##### Table of Contents



UNITED STATES
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, 2009
 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
    
    (I.R.S. Employer Identification No.)incorporation or organization)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
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 þ o




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##### 



ODIMO INCORPORATED
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONITEM
1. Condensed Financial Statements
    
    
    1ITEM 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    9ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    12ITEM 4T. Controls and Procedures
    
    
    13PART II. OTHER INFORMATIONITEM 6. Exhibits
    
    
    14SIGNATURES
    
    
    17EX-31.1EX-31.2EX-32.1EX-32.2




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PART I. FINANCIAL INFORMATION
 
 ITEM 1.
    
    Condensed Financial Statements
 Odimo Incorporated
 CONDENSED BALANCE SHEETS
 (in thousands, except par value)
 September 30,
    
    
    December 31,2009
    
    
    2008(Unaudited)ASSETSCurrent Assets:Cash
    
    $
    127
    
    
    $
    1Prepaid expense and other current assets
    
    
    
    
    
    
    4Total
    
    $
    127
    
    
    $
    5LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)Current Liabilities:Total current liabilities
    
    $
    242
    
    
    $
    249Commitments, 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, 11,086 and 7,753 shares issued and outstanding
    
    
    10
    
    
    
    7Additional paid-in capital
    
    
    104,513
    
    
    
    104,424Accumulated deficit
    
    
    (104,638
    )
    
    
    (104,675
    )Total stockholders equity (deficiency)
    
    
    (115
    )
    
    
    (244
    )Total
    
    $
    127
    
    
    $
    5
   1




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##### Table of Contents



Odimo Incorporated
 CONDENSED STATEMENTS OF OPERATIONS
 (in thousands, except per share data)
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2009
    
    
    September 30, 2008
    
    
    September 30, 2009
    
    
    September 30, 2008Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1Operating expenses
    
    
    (91
    )
    
    
    18
    
    
    
    (37
    )
    
    
    95Total operating expenses
    
    
    (91
    )
    
    
    18
    
    
    
    (37
    )
    
    
    95Income (Loss) from Operations
    
    
    91
    
    
    
    (18
    )
    
    
    37
    
    
    
    (94
    )Other Income (Expense):Gain on sale of assets
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    6Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net Income (Loss)
    
    $
    91
    
    
    $
    (12
    )
    
    $
    37
    
    
    $
    (88
    )Net Income (Loss) per Common ShareBasic and diluted
    
    $
    0.01
    
    
    $
    (0.00
    )
    
    $
    0.00
    
    
    $
    (0.01
    )Weighted Average Number of Shares:Basic and diluted
    
    
    11,086
    
    
    
    7,753
    
    
    
    10,354
    
    
    
    7,665
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Odimo Incorporated
 CONDENSED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY)
 (in thousands, except per share data)
 (Unaudited)
 Additional
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Paid-In
    
    
    Accumulated
    
    
    StockholdersShares
    
    
    Par Value
    
    
    Capital
    
    
    Deficit
    
    
    Equity (Deficiency)BALANCE-December 31, 2008
    
    
    7,753
    
    
    $
    7
    
    
    $
    104,424
    
    
    $
    (104,675
    )
    
    $
    (244
    )Sale of common stock
    
    
    3,333
    
    
    
    3
    
    
    
    47
    
    
    
    
    
    
    
    50Credits arising from services contributed by related parties
    
    
    
    
    
    
    
    
    
    
    42
    
    
    
    
    
    
    
    42Net Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    37BALANCE-September 30, 2009
    
    
    11,086
    
    
    $
    10
    
    
    $
    104,513
    
    
    $
    (104,638
    )
    
    $
    (115
    )
   3




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Odimo Incorporated
 CONDENSED STATEMENTS OF CASH FLOWS
 (in thousands)
(Unaudited)
 Nine Months EndedSeptember 30,2009
    
    
    2008Cash Flows from Operating Activities:Net Income (Loss)
    
    $
    37
    
    
    $
    (88
    )Adjustments to reconcile net income (loss) to net cash
used in operating activities:Charge in lieu of compensation contributed by officer and related party
    
    
    42
    
    
    
    21Gain on sale of assets
    
    
    
    
    
    
    (6
    )Changes in operating assets and liabilities:(Increase) decrease in:Prepaid expenses and other current assets
    
    
    4
    
    
    
    7Increase (decrease) in:Accounts payable
    
    
    (7
    )
    
    
    (25
    )Accrued liabilities
    
    
    
    
    
    
    (15
    )Net cash provided by (used in) operating activities
    
    
    76
    
    
    
    (106
    )Cash Flows from Investing Activities:Proceeds from sale of assets, net of expenses
    
    
    
    
    
    
    6Net cash provided by investing activities
    
    
    
    
    
    
    6Cash Flows from Financing Activities:Proceeds from notes payable to related party, net of repayments
    
    
    
    
    
    
    10Proceeds from sale of common stock
    
    
    50
    
    
    
    100Net cash provided by financing activities
    
    
    50
    
    
    
    110Net Increase in Cash and Cash Equivalents
    
    
    126
    
    
    
    10Cash and Cash Equivalents, Beginning
    
    
    1
    
    
    
    1Cash and Cash Equivalents, Ending
    
    $
    127
    
    
    
    11Supplemental Disclosures of Cash Flow Information:Cash paid during the period for:Interest
    
    $
    
    
    
    $
    Forgiveness of note payable to related party
    
    $
    
    
    
    $
    563
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Odimo Incorporated
Notes to Condensed Financial Statements
(Unaudited)
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Business
 Basis of Presentation 
 Use of Estimates
 General and Administrative Expenses
 Income Taxes Income Taxes.
 Income (Loss) Per Share
 Recently Issued Accounting Standards The FASB Accounting
Standards Codification and the Hierarchy of Generally Accepted Accounting
Principles The Hierarchy of Generally Accepted
Accounting Principles Generally Accepted Accounting Principles
  5




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Odimo Incorporated  Notes to Condensed Financial Statements  (Unaudited)
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 Measuring Liabilities at Fair Value, Fair Value Measurements and
Disclosures,
 2. GOING CONCERN CONSIDERATIONS
     6




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Odimo Incorporated
Notes to Condensed Financial Statements
(Unaudited)
 3. STOCK OPTION PLAN
  September 30, 2009WeightedAverageExerciseOptions
    
    
    PriceOutstanding at beginning of year
    
    
    26
    
    
    $
    24.48Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Canceled
    
    
    (
    )
    
    
    (
    )Outstanding at September 30, 2009
    
    
    26
    
    
    $
    24.48Exercisable at September 30, 2009
    
    
    26
    
    
    $
    24.48
  4. INCOME TAXES
  5. RELATED PARTY TRANSACTIONS
 Note Payable to Related Party
 Sale
of Common Stock
 Services Contributed by Stockholders
  7




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Odimo Incorporated
Notes to Condensed Financial Statements
(Unaudited)
 6. SUBSEQUENT EVENTS
   8




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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 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
       9




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Comparison of Quarter Ended September 30, 2009 to Quarter Ended September 30, 2008
 General and Administrative Expenses.
 Net Income(Loss).
 Comparison of Nine Months Ended September 30, 2009 to Nine Months Ended September 30, 2008
 General and Administrative Expenses.
 Net Income (Loss).
 Liquidity and Capital Resources
 
  Discussion of Cash Flows
 
   Outstanding Stock Options
   10




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Liquidity Sources
      Off Balance Sheet Arrangements
  Critical Accounting Policies and Estimates
   Income Taxes
   11




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Recently Issued Accounting Standards
  Measuring Liabilities at Fair Value, Fair Value Measurements and
Disclosures,
 
 ITEM 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
   12




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ITEM 4T.
    
    Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
    Changes in Internal Control Over Financial Reporting.
   13




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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.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.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.
  14




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Exhibit
    
    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 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 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(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
  15




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(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, 2007 filed
with the Securities and Exchange Commission on June 30, 2008 and
is incorporated herein by reference.  16




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SIGNATURES
  ODIMO INCORPORATED
RegistrantDate: November 12, 2009
    /s/ Amerisa KornblumAmerisa KornblumChief Financial Officer (Principal Financial Officer and Duly Authorized Officer)  17