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UNITED
STATESSECURITIES 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
    
    
    2ITEM 1. Financial Statements
    
    
    2ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    9ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    13ITEM 4T. Controls and Procedures
    
    
    13PART II. OTHER INFORMATION
    
    
    14ITEM 6. Exhibits
    
    
    14SIGNATURES
    
    
    17EX-31.1EX-31.2EX-32.1EX-32.2




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PART I. FINANCIAL INFORMATION
 
 ITEM 1. Financial Statements
 Odimo, Incorporated
 BALANCE SHEETS
(in thousands, except par value)
 September 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    10
    
    
    $
    1Prepaid expense and other current assets
    
    
    11
    
    
    
    17Total
    
    $
    21
    
    
    $
    18LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)Current Liabilities:Accounts payable
    
    $
    279
    
    
    $
    304Accrued interest to related party
    
    
    
    
    
    
    38Accrued liabilities
    
    
    10
    
    
    
    25Total current liabilities
    
    
    289
    
    
    
    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
    
    
    104,389
    
    
    
    103,705Accumulated deficit
    
    
    (104,664
    )
    
    
    (104,576
    )Total stockholders equity (deficiency)
    
    
    (268
    )
    
    
    (864
    )Total
    
    $
    21
    
    
    $
    18
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##### Table of Contents



Odimo, Incorporated
 STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30, 2008
    
    
    September 30, 2007
    
    
    September 30, 2008
    
    
    September 30, 2007Commissions
    
    $
    
    
    
    $
    
    
    
    $
    1
    
    
    $
    14Total Revenue
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    14Operating Expenses:General and administrative
    
    
    18
    
    
    
    124
    
    
    
    95
    
    
    
    890Depreciation and amortization
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    10Total operating expenses
    
    
    18
    
    
    
    128
    
    
    
    95
    
    
    
    900Loss from Operations
    
    
    (18
    )
    
    
    (128
    )
    
    
    (94
    )
    
    
    (886
    )Other Income (Expense):Gain on sale of assets
    
    
    6
    
    
    
    
    
    
    
    6
    
    
    
    424Interest expense, net
    
    
    
    
    
    
    (10
    )
    
    
    
    
    
    
    (28
    )6
    
    
    
    (10
    )
    
    
    6
    
    
    
    396Net Income (Loss)
    
    $
    (12
    )
    
    $
    (138
    )
    
    $
    (88
    )
    
    $
    (490
    )Net Income (Loss) per Common ShareBasic and diluted
    
    $
    (0.00
    )
    
    $
    (0.02
    )
    
    $
    (0.01
    )
    
    $
    (0.07
    )Weighted Average Number of Shares:Basic and diluted
    
    
    7,753
    
    
    
    7,039
    
    
    
    7,665
    
    
    
    7,039
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Odimo, Incorporated
 STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 Nine Months EndedSeptember 30,2008
    
    
    2007Cash Flows from Operating Activities:Net loss
    
    $
    (88
    )
    
    $
    (490
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation and amortization
    
    
    
    
    
    
    10Gain on sale of assets
    
    
    (6
    )
    
    
    (424
    )Compensation contributed by officer
    
    
    21
    
    
    
    Changes in operating assets and liabilities:(Increase) decrease in:Deposits with credit card processing company
    
    
    
    
    
    
    108Escrow deposit
    
    
    
    
    
    
    30Prepaid expenses and other current assets
    
    
    7
    
    
    
    25Increase (decrease) in:Accounts payable
    
    
    (25
    )
    
    
    (299
    )Accrued liabilities
    
    
    (15
    )
    
    
    145Net cash used in operating activities
    
    
    (106
    )
    
    
    (895
    )Cash Flows from Investing Activities:Proceeds from sale of assets, net of expenses
    
    
    6
    
    
    
    674Net cash provided by investing activities
    
    
    6
    
    
    
    674Cash Flows from Financing Activities:Proceeds from notes payable to related party, net of repayments
    
    
    10
    
    
    
    228Proceeds from sale of common stock
    
    
    100
    
    
    
    Net cash provided by financing activities
    
    
    110
    
    
    
    228Net Increase in Cash and Cash Equivalents
    
    
    10
    
    
    
    7Cash and Cash Equivalents, Beginning
    
    
    1
    
    
    
    75Cash and Cash Equivalents, Ending
    
    $
    11
    
    
    $
    82Supplemental Disclosures of Cash Flow Information:Cash paid during the period for:Interest
    
    $
    
    
    
    $
    27Forgiveness of note payable to related party
    
    $
    563
    
    
    $
    
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Odimo, Incorporated
 STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY)
Nine Months Ended September 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
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    21Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (88
    )
    
    
    (88
    )BALANCE-September 30, 2008
    
    
    7,753
    
    
    $
    7
    
    
    $
    104,389
    
    
    $
    (104,664
    )
    
    $
    (268
    )
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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
    -6-




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2. GOING CONCERN CONSIDERATIONS
    3. STOCK OPTION PLAN
  September 30, 2008WeightedAverageExerciseOptions
    
    
    PriceOutstanding at beginning of year
    
    
    131
    
    
    $
    24.43Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Canceled
    
    
    (105
    )
    
    
    (8.99
    )Outstanding at
September 30, 2008
    
    
    26
    
    
    $
    24.48Options exercisable at
September 30, 2008
    
    
    26
    
    
    $
    24.48
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4. INCOME TAXES
  5. RELATED PARTY TRANSACTIONS
 Note Payable to Related Party
  December 31, 2007Historical
    
    
    Pro-Forma 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
 -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 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
     -9-




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Comparison of Quarter Ended September 30, 2008 to Quarter Ended September 30, 2007
 General and Administrative Expenses.
 Interest Expense, Net.
 Net Loss.
 Comparison of Nine Months Ended September 30, 2008 to Nine Months Ended September 30, 2007
 General and Administrative Expenses.
 Depreciation and Amortization.
 Interest Expense, Net.
 Net Loss.
 Liquidity and Capital Resources
   Discussion of Cash Flows
  -10-




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Outstanding Stock Options
  Liquidity Sources
      Off Balance Sheet Arrangements
  Critical Accounting Policies and Estimates
  -11-




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Income Taxes
  Recently Issued Accounting Standards
     -12-




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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.
  -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.
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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
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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, 2007filed 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 11, 2008
    /s/ Amerisa KornblumAmerisa KornblumChief Financial Officer (Principal Financial
Officer and Duly Authorized Officer) 17