shares,       Payout
                Exercisable  Unexercisable Underlying                                (#)        Vested     Units or     Value of
                                           Unexercised                                            ($)       Other       Unearned
                                            Unearned                                                     Rights That     Shares,
                                             Options                                                       Have Not     Units or
                                               (#)                                                          Vested     Other Rights
                                                                                                             (#)        That Have
                                                                                                                       Not Vested
                                                                                                                           ($)
--------------- ------------ ------------- ------------ ------------ ----------- ------------ ---------- ------------- ------------
  Edward C.
  Feintech,
     CEO,
President and   128,646(1)    196,354(1)         N/A       $0.10       May 31,       N/A          N/A         N/A           N/A
   Director                                                             2013
--------------- ------------ ------------- ------------ ------------ ----------- ------------ ---------- ------------- ------------
                168,229(1)    256,771(1)         N/A       $0.10       May 31,       N/A          N/A         N/A           N/A
                                                                        2014
--------------- ------------ ------------- ------------ ------------ ----------- ------------ ---------- ------------- ------------
</TABLE>

          (1) Options vest 25% on May 31, 2007 and 1/48 each month thereafter
until fully vested.

DIRECTOR'S COMPENSATION

         Directors who are not officers of the Company do not receive any
regular compensation for their service on the board of directors but are
entitled to reimbursement of any actual expenses associated with the attendance
of board meeting and other activities and to receive options and other awards
under the Company's stock incentive plan. Directors are entitled to receive
compensation for services unrelated to their service as a director to the extent
that they provide such unrelated services to the Company.

                                       27
<PAGE>

         No directors received any compensation, including option awards, for
their service as directors for the Company, during the fiscal year ended
December 31, 2007. Information with respect to the compensation of Edward C.
Feintech, our Chief Executive Officer and President, is set forth in the tables
above.

EXECUTIVE EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL
ARRANGEMENTS

         Except as described in following paragraph, we have not entered into
employment agreements with any of our executive officers and, other than
provisions in our stock incentive plan that permit acceleration of vesting of
awards in connection with a change of control, have no arrangements or plans
which provide benefits in connection with retirement, resignation, termination
or a change of control.

         Pursuant to his executive employment agreement dated May 10, 2007 ,
Edward C. Feintech is entitled to receive, as severance and following execution
of a release of liabilities in favor of the Company, (i) if the termination was
by the Company without cause or by employee with good reason (except in
connection with a change of control), base salary and medical benefits (plus any
pro-rated bonus for which he otherwise qualified) for a period of 12-months
following the termination, or (ii) if the termination was by the Company without
cause or by employee with good reason and occurred 90-days prior to or within
one year after a change of control, base salary and medical benefits for a
period of 24 months and acceleration of the vesting of any stock options granted
under the employment agreement. Mr. Feintech is not entitled to such severance
benefits if the termination is by the Company for cause, by Mr. Feintech without
good reason or after May 10, 2010. A change of control includes (a) any capital
reorganization, reclassification of the capital stock of Company, consolidation
or merger of Company with another corporation in which Company is not the
survivor (other than a transaction effective solely for the purpose of changing
the jurisdiction of incorporation of Company), (b) the sale, transfer or other
disposition of all or substantially all of the Company's assets to another
entity, (c) the acquisition by a single person (or two or more persons acting as
a group, as a group is defined for purposes of Section 13(d)(3) under the
Securities Exchange Act of 1934, as amended) of more than 40% of the outstanding
shares of common stock of the Company.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS.

The following table sets forth information with respect to the beneficial
ownership of our common stock as of March 31, 2008 and as adjusted to reflect
the sale of the shares of our common stock offered hereby, by:

         o    all persons known by us to beneficially own more than 5% of our
              common stock;
         o    each of our named executive officers;
         o    each of our directors;
         o    all directors and executive officers as a group; and
         o    stockholders whose shares are being registered pursuant to this
              prospectus for resale.

         Beneficial ownership is determined according to the rules of the SEC
and generally means that a person has beneficial ownership of a security if he,
she or it possesses sole or shared voting or investment power of that security,
and includes options and warrants that are currently exercisable or exercisable
within 60 days. Except as indicated by footnote, and subject to community
property laws where applicable, we believe the persons named in the table have
sole voting and investment power with respect to all shares of common stock
shown as beneficially owned by them.

                                       28
<PAGE>

      NAME OF EXECUTIVE OFFICER OR DIRECTOR   AMOUNT AND NATURE OF
                                                BENEFICIAL OWNER        PERCENT
      -------------------------------------   --------------------      -------
      Edward C. Feintech (includes Smoky
      Systems, LLC)
      Chairman, President and CEO                  43,028,251      (2)   71.50%

      Scott L. Bargfrede, Director                    448,449      (3)      *

      Daniel Brune, Director (includes Brune
      Family Trust)                                 2,536,983      (4)    4.21%

      All Officers and Directors as a Group
      (5 persons)                                  46,705,349      (5)   75.38%

      NAME OF 5% STOCKHOLDER

      Edward C. Feintech (includes Smoky
      Systems, LLC)
      1511 E 2nd St., Webster City, IA 50595       43,028,251      (2)   71.50%

---------------------------
* Represents less than 1% of the outstanding shares of common stock.

(1) The percentages set forth above have been computed assuming the number of
shares of common stock outstanding equals the sum of (a) 59,056,988, which is
the number of shares of common stock actually outstanding on March 31, 2008, and
(b) shares of common stock subject to options, warrants, convertible notes and
similar securities exercisable or convertible for common stock within 60 days of
such date held by the person with respect to percentage is computed (but not by
any other person).
(2) Includes, in addition to outstanding shares held by Mr. Feintech, 250,000
shares of common stock issuable upon exercise of warrants to purchase common
stock, and 375,500 shares issuable upon exercise of non-statutory stock options,
each held in the name of Mr. Feintech. Also includes 40,095,730 shares of common
stock held of record by Smoky Systems, LLC and 500,000 shares of common stock
issuable upon exercise of warrants to purchase common stock held in the name of
Smoky Systems, LLC. Mr. Feintech, as manager of Smoky Systems, LLC, has voting
and investment control over shares held by Smoky Systems, LLC.
(3) Includes 150,000 shares of common stock issuable upon exercise of warrants
to purchase common stock held in the name of Scott and Terri Bargfrede; and
81,250 shares issuable upon the exercise of non-statutory stock options.
(4) Includes 64,323 shares issuable upon the exercise of non-statutory stock
options held by Mr. Brune. Also includes 1,267,660 shares of common stock held
of record by the Brune Family Trust and 1,155,000 shares of common stock
issuable upon exercise of warrants to purchase common stock held in the name of
the Brune Family Trust.
(5) Includes 845,573 shares issuable upon the exercise of non-statutory stock
options and 2,055,000shares of common stock issuable upon exercise of warrants
to purchase common stock.


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

         The information set forth in Item 5 under "Securities Authorized for
Issuance under Equity Compensation Plans" is incorporated herein by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
         INDEPENDENCE.

ARRANGEMENTS WITH OFFICERS, DIRECTORS AND PROMOTERS

Set forth below is a description of certain transactions entered into since
January 1, 2007, or presently contemplated, with any officer, director,
affiliate or other related person:

Our directors have set the initial salary or consulting fee of certain of our
officers as follows (in each case pending availability of capital):

                                       29
<PAGE>

                                                     BASE SALARY OR CONSULTING
                                                     -------------------------
            NAME                                     FEE PER ANNUM
            ----                                     -------------

            Edward C. Feintech, President & CEO      $175,000
            Shane Campbell, CFO                      $65,000*
            Dennis Harrison, CIO                     $105,000*

         *Currently serving as a part-time consultant; salary is not being paid.

         Certain officer, directors, promoter and affiliates purchased
convertible notes, and received warrants, in our convertible note offering
conducted between May 2006 and May 2007. The convertible notes and warrants were
purchased on the same terms as offered to all participants in the offering. The
principal amount of the convertible notes (all of which have been converted into
common stock), and the number of warrants received in, by any participating
officers, directors, promoters or affiliates are as follows:

         ------------------------------ -------------------- ------------------
                                        PRINCIPAL AMOUNT OF
         NAME OF PERSON                 CONVERTIBLE NOTES    NUMBER OF WARRANTS
         ------------------------------ -------------------- ------------------
         Edward C. Feintech, President,        $25,000             250,000
         CEO and Chairman
         ------------------------------ -------------------- ------------------
         Toni L. Adams, Secretary and
         former Director of Operations         $40,000             400,000
         ------------------------------ -------------------- ------------------
         Daniel Brune, Director
         (Brune Family Trust)                 $115,500           1,155,000
         ------------------------------ -------------------- ------------------
         Scott L. Bargfrede, Director          $15,000             150,000
         ------------------------------ -------------------- ------------------

         On May 10, 2007, we signed an employment agreement with Edward C.
Feintech, our Chief Executive Officer, President, Chairman and promoter. The
agreement is for a three-year term and calls for him to receive a minimum base
salary of $175,000 per year. The employment agreement also grants to him: (i) a
one-time stock issuance of 1,500,000 shares of common stock upon execution of
the agreement; (ii) an award upon execution of the agreement of non-statutory
stock options of 425,000 shares of common stock at an exercise price of $0.10
per share, which options vest 25% on May 31, 2007 and 1/48 each month thereafter
until fully vested; and (iii) a bonus equal to an additional 1,000,000 shares of
common stock upon the achievement of each incremental level of $50,000,000 in
revenue, provided that cumulative net after-tax income is being maintained at a
level not less than 7.5% on total revenue. Mr. Feintech is subject to
noncompetition and nonsolicitation covenants during the term of the agreement
and for 12 months thereafter, and he has agreed to standard invention assignment
and confidentiality provisions.

         Pursuant to his executive employment agreement dated May 10, 2007 ,
Edward C. Feintech is entitled to receive, as severance and following execution
of a release of liabilities in favor of the Company, (i) if the termination was
by the Company without cause or by employee with good reason (except in
connection with a change of control), base salary and medical benefits (plus any
pro-rated bonus for which he otherwise qualified) for a period of 12-months
following the termination, or (ii) if the termination was by the Company without
cause or by employee with good reason and occurred 90-days prior to or within
one year after a change of control, base salary and medical benefits for a
period of 24 months and acceleration of the vesting of any stock options granted
under the employment agreement. Mr. Feintech is not entitled to such severance
benefits if the termination is by the Company for cause, by Mr. Feintech without
good reason or after May 10, 2010. A change of control includes (a) any capital
reorganization, reclassification of the capital stock of Company, consolidation
or merger of Company with another corporation in which Company is not the
survivor (other than a transaction effective solely for the purpose of changing
the jurisdiction of incorporation of Company), (b) the sale, transfer or other
disposition of all or substantially all of the Company's assets to another
entity, (c) the acquisition by a single person (or two or more persons acting as
a group, as a group is defined for purposes of Section 13(d)(3) under the
Securities Exchange Act of 1934, as amended) of more than 40% of the outstanding
shares of common stock of the Company.

                                       30
<PAGE>

MAJORITY STOCKHOLDER

Smoky Systems, LLC beneficially owns approximately 71.50% of our common stock as
of March 31, 2008, and its manager is Edward C. Feintech, our President, CEO,
the Chairman of our Board of Directors and a promoter. In addition, the
following affiliates of our company own the following percentage of the
outstanding equity interests of Smoky Systems:

                  -------------------------------- -----------------
                  NAME OF PERSON                   EQUITY INTEREST
                  -------------------------------- -----------------
                  Edward C. Feintech, President,        29.5%
                  CEO and Chairman
                  -------------------------------- -----------------
                  Toni L. Adams, Secretary and          4.83%
                  former Director of Operations
                  -------------------------------- -----------------
                  Daniel Brune, Director                    *
                  (Brune Family Trust)
                  -------------------------------- -----------------
                  Scott L. Bargfrede, Director              *
                  -------------------------------- -----------------
                         * Less than 1%

TRANSACTIONS WITH PROMOTERS

         Mr. Edward C. Feintech, our President, CEO, and the Chairman of our
Board of Directors is considered to be a promoter of our company under governing
SEC rules. Each transaction in which Mr. Feintech, or any entities affiliated
with Mr. Feintech, has an interest is described below. All such transactions
have been approved by our board of directors.

         Immediately following our organization, we entered into a license
agreement with Smoky Systems, LLC, which is managed and 29.5% owned by Mr.
Feintech, under which we issued to Smoky Systems 40 million shares of common
stock exchange for the rights to use the recipes, smoker ovens and other key
assets underlying our business. At the time, no other shares of common stock
were outstanding; since whatever number of shares of common stock issued to
Smoky Systems would represent 100% of the outstanding shares of capital stock,
decisions with respect to the number of shares to be issued to Smoky Systems was
made by the board of directors (consisting of Mr. Feintech and Scott L.
Bargfrede at the time) based upon the projected capitalization of the company
and market price for the common stock for and following various funding
transactions set forth in our business plan. It was projected that Smoky Systems
would own approximately 80% of the common stock following the purchase of
approximately 10,000,000 shares by investors at an anticipated average market
price of $0.50 per share. Because we have implemented our business plan, and
raised capital, at a slower pace than expected, Smoky Systems is now expected to
own a smaller percentage of the company than originally projected following the
completion of funding transactions necessary to launch operations.

INDEPENDENCE OF BOARD OF DIRECTORS AND COMMITTEES

         Our Board of Directors currently consists of Edward C. Feintech,
Chairman and Chief Executive Officer, Scott L. Bargfrede and Daniel L. Brune.
The Board of Directors has determined that each of Messrs. Bargfrede and Brune
are independent, using the standards of independence applicable to companies
listed on the NASDAQ Stock Market. We do not presently have a standing audit
committee, nominating committee, or compensation committee, and we do not have a
charter for any such committees. Our entire Board of Directors performs the
functions generally preformed by such committees. Mr. Brune is independent using
the standards of the NASDAQ Stock Market applicable to such committees. Mr.
Bargfrede is independent using the standards of the NASDAQ Stock Market
applicable to compensation and nominating committee but may not be independent
for purposes of applicable audit committee standards because of the financial
relationship disclosed below.

                                       31
<PAGE>

         Mr. Bargfrede has been the President and CEO of First American Bank in
Webster City, Iowa since October 18, 1999. First American Bank is our company's
primary bank.

<TABLE>
<S>  <C>
ITEM 13.  EXHIBITS.

EXHIBIT NO.                        EXHIBIT                               INCORPORATED BY REFERENCE/FILED HEREWITH
-----------  -----------------------------------------------------   -------------------------------------------------
     3.1     Amended and Restated Articles of Incorporation          Incorporated by reference to Amendment No. 3 to
                                                                     Registration Statement on Form SB-2 filed on
                                                                     August 24, 2007, File No. 333-143008

     3.2     Bylaws                                                  Incorporated by reference to Amendment No. 3 to
                                                                     Registration Statement on Form SB-2 filed on
                                                                     August 24, 2007, File No. 333-143008

     4.1     Form of Common Stock Certificate                        Incorporated by reference to Amendment No. 3 to
                                                                     Registration Statement on Form SB-2 filed on
                                                                     August 24, 2007, File No. 333-143008

     4.2     2006 Stock Incentive Plan                               Incorporated by reference to Registration
                                                                     Statement on Form 10-SB filed on February 16,
                                                                     2007, File No. 000-52158

     4.3     Form of Warrant (Bridge Financing)                      Incorporated by reference to the Quarterly Report
                                                                     on Form 10-Q filed on May 14, 2007, File No.
                                                                     000-52158

    10.1     Exclusive License Agreement with Smoky Systems, LLC     Incorporated by reference to Registration
             (Amended and Restated)                                  Statement on Form 10-SB filed on February 16,
                                                                     2007, File No. 000-52158

    10.2     Amended and Restated Processing Agreement with Mary     Incorporated by reference to Amendment No. 3 to
             Ann's Specialty Foods, Inc. dated July 1, 2006          Registration Statement on Form SB-2 filed on
                                                                     August 24, 2007, File No. 333-143008

    10.3     Form of Purchase Agreement (Bridge Financing)           Incorporated by reference to Amendment No. 3 to
                                                                     Registration Statement on Form SB-2 filed on
                                                                     August 24, 2007, File No. 333-143008

                                       32
<PAGE>

EXHIBIT NO.                        EXHIBIT                               INCORPORATED BY REFERENCE/FILED HEREWITH
-----------  -----------------------------------------------------   -------------------------------------------------
    10.4     Form of Convertible Note (Bridge Financing)             Incorporated by reference to the Quarterly Report
                                                                     on Form 10-Q filed on May 14, 2007, File No.
                                                                     000-52158

    10.5     Form of NonStatutory Stock Option Agreement             Incorporated by reference to Registration
                                                                     Statement on Form 10-SB filed on February 16,
                                                                     2007, File No. 000-52158

    10.6     Independent Contractor Agreement dated November 20,     Incorporated by reference to Registration
             2006 with Kenneth N. Hankin                             Statement on Form 10-SB filed on February 16,
                                                                     2007, File No. 000-52158

    10.7     Employment Agreement dated May 10, 2007 with Edward     Incorporated by reference to the Quarterly Report
             C. Feintech                                             on Form 10-Q filed on May 14, 2007, File No.
                                                                     000-52158

    10.8     QMG Services Proposal                                   Incorporated by reference from Amendment No. 2 to
                                                                     Registration Statement on Form SB-2, File No.
                                                                     333-143008, filed on August 1, 2007

    10.9     Investment Agreement dated October 30, 2007 with        Incorporated by reference to the Current Report
             Dutchess Private Equities Fund, Ltd.                    on 8-K/A filed on November 6, 2007, File No.
                                                                     000-52158

    10.10    Registration Rights Agreement dated October 30, 2007    Incorporated by reference to the Current Report
             with Dutchess Private Equities Fund, Ltd.               on 8-K/A filed on November 6, 2007, File No.
                                                                     000-52158

    10.11    Binding Term Sheet for Purchase Agreement dated         Incorporated by reference to the Current Report
             November 7, 2007 with Ron Barone                        on 8-K filed on November 19, 2007, File No.
                                                                     000-52158

    10.12    Independent Contractor Agreement dated March            Filed herewith
             10, 2008 with Michael Harris

    23.1     Consent of Independent  Registered Public               Filed herewith
             Accountants

     24      Power of Attorney                                       Included on the signature page hereof

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

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

    32.1     Section 1350 Certification of Chief Executive Officer   Filed herewith

    32.2     Section 1350 Certification of Chief Financial Officer   Filed herewith
</TABLE>


                                       33
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         AUDIT FEES

         The Company's independent auditor for the year ended December 31, 2007
was Jaspers + Hall, PC ("Jaspers + Hall"). The aggregate fees for audit services
totaled $5,000 for the fiscal year ended December 31, 2007 and $3,500 for the
fiscal year ended December 31, 2006.

         AUDIT RELATED FEES

         The aggregate fees for professional services rendered by Jaspers + Hall
for assurance and other audit related services was $3,000 for the year ended
December 31, 2007 and none for the fiscal year ended December 31, 2006.

         TAX FEES

         There were no fees paid to Jaspers + Hall for tax related professional
services for the year ended December 31, 2007 or the fiscal year ended December
31, 2006.

         ALL OTHER FEES

         Jaspers + Hall did not provide to the Company any other material
services during the fiscal year ended December 31, 2007 or the fiscal year ended
December 31, 2006.

         AUDIT COMMITTEE PRE-APPROVAL POLICIES

         Under the pre-approval policies and procedures established by the Board
of Directors, functioning as the Audit Committee, it would not permit engagement
of accountants to render audit or non-audit services without prior approval of
the Board of Directors, functioning as the Audit Committee. As a result, all
engagements of the independent auditors to render audit or non-audit services
were approved by the Board of Directors, functioning as the Audit Committee.


                                       34
<PAGE>

                                   SIGNATURES

         In accordance with the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this Form 10-KSB
to be signed on its behalf by the undersigned, thereunto duly authorized.

                                            SMOKY MARKET FOODS, INC.

                                            By:   /s/   Eddie Feintech
                                                  -----------------------
                                                  Eddie Feintech
                                                  Chief Executive Officer

                                            Date: April 15, 2007
                                                  -----------------------


                   POWER OF ATTORNEY AND ADDITIONAL SIGNATURES

         In accordance with the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons in the capacities and
on the dates indicated. Each person, whose signature to this Form 10-KSB appears
below, hereby constitutes and appoints Eddie Feintech as his true and lawful
attorney-in-fact and agent, with full power of substitution, to sign on his
behalf individually and in the capacity stated below and to perform any acts
necessary to be done in order to file all amendments and post-effective
amendments to this Form 10-KSB, and any and all instruments or documents filed
as part of or in connection with this Form 10-KSB or the amendments thereto and
each of the undersigned does hereby ratify and confirm all that said
attorney-in-fact and agent, or his substitutes, shall do or cause to be done by
virtue hereof.


Signature                       Title                             Date
---------                       -----                             ----

/s/ Edward C. Feintech          Chief Executive Officer,          April 15, 2008
--------------------------      President and Chairman
Edward C. Feintech              (Principal Executive Officer)

/s/ Shane Campbell              Chief Financial Officer           April 15, 2008
--------------------------      (Principal Financial and
Shane Campbell                  Accounting Officer)

/s/ Scott L. Bargfrede          Director                          April 15, 2008
--------------------------
Scott L. Bargfrede


/s/ Daniel Brune                Director                          April 15, 2008
--------------------------
Daniel Brune



                                       35

<PAGE>




SMOKY MARKET FOODS, INC.
(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS
DECEMBER 31, 2007 AND 2006





<PAGE>

JASPERS + HALL, PC
CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------------------------------------
9175 KENYON AVENUE, SUITE 100
DENVER, CO 80237
303-796-0099

             Report of Independent Registered Public Accounting Firm

To the Board of Directors
Smoky Market Foods, Inc.

We have audited the accompanying balance sheet of Smoky Market Foods, Inc. (A
Development Stage Company) as of December 31, 2007 and 2006 and the related
statements of operations, changes in stockholders' deficit, and cash flows for
the year ended December 31, 2007 and period April 18, 2006 (inception) to
December 31, 2006. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Smoky Market Foods, Inc. at
December 31, 2007 and 2006, and the results of its operations and its cash flows
for the year ended December 31, 2007 and period April 18, 2006 (inception) to
December 31, 2006, in conformity with accounting principles generally accepted
in the United States.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note 2 to the
financial statements, conditions exist which raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in regard
to these matters are also discussed in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

/s/ Jaspers + Hall, PC
April 14, 2008


                                      F-1
<PAGE>

<TABLE>
<S>     <C>
                                    SMOKY MARKET FOODS, INC.
                                  (A Development Stage Company)

                                         Balance Sheets
                                         --------------

                                                                     DECEMBER 31,
                                                                2007            2006
                                                             -----------    -----------
ASSETS:
-------
Current Assets
     Cash                                                    $    16,235    $   108,120
     Accounts receivable, net of allowance                            --          1,877
     Inventory                                                     4,250         13,694
                                                             -----------    -----------

     Total Current Assets                                         20,485        123,691

Property & Equipment, net of accumulated depreciation            166,478        184,163

Other Assets
     Intangible assets                                           125,000         40,000
     Deposits                                                      8,483          2,683
                                                             -----------    -----------
     Total Other Assets                                          133,483         42,683
                                                             -----------    -----------

     Total Assets                                            $   320,446    $   350,537
                                                             ===========    ===========


LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT):
-----------------------------------------------
Current Liabilities
     Accounts payable                                        $   264,548    $   222,473
     Accrued interest                                                 --         14,460
     Short-term advance                                           40,000             --
     Convertible notes                                                --        483,600
     Current maturities of capital lease obligations              18,127         13,407
                                                             -----------    -----------

     Total Current Liabilities                                   322,675        733,940

Long-term Liabilities
     Capital lease obligatons, less current maturities            12,835         30,962
                                                             -----------    -----------

     Total Liabilities                                           335,510        764,902
                                                             -----------    -----------

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: 54,812,824 issued and outstanding at
     December 31, 2007 and 41,600,000 at December 31, 2006        54,813         41,600
     Deferred Stock-Based Compensation                        (1,096,973)       (96,465)
     Other paid-in capital                                     2,437,816        158,400
     Additional paid-in capital                                  693,106        106,619
     Deficit accumulated during the development stage         (2,103,826)      (624,519)
                                                             -----------    -----------
     Total Stockholders' Equity (Deficit)                        (15,064)      (414,365)
                                                             -----------    -----------

Total Liabilities and Stockholders' Equity (Deficit)         $   320,446    $   350,537
                                                             ===========    ===========


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

                                              F-2
<PAGE>

                            SMOKY MARKET FOODS, INC.
                          (A Development Stage Company)

                            Statements of Operations
                            ------------------------

                                               APRIL 18, 2006     APRIL 18, 2006
                              YEAR ENDED    (INCEPTION) THROUGH    (INCEPTION)
                             DECEMBER 31,       DECEMBER 31,     TO DECEMBER 31,
                                 2007               2006              2007
                             ------------       ------------      ------------


Revenue                      $      6,947       $      3,145      $     10,092

Cost of Goods Sold                 12,425              2,878            15,303
                             ------------       ------------      ------------

Gross Profit (Loss)                (5,478)               267            (5,211)

Operating Expenses              1,418,136            599,062         2,017,198
                             ------------       ------------      ------------

Operating Loss                 (1,423,614)          (598,795)       (2,022,409)
                             ------------       ------------      ------------

Other Income (Expense)
    Interest Income                   887                 --               887
    Interest Expense              (56,580)           (25,724)          (82,304)
                             ------------       ------------      ------------

Other Expense - Net               (55,693)           (25,724)          (81,417)
                             ------------       ------------      ------------

Net (Loss)                   $ (1,479,307)      $   (624,519)     $ (2,103,826)
                             ============       ============      ============

Basic and Diluted
    (Loss) per Share:
    Basic and Diluted        $     (0.032)      $     (0.014)     $     (0.048)
                             ============       ============      ============

    Weighted Average
       Number of Shares        46,388,636         43,798,268        43,798,268
                             ============       ============      ============


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



                                      F-3
<PAGE>

                                                    SMOKY MARKET FOODS, INC.
                                                  (A Development Stage Company)

                                               Statements of Stockholders' Deficit
                                               -----------------------------------

                                                                                                         ACCUMULATED
                                        COMMON STOCK           DEFERRED        OTHER      ADDITIONAL     DURING THE
                                 -------------------------   STOCK-BASED      PAID-IN       PAID-IN      DEVELOPMENT       TOTAL
                                    SHARES       AMOUNT      COMPENSATION     CAPITAL       CAPITAL         STAGE        (DEFICIT)
                                 -----------   -----------   -----------    -----------   -----------    -----------    -----------

BALANCE, APRIL 18, 2006
  (INCEPTION)                             --   $        --   $        --    $        --   $        --    $        --    $        --

Common shares issued to
  related party Smoky Systems,
  LLC                             40,000,000        40,000            --             --            --             --         40,000
Common shares issued to
  officers/directors                 300,000           300            --         29,700            --             --         30,000
Common shares issued to
  supplier                            50,000            50            --          4,950            --             --          5,000
Common shares issued to
  financial consultant             1,250,000         1,250            --        123,750            --             --        125,000
Issuance of 1,425,000 stock
  options to officers/
  directors                               --            --      (106,619)            --       106,619             --             --
Amortization of stock-based
  compensation                            --            --        10,154             --            --             --         10,154
Net (Loss) for the period
  4/18/06 to 12/31/06                     --            --            --             --            --       (624,519)      (624,519)
                                 -----------   -----------   -----------    -----------   -----------    -----------    -----------

BALANCE, DECEMBER 31, 2006        41,600,000        41,600       (96,465)       158,400       106,619       (624,519)      (414,365)

Common shares issued to
  financial consultant               100,000           100            --          9,900            --             --         10,000
Common shares issued to an
  individual for endorsement
  rights                             500,000           500       (50,000)        49,500            --             --             --
Common shares issued to an
  individual for consulting
  services                            25,000            25            --          2,475            --             --          2,500
Common shares issued to the
  CEO as compensation              1,500,000         1,500            --        148,500            --             --        150,000
Issuance of 425,000 options to
  the CEO as compensation                 --            --       (30,983)            --        30,983             --             --
Valuation of common stock
  conversion priviledges to
  convertible debtholders                 --            --      (336,158)            --       336,158             --             --
Valuation of warrants issued
  to convertible debtholders              --            --      (219,346)            --       219,346             --             --
Common shares issued for cash        628,571           629            --        301,371            --             --        302,000
Common shares issued to
  financial consultant for
  investor relations services        400,000           400      (192,000)       191,600            --             --             --
Conversion of convertible debt
  to common shares                 8,445,509         8,445            --        836,107            --             --        844,552
Common stock issued to
  existing shareholder in
  exchange for leasehold
  rights for pilot store             228,571           229            --         79,771            --             --         80,000
Common stock issued in
  satisfaction of open trade
  payable                             10,173            10            --          1,567            --             --          1,577
Commons stock issued to
  various individuals for
 future store opening/
  promotion                        1,375,000         1,375      (660,000)       658,625            --             --             --
Amortization of stock-based
  compensation                            --            --       487,979             --            --             --        487,979
Net (Loss) for the Year Ended
  December 31, 2007                       --            --            --             --            --     (1,479,307)    (1,479,307)
                                 -----------   -----------   -----------    -----------   -----------    -----------    -----------

 BALANCE, DECEMBER 31, 2007       54,812,824   $    54,813   $(1,096,973)   $ 2,437,816   $   693,106    $(2,103,826)   $   (15,064)
                                 ===========   ===========   ===========    ===========   ===========    ===========    ===========


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


                                                              F-4
<PAGE>

                                  SMOKY MARKET FOODS, INC.
                               (A Development Stage Company)

                                  Statements of Cash Flows
                                  ------------------------

                                                                       APRIL 18
                                                                      (INCEPTION)   APRIL 18, 2006
                                                       YEAR ENDED      THROUGH        (INCEPTION)
                                                      DECEMBER 31,   DECEMBER 31,   TO DECEMBER 31,
                                                          2007           2006            2007
                                                       -----------    -----------    -----------

Operating Activities
     Net (Loss)                                        $(1,479,307)   $  (624,519)   $(2,103,826)
     Stock-based financing and compensation costs          650,480        168,904        819,384
     Depreciation                                           34,405         19,055         53,460
     Accrued interest converted to common stock             58,451             --         58,451
     Adjustments to reconcile net loss to cash used
     in operating activities:
       (Increase) decrease in accounts receivable            1,877         (1,877)            --
       (Increase) decrease in inventory                      9,444        (13,694)        (4,250)
       Increase (decrease) in accounts payable              43,652        222,473        266,125
       Increase (decrease) in accrued interest             (14,460)        14,460             --
                                                       -----------    -----------    -----------

Net Cash (Used) by Operating Activities                   (695,458)      (215,198)      (910,656)
                                                       -----------    -----------    -----------

Investing Activities
     Purchase of property and equipment                    (16,720)      (151,170)      (167,890)
     Deposits and other asset purchases                    (10,800)        (2,683)       (13,483)
                                                       -----------    -----------    -----------

Net Cash (Used) by Investing Activities                    (27,520)      (153,853)      (181,373)
                                                       -----------    -----------    -----------

Financing Activities
     Proceeds from issuance of common stock                302,000          1,250        303,250
     Proceeds from issuance of convertible notes           302,500        483,600        786,100
     Proceeds from (payments on) short term                 40,000         (7,679)        32,321
       promissory note - net
     Principal payments on capital lease obligations       (13,407)            --        (13,407)
                                                       -----------    -----------    -----------

Cash Provided by Financing Activities                      631,093        477,171      1,108,264
                                                       -----------    -----------    -----------

Net Increase (Decrease) in Cash                            (91,885)       108,120         16,235

Cash, Beginning of Period                                  108,120             --             --
                                                       -----------    -----------    -----------

Cash, End of Period                                    $    16,235    $   108,120    $    16,235
                                                       ===========    ===========    ===========


Supplemental Information:
     Interest Paid                                     $    12,977    $    11,264    $    24,241

     Income Taxes Paid                                 $        --    $        --    $        --

     Intangible Assets Acquired in Exchange
       for Common Stock                                $    85,000    $    40,000    $   125,000

     Convertible Promissory Notes and Accrued
       Interest Exchanged for Common Stock             $   844,552    $        --    $        --


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


                                              F-5
</TABLE>
<PAGE>

                            SMOKY MARKET FOODS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Smoky Market Foods, Inc, (or "the Company") is a development stage company that
was incorporated on April 18, 2006 under the laws of the State of Nevada.

The Company intends to engage in the development and operation of fast service
casual restaurants. The restaurants will feature proprietary menu items and
emphasize the preparation of food with high quality ingredients developed under
the Smoky Market(TM) brand, as well as unique recipes and special seasonings to
provide appealing, tasty and attractive food at competitive prices. Traditional
restaurants will feature dine-in, carryout and, possibly in some instances,
drive-thru or delivery service. Non-traditional units are expected to include
express locations and kiosks which have a more limited menu and operate in
non-traditional locations such as airports, gasoline service stations,
convenience stores, stadiums, amusement parks and colleges, where a full-scale
traditional outlet would not be practical or efficient. The company may also
engage in other retail or wholesale distribution strategies intended to exploit
the Smoky Market brand. As of the balance sheet date, the Company had minimal
operations and in accordance with Statements on Financial Accounting Standards
No. 7 is considered to be in the development stage.

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

The Company writes off accounts receivable against the bad debt allowance when
the Company determines a balance is uncollectible. As of December 31, 2007 and
2006, management determined that the bad debt allowance balance was
appropriately established at $-0-.


                                      F-6
<PAGE>

                            SMOKY MARKET FOODS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


Inventory

Inventory consists of Smoky Market food items and branded packaging. It is
valued at the lower of cost or market using the average cost method. Inventory
consisted of the following as of December 31:

                                                       2007               2006
                                                      -------            -------

         Food                                         $    --            $12,269
         Branded Packaging                              4,250              1,425
                                                      -------            -------
                                                      $ 4,250            $13,694
                                                      =======            =======


Property and Equipment

Property and equipment are stated at cost and are being depreciated using the
straight-line method over the assets' estimated economic lives, which range from
3 to 25 years. Property and equipment were as December 31:

                                                   2007                2006
                                                 ---------          ---------

         Processing Equipment                    $ 104,771          $ 104,771
         Smallwares                                  3,765              3,765
         Transportation Equipment                   10,077             10,077
         Operating Equipment                        44,382             29,512
         Office Equipment                           29,112             27,262
         Software                                   27,831             27,831
                                                 ---------          ---------
                                                   219,938            203,218
         Accumulated depreciation                  (53,460)           (19,055)
                                                 ---------          ---------
                                                 $ 166,478          $ 184,163
                                                 =========          =========

Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions
and pertinent information available to management as of December 31, 2007. 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. The carrying value of the Company's long-term debt and capitalized leases
approximated their fair value based on the current market conditions for similar
debt instruments.

                                      F-7
<PAGE>

                            SMOKY MARKET FOODS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


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. As of December 31, 2007,
management believes that there is no impairment of long-lived assets. Intangible
assets were as follows at December 31:

                                                           2007            2006
                                                         --------       --------

         License to Smoky Market brand                   $ 40,000       $ 40,000
           and cooking technology
         Lease rights to restaurant                        85,000             --
                                                         --------       --------
                                                         $125,000       $ 40,000
                                                         ========       ========

Revenue Recognition

As of December 31, 2007, the Company was still in the development stage. As
such, the only revenue consisted of minimal amounts of ecommerce sales. Such
sales are recognized at the time of shipment.

Segment Information

The Company follows Statement of Financial Accounting Standards (SFAS) 131,
"Disclosure about Segments of an Enterprise and Related Information". Certain
information is disclosed, per SFAS 131, 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

The Company follows SFAS 128, "Earnings per 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 year. 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.

                                      F-8
<PAGE>

                            SMOKY MARKET FOODS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


Stock-Based Compensation

The Company has issued its common shares, warrants and options 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. All stock-based compensation is measured and recorded
in accordance with Financial Accounting Standard 123R.

Deferred stock-based compensation was as follows as of December 31:

                                                         2007             2006
                                                       ----------     ----------
         Deferred stock-based compensation             $1,595,106     $  106,619
         Less amortization                                498,133         10,154
                                                       ----------     ----------
                                                       $1,096,973     $   96,465
                                                       ==========     ==========

Income Taxes

The Company provides for income taxes under Statement of Financial Accounting
Standards NO. 109, "Accounting for Income Taxes." SFAS No. 109 requires the use
of an asset and liability approach in accounting for income taxes.

SFAS No. 109 requires the reduction of deferred tax assets by a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized. No
provision for income taxes is included in the statement due to its immaterial
amount, net of the allowance account, based on the likelihood of the Company to
utilize the loss carry-forward.

                                      F-9
<PAGE>

                            SMOKY MARKET FOODS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


Recent Pronouncements

SFAS 155 - `Accounting for Certain Hybrid Financial Instruments--an amendment of
FASB Statements No. 133 and 140'

This Statement, issued in February 2006, amends FASB Statements No. 133,
Accounting for Derivative Instruments and Hedging Activities, and No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities. This Statement resolves issues addressed in Statement 133
Implementation Issue No. D1, "Application of Statement 133 to Beneficial
Interests in Securitized Financial Assets."

This Statement:

         a.   Permits fair value remeasurement for any hybrid financial
              instrument that contains an embedded derivative that otherwise
              would require bifurcation
         b.   Clarifies which interest-only strips and principal-only strips are
              not subject to the requirements of Statement 133
         c.   Establishes a requirement to evaluate interests in securitized
              financial assets to identify interests that are freestanding
              derivatives or that are hybrid financial instruments that contain
              an embedded derivative requiring bifurcation
         d.   Clarifies that concentrations of credit risk in the form of
              subordination are not embedded derivatives
         e.   Amends Statement 140 to eliminate the prohibition on a qualifying
              special-purpose entity from holding a derivative financial
              instrument that pertains to a beneficial interest other than
              another derivative financial instrument.

This Statement is effective for all financial instruments acquired or issued
after the beginning of our first fiscal year that begins after September 15,
2006.

The fair value election provided for in paragraph 4(c) of this Statement may
also be applied upon adoption of this Statement for hybrid financial instruments
that had been bifurcated under paragraph 12 of Statement 133 prior to the
adoption of this Statement. Earlier adoption is permitted as of the beginning of
our fiscal year, provided we have not yet issued financial statements, including
that fiscal year. Provisions of this Statement may be applied to instruments
that we hold at the date of adoption on an instrument-by-instrument basis.
The Company is currently reviewing the effects of adoption of this statement but
it is not expected to have a material impact on our financial statements.

SFAS 156 - `Accounting for Servicing of Financial Assets--an amendment of FASB
Statement No. 140'

This Statement, issued in March 2006, amends FASB Statement No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities, with respect to the accounting for separately recognized servicing
assets and servicing liabilities. This Statement:

                                      F-10
<PAGE>

                            SMOKY MARKET FOODS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


         1.   Requires an entity to recognize a servicing asset or servicing
              liability each time it undertakes an obligation to service a
              financial asset by entering into a servicing contract in certain
              situations.
         2.   Requires all separately recognized servicing assets and servicing
              liabilities to be initially measured at fair value, if
              practicable.
         3.   Permits an entity to choose either the amortization method or the
              fair value measurement method for each class of separately
              recognized servicing assets and servicing liabilities.
         4.   At its initial adoption, permits a one-time reclassification of
              available-for-sale securities to trading securities by entities
              with recognized servicing rights, without calling into question
              the treatment of other available-for-sale securities under
              Statement 115, provided that the available-for-sale securities are
              identified in some manner as offsetting the entity's exposure to
              changes in fair value of servicing assets or servicing liabilities
              that a servicer elects to subsequently measure at fair value.
         5.   Requires separate presentation of servicing assets and servicing
              liabilities subsequently measured at fair value in the statement
              of financial position and additional disclosures for all
              separately recognized servicing assets and servicing liabilities.

Adoption of this Statement is required as of the beginning of the first fiscal
year that begins after September 15, 2006. The adoption of this statement is not
expected to have a material impact on our 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.

The Company has experienced losses since inception which relate mainly to the
Company's search for debt and equity financing necessary to carry out its
business plan. The Company incurred a net loss of $1,479,307 for the year ended
December 31, 2007 and a net loss of $624,519 for the period of April 18, 2006
(Inception) though December 31, 2006. At December 31, 2007, the Company had a
working capital deficit of $302,190. In addition, the Company had no material
revenue generating operations since inception.

The Company's ability to continue as a going concern is contingent upon its
ability to obtain debt and/or capital financing.

                                      F-11
<PAGE>

                            SMOKY MARKET FOODS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


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.  CONVERTIBLE DEBT

The Company had issued a series of convertible promissory notes to multiple
private investors. Through these efforts, the Company raised $302,500 and
$483,600 during the year ended December 31, 2007 and period ended December 31,
2006, respectively, for a total of for a total of $786,100. The notes contained
stated interest at an annual 9% rate. During 2007, all $786,100 of the notes and
$58,452 in related interest, for a total balance of $844,552 were converted to
8,445,509 shares of common stock.


NOTE 4.  CAPITAL LEASE OBLIGATIONS

The Company assumed multiple lease obligations in the transaction described in
Note 7. The leases have been capitalized and are reflected as liabilities on the
balance sheet.

Future capital lease obligations were as follows at December 31, 2007:

         Minimum lease payments:
           2008                                                          $25,915
           2009                                                           14,321
                                                                         -------
           Total                                                          40,236
         Amounts representing interest                                     9,274
                                                                         -------
         Present value of minimum lease payments                          30,962
         Current portion                                                  18,127
                                                                         -------
         Long-term portion                                               $12,835
                                                                         =======


NOTE 5.  SHORT-TERM ADVANCE

The short-term advance consists of cash loaned to the company. The loan was an
unsecured, non-interest bearing, unsecured advance with no formal repayment
terms.

                                      F-12
<PAGE>

                            SMOKY MARKET FOODS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


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
$.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.
This transaction is discussed more fully in Note 7 below.

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 at $.001 per share. 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. As of December 31, 2007, no preferred shares had been issued.


NOTE 7.  RELATED PARTY TRANSACTIONS

As discussed in Note 6, the Company issued 40,000,000 shares of common stock to
a related party, Smoky Systems, LLC in exchange for a license to certain assets.
The license entitles Smoky Market Foods, Inc. to the use of certain assets
developed by Smoky Systems, LLC, a related party. The licensed assets include
intellectual property such as trademarks, copyrights, telephone numbers, email
addresses, marketing collateral and other branded materials that will be
utilized by management to exploit the Smoky Market brand.

Management assigned a nominal value of $40,000 to such assets in this related
party transaction. The 40,000,000 shares were therefore issued at the $.001 par
value per share.

Subsequently in 2006, the Company purchased certain tangible assets from Smoky
Systems in a bulk asset purchase. The purchase was consummated at Smoky Systems,
LLC's book value, and is summarized as follows:

                                      F-13
<PAGE>

                            SMOKY MARKET FOODS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


         Property and equipment acquired                                $163,628
         Assumed capital lease obligations                                52,048
                                                                        --------
         Net purchase price                                             $111,580
                                                                        ========

NOTE 8.  COMMITMENTS

During the year ended December 31, 2007, the Company retained the services of a
consultant (the "Consultant") who is assisting the company in obtaining debt
financing and other corporate finance initiatives. The Consultant was granted
1,250,000 common shares as compensation under the terms of the agreement. The
fair value of such shares was reflected as an operating cost in the statement of
operations and were valued using the Black-Scholes Method. The Company has
offered to retain the Consultant in 2008 under similar terms. As of the date of
these financial statements, this proposed renewal has not been accepted by the
Consultant.

The Company has reserved 6,500,000 common shares for the exercise of stock
options and awards to be issued pursuant to the 2006 Stock Option Plan.
Information relating to options issued through December 31, 2007 under this plan
is as follows:


                                             Options and                Weighted
                                             Stock Awards                Average
                                              Available     Number of   Exercise
                                              for Grant      Shares       Price
                                             ----------    ----------   --------
Outstanding as of April 18, 2006 (Inception)         --            --         --
  Shares reserved                             6,500,000            --
  Options granted                            (1,462,500)    1,462,500   $   0.10
  Options exercised                                  --            --         --
  Options canceled                                   --            --         --
                                             ----------    ----------
Outstanding as of December 31, 2006           5,037,500     1,462,500   $   0.10
  Shares reserved                                    --            --         --
  Options granted                              (425,000)      425,000         --
  Stock awards granted                       (1,775,000)    1,775,000        n/a
  Options exercised                                  --            --         --
  Options canceled                                   --            --         --
                                             ----------    ----------
Outstanding as of December 31, 2007           2,837,500     3,662,500   $   0.10
                                             ==========    ==========

                                      F-14
<PAGE>


                            SMOKY MARKET FOODS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2007 AND 2006


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

         Expected stock price volatility                          75.0%
         Risk-free interest rate                                   4.7%
         Expected term (years)                                     7.00
         Weigted-aveage fair value of stock options granted     $ 0.073


The Company has also issued warrants in connection with a convertible debt
offering. A summary of the associated warrants is as follows:

                                                                 WEIGHTED
                                                                 AVERAGE
                                                                 EXERCISE
                                                  WARRANTS        PRICE
                                                  ---------      --------
Outstanding as of April 18, 2006 (Inception)             --            --
  Warrants granted                                4,296,000      $   0.10
  Warrants exercised                                     --            --
  Warrants canceled                                      --            --
                                                  ---------
OUTSTANDING AS OF DECEMBER 31, 2006               4,296,000      $   0.10
  Warrants granted                                3,565,000            --
  Warrants exercised                                                   --
  Warrants canceled                                      --            --
OUTSTANDING AS OF DECEMBER 31, 2007               7,861,000      $   0.10
                                                  =========


                                      F-15