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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
 
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 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.)
 9858 Clint Moore Road, Boca Raton, Fl
    
    33496(Address of principal executive offices)
    
    (Zip Code)
 (954) 993 -4703  (Registrants telephone number, including area code)
  þ o
   Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
  þ o




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ODIMO, INCORPORATED
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATION
    
    
    3ITEM 1. Financial Statements
    
    
    3ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    15ITEM 4T. Controls and Procedures
    
    
    15PART II. OTHER INFORMATION
    
    
    16ITEM 6. Exhibits
    
    
    16SIGNATURES
    
    
    19EX-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
 ODIMO, INCORPORATED
BALANCE SHEETS
(in thousands, except par value)
 June 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    12
    
    
    $
    1Prepaid expense and other current assets
    
    
    17
    
    
    
    17Total
    
    $
    29
    
    
    $
    18LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)Current Liabilities:Accounts payable
    
    $
    283
    
    
    $
    304Accrued interest to related party
    
    
    
    
    
    
    38Accrued liabilities
    
    
    10
    
    
    
    25Total current liabilities
    
    
    293
    
    
    
    367Note Payable to Related Party
    
    
    
    
    
    
    515Commitments, Contingencies and Subsequent EventsStockholders Equity (Deficiency):Preferred stock, $0.001 par value, 50 million shares
authorized, none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value, 300 million shares
authorized, 7,753 and 7,039 shares issued and outstanding
    
    
    7
    
    
    
    7Additional paid-in capital
    
    
    104,382
    
    
    
    103,705Accumulated deficit
    
    
    (104,653
    )
    
    
    (104,576
    )Total stockholders equity (deficiency)
    
    
    (264
    )
    
    
    (864
    )Total
    
    $
    29
    
    
    $
    18
  3




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ODIMO, INCORPORATED
 STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30, 2008
    
    
    June 30, 2007
    
    
    June 30, 2008
    
    
    June 30, 2007Commissions
    
    $
    
    
    
    $
    1
    
    
    $
    1
    
    
    $
    14Total Revenue
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    14Operating Expenses:General and administrative
    
    
    27
    
    
    
    212
    
    
    
    77
    
    
    
    768Depreciation and amortization
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    6Total operating expenses
    
    
    27
    
    
    
    214
    
    
    
    77
    
    
    
    774Loss from Operations
    
    
    (27
    )
    
    
    (213
    )
    
    
    (76
    )
    
    
    (760
    )Other Income (Expense):Gain on sale of assets
    
    
    
    
    
    
    424
    
    
    
    0
    
    
    
    424Interest expense, net
    
    
    
    
    
    
    (9
    )
    
    
    
    
    
    
    (17
    )
    
    
    
    415
    
    
    
    
    
    
    
    407Net Income (Loss)
    
    $
    (27
    )
    
    $
    202
    
    
    $
    (76
    )
    
    $
    (353
    )Net Income (Loss) per Common ShareBasic and diluted
    
    $
    (0.00
    )
    
    $
    0.03
    
    
    $
    (0.01
    )
    
    $
    (0.05
    )Weighted Average Number of Shares:Basic and diluted
    
    
    7,753
    
    
    
    7,039
    
    
    
    7,620
    
    
    
    7,039
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ODIMO, INCORPORATED
STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 Six Months EndedJune 30,2008
    
    
    2007Cash Flows from Operating Activities:Net loss
    
    $
    (76
    )
    
    $
    (353
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation and amortization
    
    
    
    
    
    
    6Gain on sale of assets
    
    
    
    
    
    
    (424
    )Compensation contributed by officer
    
    
    14
    
    
    
    Changes in operating assets and liabilities:(Increase) decrease in:Deposits with credit card processing company
    
    
    
    
    
    
    79Escrow deposit
    
    
    
    
    
    
    30Prepaid expenses and other current assets
    
    
    (1
    )
    
    
    (3
    )Increase (decrease) in:Accounts payable
    
    
    (21
    )
    
    
    (287
    )Accrued liabilities
    
    
    (15
    )
    
    
    149Net cash used in operating activities
    
    
    (99
    )
    
    
    (803
    )Cash Flows from Investing Activities:Proceeds from sale of assets, net of expenses
    
    
    
    
    
    
    674Net cash provided by investing activities
    
    
    
    
    
    
    674Cash Flows from Financing Activities:Proceeds from notes payable to related party, net of repayments
    
    
    10
    
    
    
    248Payments on note payable related party
    
    
    
    
    
    
    (30
    )Proceeds from sale of common stock
    
    
    100
    
    
    
    Net cash provided by financing activities
    
    
    110
    
    
    
    218Net Increase in Cash and Cash Equivalents
    
    
    11
    
    
    
    89Cash and Cash Equivalents, Beginning
    
    
    1
    
    
    
    75Cash and Cash Equivalents, Ending
    
    $
    12
    
    
    $
    164Supplemental Disclosures of Cash Flow Information:Cash paid during the period for:Interest
    
    $
    
    
    
    $
    17Forgiveness of note payable to related party
    
    $
    563
    
    
    $
    
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ODIMO, INCORPORATED
STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY)
Six Months Ended June 30, 2008
(in thousands, except per share data)
(Unaudited)
 Additional
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid-In
    
    
    Accumulated
    
    
    StockholdersShares
    
    
    Par Value
    
    
    Capital
    
    
    Deficit
    
    
    Equity (Deficiency)BALANCE-December 31, 2007
    
    
    7,039
    
    
    $
    7
    
    
    $
    103,705
    
    
    $
    (104,576
    )
    
    $
    (864
    )Sale of common stock
    
    
    714
    
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    100Forgiveness of note payable and accrued interest to related party
    
    
    
    
    
    
    
    
    
    
    563
    
    
    
    
    
    
    
    563Compensation contributed by officer
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    14Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (77
    )
    
    
    (77
    )BALANCE-June 30, 2008
    
    
    7,753
    
    
    $
    7
    
    
    $
    104,382
    
    
    $
    (104,653
    )
    
    $
    (264
    )
 6




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ODIMO, INCORPORATED
Notes to Unaudited Financial Statements
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Business
 Basis of Presentation
 Use of Estimates
 Recently
Issued Accounting Standards
    7




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2. GOING CONCERN CONSIDERATIONS
    3. STOCK OPTION PLAN
  June 30, 2008WeightedAverageExerciseOptions
    
    
    PriceOutstanding at beginning of year
    
    
    131
    
    
    $
    24.43Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Canceled
    
    
    (105
    )
    
    
    (8.99
    )Outstanding at
June 30, 2008
    
    
    26
    
    
    $
    24.48Options exercisable at
June 30, 2008
    
    
    26      $
    
    
    
    24.48
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4. INCOME TAXES
  5. RELATED PARTY TRANSACTIONS
 Note Payable to Related Party
  December 31, 2007Pro-FormaHistorical
    
    
    Adjustments
    
    
    Pro-FormaTotal Assets
    
    $
    18
    
    
    
    
    
    
    $
    18Total Current Liabilities
    
    $
    367
    
    
    $
    (38
    )
    
    $
    329Note Payable to Related
Party
    
    $
    515
    
    
    $
    (515
    )
    
    $
    Stockholders Deficiency
    
    $
    (864
    )
    
    $
    (553
    )
    
    $
    (311
    )
 Sale of Common Stock
 Compensation to Officer
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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.
 Non-Operating Shell Company
  Cessation of Online Retailing Business of the Company
   Going Concern
    10




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Comparison of Quarter Ended June 30, 2008 to Quarter Ended June 30, 2007
 Total Revenue
 General and Administrative Expenses.
 Interest Expense, Net.
 Net Loss.
 Comparison of Six Months Ended June 30, 2008 to Six Months Ended June 30, 2007
 Total Revenue
 General and Administrative Expenses.
 Depreciation and Amortization.
 Interest Expense, Net.
 11




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Net Loss.
 Liquidity and Capital Resources
   Discussion of Cash Flows
 
   Outstanding Stock Options
  Liquidity Sources
   12




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Off Balance Sheet Arrangements
  Critical Accounting Policies and Estimates
   Income Taxes
  13




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Recently Issued Accounting Standards
       14




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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
  
 ITEM 4T. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
   Changes in Internal Control Over Financial Reporting.
  15




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PART II. OTHER INFORMATION
 
 ITEM 6. Exhibits
 (a) Exhibits
 Exhibit
    
    Description2.1 (1)
    
    Asset Purchase Agreement among registrant and Ashford.com, Inc. dated December
6, 20023.1 (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.10.3.2 (1)
    
    Security Agreement dated December 6, 2002 between the registrant and GSI
Commerce Solutions, Inc., as assignee10.3.3 (1)
    
    Patents, Trademarks, Copyrights and Licenses 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
Grous10.5.5 (1)
    
    Lock-up Agreement dated July 12, 2004, between the registrant and Alan Lipton10.5.6 (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 Lipton10.6 (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.
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Exhibit
    
    Description10.8.4 (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.10.11 (1)
    
    First Amended and Restated Note dated as of November 13, 2004 in favor of
Silicon Valley Bank by the registrant and its subsidiaries Ashford.com, Inc.
and D.I.A. Marketing, Inc.10.12 (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 LP10.13 (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 support.10.17 (5)
    
    Termination Agreement dated March 29, 2006 by and between Odimo Incorporated
and SDG Marketing, Inc.10.18 (5)
    
    Third Amendment to Loan and Security Agreement dated March 30, 2006, by and
among Silicon Valley Bank, Odimo Incorporated, Ashford.com, Inc. and D.I.A.
Marketing, Inc.10.19 (6)
    
    Asset Purchase Agreement dated as of May 11, 2006 by and among Ice.com, Inc.,
Ice Diamond, LLC, and Odimo Incorporated.10.20 (6)
    
    Transition Services Agreement dated as of this May 11, 2006, by and between
Ice Diamond, LLC, Ice.com, Inc., and Odimo Incorporated.10.21 (6)
    
    Separation Agreement dated May 11, 2006 by Odimo Incorporated and Alan Lipton.10.22 (6)
    
    Amendment No. 1 to Employment Contract dated as of May 11, 2006, by and among
Odimo Incorporated and Jeffrey Kornblum.10.23 (7)
    
    Modification and Settlement Agreement dated November 6, 2006 by and between
IBB Realty, LLC and Odimo Incorporated.10.24 (8)
    
    Asset Purchase Agreement dated as of December 1, 2006 by and among Odimo
Incorporated, Worldofwatches.com, Inc. and ILS Holdings, LLC.10.25 (9)
    
    Separation Agreement dated as of January 16, 2007 by and among Odimo
Incorporated and Jeff Kornblum.10.26 (9)
    
    Separation Agreement dated as of January 16, 2007 by and among Odimo
Incorporated and George Grous.10.27 (9)
    
    Termination Agreement dated as of January 15, 2007 by and among Odimo
Incorporated and Amerisa Kornblum.10.30 (11)
    
    8% Secured Promissory Note in the Principal Amount of $300,00010.31 (11)
    
    Amended and Restated 8% Promissory Note in the Principal Amount of $500,00010.32 (11)
    
    8% Demand Promissory Note in the Principal Amount of $30,00010.33 (10)
    
    Asset Purchase Agreement dated as of April 6, 2007 by and among Odimo
Incorporated, Ashford.com, Inc. and Luxi Group, LLC.10.34 (12)
    
    Amended and Restated 8% Promissory Note in the Principal Amount of $525,00014.1 (2)
    
    Code of Business Conduct and Ethics
 17




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Exhibit
    
    Description16.1 (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 (12)
    
    Consent of Rachlin LLP31.1 (4)
    
    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 (4)
    
    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 (4)
    
    Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 200232.2 (4)
    
    Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
 
 (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 June 30, 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)
    
    Filed herewith.(5)
    
    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 June 30, 2006 and is
incorporated herein by reference.(6)
    
    This exhibit was previously filed as an exhibit to the Form 8-K dated
May 11, 2006 filed with the Securities and Exchange Commission on May
12, 2006 and is incorporated herein by reference.(7)
    
    This exhibit was previously filed as and exhibit to the Quarterly
Report on form 10-Q for the period ended September 30, 2006 filed
with the Securities and Exchange Commission on November 14, 2006 and
is incorporated herein by reference.(8)
    
    This exhibit was previously filed as an exhibit to the Form 8-K dated
December 1, 2006 filed with the Securities and Exchange Commission on
December 4, 2006 and is incorporated herein by reference.(9)
    
    This exhibit was previously filed as an exhibit to the Form 8-K dated
January 11, 2007 filed with the Securities and Exchange Commission on
January 18, 2007 and is incorporated herein by reference.(10)
    
    This exhibit was previously filed as an exhibit to the Form 8-K dated
April 11, 2007 filed with the Securities and Exchange Commission on
April 12, 2007 and is incorporated herein by reference.(11)
    
    This exhibit was previously filed as an exhibit to the Annual Report
on Form 10-K for the year ended December 31, 2006 filed with the
Securities and Exchange Commission on April 2, 2007 and is
incorporated herein by reference.(12)
    
    This exhibit was previously filed as an exhibit to the Annual Report
on Form 10-K for the year ended December 31, 2007filed with the
Securities and Exchange Commission on June 30, 2008 and is
incorporated herein by reference. 18




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SIGNATURES
  ODIMO INCORPORATED
RegistrantDate: August 13, 2008
    /s/ Amerisa KornblumAmerisa KornblumChief Financial Officer (Principal Financial Officer
and Duly Authorized Officer) 19