##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 000-51161
 Odimo Incorporated
 (Exact name of registrant as specified in its charter)
 Delaware
    
    22-3607813(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 14051 N.W. 14th Street, Sunrise, Florida
    
    33323(Address of principal executive offices)
    
    (Zip Code)
 (954) 835-2233
 (Registrants telephone number, including area code)
 x o
  o o x
 o x




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##### Table of Contents



ODIMO INCORPORATED
TABLE OF CONTENTS
 PART I. FINANCIAL INFORMATION
    
    
    1ITEM 1. Financial Statements
    
    
    1ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    26ITEM 4. CONTROLS AND PROCEDURES
    
    
    27PART II. OTHER INFORMATION
    
    
    27ITEM 1. LEGAL PROCEEDINGS
    
    
    27ITEM 1A. RISK FACTORS
    
    
    28ITEM 6. EXHIBITS
    
    
    28SIGNATURES
    
    
    32EX-10.22 Modification and Settlement AgreementEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO




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PART I. FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements
 1




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ODIMO, INCORPORATED AND SUBSIDIARIES
 September 30,
    
    
    December 31,2006
    
    
    2005(Unaudited)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    264
    
    
    $
    3,831Deposits with credit card processing company
    
    
    221
    
    
    
    755Escrow deposit
    
    
    106
    
    
    
    Accounts receivable
    
    
    101
    
    
    
    308Inventories
    
    
    1,810
    
    
    
    10,244Prepaid expense and other current assets
    
    
    1,041
    
    
    
    657Total current assets
    
    
    3,543
    
    
    
    15,795Property and Equipment, Net
    
    
    6,063
    
    
    
    6,927Intangible and Other Assets, Net
    
    
    406
    
    
    
    2,008Total
    
    $
    10,012
    
    
    $
    24,730LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    1,605
    
    
    $
    7,883Accounts payable to related parties
    
    
    8
    
    
    
    3,329Accrued liabilities
    
    
    148
    
    
    
    2,170Total liabilities
    
    
    1,761
    
    
    
    13,382Commitments and ContingenciesStockholders Equity:Preferred stock, $0.001 par value, 50 million shares
authorized, none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value, 300 million shares
authorized, 7,162 shares issued and outstanding
    
    
    7
    
    
    
    7Additional paid-in capital
    
    
    103,705
    
    
    
    103,705Accumulated deficit
    
    
    (95,461
    )
    
    
    (92,364
    )Total stockholders equity
    
    
    8,251
    
    
    
    11,348Total
    
    $
    10,012
    
    
    $
    24,730
 See notes to condensed consolidated financial statements. 2




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ODIMO, INCORPORATED AND SUBSIDIARIES
 Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2006
    
    
    September 30, 2005
    
    
    September 30, 2006
    
    
    September 30, 2005Net Sales
    
    $
    2,382
    
    
    $
    9,132
    
    
    $
    17,137
    
    
    $
    33,367Cost of Sales
    
    
    2,160
    
    
    
    7,091
    
    
    
    13,613
    
    
    
    25,261Gross Margin
    
    
    222
    
    
    
    2,041
    
    
    
    3,524
    
    
    
    8,106Operating Expenses:Fulfillment
    
    
    194
    
    
    
    580
    
    
    
    1,263
    
    
    
    2,273Marketing
    
    
    123
    
    
    
    1,092
    
    
    
    2,235
    
    
    
    4,657General and administrative
    
    
    1,813
    
    
    
    2,954
    
    
    
    7,091
    
    
    
    8,007Depreciation and amortization
    
    
    1,019
    
    
    
    956
    
    
    
    2,919
    
    
    
    2,666Total operating expenses
    
    
    3,149
    
    
    
    5,582
    
    
    
    13,508
    
    
    
    17,603Loss from Operations
    
    
    (2,927
    )
    
    
    (3,541
    )
    
    
    (9,984
    )
    
    
    (9,497
    )Other Income (Expense):Gain on sale of assets
    
    
    
    
    
    
    
    
    
    
    6,904
    
    
    
    Interest expense, net
    
    
    8
    
    
    
    10
    
    
    
    (17
    )
    
    
    (41
    )8
    
    
    
    10
    
    
    
    6,887
    
    
    
    (41
    )Net Loss
    
    
    (2,919
    )
    
    
    (3,531
    )
    
    
    (3,097
    )
    
    
    (9,538
    )Dividends to Preferred Stockholders
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (832
    )Net Loss Attributable to Common Stockholders
    
    $
    (2,919
    )
    
    $
    (3,531
    )
    
    $
    (3,097
    )
    
    $
    (10,370
    )Net Loss per Common Share Attributable
to Common Stockholders:Basic and diluted
    
    $
    (0.41
    )
    
    $
    (0.49
    )
    
    $
    (0.43
    )
    
    $
    (1.72
    )Weighted Average Number of Shares:Basic and diluted
    
    
    7,162
    
    
    
    7,162
    
    
    
    7,162
    
    
    
    6,013
 See notes to condensed consolidated financial statements. 3




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ODIMO, INCORPORATED AND SUBSIDIARIES
 Nine Months EndedSeptember 30,2006
    
    
    2005Cash Flows from Operating Activities:Net loss
    
    $
    (3,097
    )
    
    $
    (9,538
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation and amortization
    
    
    2,919
    
    
    
    2,666Gain on sale of assets
    
    
    (6,904
    )
    
    
    Amortization of supply agreement
    
    
    206
    
    
    
    108Changes in operating assets and liabilities:(Increase) decrease in:Deposits with credit card processing company
    
    
    534
    
    
    
    217Escrow deposit
    
    
    (106
    )
    
    
    Accounts receivable
    
    
    207
    
    
    
    (158
    )Inventories
    
    
    5,105
    
    
    
    1,382Deposits with vendors
    
    
    
    
    
    
    167Prepaid expenses and other current assets
    
    
    (385
    )
    
    
    (68
    )Other assets
    
    
    46
    
    
    
    2,557Increase (decrease) in:Accounts payable
    
    
    (6,276
    )
    
    
    (5,035
    )Accounts payable to related parties
    
    
    8
    
    
    
    (2,242
    )Accrued liabilities
    
    
    (2,023
    )
    
    
    (2,075
    )Net cash used in operating activities
    
    
    (9,766
    )
    
    
    (12,019
    )Cash Flows from Investing Activities:Proceeds from sale of assets, net of expenses
    
    
    6,904
    
    
    
    Purchase of property and equipment
    
    
    (705
    )
    
    
    (2,795
    )Net cash provided by (used in) investing activities
    
    6,199
    
    
    (2,795
    )Cash Flows from Financing Activities:Net repayments under bank credit facility
    
    
    
    
    
    
    (9,282
    )Proceeds from exercise of warrants
    
    
    
    
    
    
    1,349Proceeds from issuance of common stock, net of expenses
    
    
    
    
    
    
    22,282Net cash provided by financing activities
    
    
    
    
    
    
    14,349Net Decrease in Cash and Cash Equivalents
    
    
    (3,567
    )
    
    
    (465
    )Cash and Cash Equivalents, Beginning
    
    
    3,831
    
    
    
    1,663Cash and Cash Equivalents, Ending
    
    $
    264
    
    
    $
    1,198Supplemental Disclosures of Cash Flow Information:Cash paid during the year for:Interest
    
    $
    24
    
    
    $
    76Supplemental Schedule of Non-Cash Investing and Financing Activities:Conversion of preferred stock into common stock
    
    $
    
    
    
    $
    3
 See notes to condensed consolidated financial statements. 4




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ODIMO INCORPORATED AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Business www.ashford.com www.worldofwatches.com.
 Basis of Presentation
 Use of Estimates
 Cash and Cash Equivalents
 Deposits with Credit Card Processing Company
 Software and Website Development Costs Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use Accounting for Web Site Development Costs
 2. GOING CONCERN CONSIDERATIONS
    5




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3. SALE OF ASSETS
 Sale of Diamond.com URL and Certain Assets www.diamond.com
 www.ashford.com www.worldofwatches.com
    6




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4. INVENTORIES
  September 30,
    
    
    December 31,2006
    
    
    2005Diamonds
    
    $
    
    
    
    $
    4,148Fine jewelry
    
    
    
    
    
    
    2,422Watches
    
    
    1,341
    
    
    
    2,592Luxury goods
    
    
    469
    
    
    
    1,082Total inventories
    
    $
    1,810
    
    
    $
    10,244
 5. PROPERTY AND EQUIPMENT
  EstimatedUseful Lives
    
    September 30,
    
    
    December 31,(in Years)
    
    2006
    
    
    2005Computers, software and equipment
    
    3
    
    $
    14,027
    
    
    $
    12,846Leasehold improvements
    
    4
    
    
    1,053
    
    
    
    1,196Furniture and fixtures
    
    5
    
    
    596
    
    
    
    596Automobiles
    
    4
    
    
    43
    
    
    
    4315,719
    
    
    
    14,681Less: accumulated depreciation
    
    
    
    
    (9,656
    )
    
    
    (8,516
    )6,063
    
    
    
    6,165Software development in process
    
    
    
    
    
    
    
    
    762Property and equipment  net
    
    
    
    $
    6,063
    
    
    $
    6,927
    6. STOCK OPTION PLAN
 Accounting for Stock Issued to Employees Accounting for Certain Transactions involving Stock
Compensation, an interpretation of APB Opinion No. 25
 Accounting for Stock-Based Compensation
 7




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Share-Based Payments
  September 30, 2006WeightedAverageExerciseOptions
    
    
    PriceOutstanding at beginning of year
    
    
    404
    
    
    $
    9.90Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Canceled
    
    
    (242
    )
    
    
    8.45Outstanding at September 30, 2006
    
    
    162
    
    
    $
    11.49Options exercisable at September
30, 2006
    
    
    162
    
    
    $
    11.49
  7. LEGAL PROCEEDINGS
  8. NOTICE OF DELISTING FROM NASDAQ
  8




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9. SUBSEQUENT EVENTS
 Letter of Intent
  Lease Termination
  9




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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion should be read in conjunction with Odimo Incorporateds (Odimo, the
Company, we, our, us,) Condensed Consolidated Financial Statements and the related Notes
contained elsewhere in this quarterly report on Form 10-Q . All statements in the following
discussion that are not reports of historical information or descriptions of current accounting
policy are forward-looking statements. Please consider our forward-looking statements in light of
the factors that may affect operating results set forth herein.
 Recent Events
  www.worldofwatches.com www.ashford.com www.worldofwatches.com
  www.ashford.com
 10




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Key Business Metrics
  Number of Orders
  Average Order Value
  Product Mix
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,Measure
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005Number of orders
    
    
    9,142
    
    
    
    23,279
    
    
    
    53,676
    
    
    
    92,040Average order value
    
    $
    285
    
    
    $
    445
    
    
    $
    349
    
    
    $
    409Product Mix:Watches
    
    
    84.3
    %
    
    
    38.8
    %
    
    
    48.9
    %
    
    
    36.3
    %Diamonds*
    
    
    
    %
    
    
    33.7
    %
    
    
    24.3
    %
    
    
    33.5
    %Jewelry*
    
    
    
    %
    
    
    15.9
    %
    
    
    17.9
    %
    
    
    18.0
    %Luxury goods
    
    
    15.7
    %
    
    
    11.6
    %
    
    
    8.9
    %
    
    
    12.2
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 
 *
    
    Through May 11, 2006.  Basis of Presentation
   11




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Results of Operations
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,(in thousands, except percentage data)
    
    
    (in thousands, except percentage data)% of Net
    
    
    
    
    
    
    % of Net
    
    
    
    
    
    
    % of Net
    
    
    
    
    
    
    % of Net2006
    
    
    Sales
    
    
    2005
    
    
    Sales
    
    
    2006
    
    
    Sales
    
    
    2005
    
    
    SalesNet sales
    
    $
    2,382
    
    
    
    100.0
    %
    
    $
    9,132
    
    
    
    100.0
    %
    
    $
    17,137
    
    
    
    100.0
    %
    
    $
    33,367
    
    
    
    100.0
    %Cost of sales
    
    
    2,160
    
    
    
    90.7
    
    
    
    7,091
    
    
    
    77.7
    
    
    
    13,613
    
    
    
    79.4
    
    
    
    25,261
    
    
    
    75.7Gross profit
    
    
    222
    
    
    
    9.3
    
    
    
    2,041
    
    
    
    22.3
    
    
    
    3,524
    
    
    
    20.6
    
    
    
    8,106
    
    
    
    24.3Operating expenses:Fulfillment
    
    
    194
    
    
    
    8.2
    
    
    
    580
    
    
    
    6.4
    
    
    
    1,263
    
    
    
    7.4
    
    
    
    2,273
    
    
    
    6.8Marketing
    
    
    123
    
    
    
    5.2
    
    
    
    1,092
    
    
    
    12.0
    
    
    
    2,235
    
    
    
    13.0
    
    
    
    4,657
    
    
    
    14.0General and
administrative
    
    
    1,813
    
    
    
    76.1
    
    
    
    2,954
    
    
    
    32.3
    
    
    
    7,091
    
    
    
    41.4
    
    
    
    8,007
    
    
    
    24.0Depreciation
and
amortization
    
    
    1,019
    
    
    
    42.8
    
    
    
    956
    
    
    
    10.5
    
    
    
    2,919
    
    
    
    17.0
    
    
    
    2,666
    
    
    
    8.0Total operating
expenses
    
    
    3,149
    
    
    
    132.2
    
    
    
    5,582
    
    
    
    61.1
    
    
    
    13,508
    
    
    
    78.8
    
    
    
    17,063
    
    
    
    52.8Loss from operations
    
    
    (2,927
    )
    
    
    (122.9
    )
    
    
    (3,541
    )
    
    
    38.8
    
    
    
    (9,984
    )
    
    
    (58.3
    )
    
    
    (9,497
    )
    
    
    (28.5
    )Gain on sale of
diamond and jewelry
business assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,904
    
    
    
    40.3
    
    
    
    
    
    
    
    Interest (expense)
income, net
    
    
    8
    
    
    
    0.3
    
    
    
    10
    
    
    
    0.1
    
    
    
    (17
    )
    
    
    (0.1
    )
    
    
    (41
    )
    
    
    (0.1
    )Net income (loss)
    
    $
    (2,919
    )
    
    
    (122.6)
    %
    
    $
    (3,531
    )
    
    
    (38.7)
    %
    
    $
    (3,097
    )
    
    
    (18.1)
    %
    
    $
    (9,538
    )
    
    
    (28.6)
    %
 12




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Comparison of Three Months Ended September 30, 2006 to Three Months Ended September 30, 2005
 Net Sales. www.diamond.com, www.ashford.com www.worldofwatches.com www.diamond.com www.ashford.com www.worldofwatches.com
  Gross Profit.
 Fulfillment.
 Marketing.
 General and Administrative Expenses.
 Depreciation and Amortization.
 13




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Interest Income.
 Net Loss.
 Comparison of Nine Months Ended September 30, 2006 to Nine Months Ended September 30, 2005
 Net Sales. www.diamond.com www.diamond.com www.worldofwatches.com www.ashford.com www.worldofwatches.com www.ashford.com
  Gross Profit.
 Fulfillment.
 Marketing.
 14




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General and Administrative Expenses.
 Depreciation and Amortization.
 Interest Expense, Net.
 Net Loss.
 Liquidity and Capital Resources
  Discussion of Cash Flows
    15




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www.ashford.com
 Liquidity Sources
    16




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Contractual Obligations
  Payments Due by PeriodLessThanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years(In thousands)Operating lease obligations*
    
    $
    1,032
    
    
    $
    61
    
    
    $
    486
    
    
    $
    486Total
    
    $
    1,032
    
    
    $
    61
    
    
    $
    486
    
    
    $
    486
 
 *
    
    In November 2006 we entered into an agreement with our landlord whereby we have been granted the
right to terminate and be released from any further liability under our lease for our corporate
headquarters in consideration for a one time lump sum payment to be made prior to January 1, 2007
of $500,000 and our release of our security deposit of approximately $80,000. We presently intend
to exercise this right in December 2006, vacate our current space and lease substantially reduced
and less expensive office space for our ongoing operations. Leasehold improvements with a book value of approximately $383,000 at September 30, 2006 will be
subject to an impairment charge upon termination of the lease agreement.  Outstanding Stock Options
  Critical Accounting Policies and Estimates
   17




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Revenue Recognition
   Inventories
  Goodwill and Other Long-Lived Assets
 Goodwill and Other Intangible Assets
 Accounting for the Impairment or Disposal
of Long-Lived Assets
 Income Taxes
  18




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Stock-Based Compensation
 Accounting for Stock Issued to Employees Accounting for Certain Transactions
involving Stock Compensation, an interpretation of APB Opinion No. 25
 Accounting for Stock-Based Compensation Share-Based Payments
 Recently Issued Accounting Standards
   19




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Cautionary Note Regarding Forward-Looking Statements
   Risk Factors
 Some of the statements in this report and in particular, statements found in Managements
Discussion and Analysis of Financial Condition and Results of Operations, that are not historical
in nature may constitute forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are often identified by the words will, should,
anticipate, believe, expect, intend, estimate, hope, or similar expressions. These
statements reflect managements current views with respect to future events and are subject to
risks and uncertainties. There are important factors that could cause actual results to differ
materially from those in forward-looking statements, many of which are beyond our control. These
factors, risks and uncertainties include, but are not limited to, the factors described below.
 Our actual results, performance or achievement could differ materially from those expressed
in, or implied by, these forward-looking statements, and accordingly, we can give no assurances
that any of the events anticipated by the forward-looking statements will transpire or occur, or if
any of them do so, what impact they will have on our results of operations or financial condition.
In view of these uncertainties, investors are cautioned not to place undue reliance on these
forward-looking statements. We expressly disclaim any obligation to publicly revise any
forward-looking statements that have been made to reflect the occurrence of events after the date
hereof.
 You should carefully consider the risks and uncertainties described below, together with all
other information included in this report, including the consolidated financial statements and the
related notes herein, as well as in our other public filings, before making any investment decision
regarding our stock. If any of the following risks actually occurs, our business, financial
condition, results of operations and future prospects would likely be materially and adversely
affected. In that event, the market price of our stock could decline and you could lose all or part
of your investment.
 20




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We are implementing a plan to cease our online retailing operations by December 31, 2006 and
thereafter will become a non-operating shell company.
 www.worldofwatches.com
   If it is determined that our sales of decoded watches violate state laws, we would be subject
to claims for damages, fines or other penalties or be unable to sell decoded watches in such
states.
  21




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Our costs have increased because we are a public company.
   We do not intend to pay dividends on our common stock, and, consequently, your only opportunity to
achieve a return on your investment is if the price of our common stock appreciates.
  Legal claims against us could be costly and result in substantial liabilities or the loss of
significant rights.
  22




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If we are required to collect sales and use taxes on the products we sell in jurisdictions outside
of Florida, we may be subject to liability for past sales and our future sales may decrease.
  Various legal rules and regulations related to privacy and the collection, dissemination and
security of personal information may adversely affect our marketing efforts.
  Consumers may prefer to purchase brand name watches and luxury goods from traditional retailers,
which would adversely affect our sales.
  
    
    concerns about buying expensive products without a physical storefront,
face-to-face interaction with sales personnel and the ability to physically handle and
examine products;
    
    concerns over counterfeit or substandard goods;
 23




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
    
    delivery times associated with Internet orders;
    
    product offerings that do not reflect consumer tastes and preferences;
    
    pricing that does not meet consumer expectations;
    
    concerns about the security of online transactions and the privacy of personal
information;
    
    delayed shipments, theft or shipments of incorrect or damaged products; and
    
    inconvenience associated with returning or exchanging purchased items.
 Risks Related to the Securities Markets and Ownership of Our Common Stock
 Our common stock was recently delisted from Nasdaq and is currently quoted for trading on the Over
the Counter Bulletin Board which may adversely impact the liquidity of our shares and reduce the
value of an investment in our stock.
  Our stock price has been and may continue to be volatile.
  
    
    actual or anticipated fluctuations in our results of operations;
    
    variance in our financial performance from the expectations of market analysts;
    
    developments with respect to intellectual property rights;
    
    announcements by us or our competitors of new product and service offerings,
significant contracts, acquisitions or strategic relationships;
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##### Table of Contents




    
    our involvement in litigation;
    
    our sale of common stock or other securities in the future;
    
    market conditions in our industry;
    
    recruitment or departure of key personnel;
    
    changes in market valuation or earnings of our competitors;
    
    the trading volume of our common stock;
    
    changes in the estimation of the future size and growth rate of our markets; and
    
    general economic or market conditions and other factors, including factors
unrelated to our operating performance or the operating performance of our competitors.
 Future sales of our common stock may cause our stock price to decline.
   Anti-takeover provisions in our organizational documents and Delaware law may discourage or prevent
a change in control, even if an acquisition would be beneficial to our stockholders, which could
affect our stock price adversely and prevent attempts by our stockholders to replace or remove our
current management.
  
    
    Our board of directors has the exclusive right to elect directors to fill a
vacancy created by the expansion of the board of directors or the resignation, death or
removal of a director, which prevents stockholders from being able to fill vacancies on
our board of directors.
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##### Table of Contents




    
    Our stockholders may not act by written consent. As a result, a holder or
holders controlling a majority of our capital stock would be able to take certain
actions only at a stockholders meeting.
    
    No stockholder may call a special meeting of stockholders. This may make it
more difficult for stockholders to take certain actions.
    
    Our stockholders may not remove a director without cause, and our certificate
of incorporation provides for a classified board of directors with staggered,
three-year terms. As a result, it could take up to three years for stockholders to
replace the entire board.
    
    Our certificate of incorporation does not provide for cumulative voting in the
election of directors. This limits the ability of minority stockholders to elect
director candidates.
    
    Stockholders must provide advance notice to nominate individuals for election
to the board of directors or to propose matters that can be acted upon at a
stockholders meeting. These provisions may discourage or deter a potential acquirer
from conducting a solicitation of proxies to elect the acquirers own slate of
directors or otherwise attempting to obtain control of our company.
    
    Our board of directors may issue, without stockholder approval, shares of
undesignated preferred stock. The ability to authorize undesignated preferred stock
makes it possible for our board of directors to issue preferred stock with voting or
other rights or preferences that could impede the success of any attempt to acquire us.
  If our officers, directors and principal stockholders choose to act together, they may be able to
control our management and operations, acting in their best interests and not in the best interests
of other stockholders.
  
 ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
  26




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##### Table of Contents



ITEM 4. Controls and Procedures
    
 PART II. OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
   27




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##### Table of Contents



ITEM 1A. Risk Factors
  
 ITEM 6. Exhibits
 (a) Exhibits
 ExhibitNumber
    
    Description2.1
    (1)
    
    Asset Purchase Agreement among registrant and Ashford.com, Inc. dated December 6, 2002.3.1
    (1)
    
    Amended and Restated Certificate of Incorporation3.2
    (1)
    
    Amended and Restated Bylaws4.1
    (1)
    
    Form of Specimen Stock Certificate4.2.1
    (1)
    
    Investors Rights Agreement dated November 18, 1999 by and between the registrant
and certain holders of the registrants capital stock4.2.2
    (1)
    
    Amended and Restated Registration Rights Agreement dated March 30, 2004
by and between the registrant and certain holders of the registrants capital stock10.1.1
    (1)
    
    Odimo Incorporated Amended and Restated Stock Incentive Plan10.1.2
    (1)
    
    Form of Stock Option Agreement pursuant to the Odimo Incorporated Stock Incentive
Plan10.2
    (1)
    
    Amended and Restated Series C Convertible Preferred Stock Purchase Agreement dated
as of March 30, 2004 between the registrant and SDG Marketing, Inc.10.3.1
    (1)
    
    Promissory Note dated December 6, 2002 by the registrant in favor of GSI Commerce
Solutions, Inc.
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##### Table of Contents



ExhibitNumber
    
    Description10.3.2
    (1)
    
    Security Agreement dated December 6, 2002 between the registrant and GSI Commerce
Solutions, Inc., as assignee10.4.1
    (1)
    
    Lease Agreement dated December 14, 1999 between the registrant and MDR Fitness Corp.10.4.2
    (1)
    
    Lease Amendment and Extension Agreement dated January 8, 2003 between the registrant
and MDR Fitness Corp.10.5.1
    (1)
    
    Employment Agreement dated July 12, 2004 between the registrant and Alan Lipton10.5.2
    (1)
    
    Employment Agreement dated July 12, 2004 between the registrant and Jeff Kornblum10.5.3
    (1)
    
    Employment Agreement dated July 12, 2004 between the registrant and Amerisa Kornblum10.5.4
    (1)
    
    Employment Agreement dated July 12, 2004 between the registrant and George Grous10.5.6
    (1)
    
    Lock-up Agreement dated July 12, 2004, between the registrant and Jeff Kornblum10.5.7
    (1)
    
    Lock-up Agreement dated July 12, 2004, between the registrant and Amerisa Kornblum10.5.8
    (1)
    
    Lock-up Agreement dated July 12, 2004, between the registrant and George Grous10.5.9
    (1)
    
    Lock-up Agreement dated July 12, 2004, between the registrant and Michael
DellArciprete10.5.10
    (1)
    
    Amended and Restated Employment Agreement dated August 27, 2004 between the
registrant and Alan Lipton10.5.11
    (5)
    
    Amendment No. 1 to Employment Contract dated as of May 11, 2006 between Jeff
Kornblum and the registrant10.6
    (1)
    
    Form of Indemnification Agreement between the registrant and each of its directors
and executive officers10.7
    (1)
    
    Supply Agreement dated March 30, 2004 between the registrant and SDG Marketing, Inc.10.8.1
    (1)
    
    Loan and Security Agreement dated as of July 31, 2004 by and among Silicon Valley
Bank, the registrant and its subsidiaries Ashford.com, Inc. and D.I.A. Marketing,
Inc.10.8.2
    (1)
    
    Revolving Promissory Note dated as of July 31, 2004 in favor of Silicon Valley Bank,
by the registrant and its subsidiaries Ashford.com, Inc. and D.I.A. Marketing, Inc.10.8.3
    (1)
    
    Intellectual Property Security Agreements dated as of July 31, 2004 in favor of
Silicon Valley Bank, by each of the registrant and Ashford.com, Inc.10.8.4
    (1)
    
    Unconditional Guaranties dated as of July 31, 2004 of Softbank Capital LP, Softbank
Capital Partners LP and Softbank Capital Advisors Fund LP10.9
    (1)
    
    Commercial Lease dated as of January 1, 2006 between the registrant and IBB Realty,
LLC10.10
    (1)
    
    First Loan Modification Agreement dated as of November 13, 2004 by and among Silicon
Valley Bank, the registrant and its subsidiaries Ashford.com, Inc. and D.I.A.
Marketing, Inc.
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##### Table of Contents



ExhibitNumber
    
    Description10.12
    (1)
    
    Amendment and Reaffirmation of Guaranty dated as of November 13, 2004 of Softbank
Capital, LP, Softbank Capital Partners, LP and Softbank Capital Advisors Fund LP.10.13
    (1)
    
    Second Loan Modification Agreement dated as of January 7, 2005 by and among Silicon
Valley Bank, the registrant and its subsidiaries Ashford.com, Inc. and D.I.A.
Marketing, Inc.10.14
    (1)
    
    Second Amended and Restated Note dated as of January 7, 2005 in favor of Silicon
Valley Bank, by the registrant and its subsidiaries Ashford.com, Inc. and D.I.A.
Marketing, Inc.10.15
    (1)
    
    Second Amendment and Reaffirmation of Guaranty dated as of January 7, 2005 of
Softbank Capital, L.P., Softbank Capital Partners, LP and Softbank Capital Advisors
Fund LP10.16
    (1)
    
    Confirmation letter dated January 7, 2005 from Softbank Capital Partners LP,
regarding financial support10.17
    (4)
    
    Termination Agreement dated March 29, 2006 by and between the registrant and SDG
Marketing, Inc.10.18
    (4)
    
    Third Amendment to Loan and Security Agreement dated March 30, 2006 by and among
Silicon Valley Bank the registrant and its subsidiaries Ashford.com, Inc. and D.I.A.
Marketing, Inc.10.19
    (5)
    
    Asset Purchase Agreement dated as of May 11 , 2006 by and among the registrant,
Ice.com, Inc. and Ice Acquisition, LLC10.20
    (5)
    
    Transition Services Agreement dated as of May11 , 2006 by and among the registrant,
Ice.com, Inc. and Ice Acquisition, LLC10.21
    (5)
    
    Separation Agreement dated as of May 11,, 2006 between Alan Lipton and the registrant10.22
    *
    
    Modification and Settlement Agreement dated November 6, 2006 between IBB Realty, LLC
and the registrant14.1
    (2)
    
    Code of Business Conduct and Ethics16.1
    (3)
    
    Letter of Deloitte & Touche LLP dated September 2, 200516.2
    (3)
    
    Letter of Rachlin Cohen & Holtz LLP dated September 2, 200521.1
    (1)
    
    Subsidiaries of Odimo Incorporated23.1
    (4)
    
    Consent of Deloitte & Touche LLP23.2
    (4)
    
    Consent of Rachlin Cohen & Holtz LLP31.1
    *
    
    Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a)
promulgated pursuant to the Securities Exchange Act of 1934, as amended31.2
    *
    
    Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a)
promulgated pursuant to the Securities Exchange Act of 1934, as amended32.1
    *
    
    Certification of Chief Executive Officer pursuant to Section 906 of t he
Sarbanes-Oxley Act of 200232.2
    *
    
    Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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*
    
    Filed herewith(1)
    
    This exhibit was previously filed as an exhibit to the Registration
Statement on Form S-1 (File No. 333-117400) originally filed with the
Securities and Exchange Commission on July 16, 2004, as amended
thereafter, and is incorporated herein by reference.(2)
    
    This exhibit was previously filed as an exhibit to the Annual Report
on Form 10-K for the year ended December 31, 2004 filed with the
Securities and Exchange Commission on March 31, 2005 and is
incorporated herein by reference.(3)
    
    This exhibit was previously filed as an exhibit to the Form 8-K dated
August 31, 2005 filed with the Securities and Exchange Commission on
September 2, 2005 and is incorporated herein by reference.(4)
    
    This exhibit was previously filed as an exhibit to the Annual Report
on Form 10-K for the year ended December 31, 2005 filed with the
Securities and Exchange Commission on March 30, 2006 and is
incorporated herein by reference.(5)
    
    This exhibit was previously filed as an exhibit to the Form 8-K dated
May 12, 2006 filed with the Securities and Exchange Commission on May
11, 2006 and is incorporated herein by reference. 31




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SIGNATURES
  ODIMO INCORPORATED
Registrant/s/ Amerisa KornblumDate: November 13, 2006
    Amerisa KornblumChief Financial Officer
(Principal Financial Officer and Duly Authorized
Officer) 32