**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**









**FORM
      10-KSB**




**(Mark
      one)**




x
            **Annual
                Report Under Section 13 or 15(d) of the Securities Exchange Act of
                1934**




**For
      the Fiscal Year Ended December 31, 2006**




**or**




o
            **Transition
                Report Under Section 13 or 15(d) of the Securities Exchange Act of
                1934**




**Commission
      File Number 0-21061**









**SP
      HOLDING CORPORATION**


**(Name
      of small business issuer in its charter)**




**Delaware**
            
            **58-2044990**(State
                or other jurisdiction
              of
                incorporation or organization)
            
            (I.R.S.
                Employer
              Identification
                No.)**3317
                Third Avenue South, Seattle, Washington**
            
            **98134**(Address
                of principal executive offices)
            
            (Zip
                Code)




**Issuer’s
      telephone number: (206) 838-4670**




**Securities
      registered under Section 12(b) of the Exchange Act:**




**None**




**Securities
      registered under Section 12(g) of the Exchange Act:**




**Common
      Stock, $0.001 par value**









Check
      whether the issuer (1) filed all reports required to be filed by
      Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
      such shorter period that the Registrant was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90
      days.    Yes x No o




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




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




State
      issuer’s revenues for its most recent fiscal year:  $9,663,000.




The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates of the registrant, based upon the closing sale price of the
      common stock on March 28, 2007, was $52,181,411.60. Shares of common stock
      held
      by officers, directors and by each person that owns more than 5% of the
      outstanding common stock have been excluded in that such persons may be deemed
      to be affiliates. This determination of affiliate status is not necessarily
      conclusive for other purposes.




The
      number of shares outstanding of registrant’s common stock, $0.001 par value at
      March 28, 2007, was 19,912,664 shares.




Transitional
      Small Business Disclosure Format (check
      one):    Yes o No x














**Table
      of Contents**


PART
                  IItem
                  1. Description of Business
              
              1Item
                  2. Description of Property
              
              15Item 3.
                  Legal Proceedings
              
              15Item 4.
                  Submission of Matters to a Vote of Security Holders
              
              15PART
                  IIItem 5.
                  Market for Common Equity and Related Stockholder Matters
              
              16Item 6.
                  Management’s Discussion and Analysis or Plan of Operation
              
              17Item
                  7. Financial Statements
              
              25Item
                  8. Changes In and Disagreements With Accountants on Accounting
                  and
                  Financial Disclosure
              
              25Item
                  8A. Controls and Procedures
              
              25Item
                  8B. Other Information
              
              25PART
                  IIIItem 9.
                  Directors, Executive Officers, Promoters, Control Persons and Corporate
                  Governance;Compliance
                  With Section 16(a) of the Exchange Act
              
              26Item 10.
                  Executive Compensation
              
              29Item
                  11. Security Ownership of Certain Beneficial Owners and Management
                  and
                  Related Stockholder Matters
              
              34Item 12.
                  Certain Relationships and Related Transactions, and Director
                  Independence
              
              36Item 13.
                  Exhibits
              
              37Item 14. Principal
                  Accountant Fees and Services
              
              38


**PART
      I**




**FORWARD
      LOOKING STATEMENTS**




*You
      should read the following discussion in conjunction with our audited financial
      statements and the notes thereto that appear elsewhere in this Annual Report
      on
      Form 10-KSB. The following discussion contains forward-looking statements,
      within the meaning of Section 27A of the Securities Act of 1933, as amended
      (the “Securities Act”) and Section 21E of the Securities Exchange Act
      of 1934, as amended (the “Exchange Act”) which involve risks and
      uncertainties. Forward-looking statements generally include words such as* *“anticipate,”
      “estimate,” “plan,” “continuing,” “ongoing,” “expect,” “believe,” “intend,”
“may,” “will,” “should,” “could,”* *and
      words of similar import as well as the negative of those terms. In addition,
      any
      statements that refer to expectations, projections or other characterizations
      of
      future events or circumstances, including any underlying assumptions, are
      forward-looking statements. All forward-looking statements included in this
      Annual Report on Form 10-KSB are based on current expectations and are subject
      to important factors that could cause actual results to differ materially from
      those projected in the forward-looking statements. Such important factors
      include, but are not limited to, those discussed below under “Risk Factors” and
      elsewhere in this Annual Report and in other documents we file with the
      Securities and Exchange Commission (the “SEC”).*




**Item
      1. Description of Business** ****




**Our
      Company**





We
      were
      incorporated in Florida on March 16, 1994 and reincorporated in Delaware on
      September 26, 2000. For the years ended December 31, 2006, 2005 and
      2004, we were a non-operating shell company and our business operations were
      limited to sustaining a public shell vehicle.





On
      February 12, 2007, we acquired Organic Holding Company, Inc., an organic food
      services company, through a reverse merger with our wholly owned subsidiary.
      As
      a result of the merger, Organic Holding Company, Inc. became our wholly owned
      subsidiary and was renamed “Organic To Go, Inc.” In connection with the merger,
      we issued the following securities to the security holders of Organic Holding
      Company, Inc.:





·
            8,633,765
                shares of our common stock in exchange for 12,372,712 shares of Organic
                Holding Company, Inc. common stock and preferred
                stock;





·
            options
                to purchase an aggregate of 718,337 shares of our common stock in
                exchange
                for options to purchase an aggregate of 1,029,432 shares of Organic
                Holding Company, Inc. common stock;





·
            warrants
                to purchase an aggregate of 2,215,746 shares of our common stock
                in
                exchange for warrants to purchase an aggregate of 3,175,356 shares
                of
                Organic Holding Company, Inc. capital stock;
                and





·
            115.731
                units, comprised of an aggregate of 4,629,240 shares of our common
                stock
                and warrants to purchase 925,848 shares of our common stock in exchange
                for certain Organic Holding Company, Inc. bridge
                notes.




Concurrently
      with the closing of the merger, we completed a private placement of 138 units
      at
      $50,000 per unit and received aggregate gross proceeds of approximately $6.9
      million. In total, we issued an aggregate of 5,523,000 shares of our common
      stock and warrants to purchase an aggregate of 1,104,600 shares of our common
      stock pursuant to the offering. We also issued warrants to purchase 888,899 shares
      of common stock to the placement agents  in
      the
      offering.




1





Additionally,
      in connection with the merger and private placement:





·
            Mr.
                Mark Schaftlein resigned as our sole officer and director;





·
            Mr. Jason
                Brown was appointed as our Chairman and Chief Executive Officer;





·
            Mr.
                Jonathan Wernick was appointed as our Chief Financial Officer; and





·
            Messrs.
                Jason Brown, Dave Smith, Peter Meehan, Roy Bingham, Douglass Lioon
                and
                S.M. “Haas” Hassan were appointed as members of our Board of Directors.





Additional
      information regarding our officers and directors is set forth in Part III of
      this Annual Report.





Our
      principal executive offices are located at 3317 Third Avenue South, Seattle,
      Washington 98134 and our telephone number is (206)
      838-4670.





In
      the
      following discussion of this Item 1 entitled “Description of Business,” unless
      otherwise noted or required by the context, references to “us,” “we,” “our,” and
      similar terms refer to Organic Holding Company, Inc. prior to the merger, and
      to
      SP Holding Corporation and Organic To Go, Inc. subsequent to the
      merger.





**Overview**





We
      prepare and serve classic American cuisine with a unique difference—we use
      organic
      ingredients when possible and always natural ingredients without pesticides
      and
      other harmful additives. Customers can get our food at our
      convenient Retail Cafés, through our Delivery/Casual Catering Services and
      at specific locations where our "grab-and-go" meals are sold via a wholesale
      relationship. Our target customers are white collar office workers as well
      as students and employees of colleges and universities. We currently
      maintain four Retail Cafés in downtown Seattle, Washington, one in Bellevue,
      Washington, four in Los Angeles, California and three in Orange County,
      California. We have an agreement with Compass Group, Inc., pursuant to which
      Compass Group maintains 17 of our “grab-and-go” locations on the Microsoft
      Corporate Campus near Seattle, Washington. We also provide sandwiches and other
      “grab-and-go” food to independent coffee vendors such as Java Java and Euro
      Coffee at the Los Angeles International Airport. We operate “grab-and-go”
locations at seven universities in the Seattle, Washington and Los Angeles,
      California areas, including the University of Washington Medical Center, the
      University of Southern California and the University of California, Los Angeles.





**Our
      Product** ****





We
      provide a delicious and healthy alternative to typical fast food options,
      lunch box deliveries and casual catering. We serve a wide range of organic,
      natural and wholesome meals, which include everything from ham and cheese
      sandwiches to deli-style roast beef sandwiches and veggie packed salads. We
      proactively source producers and manufacturers who use sustainable farming
      and/or production practices as an integral part of our overall mission to
      provide wholesome "clean" food from farm to table. We also use alternative
      packaging such as biodegradable and recycled plastics, and sugar cane based
      disposable tableware to minimize the environmental impact of convenience
      packaging for "grab-and-go" meals.





We
      offer
      packaged and private label food products prepared using specifications from
      key
      vendors and deliver them directly to our Retail Café and Delivery/Casual
      Catering Services customers. We prepare or assemble our products at one of
      two
      assembly kitchens, Seattle, Washington and Los Angeles, California. Orders
      that
      we take via the Internet or by telephone are routed to dedicated customer
      service centers in Seattle and Los Angeles and are processed in real time.
      While less than 15% of the orders placed are for “same day” delivery, there is a
      growing need for this service, thus we are increasing our ability to provide
      increased "same day" delivery, particularly to businesses in proximity to our
      Retail Cafés. Our Retail Cafés operate Monday through Friday from 7:00 a.m. to
      4:30 p.m. We provide delivery and catering services after-hours and on
      weekends.




2





More
      than
      70% of our products currently offered are organic. Our goal by the end of 2007
      is to be 100% organic with respect to all of our products that “Organic
      Certification” is available (Organic Certification is not available for all
      foods, such as water). In February 2006, we became the first fast-casual
      restaurant and retailer to be USDA certified as “Organic” by Quality Assurance
      International, the leading third-party certification agency in the organic
      foods
      industry.





**Business
      Channels** ****




We
      offer
      our food products through three primary business channels or units: Retail
      Cafés; Delivery/Casual Catering Services; and Wholesale, which accounted for
      approximately 55%, 35% and 10%, of our total sales, respectively, in 2006.
      Our
      core customer base consists of “white collar” workers and college students and
      employees.





*Retail
      Cafés*





We
      currently operate 12 cafés in Seattle and Bellevue, Washington, Los Angeles,
      California and Orange County, California. We operate Retail Cafés in large
      multi-tenant buildings and in large campuses. We believe these retail locations
      serve as a billboard for our Delivery/Casual Catering Services and branded
      Wholesale units.





*Delivery/Casual
      Catering Services*





We
      also
      distribute our products through delivery and catering services. Customers of
      our
      Delivery/Casual Catering Services unit currently include, among others,
      Starbucks Corporate Headquarters, Westin Hotels, Washington Mutual Bank,
      T-Mobile, NBC and several movie studios. Approximately 80% of our delivery
      orders are repeat orders from customers who have ordered five or more times.





*Wholesale*





Our
      Wholesale business is growing and we believe that it presents a tremendous
      opportunity to build our brand. Wholesale sales currently represent
      approximately 10% of our revenue. Current Wholesale customers include the
      University of California, Los Angeles, University of Southern California, Cal
      State Pomona, Cal State Long Beach, University of Washington, Children’s
      Hospital of Seattle, Washington, NBC and Euro Coffee at the Los Angeles
      International Airport.





**Industry
      Overview and Market Opportunity**





While
      the
      growth and popularity of natural and organic foods has been evident with the
      rise of grocery stores that sell organic products, such as Whole Foods Market,
      Wild Oats and Trader Joe’s, the food service side of the industry has not been
      as developed. We believe that we are one of the first companies to provide
      services in this area of growing consumer demand.





According
      to the Organic Trade Association’s 2006 Manufacturer Survey, the market for
      organic foods grew by 16.2% in 2005. The survey also found that sales of organic
      foods during 2005 totaled $13.8 billion, which constituted 2.5% of total U.S.
      food sales. This strong growth is consistent with annual growth rates since
      1997, all of which have been between 15% to 21% per year.




3




The
      OTA
      2006 Survey also estimated that the use of organic products in the United States
      food service industry is increasing annually by a rate of 20% per year.
      According to the survey, as recently as 2004, $330 million in natural/organic
      food sales, or only 5% of all natural/organic sales, were sold into the food
      service channel. Traditionally, retail food sales constitute roughly 70% of
      total food sales and food service sales constitute roughly 30%.





**Competition**





We
      are in
      competition with other food service operations within the same geographical
      areas in which we operate. The Retail Cafés, Delivery/Casual Catering Services
      and Wholesale business channels are highly competitive. Some of our
      competitors are significantly larger than us and have greater access to
      resources. We compete with other organizations primarily through the quality,
      variety and value perception of the food products offered. The number and
      location of units, quality and speed of service, attractiveness of facilities,
      effectiveness of marketing and new product development are also important
      factors. The price charged for each menu item we sell or service we provide
      may
      vary from market to market depending on competitive pricing and the local cost
      structure.





**Expansion
      Plans**




We
      intend
      to grow internally and through acquisitions by adding catering companies
      and café locations that are consistent with our core business focus. In each of
      the markets where we operate, we plan to take advantage of our scalability
      and
      acquire local catering companies with strong ties to the region’s corporate
      community. We also intend to work closely with landlords and property managers
      to upgrade the amenities they offer in their buildings by making our
      Delivery/Casual Catering Services and food products available to their tenants.
      There can be no assurance, however, that we will acquire or open only at such
      additional café locations or catering companies.




**Recent
      Acquisitions**





*Acquisition
      of Jackrabbit*





On
      March
      9, 2007, we acquired Jackrabbit, a Seattle-based catering company that generated
      approximately $1.85 million in revenue in 2006. Jackrabbit has been serving
      downtown Seattle businesses since 1996 with premium box lunches and casual
      catering.





*Acquisition
      of Vinaigrettes LLC*





On
      October 27, 2006, we acquired all of the operating assets of Vinaigrettes LLC,
      a
      California limited liability company doing business as “Vinaigrettes Catering
      Company,” for a purchase price of $1.0 million. Vinaigrettes was a 10-year-old
      catering services company with approximately 40 employees and sales of
      approximately $2.5 million per year. Vinaigrettes provided business casual
      catering services, ranging from corporate box lunches to lavish Hollywood
      events.




4





*Acquisition
      of Certain Operating Assets of Briazz Inc.*




In
      April
      2005, we acquired certain operating locations and related assets of Briazz,
      Inc.
      for $1.35 million, comprised of $750,000 in cash and $600,000 in notes
      convertible into Organic Holding Company, Inc. common stock. Briazz was a
      Seattle, Washington based sandwich cafe chain that filed for bankruptcy under
      Chapter 11 in June of 2004. As part of the acquisition, we acquired 6 Retail
      Cafés in the Seattle market and 6 Retail Cafés in the Los Angeles and Orange
      County markets, as well as certain catering contracts.





**Suppliers**





We
      have
      not experienced any material shortages of food, equipment, fixtures or other
      products which are necessary to our operations and we anticipate no such
      shortages of products. Sysco Food Service and United Natural Foods West, Inc.
      are our two principal suppliers of products. Generally, alternate suppliers
      are
      available for all of our raw materials and supplies.





**Dependence
      on Major Customers**





We
      are
      not dependent on any major customers. No single customer of ours accounts for
      more than 10% of our total sales.





**Environment
      and Energy**





Various
      federal, state and local agencies have adopted regulations that affect the
      discharge of materials into the environment or which otherwise relate to the
      protection of the environment. We do not believe that such regulations will
      have
      a material effect on our operations, our capital expenditures, earnings or
      our
      competitive position. However, we cannot predict the effect of future
      environmental legislation or regulations.





Companies
      involved in the food industry use significant amounts of energy in their
      operations. Our principal sources of energy for our operations are electricity
      and natural gas. To date, the supply of energy available to us has been
      sufficient to maintain normal operations.





**Government
      Regulation**




We
      operate in the perishable food industry. The development, manufacture and
      marketing of products sold by us may be subject to extensive regulation by
      various government agencies, including the U.S. Food and Drug Administration
      and
      the U.S. Federal Trade Commission, as well as various state and local agencies.
      These and other agencies regulate production processes, product attributes,
      packaging, labeling, advertising, storage and distribution and establish and
      enforce standards for safety, purity and labeling. In addition, other
      governmental agencies (including the U.S. Occupational Safety and Health
      Administration), establish and enforce health and safety standards and
      regulations in the workplace, including those in our retail locations. Our
      retail locations will be subject to inspection by federal, state, and local
      authorities.




**Information
      Technology**




We
      have
      integrated information technology systems that facilitate efficient and
      scaleable operations throughout our operations.




5





**Employees**




As
      of
      March 27, 2007, we had a workforce of approximately 238 employees, consisting
      of 220 full-time and 18 part-time employees. None of our employees are
      represented by a collective bargaining agreement, nor have we experienced any
      work stoppages.




**Trademark
      and Website**




We
      have
      registered our stylized logo, and we have registered the Internet domain name
      “www.organictogo.com.”




6


**RISK
      FACTORS**





*You
      should consider carefully the risks described below, together with all of the
      other information in this Annual Report, in evaluating our company, our business
      and our common stock. If any of the following risks actually occur, our
      business, financial condition, and results of operations could suffer. In this
      case, the trading price of our common stock could decline and you may lose
      all
      or part of your investment.*





**Risks
      Related to Our Company**





**Our
      limited operating history makes evaluation of our company difficult.**





Our
      current business operations began in February 2004 and as a result, we have
      a
      limited operating history. This limited operating history and the
      unpredictability of our industry make it difficult for investors to evaluate
      our
      business and future operating results. An investor in our securities must
      consider the risks, uncertainties and difficulties frequently encountered by
      companies in new and rapidly evolving markets. The risks and difficulties we
      face include challenges in accurate financial planning as a result of limited
      historical data and the uncertainties resulting from having had a relatively
      limited time period in which to implement and evaluate our business strategies
      as compared to older companies with longer operating histories.





**Our
      future operating results may fluctuate and cause the price of our common stock
      to decline.**





We
      believe that our sales and operating results may continue to fluctuate
      significantly from quarter to quarter due to various factors, many of which
      are
      beyond our control. The factors that could cause our operating results to
      fluctuate include, but are not limited to:





·
            our
                ability to open new Retail Cafés and to expand our Delivery/Casual
                Catering Services and Wholesale
                operations;





·
            our
                ability to locate suitable properties for our
                operations;





·
            our
                ability to obtain additional financing on satisfactory
                terms;





·
            our
                dependence on our suppliers and distributors;





·
            our
                ability to attract and retain qualified
                employees;





·
            our
                ability to successfully expand into new
                markets;





·
            our
                ability to manage the strain on our infrastructure caused by the
                growth of
                our Retail Cafés, Delivery/Casual Catering Services and Wholesale
                operations;





·
            changes
                in the costs we pay;





·
            changes
                in consumer preferences or discretionary consumer spending;




·
            litigation
                and publicity concerning food quality, health and other issues affecting
                consumer tastes;




7


·
            governmental
                regulation associated with the food service industry;
                and





·
            geographic
                concentration of our business in Washington and
                California.





If
      our
      sales or operating results fall below the expectations of investors or
      securities analysts, the price of our common stock could significantly decline.





**Our
      growth strategy requires us to open new Retail Cafés and expand our
      Delivery/Casual Catering Services and Wholesale
      operations.**





We
      may
      not be able to achieve our expansion goals or operate our new Retail Cafés,
      Delivery/Casual Catering Services and Wholesale operations profitably. Further,
      any new Retail Café, Delivery/Casual Catering Services or Wholesale operation we
      open may not be able obtain similar operating results to those of our existing
      operations. The success of our planned expansion will be dependent upon numerous
      factors, many of which are beyond our control, including the
      following:




·
            hiring,
                training and retention of qualified operating
                personnel;




·
            identification
                and availability of suitable
                properties;




·
            negotiation
                of favorable lease terms;




·
            timely
                development of new Retail Café, Delivery/Casual Catering Services and
                Wholesale operations;




·
            management
                of construction and development costs of Retail Café, Delivery/Casual
                Catering Services and Wholesale
                operations;




·
            competition
                in our markets; and




·
            general
                economic conditions.




**Our
      success depends on our ability to locate suitable sites for our Retail Café,
      Delivery/Casual Catering Services and Wholesale
      operations.**




One
      of
      our biggest challenges in meeting our growth objectives will be to secure
      suitable sites for our Retail Café, Delivery/Casual Catering Services and
      Wholesale operations. We may not be able to procure suitable locations for
      our
      planned expansion in any future period. Delays or failures in opening new Retail
      Cafés or in expanding our Delivery/Casual Catering Services and Wholesale
      operations could materially adversely affect our business, financial condition,
      operating results or cash flows.




**We
      may need additional financing, which may not be available on satisfactory terms
      or at all.**




We
      may
      need to raise additional funds to support our future expansion and growth plans.
      Our funding requirements may change as a result of many factors, including
      underestimates of budget items, unanticipated cash requirements, future product
      and service opportunities, and future business combinations. Consequently,
      we
      may need to seek additional sources of financing, which may not be available
      on
      favorable terms, if at all, and which may be dilutive to existing
      stockholders.




We
      may
      seek to raise additional financing through equity offerings, debt financings
      or
      additional corporate collaboration and licensing arrangements. To the extent
      we
      raise additional capital by issuing equity securities, our stockholders will
      experience dilution. To the extent that we raise additional capital by issuing
      debt securities, we could incur substantial interest obligations, may be
      required to pledge assets as collateral for the debt and may be constrained
      by
      restrictive financial and/or operational covenants. Debt financing would also
      be
      superior to the stockholders’ interests in bankruptcy or liquidation. To the
      extent we raise additional funds through collaboration and licensing
      arrangements, it may be necessary to relinquish some rights to our products,
      or
      grant licenses on unfavorable terms.




8




**We
      depend on our suppliers and distributors.**




Our
      reliance on our suppliers subjects us to a number of risks, including possible
      delays or interruptions in supplies, diminished direct control over quality
      and
      a potential lack of adequate raw material capacity. Any disruption in the supply
      of or degradation in the quality of the raw materials provided by our suppliers
      could have a material adverse effect on our business, operating results and
      financial condition. In addition, such disruptions in supply or degradations
      in
      quality could have a long-term detrimental impact on our efforts to develop
      a
      strong brand identity and a loyal consumer base. Although we maintain
      relationships with a number of suppliers and always attempt to have more than
      one potential supplier for any required item, there can be no assurance that
      we
      will be able to continue to maintain multiple supply sources. If any supplier
      or
      distributor fails to perform as anticipated, or if there is a termination or
      any
      disruption in any of these relationships for any reason, it could have a
      material adverse effect on results of operations.




**We
      could face labor shortages that could slow our growth.**




Our
      success depends in part upon our ability to attract, motivate and retain a
      sufficient number of qualified employees, including managers, chefs and other
      kitchen staff, necessary to keep pace with our expansion schedule. Qualified
      individuals of the requisite caliber and number needed to fill these positions
      are in short supply in some areas. Although we have not experienced any
      significant challenges in recruiting or retaining employees, any future
      inability to recruit and retain sufficient individuals may delay the planned
      openings and development of new Retail Cafés, Delivery/Casual Catering Services
      and Wholesale operations. Any such delays or any material increases in employee
      turnover rates in existing Retail Cafés and in our Delivery/Casual Catering
      Services and Wholesale operations could have a material adverse effect on our
      business, financial condition, operating results or cash flows. Additionally,
      competition for qualified employees could require us to pay higher wages to
      attract sufficient employees, which could result in higher labor
      costs.




**Our
      expansion into new markets may present increased risks due to our unfamiliarity
      with the area.**




We
      anticipate that our new Retail Cafés, Delivery/Casual Catering Services and
      Wholesale operations will typically take several months to reach budgeted
      operating levels due to challenges commonly associated with new businesses,
      including lack of market awareness, inability to hire sufficient staff and
      other
      factors. Although we will attempt to mitigate these factors by careful attention
      to training and staffing needs, there is a risk that we will not be successful
      in operating our new Retail Cafés, Delivery/Casual Catering Services and
      Wholesale operations on a profitable basis. New markets that we enter may have
      different competitive conditions, consumer tastes and discretionary spending
      patterns than our existing markets, which may cause our new Retail Cafés,
      Delivery/Casual Catering Services and Wholesale operations in those new markets
      to be less successful than those in our existing markets.




9




**Our
      expansion may strain our infrastructure, which could slow our
      development.**




We
      face
      the risk that our existing systems and procedures, financial controls and
      information systems will be inadequate to support our planned expansion. We
      may
      not be able to accurately predict whether we will be able to respond on a timely
      basis to all of the changing demands that our planned expansion will impose
      on
      management and these systems and controls. If we fail to continue to improve
      our
      information systems and financial controls or to manage other factors necessary
      for us to achieve our expansion objectives, our business, financial condition,
      operating results or cash flows could be materially adversely
      affected.




**All
      of our operations are currently located in Washington and California. As a
      result, we are highly sensitive to negative occurrences in those two
      states.**




We
      are
      particularly susceptible to adverse trends and economic conditions in the States
      of Washington and California, including in their labor markets. In addition,
      given our geographic concentration, negative publicity regarding any of our
      operations in the States of Washington or California could have a material
      adverse effect on our business and operations, as could other regional
      occurrences such as local strikes, supply shortages, local economic conditions,
      consumer preferences, earthquakes or other natural disasters.





**Our
      operation as a public company subjects us to evolving corporate governance
      and
      public disclosure regulations that will result in additional expenses and
      liability exposures.**





As
      a
      public company, we will incur significant legal, accounting and other expenses
      that non-public companies may not incur. We will incur costs associated with
      our
      public company reporting requirements. We also anticipate that we will incur
      costs associated with recently adopted corporate governance requirements,
      including certain requirements under the Sarbanes-Oxley Act of 2002, as well
      as
      new rules implemented by the SEC and the National Association of Securities
      Dealers. We expect these rules and regulations, in particular Section 404 of
      the
      Sarbanes-Oxley Act of 2002, to increase significantly our legal and financial
      compliance costs and to make some activities more time-consuming and costly.
      Like many smaller public companies, we face a significant impact from required
      compliance with Section 404 of the Sarbanes-Oxley Act of 2002. Section 404
      requires management of public companies to evaluate the effectiveness of
      internal control over financial reporting and the independent auditors to attest
      to the effectiveness of such internal controls and the evaluation performed
      by
      management. The SEC has adopted rules implementing Section 404 for public
      companies as well as disclosure requirements. The Public Company Accounting
      Oversight Board, or PCAOB, has adopted documentation and attestation standards
      that the independent auditors must follow in conducting its attestation under
      Section 404. We are currently preparing for compliance with Section 404;
      however, there can be no assurance that we will be able to meet effectively
      all
      of the requirements of Section 404 as known to us in the currently mandated
      timeframe. Any failure to implement effectively new or improved internal
      controls, or to resolve difficulties encountered in their implementation, could
      harm our operating results, cause us to fail to meet reporting obligations
      or
      result in management being required to give a qualified assessment of our
      internal controls over financial reporting or our independent auditors providing
      an adverse opinion regarding management’s assessment. Any such result could
      cause investors to lose confidence in our reported financial information, which
      could have a material adverse effect on our stock price.




We
      also
      expect these rules and regulations may make it more difficult and more expensive
      for us to obtain director and officer liability insurance and we may be required
      to accept reduced policy limits and coverage or incur substantially higher
      costs
      to obtain the same or similar coverage. As a result, it may be more difficult
      for us to attract and retain qualified individuals to serve on our Board of
      Directors or as executive officers. We are currently evaluating and monitoring
      developments with respect to these rules, and it is difficult to predict or
      estimate the amount of additional costs we may incur or the timing of such
      costs.




10





**If
      we fail to maintain the adequacy of our internal controls, our ability to
      provide accurate financial statements and comply with the requirements of the
      Sarbanes-Oxley Act of 2002 could be impaired, which could cause our stock price
      to decrease substantially.**





Our
      current management was previously the management of our operating subsidiary,
      Organic To Go, Inc., which we acquired in a reverse merger on February 12,
      2007.
      Prior to that time, our subsidiary was a private company without public
      reporting obligations. As a result, prior to the merger, our management had
      committed limited personnel and resources to the development of the external
      reporting and compliance obligations that would be required of a public company.
      We have taken and will continue to take measures to address and improve our
      financial reporting and compliance capabilities and we are in the process of
      instituting changes to satisfy our obligations in connection with being a public
      company, when and as such requirements become applicable to us. Prior to taking
      these measures, we did not believe we had the resources and capabilities to
      do
      so. We plan to obtain additional financial and accounting resources to support
      and enhance our ability to meet the requirements of being a public company.
      We
      will need to continue to improve our financial and managerial controls,
      reporting systems and procedures, and documentation thereof. If our financial
      and managerial controls, reporting systems or procedures fail, we may not be
      able to provide accurate financial statements on a timely basis or comply with
      the Sarbanes-Oxley Act of 2002 as it applies to us. Any failure of our internal
      controls or our ability to provide accurate financial statements could cause
      the
      trading price of our common stock to decrease substantially.





**We
      depend on our key personnel, and the loss of their services may adversely affect
      our business.**





We
      are
      highly dependent upon the efforts of our senior management team. The death
      or
      departure of any of our key personnel could have a material adverse effect
      on
      our business. In particular, the loss of Jason Brown, our Chief Executive
      Officer and Chairman, could significantly impact our ability to operate and
      grow
      and could cause performance to differ materially from projected results. We
      have
      a $2 million “key man” insurance policy covering Mr. Brown.





**Our
      past activities prior to our merger with Organic Holding Company, Inc., may
      lead
      to future liability for the combined companies.**





Prior
      to
      February 12, 2007, we were engaged in businesses and were managed by parties
      unrelated to that of our new operations. Any liabilities relating to such prior
      business may have a material adverse effect on us.




**Risks
      Related to Our Industry**





**We
      operate in a highly competitive industry where many of our competitors are
      larger and have more resources than us.**





We
      operate in a highly competitive environment. Many of our competitors are
      substantially larger than us in terms of resources and market share. As a
      result, many of our competitors offer products and services at a lower cost
      to
      consumers. Our success will depend to a significant extent on our ability to
      continue to develop and introduce differentiated products and services and
      deliver them to consumers in a widespread, convenient and cost-effective manner.
      The success of our products and services is dependent on several factors
      including understanding consumer needs, differentiation from competitive
      offerings, market acceptance and lower costs. Although we believe that we can
      take the necessary steps to meet the competitive challenges of the marketplaces
      in which we operate, we may not be successful in differentiating our products
      and services from those of our competitors or meeting consumer demand.




11




**Our
      operations are susceptible to changes in food and supply costs, which could
      adversely affect our margins.**




Our
      profitability depends, in part, on our ability to anticipate and react to
      changes in food and supply costs. Our centralized purchasing staff negotiates
      prices for all of our ingredients and supplies. Any increase in distribution
      costs could cause our food and supply costs to increase. Further, various
      factors beyond our control, including adverse weather conditions and
      governmental regulations, could cause our food and supply costs to increase.
      We
      may not be able to anticipate and react to changing food and supply costs by
      adjusting our purchasing practices in a timely fashion. A failure to do so
      could
      adversely affect our operating results and cash flows.




**Changes
      in consumer preferences or discretionary consumer spending could negatively
      impact our results.**




Our
      Retail Cafés, Delivery/Casual Catering Services and Wholesale operations feature
      various types of organic foods and beverages. Our continued success depends,
      in
      part, upon the popularity of these foods in the future. Shifts in consumer
      preferences away from this cuisine could materially adversely affect our future
      profitability. Also, our success depends on numerous factors affecting
      discretionary consumer spending, including economic conditions, disposable
      consumer income and consumer confidence. Adverse changes in these factors could
      reduce customer traffic or impose practical limits on pricing, either of which
      could materially adversely affect our business, financial condition, operating
      results or cash flows. We can also be materially adversely affected by negative
      publicity concerning food quality, illness, injury, publication of government
      or
      industry findings concerning food products served by us, or other health
      concerns or operating issues stemming from our operations.




**Our
      industry is affected by litigation and publicity concerning food quality, health
      and other issues which can cause customers to avoid our cafés and result in
      liabilities.**




We
      could
      become the subject of complaints or litigation from customers or employees
      alleging illness, injury or other food quality, health or operational concerns.
      Adverse publicity resulting from these allegations may materially adversely
      affect us and our Retail Cafés, Delivery/Casual Catering Services and Wholesale
      operations, regardless of whether the allegations are valid or whether we are
      liable.




**Our
      operations are subject to governmental regulation associated with the food
      service industry, the operation and enforcement of which may restrict our
      ability to carry on our business.**




We
      are in
      the perishable food industry. The development, manufacture and marketing of
      products sold by us will be subject to extensive regulation by various
      government agencies, including the U.S. Food and Drug Administration and the
      U.S. Federal Trade Commission, as well as various state and local agencies.
      These agencies regulate production processes, product attributes, packaging,
      labeling, advertising, storage and distribution. These agencies establish and
      enforce standards for safety, purity and labeling. In addition, other
      governmental agencies (including the U.S. Occupational Safety and Health
      Administration), establish and enforce health and safety standards and
      regulations in the workplace, including those in our retail locations. Our
      retail locations will be subject to inspection by federal, state, and local
      authorities. Although we intend to comply at all times with all such laws and
      regulations, including obtaining and maintaining all necessary permits and
      licenses relating to our operations, there is a risk that we may not be able
      to
      comply with such laws and regulations on a timely basis, or at all. Our failure
      to comply with applicable laws and regulations could subject us to civil
      remedies including fines, injunctions, recalls or seizures as well as potential
      criminal sanctions. In addition, compliance or attempted compliance with
      governmental laws and regulations may result in significant time or cost
      expenditures, which could delay or preclude us from marketing our products
      or
      continuing or expanding our operations.




12





**Risks
      Relating to Ownership of Our Common Stock**





**The
      market price of our common stock may be highly volatile.**





The
      market price of our common stock may fluctuate significantly in response to
      factors, most of which are beyond our control, such as:





·
            the
                announcement of new products or services by us or our
                competitors;





·
            quarterly
                variations in our and our competitors’ results of
                operations;





·
            changes
                in earnings estimates or recommendations by securities
                analysts;





·
            developments
                in our industry; and





·
            general
                market conditions and other factors, including factors unrelated
                to our
                own operating performance or the condition or prospects of our
                industry.





Further,
      the stock market in general, and securities of small-cap companies in
      particular, have recently experienced extreme price and volume fluctuations.
      Continued market fluctuations could result in extreme volatility in the price
      of
      our common stock, which could cause a decline in its value. You should also
      be
      aware that price volatility might be worse if the trading volume of our common
      stock is low.




Although
      our common stock is currently quoted on the Over-The-Counter Bulletin Board,
      trading may be extremely sporadic. A more active market for our common stock
      may
      not develop. Accordingly, you may have to bear the economic risk of an
      investment in our common stock indefinitely.




**We
      may not be able to list our common stock on a securities
      exchange.**




We
      intend
      to seek to have our common stock listed on the American Stock Exchange or the
      NASDAQ Stock Market as soon as practicable. However, we may not be able to
      initially meet or maintain the listing standards of either of those or any
      other
      stock exchange. In addition, if we fail to meet the listing standards set forth
      by SEC regulations, various requirements may be imposed on broker-dealers who
      sell our securities to persons other than established customers and accredited
      investors. These requirements may deter broker-dealers from recommending or
      selling our common stock, which may further affect its liquidity and make it
      more difficult for us to raise additional capital.





**We
      have a substantial number of convertible securities outstanding, which, if
      fully
      exercised, could require us to issue a significant number of shares of our
      common stock and result in substantial dilution to existing
      stockholders.**




As
      of
      March 28, 2007, we had outstanding options and warrants to purchase up to
      1,965,179 and 5,135,093 shares of common stock, respectively. In the event
      these
      securities are exercised, you could suffer substantial dilution in terms of
      your
      percentage ownership in us as well as the book value of your common stock.




13




**A
      large number of additional shares may be sold into the public market in the
      near
      future, which may cause the market price of our common stock to decline
      significantly, even if our business is doing well.**




Sales
      of
      a substantial amount of common stock in the public market, or the perception
      that these sales may occur, could adversely affect the market price of our
      common stock. On a fully diluted basis, we had 27,012,936 shares of common
      stock
      outstanding as of March 28, 2007. If these shares of common stock are registered
      or otherwise become eligible for public sale, the market price of our common
      stock could decline significantly.




**We
      have not and do not intend to pay any dividends.**




Our
      current management has not paid dividends in the past and does not plan to
      pay
      dividends in the near future. We expect to retain earnings to finance and
      develop our business. In addition, the payment of future dividends will be
      directly dependent upon our earnings, our financial needs and other similarly
      unpredictable factors.




14




**Item
      2. Description of Property** ****




Our
      principal executive offices are located at 3317 Third Avenue South, Seattle,
      Washington 98134. This facility consists of approximately 13,500 square feet
      of
      office space pursuant to a lease that expires on December 31, 2011.





We
      lease
      space for our retail properties as needed for our business operations from
      time
      to time. We believe that we will continue to be able to find and lease the
      properties we need on reasonable terms. However, there can be no assurance
      that
      we will be able to find suitable locations for our planned expansion or for
      continued operations. We believe that the condition of all of the properties
      we
      lease are generally adequate for their respective purposes.





**** **Item 3.
      Legal Proceedings** ****




On
      October 18, 2006, Susana Chi, a former employee of Organic Holding Company,
      Inc., brought suit against us in the Superior Court of the State of California
      for the County of Los Angeles claiming discrimination, wrongful termination
      and
      infliction of emotional distress in connection with the termination of Ms.
      Chi’s
      employment with us. We have filed an answer to Ms. Chi’s complaint and,
      subsequently, we caused the suit to be transferred to U.S. Federal District
      Court. The matter is currently in the discovery phase of the litigation. Ms.
      Chi’s claims appear to be unfounded and we intend to defend vigorously such
      action. We do not believe that Ms. Chi’s suit is material to our company or our
      business or that the failure to prevail in the suit would have a material
      adverse effect on our business or our consolidated financial position or results
      of operation.





We
      are
      not a party to any other material legal proceedings nor are we aware of any
      circumstance that may reasonably lead a third party to initiate legal
      proceedings against us.




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




No
      matters were submitted to a vote by security holders during the fourth quarter
      ended December 31, 2006.




15


**PART
      II**




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




**Market
      for Common Equity**




Our
      common stock is traded on the Over-The-Counter Bulletin Board under the symbol
      “SPHG.OB.” We intend to apply for a new trading symbol in the near future,
      however we can provide no assurance that we will be successful in obtaining
      a
      new trading symbol.





The
      following table sets forth, for the periods indicated, the reported high and
      low
      closing bid quotations for our common stock as reported on the Over-The-Counter
      Bulletin Board. The bid prices reflect inter-dealer quotations, do not include
      retail markups, markdowns or commissions and do not necessarily reflect actual
      transactions.





**Quarter
                Ended**
            
            **High
                Bid ($)**
            
            **Low
                Bid ($)**March
                31, 2005
            
            
            9.30
            
            
            4.50June
                30, 2005
            
            
            6.90
            
            
            3.30September
                30, 2005
            
            
            6.00
            
            
            3.00December
                31, 2005
            
            
            7.50
            
            
            2.00March
                31, 2006
            
            
            6.00
            
            
            3.50June
                30, 2006
            
            
            5.03
            
            
            3.00September
                30, 2006
            
            
            3.25
            
            
            3.25December
                31, 2006
            
            
            3.25
            
            
            2.00





**Holders**





As
      of
      March 28, 2007, there were approximately 202 holders of record of our common
      stock.





**Dividend
      Policy**




We
      did
      not pay any dividends in the periods indicated in the above table. We do not
      intend to pay cash dividends in the foreseeable future. We intend to retain
      earnings, if any, for future operation and expansion. Any decision to declare
      and pay dividends in the future will be made at the discretion of our Board
      of
      Directors and will depend on, among other things, our results of operations,
      cash requirements, financial condition, contractual restrictions and other
      factors that our Board of Directors may deem relevant.





**Recent
      Sales of Unregistered Securities**




In
      December 2006, we issued .8444 shares of Series A Preferred Stock to a
      consultant in consideration for the settlement of $7,600 of debt. This issuance
      of the securities was exempt from registration pursuant to Section 4(2) of
      the
      Securities Act.




Additional
      information regarding our recent sales of unregistered securities has been
      included in our filings made with the SEC.




16


**Item 6.
      Management’s Discussion and Analysis or Plan of Operation** ****




*The
      following discussion and analysis of the results of operations and financial
      condition of Organic Holding Company, Inc. for the years ended December 31,
      2006
      and 2005 should be read in conjunction with our financial statements and the
      notes to those financial statements that are included elsewhere in this Form
      10-KSB. This discussion includes forward-looking statements based upon current
      expectations that involve risks and uncertainties, such as plans, objectives,
      expectations and intentions. Actual results and the timing of events could
      differ materially from those anticipated in these forward-looking statements
      as
      a result of a number of factors. Words such as “anticipate,” “estimate,” “plan,”
“continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,”
“could,” and similar expressions are used to identify forward-looking
      statements.*





**Overview**





*Organization
      and Business*





Organic
      Holding Company, Inc., d/b/a Organic To Go, whose name was changed to Organic
      To
      Go, Inc. effective February 27, 2007, was incorporated in the state of Delaware
      in February 2004. We provide convenient retail and delivery store locations,
      which prepare and serve “grab and go” lunch, dinner, and breakfast foods and
      beverages prepared using organic ingredients, whenever possible. We also
      distribute our products through select wholesale accounts. At December 31,
      2006,
      we operated five stores in Washington and seven stores in California. In October
      2006, we expanded our catering operations in the California area by acquiring
      the assets of a catering operation headquartered in Los Angeles, California.





*Reverse
      Merger with Public Shell Company in February 2007*





Pursuant
      to terms of an Agreement and Plan of Merger and Reorganization by and among
      the
      SP Holding Corporation, Organic Acquisition Corporation and Organic Holding
      Company, Inc. on February 12, 2007, all of the outstanding shares of common
      and
      preferred stock of Organic Holding Company, Inc. were exchanged for shares
      of SP
      Holding Corporation common stock as determined by multiplying each such
      outstanding share of Organic Holding Company, Inc. stock by an exchange ratio
      of
      0.69781 (the “Exchange Ratio”). In addition, convertible promissory bridge notes
      of Organic Holding Company, Inc. approximating $5.8 million automatically
      converted into SP Holding Corporation common stock. As a result, among other
      things, Organic Holding Company, Inc. became a wholly-owned subsidiary of SP
      Holding Corporation. Outstanding options, warrants and purchase rights of
      Organic Holding Company, Inc. were converted into options, warrants and purchase
      rights to purchase shares of SP Holding Corporation common stock in accordance
      with the Exchange Ratio. The closing of the merger was conditioned upon the
      closing a private placement offering of a minimum of eighty units (the “Units”)
      at a purchase price of $50,000 per Unit for $4 million, with the option to
      offer
      additional Units. Each Unit consists of (i) 40,000 shares of SP Holding
      Corporation common stock, and (ii) a warrant to purchase 8,000 shares of SP
      Holding Corporation common stock. Each warrant entitles the holder thereof
      to
      purchase shares of SP Holding Corporation common stock at an exercise price
      of
      $2.50 per share and is exercisable for a period of five years from the date
      of
      issuance. The consummation of the merger occurred concurrently with the
      completion of a private placement of 138 Units, for an aggregate of
      approximately $6.9 million. Prior to the merger, SP Holding Corporation was
      a
      non-operating “public shell” company.





From
      an
      accounting perspective, the merger transaction is considered a recapitalization
      of Organic Holding Company, Inc. accompanied by the issuance of securities
      by
      Organic Holding Company, Inc. for the net liabilities of SP Holding Corporation,
      as a result of SP Holding Corporation not having operations immediately prior
      to
      the merger. After the merger and the private placement, former SP Holding
      Corporation stockholders own approximately 5% of our common stock, and former
      Organic Holding Company, Inc. stockholders and convertible bridge note holders
      own approximately 70% of our common stock. Our Board of Directors and executive
      officers are comprised of former directors and executive officers of Organic
      Holding Company, Inc.




17





The
      merger transaction is accounted for as a capital transaction rather than as
      a
      business combination, because the transaction is equivalent to the issuance
      of
      securities by Organic Holding Company, Inc. for the net liabilities of SP
      Holding Corporation, accompanied by a recapitalization. The accounting is
      identical to that resulting from a reverse acquisition, except that no goodwill
      or other intangibles are recorded. Unless otherwise indicated, all share and
      per
      share information presented and disclosed has been adjusted in accordance with
      the Exchange Ratio.





*Basis
      of Presentation and Liquidity*





The
      accompanying financial statements have been prepared in conformity with
      generally accepted accounting principles, which contemplate our continuation
      as
      a going concern. We have reported recurring losses and cash used by operating
      activities, and at December 31, 2006 have a net working capital deficiency
      and
      stockholders’ deficit that could raise doubt about our ability to continue as a
      going concern.  Since our inception, we have funded operations and business
      development and growth through debt and equity financings .  
      In this regard, during 2006 we raised approximately $8.1 million pursuant to
      sales of debt and equity securities in connection with our private placement
      and
      subordinated debt offerings. Further, subsequent to December 31, 2006, proceeds
      of approximately $6.9 million were received from the sale of equity securities
      in connection with the merger and private placement, and approximately $5.8
      million of notes payable has been converted into shares of common stock. 
While we plan to become profitable during the second half of 2007, our
      management intends to continue to be engaged in additional fund-raising
      activities to fund future capital expenditures, potential acquisitions of
      businesses and provide additional working capital.  We anticipate having
      sufficient working capital in place for the next 12 months to continue
      operations. The accompanying financial statements do not include any adjustments
      to reflect the possible future effects on the recoverability and classification
      of assets or the amounts and classifications of liabilities that could result
      should we not continue as a going concern.





**Critical
      Accounting Policies and Estimates**





Management's
      discussion and analysis of financial condition and results of operations are
      based on our financial statements, which have been prepared in accordance with
      accounting principles generally accepted in the United States. The preparation
      of these financial statements requires our management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      the
      disclosure of contingent assets and liabilities at the date of the financial
      statements, as well as the reported net sales and expenses during the reporting
      periods. On an ongoing basis, estimates and assumptions are evaluated. Estimates
      are based on historical experience and on various other factors believed
      reasonable under the circumstances, the results of which form the basis for
      making judgments about the carrying value of assets and liabilities that are
      not
      readily apparent from other sources. Actual results may differ from these
      estimates under different assumptions or conditions. A summary of significant
      accounting policies is presented in Note 1 to our financial statements elsewhere
      in this Form 10-KSB. The following accounting policies are considered the more
      critical to aid in understanding and evaluating our results of operations and
      financial condition.




18




*Use
      of Estimates*





In
      preparing the financial statements in conformity with accounting principles
      generally accepted in the United States of America, management makes estimates
      and assumptions that affect the reported amounts of assets and liabilities
      and
      disclosures of contingent assets and liabilities at the dates of the financial
      statements, as well as the reported amounts of revenues and expenses during
      the
      reporting years. Actual results could differ from those estimates. The
      more
      significant accounting estimates inherent in the preparation of our financial
      statements include estimates as to the depreciable lives of property and
      equipment, valuation of inventories, valuation of equity related instruments
      issued, and valuation allowance for deferred income tax assets.





*Inventory*





Inventory,
      which consists primarily of food, beverages and packaging products, is stated
      at
      the lower of cost or market. Cost is determined on a first-in, first-out basis.
      In assessing the ultimate realization of inventories, our management makes
      judgments as to future demand requirements compared to current inventory levels.





*Impairment
      of Long-lived Assets*





Long-lived
      assets are reviewed for impairment whenever events or changes in circumstances
      indicate that the carrying amount of the assets may not be recoverable.
      Impairment of long-lived assets would be recognized in the event that the net
      book values of such assets exceed the future undiscounted cashflows attributable
      to such assets. No impairment of long-lived assets was recognized for any of
      the
      periods presented.





*Fair
      Value of Financial Instruments*





We
      measure our financial assets and liabilities in accordance with generally
      accepted accounting principles. For certain of our financial instruments,
      including cash and cash equivalents, accounts receivable, accounts payable
      and
      accrued liabilities, the carrying amounts approximate fair value due to their
      short maturities. Amounts recorded for notes payable also approximate fair
      value
      because current interest rates offered to us for debt of similar maturities
      are
      substantially the same.





*Intangible
      Assets*





In
      connection with the acquisition of certain store assets in April 2005, we
      acquired certain leasehold interests and other intangible assets. Leasehold
      interests are being amortized over the 1 to 4 year lives of the leases and
      the
      other intangible assets were fully amortized during the year ended December
      31,
      2005. In connection with the acquisition in October 2006 of certain assets
      of a
      catering business, we acquired certain identifiable intangible assets including
      customer-based intangibles and a covenant not to compete received from the
      sellers. Amounts allocated to intangible assets were identified by management
      and have been valued on a number of factors based upon preliminary estimates.
      The estimate of useful lives of each intangible asset was based on an analysis
      by management of all pertinent factors, and selected an estimated useful life
      of
      two years for each identifiable intangible asset. ****





*Revenue
      Recognition*





Revenues
      are recognized at the point of sale at retail locations or upon delivery of
      the
      product for delivery and wholesale transactions.




19





*Cost
      of Sales* **





Cost
      of
      sales includes the cost of food and paper products.





*Income
      Taxes*





We
      account for income taxes in accordance with SFAS No. 109, “Accounting for Income
      Taxes,” which requires recognition of deferred tax assets and liabilities for
      expected future tax consequences of events that have been included in financial
      statements or tax returns. Under this method, deferred income taxes are
      recognized for the tax consequences in future years of differences between
      the
      tax bases of assets and liabilities and their financial reporting amounts at
      each period end based on enacted tax laws and statutory tax rates applicable
      to
      the periods in which the differences are expected to affect taxable income.
      Valuation allowances are established, when necessary, to reduce deferred tax
      assets to amounts expected to be realized. We
      continue to provide a full valuation allowance in order to reduce our net
      deferred tax asset to zero, inasmuch as our management has not determined that
      realization of deferred tax assets is more likely than not. The
      provision for income taxes represents the tax payable for the period and change
      during the period in net deferred tax assets and liabilities.




*Stock-based
      Compensation*





In
      December 2002, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      148, “Accounting for Stock-Based Compensation-Transition and Disclosure,” an
      amendment to SFAS No. 123, “Accounting for Stock-Based Compensation.” SFAS No.
      148 provides alternative methods of transition for a voluntary change to the
      fair value based method of accounting for stock-based employee compensation.
      In
      addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to
      require prominent disclosures in both annual and interim financial statements
      about the method of accounting for stock-based employee compensation and the
      effect of the method used on reported results. We have adopted the fair value
      based method of accounting under SFAS No. 123 for stock-based compensation
      for
      stock issued to employees and consultants for compensation.





We
      account for equity instruments issued to non-employees in accordance with the
      provisions of SFAS No. 123 and Emerging Task Force Issue No. 96-18, “Accounting
      for Equity Instruments that are Issued to Other Than Employees for Acquiring
      or
      in Conjunction with Selling Goods or Services.” Compensation expense related to
      equity instruments issued to non-employees is recognized as the equity
      instruments vest.





In
      December 2004, the FASB released SFAS
      No. 123 (revised 2004), “Share Based Payment” (“SFAS 123R”). S FAS
      123R
      sets forth the accounting for share-based payment transactions in which an
      enterprise receives employee services in exchange for (a) equity instruments
      of
      the enterprise, or (b) liabilities that are based on the fair value of the
      enterprise's equity instruments or that may be settled by the issuance of such
      equity instruments. The statement eliminates the ability to account for
      share-based compensation transactions using APB Opinion No. 25, “Accounting for
      Stock Issued to Employees,” and generally requires instead that such
      transactions be accounted for using a fair-value-based method, which requires
      recording an expense over the requisite service period for the fair value of
      all
      options or warrants granted to employees and consultants. We adopted SFAS 123R
      effective beginning January 1, 2006.




20




**Results
      of Operations**





*Sales*





Sales
      f or
      2006
      increased approximately 58%, to $9.7 million, as compared to $6.1 million for
      2005. Retail sales were $5.2 million during 2006, an increase of 16% over $4.5
      million during 2005. Retail sales comprised 54% of total sales in the 2006
      period as compared to 74% in 2005. Delivery/Catering sales were $3.3 million
      during 2006, an increase of 207% over $1.1 million during 2005.
      Delivery/Catering sales comprised 34% of total sales in the 2006 period as
      compared to 18% in 2005. Wholesale sales were $1.1 million during 2006, an
      increase of 108% over $527,000 during 2005. Wholesale sales comprised 11% of
      total sales in 2006 as compared to 9% in 2005. The increases in sales were
      due
      in part to having only one store open during the first quarter of 2005, and
      also
      to increased business volume. With respect to Delivery/Catering, the increase
      in
      2006 was attributable to increased sales resulting from the acquisition of
      the
      Vinaigrette’s business.





*Cost
      of Sales*





Cost
      of
      sales includes the cost of food and paper products. Cost of sales for 2006
      increased approximately 25%, to $4.9 million, as compared to $3.9 million for
      2005. Cost of sales for 2006 approximated 50% as a percent of sales as compared
      to 64% during 2005. The decrease in cost of sales as a percent of sales was
      due
      primarily to decreases in costs in each of Retail, Delivery/Catering and
      Wholesale sales.





*Gross
      Profit* **





Gross
      profit increased approximately 115%, to $4.8 million for 2006, as compared
      to
      $2.2 million for 2005. Gross profit for 2006 approximated 50% as a percent
      of
      sales as compared to 36% during 2005. The increase in gross profit was due
      primarily to retail and catering sales due to increased sales volumes and
      increased gross margins during 2006 as compared to 2005.





*Operating
      Expenses*





Operating
      expenses for 2006 increased approximately 46%, to $10.3 million, as compared
      to
      $7.2 million for 2005. Operating expenses are comprised primarily of labor,
      and,
      to a lesser extent, occupancy and utilities, and selling, general and
      administrative expenses. Operating expenses increased in 2006, as compared
      to
      2005, primarily due to increased labor and related costs as a result of
      continued growth during the year and preparing for future growth.





*Depreciation
      and Amortization*





Depreciation
      and amortization expense for 2006 increased approximately 91%, to approximately
      $1.2 million, as compared to $630,000 for 2005, due to having more assets in
      service. Depreciation and amortization for 2006 approximated 12% as a percent
      of
      sales as compared to 10% during 2005. Amortization expense includes amortization
      of leasehold improvements and intangible assets.




*Loss
      from Operations*





Loss
      from
      operations for 2006, increased to approximately $6.9 million as compared to
      $5.6
      million for 2005. The increase in loss from operations is the result of the
      increase in gross profit of $2.6 million being offset by the $3.3 million
      increase in operating expenses and a $576,000 increase in depreciation and
      amortization. Loss from operations for 2006 approximated 71% as a percent of
      sales as compared to 91% during 2005.




21





*Interest
      Expense, Net* **





Interest
      expense, net for 2006, increased to approximately $1.1 million from $78,000
      for
      2005. The increase was primarily due to increased borrowings in 2006 and related
      amortization of debt discount and debt issue costs, which resulted in non-cash
      interest expense of approximately $687,000.





*Net
      loss* **





Net
      loss
      for 2006 increased approximately $2.3 million, or approximately 41%, to $8.0
      million as compared to $5.7 million for 2005. The increase in net loss was
      due
      primarily to the increase in gross profit being offset by increases in operating
      expenses, depreciation and amortization and interest expense. Approximately
      $1.6
      million of the increase in net loss was attributable to increases in
      depreciation and amortization and interest expense.





**Liquidity
      and Capital Resources**





Since
      our
      inception, we have funded operations through financing activities consisting
      primarily of private placements of debt and equity securities. Our
      management intends to raise additional debt and equity financing to fund future
      capital expenditures, operations and to provide additional working capital,
      and
      in this regard, during 2006, we have raised approximately $8.1 million pursuant
      to sales of debt and equity securities in connection with our 2006 private
      placement and subordinated debt offerings. Further, subsequent to December
      31,
      2006, we received aggregate proceeds of approximately $6.9 million from the
      sale
      of equity securities in connection with the merger and private placement, and
      $5.8 million of notes payable have been converted into shares of our common
      stock. We continue to be engaged in additional fund-raising activities. There
      is
      no assurance that such financing will be obtained in sufficient amounts
      necessary to meet our needs. In light of these matters, continuation as a going
      concern is dependent upon our ability to meet our financing requirements, raise
      additional capital, and the success of our future operations or completion
      of a
      successful business combination.




Net
      cash
      used by operating activities was approximately $6.0 million in 2006 and $3.4
      million in 2005. The $2.6 million increase in cash used by operating activities
      was due primarily to the $962,000 increase in net loss as adjusted for
      depreciation and amortization expense, along with the decrease in accounts
      payable of approximately $1.8 million (an increase of $1.6 million in 2005
      as
      compared to a decrease of $245,000 in 2006).





Net
      cash
      used in investing activities was approximately $1.2 million and $2.3 million
      for
      2006 and 2005, respectively. Uses of cash flow for investing activities in
      2006
      primarily relate to the acquisition of identifiable intangible assets in
      connection with the acquisition of Vinaigrette’s, and in 2005, relate primarily
      to capital expenditures associated with business expansion for the acquisition
      of store and kitchen fixtures, equipment and leasehold improvements, including
      payments for the acquisition of certain store operations and assets of a former
      retailer.





Net
      cash
      provided by financing activities was $7.8 million and $5.8 million for 2006
      and
      2005, respectively. The increase of net cash provided in 2006 was primarily
      due
      to an increase in proceeds, net of issuance costs, from the issuance of notes
      payable and preferred stock.




22




**Recent
      Accounting Pronouncements**





In
      November 2004, the FASB issued SFAS No. 151, “Inventory Costs,” which is an
      amendment of Accounting Research Bulletin No. 43, Chapter 4, “Inventory
      Pricing.” SFAS No. 151 clarifies that abnormal amounts of idle facility expense,
      freight, handling costs and wasted materials (spoilage), should be recognized
      as
      current-period costs incurred during fiscal years beginning after June 15,
      2005.
      It is expected that the adoption of provisions of SFAS No. 151 will not have
      a
      material effect on our results of operations or financial condition.





In
      May
      2005, the FASB issued Statement of Financial Accounting Standards No. 154,
      “Accounting Changes and Error Corrections.” SFAS 154 replaces APB Opinion No.
      20, “Accounting Changes,” and SFAS No. 3, “Reporting Accounting Changes in
      Interim Financial Statements,” and changes the requirements for the accounting
      for and reporting of a change in accounting principle. We were required to
      adopt
      SFAS 154 in 2006. Our results of operations and financial condition will only
      be
      impacted by SFAS 154 if we implement changes in accounting principles that
      are
      addressed by the standard or corrects accounting errors in future
      periods.





In
      July
      2006, the FASB issued FASB Interpretation No. 48, “Accounting for
      Uncertainty in Income Taxes” ** (“FIN No. 48”),
      which prescribes a recognition threshold and measurement process for recording
      in the financial statements uncertain tax positions taken or expected to be
      taken in a tax return. Additionally, FIN No. 48 provides guidance on
      the recognition, classification, accounting in interim periods and disclosure
      requirements for uncertain tax positions. The accounting provisions of
      FIN No. 48 became effective for us beginning January 1, 2007. We
      are in the process of determining the effect, if any, that the adoption of
      FIN No. 48 will have on our results of operations or financial
      position.





In
      September 2006, the SEC issued Staff Accounting Bulletin No. 108, “Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements” (“SAB 108”).  SAB 108 provides
      interpretive guidance on how the effects of the carryover or reversal of prior
      year misstatements should be considered in quantifying a current year
      misstatement.  The SEC believes that registrants should quantify errors
      using both a balance sheet and income statement approach and evaluate whether
      either approach results in quantifying a misstatement that, when all relevant
      quantitative and qualitative factors are considered, is material.  SAB 108
      is effective for fiscal years ending on or after November 15, 2006, with early
      application encouraged.  We believe that SAB 108 will not have a
      significant impact on our results of operations or financial
      position.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value
      Measurements.” SFAS No. 157 defines fair value, establishes a framework for
      measuring fair value and requires enhanced disclosures about fair value
      measurements. SFAS No. 157 requires companies to disclose the fair value of
      its
      financial instruments according to a fair value hierarchy (i.e., levels 1,
      2,
      and 3, as defined). Additionally, companies are required to provide enhanced
      disclosure regarding instruments in the level 3 category, including a
      reconciliation of the beginning and ending balances separately for each major
      category of assets and liabilities. SFAS No. 157 is effective for financial
      statements issued for fiscal years beginning after November 15, 2007 and
      interim periods within those fiscal years. We are currently evaluating the
      impact, if any, adoption may have on our results of operation or financial
      position.





In
      October 2006, the FASB issued FASB Staff Position No. 123(R)-5, “Amendment of
      FASB Staff Position FAS 123(R)-1” (“FSP 123(R)-5”). FSP 123(R)-5 amends FSP
      123(R)-1 for equity instruments that were originally issued as employee
      compensation and then modified, with such modification made to the terms of
      the
      instrument solely to reflect an equity restructuring that occurs when the
      holders are no longer employees. In such circumstances, no change in the
      recognition or the measurement date of those instruments will result if both
      of
      the following conditions are met: (a) there is no increase in fair value of
      the
      award (or the ratio of intrinsic value to the exercise price of the award is
      preserved, that is, the holder is made whole), or the antidilution provision
      is
      not added to the terms of the award in contemplation of an equity restructuring;
      and (b) all holders of the same class of equity instruments (for example, stock
      options) are treated in the same manner. We believe that FSP 123(R)-5 will
      not
      have a significant impact on our results of operations or financial
      position.




23





In
      December 2006, the FASB issued FASB Staff Position No. EITF 00-19-2 “Accounting
      for Registration Payment Arrangements” (“FSP EITF 00-19-2”), which addresses an
      issuer’s accounting and disclosures relating to registration payment
      arrangements. In connection with issuance of the Units in the private placement
      in February 2007, we have agreed to register the shares underlying the Units.
      In
      accordance with FSP EITF 00-19-2, the registration payment arrangements are
      accounted for as an instrument separate and apart from the related securities
      and will be accounted for in accordance with SFAS No. 5 “Accounting for
      Contingencies,” accruing a liability if payment is probable and the amount can
      be reasonably estimated.





**Contractual
      Obligations and Off-Balance Sheet Arrangements**




We
      have
      certain fixed contractual obligations and commitments that include future
      estimated payments. Changes in our business needs, cancellation provisions,
      changing interest rates, and other factors may result in actual payments
      differing from the estimates. We cannot provide certainty regarding the timing
      and amounts of payments. The following table summarizes our contractual
      obligations as of December 31, 2006, and the effect these obligations are
      expected to have on liquidity and cash flows in future periods (in
      thousands).




**Total**
            
            **Less
                than 1 year**
            
            **1-3
                Years**
            
            **3-5
                Years**Contractual
                Obligations:Notes
                payable
            
            $
            7,575
            
            $
            6,983
            
            $
            592
            
            $
            -Capital
                Lease Obligations
            
            
            214
            
            
            63
            
            
            151
            
            
            -Operating
                Leases
            
            
            1,059
            
            
            493
            
            
            530
            
            
            36Total
                Contractual Obligations:
            
            $
            8,848
            
            $
            7,539
            
            $
            1,273
            
            $
            36




Notes
      payable consist primarily of convertible notes payable, a substantial portion
      of
      which has subsequently been converted into our common stock, resulting from
      debt
      financing from independent third parties for working capital purposes, and
      of
      other notes payable collateralized by vehicles and certain other assets.




Capital
      lease obligations consist of leases for certain office equipment under
      non-cancelable lease agreements.





Operating
      lease amounts include leases for store, kitchen and office facilities under
      various non-cancelable operating lease agreements that expire at various dates
      through years 2009, with options to renew certain of the leases. All leases
      are
      on a fixed repayment basis. None of the leases include contingent
      rentals.




24





We
      have
      not entered into any other financial guarantees or other commitments to
      guarantee the payment obligations of any third parties, nor entered into any
      derivative contracts that are indexed to our shares and classified as
      stockholder’s equity or that are not reflected in our financial statements.
      Furthermore, we do not have any retained or contingent interest in assets
      transferred to an unconsolidated entity that serves as credit, liquidity or
      market risk support to such entity. We do not have any variable interest in
      any
      unconsolidated entity that provides financing, liquidity, market risk or credit
      support to us or engages in leasing, hedging or research and development
      services with us.





**Quantitative
      and Qualitative Disclosures about Market Risk**





We
      do not
      use derivative financial instruments. Our financial instruments consist of
      cash
      and cash equivalents, trade accounts receivable, accounts payable and long-term
      obligations. Investments in highly liquid instruments purchased with a remaining
      maturity of 90 days or less at the date of purchase are considered to be cash
      equivalents.





Our
      exposure to market risk for changes in interest rates relates primarily to
      our
      short-term investments and short and long-term obligations, all of which have
      fixed interest rates. Thus, fluctuations in interest rates would not have a
      material impact on the fair value of these securities. At December 31, 2006,
      we
      had approximately $865,000 in cash and cash equivalents. A hypothetical 10%
      increase or decrease in interest rates would not have a material impact on
      our
      results of operations, or the fair market value or cash flows of these
      instruments.




**Item
      7. Financial Statements** ****




Our
      audited financial statements appear beginning on page F-1 of this report.




**Item
      8. Changes In and Disagreements With Accountants on Accounting and Financial
      Disclosure** ****




None.




**Item
      8A. Controls and Procedures** ****




(a) Evaluation
      of Disclosure Controls and Procedures .




Our
      management, with the participation of our Chief Executive Officer and Chief
      Financial Officer, evaluated the effectiveness of our disclosure controls and
      procedures (as defined in the rules and regulations of the SEC under the
      Exchange Act) as of the end of the period covered by this report (the
“Evaluation Date”). Based on this evaluation, our Chief Executive Officer and
      Chief Financial Officer have concluded that our disclosure controls and
      procedures were effective as of the Evaluation Date.




(b) Changes
      in Internal Control Over Financial Reporting .




During
      the fiscal quarter ended December 31, 2006, there were no changes to our
      internal controls over financial reporting that have materially affected, or
      are
      reasonably likely to materially affect, our internal controls over financial
      reporting.




**Item
      8B. Other Information** ****




None.




25


**PART
      III**




**Item 9.
      Directors, Executive Officers, Promoters, Control Persons and Corporate
      Governance; Compliance With Section 16(a) of the Exchange
      Act** ****




The
      table
      below sets forth information regarding our current directors and executive
      officers. All of our directors and executive officers have held their positions
      with us since February 12, 2007, which is the date when we acquired Organic
      Holding Company, Inc. Prior to the merger, Mr. Mark Schaftlein served as our
      sole officer and director since January 2004.





**Name**
            
            **Age**
            
            **Position**Jason
                Brown
            
            49
            
            Chief
                Executive Officer and ChairmanMichael
                Johnson
            
            40
            
            Vice
                President of Retail OperationsWendy
                Tenenberg
            
            50
            
            Vice
                President of MarketingJonathan
                Wernick
            
            39
            
            Chief
                Financial OfficerDave
                Smith
            
            64
            
            DirectorPeter
                Meehan
            
            50
            
            DirectorRoy
                Bingham
            
            44
            
            DirectorDouglas
                Lioon
            
            50
            
            DirectorS.M.
                “Hass” Hassan
            
            58
            
            Director





**Jason
      Brown** served
      as
      Chief Executive Officer and Chairman of the Board of Directors of Organic
      Holding Company, Inc. since its inception in February 2004. Mr. Brown has more
      than 25 years of experience in branded direct to consumer retail operations.
      From 2000 through March 2003, Mr. Brown served as the Chief Executive Officer
      of
      Custom Nutrition Services, a company which provided consumers with personalized
      vitamin solutions based on tailored medical expertise which he founded. In
      April
      2003, Custom Nutrition Services was sold to Drugstore.com for $5.6 million
      in
      cash and stock. From 1995 to 2000, Mr. Brown served as the Chief Executive
      Officer of Concept Development, an alterntive healthcare consulting firm. From
      1990 to 2000, Mr. Brown served as a Managing Director for Columbia Sportswear
      NZ/Australia, an international sportswear maufacturer and retailer. From 1978
      to
      1989, Mr. Brown served as the Chief Executive Officer of Cotton Comfort, a
      vertically integrated cotton clothing store chain.




**Michael
      Johnson** served
      as
      Vice President of Retail Operations of Organic Holding Company, Inc. since
      January 2006. As Vice President of Retail Operations, Mr. Johnson is responsible
      for overseeing the operations of our cafés and overseeing the business
      relationships we have with colleges and universities. Mr. Johnson has more
      than
      20 years of experience managing restaurants including white tablecloth cafes
      and
      other retail food establishments such as Noah's bagel shop and Briazz Specialty
      Cafes.




**Wendy
      Tenenberg** served
      as
      Vice President of Retail Marketing of Organic Holding Company, Inc. since its
      inception in February 2004. As Vice President of Marketing, Ms. Tenenberg is
      responsible for all aspects of graphic design and direct-to-consumer marketing
      initiatives. Ms. Tenenberg has more than 15 years of experience in retail and
      direct-to-consumer marketing that has included extensive experience in customer
      acquisition and direct marketing. From 2000 to 2003, Ms. Tenenberg was in charge
      of marketing at Custom Nutrition Services. From 2003 to 2004, Ms. Tenenberg
      served as the Director of Marketing of Drugstore.com.




26




**Jonathan**  **Wernick** served
      as
      Chief Financial Officer of Organic Holding Company, Inc. since January 2007
      and
      has more than 15 years experience as a financial executive, having served as
      part of senior management teams in both privately held and public corporations.
      From 2005 to January 2007, Mr. Wernick was Vice President of Finance at
      DavexLabs, a hair care products company. From 2003 to 2005, he was Director
      of
      Finance of RA Patina Restaurants, a multi-unit operator of restaurants, catering
      and food service operations. From 1999 until 2003, Mr. Wernick was General
      Manager and Chief Financial Officer of the Datafaction Division of Softline,
      a
      financial software company. He is a graduate of Yeshiva University, earned
      a
      Masters Degree in Business Administration from the University of Southern
      California and is a Certified Public Accountant.




**Dave
      Smith** served
      as a Director of Organic Holding Company, Inc. since its inception in February
      2004. Mr. Smith is the co-founder of Smith & Hawken, the garden tool
      company, which has annual sales in excess of $150 million. From July of 1979
      to
      September of 1988, Mr. Smith served as President and Chief Operating Officer
      of
      Smith & Hawken. From September of 1997 to June of 2001, Mr. Smith served as
      the Vice President of Catolog/Internet Marketing and Operations of Seeds of
      Change. Since June of 2001, Mr. Smith has worked as an independent consultant
      to
      a variety of companies. Mr. Smith has been involved in the retail and catalog
      industries as an executive and consultant for over 20 years with companies
      such
      as SelfCare, Real Goods, Diamond Organics, Seeds of Change and Organic Bouquet.




**Peter
      Meehan** served
      as a Director of Organic Holding Company, Inc. since its inception in February
      2004. Mr. Meehan has served as the Chief Executive Officer of Newman's Own
      Organics since it was co-founded in 1993 by Mr. Meehan, Paul Newman and Nell
      Newman. Newman's Own Organics, which is considered by many to be one of the
      most
      prominent brands in the organic industry, initially started as a division of
      Newman's Own and is now a multimillion-dollar independent company.




**Roy
      Bingham** served
      as a Director of Organic Holding Company, Inc. since its inception in February
      2004. In 2006, Mr. Bingham co-founded NourishLife, LLC, an online marketer
      of
      branded nutritional solutions. Until recently, Mr. Bingham served as a Managing
      Director of Health Business Partners, LLC, an investment banking company he
      co-founded. In his capacity as Managing Director of Health Business Partners,
      LLC, Mr. Bingham managed more than 20 acquisition transactions in the nutrition
      and consumer health care industries with a value of over $120 million. From
      1995
      to 1997, Mr. Bingham served as a consultant with McKinsey & Company in
      Boston, where he provided management-consulting services to several Fortune
      500
      companies. From 1988 to 1993, Mr. Bingham worked in London, England as the
      corporate treasurer and eventually a Board member of Paragon, PLC. Mr. Bingham
      earned a Masters Degree in Business Administration with distinction from Harvard
      Business School in 1995.




**Douglas**  **Lioon** served
      as a Director of Organic Holding Company, Inc. since its inception in February
      2004. Mr. Lioon joined HVL Incorporated, a healthcare and nutritional products
      company whose principal brand is Douglas Laboratories, in 1978 as a Sales
      Representative and served as its President from 1985 to December 2005, when
      HVL
      Incorporated was sold to Atrium Biotechnologies Inc. for $92 million. Mr. Lioon
      created and developed the Douglas Laboratories brand, a leading dietary
      supplement company, and engineered its vertical integration strategy growing
      Douglas Laboratories into one of the leader’s in the Practitioner segment of the
      dietary supplement industry.





**S.M.
      “Hass” Hassan** served
      as
      a Director of Organic Holding Company, Inc. since December 2006. Since June
      2006, Mr. Hassan has served as a member of the Board of Directors of Whole
      Foods
      Markets, a leading natural food supermarket chain. In 1979, Mr. Hass founded
      Alfalfa’s Markets, a whole food supermarket chain, and served as its President
      and Chief Executive Officer until 1996. From 1996 to 1998, Mr. Hassan served
      as
      the President of Wild Oats Markets, a whole food supermarket chain. In 1999,
      Mr.
      Hassan founded Fresh & Wild, the United Kingdom’s leading retailer of
      organic foods, and served as its Executive Chairman until its sale to Whole
      Foods Markets in 2004. During his career, Mr. Hassan has received many industry
      recognitions, including the Chain Store Retail Executive of the Year, Boulder
      Entrepreneur of the Year and EY National Entrepreneur of the Year. Since 2004,
      Mr. Hassan has been working as an active board member and investor in several
      companies in the natural products industry.




27





**Board
      of Directors**




Our
      Board
      of Directors is currently composed of six members, all of whom, other than
      Jason
      Brown, are “independent” as defined under the National Association of Securities
      Dealers’ listing standards. Mr. Brown has been elected as the Chairman of
      the Board of Directors. In this capacity he is responsible for presiding at
      the
      meetings of the Board of Directors. All directors are elected annually and
      serve
      until the next annual meeting of stockholders or until the election and
      qualification their successors. There are no family relationships between any
      of
      our directors or executive officers.




**Committees**




The
      Board
      of Directors may designate from among its members one or more committees. We
      do
      not currently have any such committees. We are not a “listed company” under SEC
      rules and regulations and therefore are not required to have an audit committee,
      compensation committee or a nominating/corporate governance committee.
      Accordingly, we do not have an “audit committee financial expert” as such term
      is defined in the rules promulgated under the Securities Act and the Exchange
      Act. The functions ordinarily handled by these committees are currently handled
      by our entire Board of Directors. We anticipate creating an audit, compensation
      and nominating/corporate governance committee in the near future.




**Nominations
      by Stockholders**




Nominees
      for our Board of Directors are determined by our Board of Directors as a whole,
      based on recommendations of one or more of its members. We do not have a
      nominating committee or a formal method for stockholders to communicate
      prospective nominees to us. We do not have any restrictions on stockholder
      nominations under our Amended and Restated Certificate of Incorporation or
      Amended and Restate Bylaws. The only restrictions are those applicable generally
      under Delaware law and the federal proxy rules. The Board of Directors will
      consider suggestions from individual stockholders, subject to evaluation of
      the
      suggested nominee’s merits. Stockholders may communicate nominee suggestions
      directly to any of the Board members, accompanied by biographical details and
      a
      statement of support for the nominees. The suggested nominee must also provide
      a
      statement of consent prior to being considered for nomination. Although there
      is
      no formal criteria for nominees, our Board of Directors believes that nominees
      should be actively engaged in business endeavors, have a financial background,
      and be familiar with acquisition strategies and the restaurant or food service
      industry.




**Code
      of Ethics**




Prior
      to
      our merger with Organic Holding Company, Inc. on February 12, 2007, we were
      a
      non-operating shell company, and as a result, we had no need for, and had not
      adopted a code of ethics. In connection with the merger, we plan to adopt a
      code
      of ethics in the near future.




28




**Section 16(a)
      Beneficial Ownership Reporting Compliance**




Section 16(a)
      of the Exchange Act requires our executive officers and directors and persons
      who own more than ten percent of a registered class of our equity securities
      to
      file an initial report of ownership on Form 3 and changes in ownership on
      Form 4 or 5 with the SEC and the National Association of Securities
      Dealers, Inc. Executive officers, directors and greater than ten percent
      stockholders are also required by SEC rules to furnish us with copies of all
      Section 16(a) forms they file. Based solely on our review of copies of any
      such forms received by us, or written representations from certain reporting
      persons, we believe that during the fiscal year ended December 31, 2006 all
      Section 16(a) filing requirements applicable to our officers, directors and
      ten
      percent stockholders were fulfilled.




**Item 10.
      Executive Compensation** ****





For
      purposes of the discussion contained in this Item 10, entitled “Executive
      Compensation,” information regarding our executive compensation is presented in
      each instance, first, with respect to SP Holding Corporation prior to the merger
      and second, with respect to our operating subsidiary, Organic Holding Company,
      Inc., prior to the merger.





**Summary
      Compensation**





*SP
      Holding Corporation*





Mark
      Schaftlein served as our sole officer and director prior to the merger. Mr.
      Schaftlein did not receive direct cash or non-cash compensation during the
      fiscal year ended December 31, 2006. From time to time, we utilized the
      services of a consulting firm where Mr. Schaftlein is a managing partner
      and the fees paid to the firm were $50,727 and $15,000 in years 2005 and 2004,
      respectively. We did not pay fees to Mr. Schaftlein’s consulting firm for the
      year ended December 31, 2006. No other executive officer received total
      compensation in excess of $100,000 during the fiscal year ended December 31,
      2006.





*Organic
      Holding Company, Inc.*





The
      following Summary Compensation Table indicates the cash and non-cash
      compensation earned during the fiscal year ended December 31, 2006 by Jason
      Brown, Organic Holding Company, Inc.’s Chief Executive Officer, for the year
      ended December 31, 2006. Organic Holding Company, Inc. did not have any
      executive officers, other than Mr. Brown, whose total compensation exceeded
      $100,000 for the year ended December 31, 2006. Certain aspects of Mr.
      Brown’s compensation are governed by an employment agreement, the materials
      terms of which are presented below under the heading “Employment Agreements.”





**SUMMARY
                COMPENSATION TABLE (1)**Name
                and principal position(a)
            
            
            Year
              (b)
            
            
            Salary
                ($)
              (c)
            
            
            Bonus
                ($)
              (d)
            
            
            Stock
                Awards ($)
              (e)
            
            
            Option
                Awards ($)
              (f)
                (2)
            
            
            All
                Other Compensation ($)
              (i)
            
            
            Total
                ($)
              (j)Jason
                Brown,
              Chairman
                and Chief Executive Officer
            
            
            2006
            
            $
            156,924
            
            
            —
            
            
            —
            
            $
            3,600
            
            $
            5,000
                (3
            )
            $
            165,524




29


(1)
            Mr.
                Brown did not receive anyNon-Equity
                Incentive Plan Compensation or Nonqualified Deferred Compensation
                Earnings
                during the year ended December 31, 2006. Accordingly, columns (g)
                and (h)
                of the foregoing table relating to such items were omitted from the
                tabular presentation.





(2)
            The
                amount in the “Option Awards” column is calculated using the provisions of
                SFAS 123R for the fiscal year ended December 31, 2006. The Board
                of
                Directors of Organic Holding Company, Inc. approved the issuance
                of
                options to purchase 60,000 shares of common stock to Mr. Brown in
                2006.
                The options had a term of 10 years, an exercise price of $0.12 per
                share
                and vested monthly over two years from January 1, 2006. Pursuant
                to the
                merger, Mr. Brown’s options to purchase 60,000 shares of Organic Holding
                Company, Inc. common stock were converted into options to purchase
                41,868
                shares of SP Holding Corporation common stock, with the same term
                and
                vesting as the prior options and with an exercise price of $0.17
                per
                share.





(3)
            Mr.
                Brown received $5,000 in director’s fees in
                2006.





**Outstanding
      Equity Awards**





*SP
      Holding Corporation*





Mr.
      Schaftlein, who served as our sole officer and director prior to the merger,
      did
      not have any option awards, unexercised options, unvested stock awards or equity
      incentive plan awards during the fiscal year ended December 31, 2006.





*Organic
      Holding Company, Inc.*





The
      following Outstanding Equity Awards at Fiscal Year-End Table indicates, with
      respect to Mr. Brown: (1) the number of securities underlying unexercised
      options that are exercisable; (2) on
      an
      award-by-award basis, the number of securities underlying unexercised options
      that are unexercisable; (3) for each item reported in clauses (1) and (2) above,
      the exercise or base price of such item; and (4) for each item reported in
      clauses (1) and (2) above, the expiration date of such item. Mr. Brown did
      not
      receive any awards under any equity incentive plan or stock awards during the
      fiscal year ended December 31, 2006.




**OUTSTANDING
                EQUITY AWARDS AT FISCAL YEAR-END**OPTION
                AWARDSName
              (a)
            
            Number
                of Securities Underlying Unexercised Options
              (#)
              Exercisable
              (b)
            
            Number
                of Securities Underlying Unexercised Options
              (#)
              Unexercisable
              (c)
            
            Equity
                Incentive Plan Awards: Number of Securities Underlying Unexercised
                Unearned Options
              (#)
              (d)
            
            Option
                Exercise Price
              ($)
              (e)
            
            Option
                Expiration Date
              (f)Jason
                Brown (1) (2)
            
            
            27,500
            
            
            32,500
            
            
            -0-
            
            $
            0.12
            
            
            2-29-16





30


(1)
            Mr.
                Brown did not receive any stock awards during the year ended December
                31,
                2006 or have any stock awards at such date. Accordingly, columns
                (g), (h),
                (i) and (j) of the foregoing table relating to such items were omitted
                from the tabular presentation.





(2)
            The
                Board of Directors of Organic Holding Company, Inc. approved the
                issuance
                of options to purchase 60,000 shares of common stock to Mr. Brown
                in 2006.
                The options had a term of 10 years, an exercise price of $0.12 per
                share
                and vested monthly over two years from January 1, 2006. Pursuant
                to the
                merger, Mr. Brown’s options to purchase 60,000 shares of Organic Holding
                Company, Inc. common stock were converted into options to purchase
                41,868
                shares of SP Holding Corporation, with the same term and vesting
                as the
                prior options and with an exercise price of $0.17 per share.





**Director
      Compensation**





*SP
      Holding Corporation*





Prior
      to
      the merger, we only had one director, Mr. Schaftlein. Mr. Schaftlein did
      not receive any direct compensation for his services as a director. From time
      to
      time, we utilized the services of a consulting firm where Mr. Schaftlein is
      a managing partner. The fees paid to the firm were $50,727 and $15,000 in years
      2005 and 2004, respectively.





In
      connection with the merger, which occurred on February 12, 2007,
      Mr. Schaftlein resigned as a director and concurrently, we appointed six
      new directors to our Board of Directors: Messrs. Brown, Smith, Meehan, Bingham,
      Lioon and Hassan, who were formally the directors of Organic Holding Company,
      Inc.





*Organic
      Holding Company, Inc.*





The
      following Director Compensation Table indicates the compensation earned during
      the fiscal year ended December 31, 2006 by the directors of Organic Holding
      Company, Inc. Each director of Organic Holding Company, Inc. was paid an annual
      director’s fee of $5,000 and was awarded a one-time grant of options to purchase
      60,000 shares of common stock. Pursuant to the merger, the directors’ options to
      purchase shares of Organic Holding Company, Inc. common stock were converted
      into options to purchase shares of SP Holding Corporation common stock.





**DIRECTOR
                COMPENSATION (1) (2)**Name
              (a)
                (1) (2)
            
            Fees
                Earned or Paid in Cash
              ($)
              (b)
            
            Option
                Awards ($)
              (d)
                (3)
            
            All
              Other
                Compensation ($)
              (g)
            
            Total
                ($)
              (j)Dave
                Smith
            
            $
            5,000
            
            $
            3,600
            
            
            -
            
            $
            8,600Peter
                Meehan
            
            $
            5,000
            
            $
            3,600
            
            
            -
            
            $
            8,600Roy
                Bingham
            
            $
            5,000
            
            $
            3,600
            
            
            -
            
            $
            8,600Douglas
                Lioon
            
            $
            5,000
            
            $
            3,600
            
            
            -
            
            $
            8,600S.M.
                “Hass” Hassan
            
            $
            5,000
            
            $
            46,200
            
            
            -
            
            $
            51,200





(1)
            Mr.
                Brown also serves as a director. He does not receive any additional
                compensation beyond that disclosed in the “Summary Compensation Table” set
                forth above for his services as a
                director.




31




(2)
            None
                of the directors received any Non-Equity Incentive Plan Compensation
                or
                Non-Qualified Deferred Compensation Earnings during the year ended
                December 31, 2006. Accordingly, columns (e) and (f) of the foregoing
                table
                relating to such items were deleted from the tabular
                presentation.





(3)
            The
                amount in the “Option Awards” column is calculated using the provisions of
                SFAS 123R for the fiscal year ended December 31, 2006.





**Employment
      Agreements**





All
      of
      our employees, other than Mr. Brown, are “at-will” employees. We entered into an
      employment agreement with Mr. Brown, effective January 1, 2007, which has a
      three-year term. The summary of Mr. Brown’s employment agreement presented
      below is qualified in its entirety by reference to full text of the employment
      agreement, which was filed with our Current Report on Form 8-K filed with the
      SEC on February 13, 2007, and is incorporated by reference herein.




Pursuant
      to the employment agreement, we are obligated to pay Mr. Brown a base salary
      at
      an annual rate of $225,000, subject to annual increases by the Board of
      Directors. Mr. Brown is eligible for a cash incentive bonus of up to 35% of
      his
      base salary per year. The total amount of Mr. Brown’s cash incentive bonus is
      determined by the following:




·
            25%
                is based on Mr. Brown achieving certain performance goals mutually
                agreed
                upon by him and the Board of Directors each
                year;




·
            25%
                is determined at the discretion of the Board of Directors;
                and




·
            50%
                is based on achievement of performance goals set by our company.




The
      Board
      of Directors may pay additional bonuses in its discretion. We will also provide
      Mr. Brown and his family with certain health benefits and Mr. Brown is entitled
      to receive reimbursements for all reasonable business, travel and entertainment
      expenses that he incurs or he pays for on our behalf.




Effective
      upon the closing of our merger with Organic Holding Company, Inc., we issued
      to
      Mr. Brown options to purchase 1,246,674 shares of common stock, which was equal
      to 5% of the outstanding shares of common stock as of the closing of the merger
      determined on a fully-diluted basis. Except in connection with a “Change in
      Control” (as defined in the employment agreement), 25% of such options vest
      after 12 months of employment, with the remainder vesting monthly over the
      next
      three years, for a total vesting period of 48 months. All of Mr. Brown’s options
      vest immediately if, within 12 months after a “Change in Control,” Mr. Brown is
      terminated for any reason other than for “Cause” or if Mr. Brown terminates his
      employment for “Good Reason” (each as defined in the employment agreement).
      Additionally, in the event that Mr. Brown is terminated due to permanent
      disability, for any other reason other than for “Cause,” or if Mr. Brown
      terminates his employment for “Good Reason,” we will be obligated to pay Mr.
      Brown a lump sum equal to one year’s salary (at his then current base salary)
      and continue to provide him with his medical and other similar benefits for
      12
      months after the date of his termination.




We
      may
      terminate Mr. Brown’s employment immediately, without prior notice or payment in
      lieu of notice, if at any time Mr. Brown:




32





·
            becomes
                physically or mentally disabled, whether totally or partially, so
                that he
                is substantially unable to perform his duties for more than 120 days
                (whether or not consecutive) in the aggregate in any 365 day
                period;





·
            is
                convicted of or pleads guilty or no contest to a felony; or





·
            fails
                to perform his assigned duties, comply with our written policies
                or rules,
                or comply with any written agreement between us and Mr. Brown, which
                failure continues for more than 30 days after receiving written
                notification of such failure from the Board of Directors.





Mr.
      Brown’s employment agreement contains restrictive covenants preventing him
      from:





·
            competing
                with us during his employment;





·
            competing
                with us for a period of 12 months after termination of his employment;
                and





·
            using
                our confidential business information at any time, except in connection
                with the performance of his duties for us.




33


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




The
      following table sets forth certain information regarding our common stock
      beneficially owned on March 28, 2007, for (i) each executive officer and
      director, (ii) all executive officers and directors as a group and (iii) each
      stockholder known to be the beneficial owner of more than 5% of our outstanding
      common stock.





**Name
                of Beneficial Owner (1)**
            
            **Amount
                and Nature of Beneficial Ownership of Common Stock
                (2)**
            
            **Percent
                of Class of Common Stock****Officers
                and Directors:**Jason
                Brown, Chief Executive Officer and Chairman(3)
            
            
            2,222,941
            
            
            10.9
            %Michael
                Johnson, VP of Retail Operations(4)
            
            
            12,211
            
            
            *Wendy
                Tenenberg, VP of Marketing(5)
            
            
            232,009
            
            
            1.2
            %Jonathan
                Wernick, Chief Financial Officer
            
            
            0
            
            
            *Dave
                Smith, Director(6)
            
            
            90,488
            
            
            *Peter
                Meehan, Director(7)
            
            
            69,780
            
            
            *Roy
                Bingham, Director(8)
            
            
            195,530
            
            
            *Douglas
                Lioon, Director(9)
            
            
            540,367
            
            
            2.7
            %S.M.
                “Hass” Hassan, Director(10)
            
            
            122,812
            
            
            *All
                directors and executive officers as a group (9 persons)(11)
            
            
            3,486,139
            
            
            16.9
            %**More
                than 5% Beneficial Owners:**Vicis
                Capital Master Fund, LLC (12)
            
            
            1,320,000
            
            
            6.6
            %





*
              Less
                  than 1%




(1)
            Unless
                otherwise indicated, the address of the beneficial owner is c/o SP
                Holding
                Corporation, 601 Union Street, Suite 3700, Seattle, Washington
                98101.(2)
            Beneficial
                ownership is determined in accordance with the rules of the SEC and
                generally includes voting or investment power with respect to securities.
                Shares of common stock which are purchasable under options or warrants
                which are currently exercisable, or which will become exercisable
                no later
                than 60 days after March 28, 2007, are deemed outstanding for computing
                the percentage of the person holding such options or warrants, but
                not
                deemed outstanding for computing the percentage of any other person.
                Except as indicated by footnote and subject to community property
                laws
                where applicable, the persons named in the table have sole voting
                and
                investment power with respect to all shares of common stock shown
                as
                beneficially owned by them.(3)
            Mr.
                Brown’s holdings consist of 2,183,161 shares of common stock, options to
                purchase 27,912 shares of common stock and warrants to purchase 11,868
                shares of common stock.




34




(4)
            Mr.
                Johnson’s holdings consist of options to purchase 12,211 shares of common
                stock.(5)
            Ms.
                Tenenberg’s holdings consist of 227,939 shares of common stock and options
                to purchase 4,070 shares of common stock(6)
            Mr.
                Smith’s holdings consist of 58,255 shares of common stock, options to
                purchase 32,084 shares of common stock and warrants to purchase 149
                shares
                of common stock.(7)
            Mr.
                Meehan’s holdings consist of 41,868 shares of common stock and options to
                purchase 27,912 shares of common stock.(8)
            Mr.
                Bingham’s holdings consist of 167,380 shares of common stock, options to
                purchase 27,912 shares of common stock and warrants to purchase 238
                shares
                of common stock.(9)
            Mr.
                Lioon’s holdings consist of 500,587 shares of common stock, options to
                purchase 27,912 shares of common stock and warrants to purchase 11,868
                shares of common stock.(10)
            Mr.
                Hassan’s holdings consist of 66,000 shares of common stock, options to
                purchase 27,912 shares of common stock and warrants to purchase 28,900
                shares of common stock.(11)
            The
                beneficial owners’ holdings consist of 3,245,190 shares of common stock,
                options to purchase 187,925 shares of common stock and warrants to
                purchase 53,023 shares of common stock.(12)
            The
                address of the beneficial owner is Tower 56, Suite 98101, 126 East
                56thStreet, New York, New York 10022. The beneficial owner’s holdings consist
                of 1,320,000 shares of common
                stock.




**Equity
      Compensation Plans**




Neither
      SP Holding Corporation nor Organic Holding Company, Inc. had any equity
      compensation plans in place as of December 31, 2006. As of the end of our fiscal
      year, SP Holding Corporation had options to purchase 252 shares of common stock
      outstanding, of which, options to purchase 168 shares of common stock remained
      outstanding on March 28, 2007.





In
      connection with our merger with Organic Holding Company, Inc. on February 12,
      2007, we issued options to purchase shares of our common stock in exchange
      for
      outstanding options to purchase shares of Organic Holding Company, Inc. common
      stock that were issued to directors, officers, employees and consultants of
      Organic Holding Company, Inc. prior to the merger. The following table
      summarizes the number and average weighted exercise price of Organic Holding
      Company, Inc. options that were outstanding as of December 31, 2006 on a
      pre-merger basis, and the equivalent information with respect to options to
      purchase our common stock that were exchanged for such Organic Holding Company,
      Inc. options on a post-merger basis.





**Pre
                Merger**
            
            **Post
                Merger**Number
                of Shares of Organic Holding Company, Inc. Common Stock Underlying
                Options
            
            Weighted
                Average Exercise Price
              of
                Options
            
            Number
                of Shares of our Common Stock Underlying Options (1)
            
            Weighted
                Average Exercise Price
              of
                Options (1)939,432
            
            $
            0.38
            
            
            655,535
            
            $
            0.54





(1)
            This
                amount excludes options to purchase 252 shares of our common stock
                outstanding as of the end of our fiscal year that were issued to
                our
                former directors prior to the
                merger.





The
      options issued in connection with the merger generally expire 10 years from
      the
      date of grant and have vesting schedules ranging from immediately exercisable,
      to fully exercisable by July 2011.




35





Effective
      upon the closing of the merger, Mr. Brown received options to purchase 1,246,674
      shares of our common stock, which represented an amount equal to 5% of the
      outstanding shares of our common stock as of the closing date of the merger
      determined on a fully-diluted basis. The options granted to Mr. Brown at closing
      have an exercise price of $1.38 per share and expire on February 11, 2016.
      Except in connection with a “Change in Control” (as defined in Mr. Brown’s
      employment agreement), 25% of such options vest after 12 months of employment,
      with the remainder vesting over the next 36 months, for a total vesting period
      of 48 months.  All of the options vest immediately if, within 12 months
      after a “Change in Control,” Mr. Brown is terminated for any reason other than
“Cause” or if Mr. Brown terminates his employment for “Good Reason” (each as
      defined in Mr. Brown’s employment agreement).





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





Mark
      Schaftlein was our sole officer and director during the fiscal year ended
      December 31, 2006. From time to time, we utilized the services of a consulting
      firm where Mr. Schaftlein is a managing partner. The fees paid to the firm
      were $50,727 and $15,000 in years 2005 and 2004, respectively. As a result,
      Mr.
      Schaftlein was not “independent” as defined under the National Association of
      Securities Dealers’ listing standards. We did not pay fees to Mr. Schaftlein’s
      consulting firm for the year ended December 31, 2006. Mr. Schaftlein resigned
      from all of his positions with us on February 12, 2007 upon consummation of
      our
      merger with Organic Holding Company, Inc.




36


**Item 13.
      Exhibits** ****




**Exhibit**
              **Number**
            
            **Description**2.1
            
            Agreement
                and Plan of Merger and Reorganization, dated as of January 11, 2007
                (1)2.2
            
            First
                Amendment to Agreement and Plan of Merger and Reorganization and
                Company
                Disclosure Schedule, dated as of February 12, 2007 (2)3.1
            
            Amended
                and Restated Certificate of Incorporation (3)3.2
            
            Amended
                and Restated Bylaws (4)4.1
            
            Specimen
                Stock Certificate for Shares of SP Holding Corporation Common Stock
                (2)4.2
            
            Form
                of SP Holding Corporation Warrant (2)10.1
            
            Placement
                Agent Agreement, dated December 18, 2006, by and between Organic
                Holding
                Company, Inc. and Burnham Hill Partners, a division of Pali Capital,
                Inc.
                (2)10.2
            
            Form
                of Subscription Agreement by and between SP Holding Corporation and
                the
                Investors (2)10.3
            
            Employment
                Agreement by and between Jason Brown and Organic Holding Company,
                Inc.
                (2)10.4
            
            Asset
                Purchase Agreement by and among Vinaigrettes LLC, Dan Karzen and
                Organic
                Holding Company, Inc. (2)10.5
            
            Asset
                Purchase Agreement by and between Organic Holding Company, Inc. and
                Briazz
                Inc. (2)16.1
            
            Letter
                from De Leon & Company, P.A. to the Securities and Exchange
                Commission, dated March 7, 2007 (5)21.1
            
            List
                of Subsidiaries (2)31.1
            
            Certifications
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
                *31.2
            
            Certifications
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
                *32.1
            
            Certifications
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                *


*
              Filed
                  herewith




(1)
            
            Filed
                on February 7, 2007 as an exhibit to our Current Report on Form 8-K
                and
                incorporated herein by reference.(2)
            
            Filed
                on February 13, 2007 as an exhibit to our Current Report on Form
                8-K dated
                February 13, 2006 and incorporated herein by reference.(3)
            
            Filed
                on December 13, 2003 as an exhibit to our Current Report on Form
                8-K and
                incorporated herein by reference.(4)
            
            Filed
                on May 14, 2001 as an exhibit to our report on Form 10-QSB and
                incorporated herein by reference.(5)
            
            Filed
                on March 9, 2007 as an exhibit to our Current Report on Form 8-K
                and
                incorporated herein by reference.




37





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




On
      February 27, 2007, we dismissed De Leon & company, P.A. (“De Leon &
Company”) as our independent registered accounting firm. On that same date, our
      Board of Directors appointed Rose, Snyder & Jacobs as our independent
      registered public accounting firm. Rose, Snyder & Jacobs served as Organic
      Holding Company, Inc.’s independent public accounting firm for the last two
      fiscal years.





**Independent
      Registered Public Accounting Firm Fees**




The
      following table represents the fees billed to us by De Leon & Company for
      the years ended December 31, 2006 and December 31, 2005.





**Type
                of Fees**
            
            **2006**
            
            **2005**Audit
                Fees
            
            $
            23,110
            
            $
            25,360Audit-Related
                Fees
            
            
            -
            
            
            -Tax
                Fees
            
            
            -
            
            
            -All
                Other Fees
            
            
            -
            
            
            -





The
      following table represents the fees billed to Organic Holding Company, Inc.
      by
      Rose, Snyder & Jacobs for the years ended December 31, 2006 and December 31,
      2005.





**Type
                of Fees**
            
            **2006**
            
            **2005**Audit
                Fees
            
            $
            55,000
            
            $
            37,400Audit-Related
                Fees
            
            $
            20,500
            
            $
            2,250Tax
                Fees
            
            
            -
            
            
            -All
                Other Fees
            
            
            -
            
            
            -





**Pre-Approval
      of Independent Auditor Services and Fees**





Our
      Board
      of Directors approves all audit and non-audit services to be rendered in
      advance, before our independent auditors are engaged to perform such services.




38




**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
      duly
      caused this report to be signed on our behalf by the undersigned, thereunto
      duly
      authorized.




SP
                HOLDING CORPORATIONBy:  
                /s/
                Jason
                Brown
            
            
            Date:
                April
                2, 2007Jason
                BrownTitle
              : Chief
              Executive Officer and Chairman




In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of the registrant and in the capacities and on
      the
      dates indicated.




SIGNATURE
            
            TITLE
            
            DATE/s/
                Jason Brown
            
            Chief
                Executive Officer and Chairman
            
            April
                2, 2007Jason
                Brown
            
            (Principal
                Executive Officer)/s/
                Jonathan Wernick
            
            Chief
                Financial Officer
            
            April
                2, 2007Jonathan
                Wernick
            
            (Principal
                Financial Officer)/s/
                Dave Smith
            
            Director
            
            April
                2, 2007Dave
                Smith/s/
                Peter Meehan
            
            Director
            
            April
                2, 2007Peter
                Meehan/s/
                Roy Bingham
            
            Director
            
            April
                2, 2007Roy
                Bingham/s/
                Douglas Lioon
            
            Director
            
            April
                2, 2007Douglas
                Lioon/s/
                S.M. “Hass” Hassan
            
            Director
            
            April
                2, 2007S.M.
                “Hass” Hassan





39


**Organic
      Holding Company, Inc.**


**d/b/a
      ORGANIC TO GO and, effective February 27, 2007, Organic To Go,
      Inc.**


**December
      31, 2006 Financial Statements**





**Table
      of Contents**


Report
                  of Independent Registered Accounting Firm
              
              F-2Audited
                  Financial Statements:Balance
                  Sheets
              
              F-3Statements
                  of Operations
              
              F-4Statement
                  of Stockholders’ Deficit
              
              F-5Statements
                  of Cash Flows
              
              F-6Notes
                  to Financial Statements
              
              F-7


F-1


**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**





To
      the
      Board of Directors and Stockholders


Organic
      To Go, Inc.





We
      have
      audited the accompanying balance sheets of Organic To Go, Inc. as of December
      31, 2005 and 2006, and the related statements of operations, stockholders’
deficit, and cash flows for the years ended December 31, 2005 and 2006. 
These financial statements are the responsibility of the Company’s
      management.  Our responsibility is to express an opinion on these
      consolidated financial statements based on our audits.





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





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Organic To Go, Inc. as of December
      31, 2005 and 2006, and the results of their operations and their cash flows
      for
      the years ended December 31, 2005 and 2006, in conformity with accounting
      principles generally accepted in the United States of America.





/s/
      Rose,
      Snyder & Jacobs


A
      Corporation of Certified Public Accountants





Encino,
      California





March
      8,
      2007




F-2


**Organic
      Holding Company, Inc.**


**d/b/a
      Organic To Go and, effective February 27, 2007, Organic To Go,
      Inc.**


**Balance
      Sheets**


**(in
      thousands, except share amounts)**





December
                31,2005
            
            2006Current
                assetsCash
                and cash equivalents
            
            $
            250
            
            $
            865Accounts
                receivable, net
            
            
            84
            
            
            365Inventory
            
            
            278
            
            
            236Prepaid
                expenses and other current assets
            
            
            66
            
            
            189Total
                current assets
            
            
            678
            
            
            1,655Property
                and equipment, net
            
            
            2,629
            
            
            2,148Identifiable
                intangible assets, net
            
            
            66
            
            
            851Deposits
                and other assets
            
            
            120
            
            
            623Total
                assets
            
            $
            3,493
            
            $
            5,277Current
                liabilitiesAccounts
                payable
            
            $
            1,634
            
            $
            1,389Accrued
                liabilities
            
            
            300
            
            
            829Current
                portion of notes payable, net of discount
            
            
            2,204
            
            
            6,281Current
                portion of capital lease obligations
            
            
            46
            
            
            50Total
                current liabilities
            
            
            4,184
            
            
            8,549Notes
                payable, net of current portion
            
            
            1,207
            
            
            592Capital
                lease obligations, net of current portion
            
            
            188
            
            
            137Total
                liabilities
            
            
            5,579
            
            
            9,278Stockholders'
                deficitSeries
                A preferred stock
            
            
            3
            
            
            3Series
                B preferred stock
            
            
            1
            
            
            1Series
                C preferred stock
            
            
            -
            
            
            4Common
                stock, 15,100,000 shares of $0.001 par value authorized;
                2,942,402and
                2,898,904 Exchange Ratio adjusted shares issued and
                outstanding
            
            
            4
            
            
            4Additional
                paid-in-capital
            
            
            4,363
            
            
            10,410Accumulated
                deficit
            
            
            (6,457
            )
            
            (14,423
            )Total
                stockholders' deficit
            
            
            (2,086
            )
            
            (4,001
            )Total
                liabilities and stockholders' deficit
            
            $
            3,493
            
            $
            5,277





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




F-3


**Organic
      Holding Company, Inc.**


**d/b/a
      Organic To Go and, effective February 27, 2007, Organic to Go,
      Inc.**


**Statements
      of Operations**


**(in
      thousands, except per share amounts)**





Year
                ended December 31,2005
            
            2006Sales
            
            $
            6,121
            
            $
            9,663Cost
                of sales
            
            
            3,895
            
            
            4,876Gross
                Profit
            
            
            2,226
            
            
            4,787Operating
                expenses
            
            
            7,173
            
            
            10,483Depreciation
                and amortization
            
            
            630
            
            
            1,206Loss
                from operations
            
            
            (5,577
            )
            
            (6,902
            )Interest
                expense, net
            
            
            (78
            )
            
            (1,064
            )Loss
                before income taxes
            
            
            (5,655
            )
            
            (7,966
            )Income
                taxes
            
            
            -
            
            
            -Net
                loss
            
            $
            (5,655
            )
            $
            (7,966
            )Net
                loss per share - basic and diluted
            
            $
            (1.97
            )
            $
            (2.78
            )Weighted
                average shares outstanding
            
            
            2,875
            
            
            2,868





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




F-4





**Organic
      Holding Company, Inc.**


**d/b/a
      Organic To Go and, effective February 27, 2007, Organic to Go,
      Inc.**


**Statement
      of Stockholders' Deficit**


**(in
      thousands, except share amounts)***





Series
                A Preferred Stock
            
            Series
                B Preferred Stock
            
            Series
                C Preferred Stock
            
            Common
                Stock
            
            Additional
              paid-in
              capital
            
            Accumulated
              deficit
            
            Total
              Stockholders'
              deficitShares
            
            Amount
            
            Shares
            
            Amount
            
            Shares
            
            Amount
            
            Shares
            
            AmountBalance
                at December 31, 2004
            
            
            715,255
            
            $
            1
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,905,543
            
            $
            4
            
            $
            1,048
            
            $
            (802
            )
            $
            251Issuance
                of common stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            217,019
            
            
            
            
            
            32
            
            
            
            
            
            32Issuance
                of Series A PreferredStock
                for cash and conversion ofnotes
                payable
            
            
            1,423,428
            
            
            2
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,038
            
            
            
            
            
            2,040Issuance
                of Series B Preferred Stock
            
            
            
            
            
            
            
            
            849,999
            
            $
            1
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,424
            
            
            
            
            
            1,425Redemption
                of common stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (180,159
            )
            
            
            
            
            (2
            )
            
            
            
            
            (2
            )Stock
                issue costs
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (177
            )
            
            
            
            
            (177
            )Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (5,655
            )
            
            (5,655
            )Balance
                at December 31, 2005
            
            
            2,138,684
            
            
            3
            
            
            849,999
            
            
            1
            
            
            -
            
            
            -
            
            
            2,942,402
            
            
            4
            
            
            4,363
            
            
            (6,457
            )
            
            (2,086
            )Issuance
                of Series C PreferredStock
                and warrants for cash andconversion
                of notes payable
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,664,153
            
            $
            4
            
            
            
            
            
            
            
            
            4,477
            
            
            
            
            
            -
              4,481Issuance
                of warrants with borrowings
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            1,476
            
            
            
            
            
            1,476Stock
                issue costs
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (32
            )
            
            
            
            
            (32
            )Redemption
                of common stockfor
                cash
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (132,961
            )
            
            
            
            
            (2
            )
            
            
            
            
            (2
            )Issuance
                of common stock
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            89,463
            
            
            
            
            
            128
            
            
            
            
            
            128Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (7,966
            )
            
            (7,966
            )Balance
                at December 31, 2006
            
            
            2,138,684
            
            $
            3
            
            
            849,999
            
            $
            1
            
            
            2,664,153
            
            $
            4
            
            
            2,898,904
            
            $
            4
            
            $
            10,410
            
            $
            (14,423
            )
            $
            (4,001
            )





*
            Shares
                are presented after multiplied by the .69781 Exchange Ratio—See Note
                1.




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




F-5





**Organic
      Holding Company, Inc.**


**d/b/a
      Organic To Go and, effective February 27, 2007, Organic to Go,
      Inc.**


**Statements
      of Cash Flows**


**(in
      thousands)**





Year
                ended December 31,2005
            
            2006Cash
                flows from operating activities:Net
                loss
            
            $
            (5,655
            )
            $
            (7,966
            )Adjustments
                to reconcile net loss to netcash
                used by operating activities:Depreciation
                and amortization expense
            
            
            630
            
            
            1,206Amortization
                  of debt issue costs and debt
                  discount
                    included in interest expense
            
            
            3
            
            
            776Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            (84
            )
            
            (281
            )Inventory
            
            
            (93
            )
            
            42Other
                current assets
            
            
            (54
            )
            
            (123
            )Accounts
                payable
            
            
            1,563
            
            
            (245
            )Accrued
                liabilities
            
            
            222
            
            
            431Other
            
            
            50
            
            
            143Net
                cash used by operating activities
            
            
            (3,418
            )
            
            (6,017
            )Cash
                flows from investing activities:Purchases
                of property, equipment and other assets
            
            
            (2,064
            )
            
            (172
            )Purchases
                of other assets and related costs
            
            
            (255
            )
            
            (1,010
            )Net
                cash used by investing activities
            
            
            (2,319
            )
            
            (1,182
            )Cash
                flows from financing activities:Principal
                payments of long-term debt
            
            
            (50
            )
            
            (264
            )Proceeds
                from issuance of notes payable, net of issue costs
            
            
            2,823
            
            
            5,918Payments
                of capital lease obligations
            
            
            (24
            )
            
            (47
            )Proceeds
                from sale of preferred stock, net of issue costs
            
            
            3,038
            
            
            2,209Redemption
                of common stock
            
            
            (2
            )
            
            (2
            )Proceeds
                from sale of common stock
            
            
            10
            
            
            -Net
                cash provided by financing activities
            
            
            5,795
            
            
            7,814Net
                increase in cash and cash equivalents
            
            
            58
            
            
            615Cash
                and cash equivalents, beginning of period
            
            
            192
            
            
            250Cash
                and cash equivalents, end of period
            
            $
            250
            
            $
            865Supplemental
                disclosures of cash flow information:Cash
                paid for interest
            
            $
            78
            
            $
            237Notes
                payable converted into preferred stock
            
            $
            -
            
            $
            1,843Fixed
                assets acquired under financing agreements
            
            $
            600
            
            $
            326Assets
                acquired under capital lease
            
            $
            248
            
            $
            -





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




F-6


**Organic
      Holding Company, Inc.**


**d/b/a
      ORGANIC TO GO and effective February 27, 2007, Organic To Go,
      Inc.**


**Notes
      to financial statements**


**December
      31, 2006**





**Note
      1. Description of Business and Summary of Significant Accounting
      Policies**





*Organization
      and Business*





Organic
      Holding Company, Inc., d/b/a Organic To Go, which name was changed to Organic
      To
      Go, Inc. effective February 27, 2007 (the “Company” or “Organic”), was
      incorporated in the state of Delaware in February 2004. The Company provides
      convenient retail and delivery store locations, which prepare and serve “grab
      and go” lunch, dinner, and breakfast foods and beverages prepared using organic
      ingredients, whenever possible. The Company also distributes its products
      through select wholesale accounts. At December 31, 2006, the Company operated
      five stores in Washington and seven stores in California. In October 2006,
      the
      Company expanded its catering operations in the California area by acquiring
      the
      assets, of a catering operation headquartered in Los Angeles, California.





*Reverse
      Merger with Public Shell Company in February 2007*





Pursuant
      to terms of an Agreement and Plan of Merger and Reorganization by and among
      the
      SP Holding Corporation, Organic Acquisition Corporation and Organic on February
      12, 2007, all of the outstanding shares of common and preferred stock of Organic
      were exchanged for shares of SP Holding Corporation common stock as determined
      by multiplying each such outstanding share of Organic stock by an exchange
      ratio
      of 0.69781 (the “Exchange Ratio”). In addition, convertible promissory bridge
      notes of Organic approximating $5.8 million automatically converted into SP
      Holding Corporation common stock. As a result, among other things, Organic
      became a wholly-owned subsidiary of SP Holding Corporation. Outstanding options,
      warrants and purchase rights of Organic were converted into options, warrants
      and purchase rights to purchase shares of SP Holding Corporation common stock
      in
      accordance with the Exchange Ratio. The closing of the merger was conditioned
      upon the closing a private placement offering of a minimum of eighty units
      (the
“Units”) at a purchase price of $50,000 per Unit for $4 million, with the option
      to offer additional Units. Each Unit consists of (i) 40,000 shares of SP Holding
      Corporation common stock, and (ii) a warrant to purchase 8,000 shares of SP
      Holding Corporation common stock. Each warrant entitles the holder thereof
      to
      purchase shares of SP Holding Corporation common stock at an exercise price
      of
      $2.50 per share and is exercisable for a period of five years from the date
      of
      issuance. The consummation of the merger occurred concurrently with the
      completion of a private placement of 138 Units, for an aggregate of
      approximately $6.9 million. Prior to the merger, SP Holding Corporation was
      a
      non-operating “public shell” company.





From
      an
      accounting perspective, the merger transaction is considered a recapitalization
      of Organic accompanied by the issuance of securities by Organic for the net
      liabilities of SP Holding Corporation, as a result of SP Holding Corporation
      not
      having operations immediately prior to the merger. After the merger and the
      private placement, former SP Holding Corporation stockholders own approximately
      5% of our common stock, and former Organic stockholders and convertible bridge
      note holders own approximately 70% of our common stock. The board of directors
      and executive officers are comprised of former directors and executive officers
      of Organic.





The
      merger transaction is accounted for as a capital transaction rather than as
      a
      business combination, because the transaction is equivalent to the issuance
      of
      securities by Organic for the net liabilities of SP Holding Corporation,
      accompanied by a recapitalization. The accounting is identical to that resulting
      from a reverse acquisition, except that no goodwill or other intangibles are
      recorded. All share and per share information presented and disclosed in these
      financial statements have been Exchange Ratio adjusted. See Note 9 for
      additional information relating to this merger and pro forma balance sheet
      giving effect to the transaction.




F-7




*Basis
      of Presentation and Liquidity*





The
      accompanying financial statements have been prepared in conformity with
      generally accepted accounting principles, which contemplate continuation of
      the
      Company as a going concern. The Company has reported recurring losses and cash
      used by operating activities, and at December 31, 2006 has a net working capital
      deficiency and stockholders’ deficit that could raise doubt about its ability to
      continue as a going concern.  Since inception, the Company has funded its
      operations and business development and growth through debt and equity financings .  
      In this regard, during 2006, the Company raised approximately $8.1 million
      pursuant to sales of debt and equity securities in connection with its private
      placement and subordinated debt offerings. Further, subsequent to December
      31,
      2006, proceeds of approximately $6.9 million were received from the sale of
      equity securities in connection with the merger and private placement, and
      approximately $5.8 million of notes payable has been converted into common
      shares.  While the Company plans to become profitable during the second
      half of 2007 management intends to continue to be engaged in additional
      fund-raising activities to fund future capital expenditures, potential
      acquisitions of businesses, and provide additional working capital.  The
      Company anticipates having sufficient working capital in place for the next
      12
      months to continue operations. The accompanying financial statements do not
      include any adjustments to reflect the possible future effects on the
      recoverability and classification of assets or the amounts and classifications
      of liabilities that could result should the Company not continue as a going
      concern.





*Use
      of Estimates in the Preparation of Financial Statements*





Preparation
      of financial statements in conformity with generally accepted accounting
      principles requires management to make estimates and assumptions that affect
      reported amounts of assets and liabilities and disclosure of contingent assets
      and liabilities at the date of the financial statements and reported amounts
      of
      revenue and expenses during the reporting period. Actual results could differ
      from those estimates. The more significant accounting estimates inherent in
      the
      preparation of the Company's financial statements include estimates as to the
      depreciable lives of property and equipment, valuation of inventories, valuation
      of equity related instruments issued, and valuation allowance for deferred
      income tax assets.





** *Cash
      and Cash Equivalents*





The
      Company considers all highly liquid investments purchased with maturities of
      three months or less to be cash equivalents.





*Contingencies*





Certain
      conditions may exist as of the date financial statements are issued, which
      may
      result in a loss to the Company, but which will only be resolved when one or
      more future events occur or fail to occur. Company management and its legal
      counsel assess such contingent liabilities, and such assessment inherently
      involves an exercise of judgment. In assessing loss contingencies related to
      legal proceedings that are pending against the Company or unasserted claims
      that
      may result in such proceedings, the Company's legal counsel evaluates the
      perceived merits of any legal proceedings or unasserted claims as well as the
      perceived merits of the amount of relief sought or expected to be sought
      therein. If the assessment of a contingency indicates that it is probable that
      a
      liability has been incurred and the amount of the liability can be estimated,
      then the estimated liability would be accrued in the Company's financial
      statements. If the assessment indicates that a potentially material loss
      contingency is not probable but is reasonably possible, or is probable but
      cannot be estimated, then the nature of the contingent liability, together
      with
      an estimate of the range of possible loss if determinable would be
      disclosed.




*Concentrations*




The
      Company maintains its cash balances in a financial institution, which at times,
      may exceed federally insured limits. The Company has not experienced any losses
      in such accounts and believes it is not exposed to any significant credit risk
      on its cash balances.




All
      of
      the Company’s operations are currently located in Washington and California, and
      as a result, is sensitive to negative occurrences in markets where the Company
      is located, and particularly susceptible to adverse trends and economic
      conditions including labor markets.  In addition, given geographic
      concentration, negative publicity regarding any of our operations in Washington
      or California could have a material adverse effect on our business and
      operations, as could other regional occurrences such as local strikes,
      earthquakes or other natural disasters.




F-8




*Fair
      Value of Financial Instruments*





The
      Company measures its financial assets and liabilities in accordance with
      generally accepted accounting principles. For certain of the Company's financial
      instruments, including cash and cash equivalents, accounts receivable, accounts
      payable and accrued liabilities, the carrying amounts approximate fair value
      due
      to their short maturities. Amounts recorded for notes payable also approximate
      fair value because current interest rates offered to the Company for debt of
      similar maturities are substantially the same **.**





*Accounts
      Receivable*





The
      Company extends credit to some of its customers. Accounts receivable are
      customer obligations due under normal trade terms. The Company performs
      continuing credit evaluations of its customers’ financial condition. Management
      reviews accounts receivable on a regular basis on contracted terms and how
      recently payments have been received in order to determine estimates of amounts
      that could potentially be uncollectible. The Company includes an estimate of
      the
      amount that is more likely that not to be uncollectible in its allowance for
      doubtful accounts. Accounts uncollected are ultimately written off after all
      reasonable collection efforts have occurred.





*Inventory*





Inventory,
      which consists primarily of food, beverages and packaging products, is stated
      at
      the lower of cost or market. Cost is determined by the first-in, first-out
      method. In assessing the ultimate realization of inventories, Company management
      makes judgments as to future demand requirements compared to current inventory
      levels.





*Property
      and Equipment*





Property
      and equipment is stated at cost. Additions and improvements that significantly
      add to the productive capacity or extend the life of an asset are capitalized.
      Maintenance and repairs are expensed as incurred. Depreciation is computed
      using
      the straight-line method over five to seven years for furniture, fixtures,
      equipment and vehicles, and over three years for computer software and hardware.
      Leasehold improvements are amortized over the shorter of the lease term or
      10
      years.





*Identifiable
      Intangible Assets*





In
      connection with the acquisition of certain store assets in April 2005, the
      Company acquired certain leasehold interests and other intangible assets.
      Leasehold interests are being amortized over the 1 to 4 year lives of the leases
      and the other intangible assets were fully amortized during the year ended
      December 31, 2005. In connection with the acquisition in October 2006 of certain
      assets of a catering business, the Company acquired certain identifiable
      intangible assets including customer-based intangibles and a covenant not to
      compete received from the sellers. Amount allocated to intangible assets were
      identified by management and have been valued on a number of factors based
      upon
      preliminary estimates. The estimate of useful lives of each intangible asset
      was
      based on an analysis by management of all pertinent factors, and selected an
      estimated useful life of two years for each identifiable intangible asset.
      Customer based intangible assets are amortized utilizing an accelerated method
      and non-compete intangible assets are amortized on a straight-line basis. At
      December 31, 2006, intangible assets were comprised of customer based of
      approximately $860,000, less accumulated amortization of $147,000, and
      non-compete of approximately $150,000, less accumulated amortization of
      approximately $12,000. Amortization expense for these intangible assets will
      approximate $675,000 in 2007 and $175,000 in 2008.




F-9




*Impairment
      of Long-lived Assets*





Long-lived
      assets are reviewed for impairment whenever events or changes in circumstances
      indicate that the carrying amount of the assets may not be recoverable.
      Impairment of long-lived assets would be recognized in the event that the net
      book values of such assets exceed the future undiscounted cash flows
      attributable to such assets.





*Deferred
      Debt Issue Costs*





The
      Company capitalizes costs incurred in connection with borrowings. These costs
      are amortized as an adjustment to interest expense over the life of the
      borrowing.





*Debt
      Discount*





The
      Company records he fair value of warrants issued with debt securities as a
      debt
      discount, which is amortized as an adjustment to interest expense over the
      life
      of the borrowings




*Revenue
      Recognition*





Revenues
      are recognized at the point of sale at retail locations or upon delivery of
      the
      product for delivery and wholesale transactions.





*Cost
      of Sales*





Cost
      of
      sales includes the cost of food and paper products.





*Pre-operating
      Costs*





Costs
      incurred in connection with start-up and promotion of new store openings are
      expensed as incurred.





*Advertising
      and Promotion*





Advertising
      and promotion costs are expensed as incurred. Approximately $434,000 and
      $671,000 was expensed in 2005 and 2006, respectively.





*Income
      Taxes*





The
      Company accounts for income taxes in accordance with SFAS No. 109, “Accounting
      for Income Taxes,” which requires recognition of deferred tax assets and
      liabilities for expected future tax consequences of events that have been
      included in financial statements or tax returns. Under this method, deferred
      income taxes are recognized for the tax consequences in future years of
      differences between the tax bases of assets and liabilities and their financial
      reporting amounts at each period end based on enacted tax laws and statutory
      tax
      rates applicable to the periods in which the differences are expected to affect
      taxable income. Valuation allowances are established, when necessary, to reduce
      deferred tax assets to amounts expected to be realized. The
      Company continues to provide a full valuation allowance to reduce its net
      deferred tax asset to zero, inasmuch as Company management has not determined
      that realization of deferred tax assets is more likely than not. The
      provision for income taxes represents the tax payable for the period and change
      during the period in net deferred tax assets and liabilities.




*Stock-based
      Compensation*





Prior
      to
      January 1, 2006, the Company accounted for employee stock option grants in
      accordance with APB No. 25, and adopted the disclosure-only provisions of SFAS
      No. 123, “Accounting for Stock-Based Compensation,” amended by SFAS No. 148,
“Accounting for Stock-Based Compensation - Transition and Disclosure.” In
      December 2004, the Financial Accounting Standards Board (“FASB”) released a
      revision to SFAS No. 123, Accounting for Stock-Based Compensation” (“SFAS
      123R”). SFAS 123R sets forth the accounting for share-based payment transactions
      in which an enterprise receives employee services in exchange for (a) equity
      instruments of the enterprise, or (b) liabilities that are based on the fair
      value of the enterprise's equity instruments or that may be settled by the
      issuance of such equity instruments. The statement eliminates the ability to
      account for share-based compensation transactions using APB Opinion No. 25,
      “Accounting for Stock Issued to Employees,” and generally requires instead that
      such transactions be accounted for using a fair-value-based method, which
      requires recording an expense over the requisite service period for the fair
      value of all options or warrants granted to employees and consultants. The
      Company adopted SFAS 123R effective beginning January 1, 2006 using the modified
      prospective method.




F-10





The
      Company accounts for equity instruments issued to non-employees in accordance
      with the provisions of SFAS No. 123 and Emerging Task Force Issue No. 96-18,
      “Accounting for Equity Instruments that are Issued to Other Than Employees for
      Acquiring or in Conjunction with Selling Goods or Services.” Compensation
      expense related to equity instruments issued to non-employees is recognized
      as
      the equity instruments vest.





*Basic
      and Diluted Net Loss per Share*





Basic
      net
      loss per common share is computed by dividing net loss by the weighted-average
      number of common shares outstanding during the period. Diluted net loss per
      common share is determined using the weighted-average number of common shares
      outstanding during the period, adjusted for the dilutive effect of common stock
      equivalents, consisting of shares that might be issued upon exercise of common
      stock options, warrants or convertible promissory notes, or conversion of
      preferred stock. In periods where losses are reported, the weighted-average
      number of common shares outstanding excludes common stock equivalents, because
      their inclusion would be anti-dilutive. In connection with the merger with
      SP
      Holding Corporation in February 2007, all shares of Organic preferred stock
      automatically converted into an equal number of Organic common shares and all
      Organic common shares automatically converted into SP Holding Corporation common
      shares at the Exchange Ratio adjusted number of shares equal to .69781 SP
      Holding Corporation common shares for every one Organic common share. All
      share and per share amounts have been Exchange Ratio adjusted. Computations
      of
      net loss per share for 2006, exclude approximately 3,912,000 shares of common
      stock issuable upon conversion of convertible notes payable, 5,653,000 shares
      issuable upon conversion of preferred stock and 2,332,000 shares issuable upon
      exercise of outstanding and issuable warrants. Computations of net loss per
      share for 2005, exclude approximately 1,761,000 shares issuable upon conversion
      of convertible notes payable, 2,989,000 shares issuable upon conversion of
      preferred stock and 43,000 shares issuable upon exercise of outstanding and
      issuable warrants. These common stock equivalents could have the effect of
      decreasing diluted net income per share in future periods.





For
      purposes of determining the weighted average number of common shares outstanding
      historical Organic shares outstanding have been multiplied by the Exchange
      Ratio, which results in a fewer number of shares outstanding that historical
      amounts.





*Reclassifications*





Certain
      reclassifications have been made to prior year financial statements to conform
      with current year presentations. Such reclassifications had no effect on
      stockholders’ deficit, net loss or cash flows.




*Recent
      Accounting Pronouncements*





In
      November 2004, the FASB issued SFAS No. 151, “Inventory Costs,” which is an
      amendment of Accounting Research Bulletin No. 43, Chapter 4, “Inventory
      Pricing.” SFAS No. 151 clarifies that abnormal amounts of idle facility expense,
      freight, handling costs and wasted materials (spoilage), should be recognized
      as
      current-period costs incurred during fiscal years beginning after June 15,
      2005.
      It is expected that the adoption of provisions of SFAS No. 151 will not have
      a
      material effect on the Company’s results of operations or financial
      condition.





In
      May
      2005, the FASB issued Statement of Financial Accounting Standards No. 154,
      “Accounting Changes and Error Corrections” (“SFAS 154”). SFAS 154 replaced APB
      Opinion No. 20, “Accounting Changes,” and SFAS No. 3, “Reporting Accounting
      Changes in Interim Financial Statements,” and changed the requirements for the
      accounting for and reporting of a change in accounting principle. The Company
      adopted SFAS 154 in 2006 and there was no effect on the Company’s results of
      operations or financial position. The Company’s results of operations and
      financial condition will only be impacted by SFAS 154 if the Company implements
      changes in accounting principles that are addressed by the standard or corrects
      accounting errors in future periods.




F-11





In
      July
      2006, the FASB issued FASB Interpretation No. 48, “Accounting for
      Uncertainty in Income Taxes” ** (“FIN No. 48”),
      which prescribes a recognition threshold and measurement process for recording
      in the financial statements uncertain tax positions taken or expected to be
      taken in a tax return. Additionally, FIN No. 48 provides guidance on
      the recognition, classification, accounting in interim periods and disclosure
      requirements for uncertain tax positions. The accounting provisions of
      FIN No. 48 will be effective for the Company beginning January 1,
      2007. The Company is in the process of determining the effect, if any, that
      the
      adoption of FIN No. 48 will have on its results of operations or
      financial position.





In
      September 2006, the Securities and Exchange Commission (“SEC”) issued Staff
      Accounting Bulletin No. 108, “Considering the Effects of Prior Year
      Misstatements when Quantifying Misstatements in Current Year Financial
      Statements” (“SAB 108”).  SAB 108 provides interpretive guidance on how the
      effects of the carryover or reversal of prior year misstatements should be
      considered in quantifying a current year misstatement.  The SEC believes
      that registrants should quantify errors using both a balance sheet and income
      statement approach and evaluate whether either approach results in quantifying
      a
      misstatement that, when all relevant quantitative and qualitative factors
      considered, is material.  SAB 108 is effective for fiscal years ending on
      or after November 15, 2006, with early application encouraged.  SAB 108 had
      no effect of the Company’s results of operations or financial
      position.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value
      Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework
      for measuring fair value and requires enhanced disclosures about fair value
      measurements. SFAS 157 requires companies to disclose the fair value of its
      financial instruments according to a fair value hierarchy (i.e., levels 1,
      2,
      and 3, as defined). Additionally, companies are required to provide enhanced
      disclosure regarding instruments in the level 3 category, including a
      reconciliation of the beginning and ending balances separately for each major
      category of assets and liabilities. SFAS 157 is effective for financial
      statements issued for fiscal years beginning after November 15, 2007 and
      interim periods within those fiscal years. The Company is currently evaluating
      the impact, if any, adoption may have on its results of operation or financial
      position.





In
      October 2006, the FASB issued FASB Staff Position No. 123(R)-5, “Amendment of
      FASB Staff Position FAS 123(R)-1” (“FSP 123(R)-5”) FSP 123(R)-5 amends FSP
      123(R)-1 for equity instruments that were originally issued as employee
      compensation and then modified, with such modification made to the terms of
      the
      instrument solely to reflect an equity restructuring that occurs when the
      holders are no longer employees. In such circumstances, no change in the
      recognition or the measurement date of those instruments will result if both
      of
      the following conditions are met: (a) there is no increase in fair value of
      the
      award (or the ratio of intrinsic value to the exercise price of the award is
      preserved, that is, the holder is made whole), or the antidilution provision
      is
      not added to the terms of the award in contemplation of an equity restructuring;
      and (b) all holders of the same class of equity instruments (for example, stock
      options) are treated in the same manner. The Company believes that FSP 123(R)-5
      will not have a significant impact on its results of operations or financial
      position.





In
      December 2006, the FASB issued FASB Staff Position No. EITF 00-19-2 “Accounting
      for Registration Payment Arrangements” (“FSP EITF 00-19-2”), which addresses an
      issuer’s accounting and disclosures relating to registration payment
      arrangements. In connection with issuance of Units in the private placement
      in
      February 2007, the Company has agreed to register the shares underlying the
      Units. In accordance with FSP EITF 00-19-2, the registration payment
      arrangements are accounted for as an instrument separate and apart from the
      related securities and will be accounted for in accordance with Statement of
      Financial Accounting Standards No. 5 “Accounting for Contingencies,” accruing a
      liability if payment is probable and the amount can be reasonably
      estimated.





**Note
      2. Inventories**


Inventories
                  at December 31, consist of the following (in thousands):
              
              2005
              
              2006Food
                  and beverages
              
              $
              230
              
              $
              191Paper
                  products
              
              
              48
              
              
              45$
              278
              
              $
              236







F-12





**Note
      3. Property and Equipment**


Property
                  and equipment at December 31, consist of the following (in
                  thousands):
              
              2005
              
              2006Leasehold
                  improvements
              
              $
              1,499
              
              $
              1,512Furniture,
                  fixtures and equipment
              
              
              1,560
              
              
              1,711Vehicles
              
              
              101
              
              
              3913,160
              
              
              3,614Less
                  accumulated depreciation and amortization
              
              
              531
              
              
              1,466$
              2,629
              
              $
              2,148





The
      Company leases certain equipment under non-cancelable capital leases having
      a
      cost of approximately $259,000 and accumulated amortization of $137,000 at
      December 31, 2006.





**Note
      4. Notes Payable**


Notes
                  payable at December 31, consist of the following (in
                  thousands):
              
              2005
              
              2006Notes
                  payable, interest at 6% to 8%, collateralized by vehicles &
                  equipment
              
              $
              54
              
              $
              323Convertible
                  promissory note, interest at 8.25%, due September 2007,collateralized
                  by substantially all assets
              
              
              568
              
              
              759Promissory
                  notes, interest at 7.75% per annum, due April 2010,collateralized
                  by certain assets
              
              
              610
              
              
              418Convertible
                  promissory notes, interest at 8% per annum, due June 2007
              
              
              -
              
              
              5,800Payable
                  for Series C Preferred Stock Shares issued in 2006
              
              
              1,843
              
              
              -Promissory
                  notes, interest at 8% to 12% per annum, no specified due
                  date
              
              
              366
              
              
              -Promissory
                  note payable, interest at 9% per annum, due December 2006
              
              
              -
              
              
              275Total
                  notes payable
              
              
              3,441
              
              
              7,575Less:
                  unamortized original discount
              
              
              (
                  30
              )
              
              (
                  702
              )Less:
                  current portion of notes payable
              
              
              (2,204
              )
              
              (6,281
              )Notes
                  payable, net of current portion
              
              $
              1,207
              
              $
              592





The
      Company has a borrowing agreement with a vendor providing for borrowings up
      to
      $500,000, potentially increasing up to $1 million based on the occurrence of
      new
      location openings, which borrowing amount was limited pursuant to terms of
      the
      agreement to amounts borrowed as of March 31, 2006, which was approximately
      $759,000. The note payable requires monthly payments of interest at the prime
      rate plus 1% (8.25% and 9.25% at December 31, 2005 and 2006, respectively),
      with
      the principal due in September 2007, and is convertible at the note holder’s
      option into shares of the Company’s Series B Preferred Stock at the Exchange
      Ratio adjusted conversion price of approximately $1.68 per share. The note
      is
      collateralized by a pledge of Company assets.





In
      connection with an asset purchase agreement, in 2005 the Company issued
      convertible promissory note of approximately $600,000, which bears interest
      at
      7.75% per annum payable quarterly, with principal due in April 2010. The note
      was convertible until April 2006 at the note holders’ option into shares of the
      Company’s Series A Preferred Stock at the Exchange Ratio adjusted conversion
      price of approximately $1.86 per share and was not converted. The note is
      collateralized by a security interest in the acquired assets. In 2006, the
      note
      issued was cancelled and separate notes, bearing essentially the same terms
      and
      conditions as the original convertible promissory note, were issued to the
      parties to the original note. In April 2006, pursuant to a repurchase agreement,
      the Company repurchased two of the notes having a total face value of
      approximately $182,000 for $130,000 cash and recorded the resultant gain on
      extinguishment of debt in other income.





During
      2005, the Company issued promissory notes of approximately $311,000 in exchange
      for $295,000 cash. The discount from face value was recorded as an original
      issue discount to be amortized to interest expense on a straight-line basis
      over
      the 3-month term of the notes. The notes were convertible at the note holders’
option into shares of the Company’s Series C Preferred Stock, and in 2006, the
      notes were converted into approximately 183,400 shares of Series C Preferred
      Stock. The remaining unamortized original issue discount of approximately
      $16,000 was recorded as interest expense upon conversion.




F-13


Additionally,
      during 2005, the Company issued promissory notes of approximately $1.8 million
      with warrants in exchange for cash. The estimated fair value of the warrants
      of
      approximately $18,000 was recorded as an original issue discount to be amortized
      to interest expense on a straight-line basis over the 6-month term of the notes.
      The notes were convertible at the note holders’ option into shares of the
      Company’s Series C Preferred Stock at a conversion price of approximately $1.68
      per share, and in 2006, the notes were converted into approximately 1,095,000
      shares of Series C Preferred Stock. The remaining unamortized original issue
      discount of approximately $15,000 was recorded as interest expense upon
      conversion.





During
      2006, the Company received approximately $4.3 million through the issuance
      of
      convertible promissory notes bearing interest at 8% due June 2007 (the “Bridge
      Notes”) and warrants to purchase shares of Company common stock (together with
      the notes, the “Bridge Securities”). The estimated fair value of the warrants of
      approximately $768,000 was recorded as an original issue discount to be
      amortized to interest expense on a straight-line basis over the 7-month term
      of
      the notes. Additionally, in 2006, the Company received approximately $1.6
      million through the issuance convertible promissory notes bearing interest
      at
      24%, approximately $1.5 million of which were converted at the holders’ option
      into bridge notes and the remaining notes were repaid. Warrants to purchase
      Series C Preferred Stock were issued in connection with the short-term loans,
      the fair value of which was expensed over the debt term prior to conversion.
      Bridge Notes of approximately $5.8 million were convertible at the note holders’
option, or in certain circumstances automatically, into shares of the Company’s
      common stock at the Exchange Ratio adjusted conversion price of approximately
      $1.68 per share. In February 2007, in connection with the closing of the merger
      with SP Holding Corporation, the Bridge Notes were automatically converted
      into
      common stock. See Note 9.





During
      2006, the Company borrowed $275,000 from one of the Company’s equity and bridge
      note investors pursuant to a promissory note payable of $275,000, bearing
      interest at 9% per annum and due in December 2006. On the basis of discussions
      with the lender, the Company has been making payments on the note and expects
      to
      fully repay the note in 2007.





During
      2006, the Company repaid promissory notes borrowings in 2005 of approximately
      $56,000.





Future
      minimum principal payments on notes payable at December 31, 2006 are as follows
      (in thousands):


2007
              
              $
              6,9842008
              
              
              1472009
              
              
              212010
              
              
              423$
              7,575





**Note
      5. Stockholders’ Deficit**





The
      Company is authorized to issue 15,100,000 shares of its common stock, par value
      $0.001 per share, 3,070,000 shares of preferred stock, par value $0.001 per
      share, all of which are designated as “Series A Preferred Stock,” 1,750,000
      shares of preferred stock, par value $0.001 per share, all of which are
      designated as “Series B Preferred Stock,” and 4,850,000 shares of preferred
      stock, par value $0.001 per share, all of which are designated as “Series C
      Preferred Stock.” Authorized shares have not been adjusted in accordance with
      the Exchange Ratio.





Series
      A
      Preferred Stock - During 2004 and 2005, the Company issued approximately
      2,138,700 Exchange Ratio adjusted shares of its Series A Preferred Stock, in
      exchange for cash of approximately $2,815,000 and conversion of a $250,000
      convertible promissory note.





Series
      B
      Preferred Stock - During 2005, the Company issued approximately 850,000 shares
      of its Series B Preferred Stock, in exchange for cash of approximately
      $1,372,000 and conversion of a $53,000 convertible promissory note.





Series
      C
      Preferred Stock - During 2005 and 2006, the Company received proceeds of
      approximately $4,500,000 from the sale of approximately 2,664,200 shares of
      its
      Series C Preferred Stock and approximately 268,300 warrants to purchase shares
      of Series C Preferred Stock at an Exchange Ratio adjusted price per share of
      approximately $1.68, such warrants expiring in October 2010. The shares were
      issued in 2006.




F-14


In
      connection with the merger with SP Holding Corporation, in February 2007, all
      of
      the issued and outstanding shares of Series A, B and C Preferred Stock were
      converted into shares of the Company’s common stock on a one-for-one basis, and
      all shares of the Company’s common stock and rights to acquire shares of the
      Company’s common stock were exchanged for shares of SP Holding Corporation in
      such amounts as determined by multiplying the number of issued and outstanding
      shares of Company’s common stock by the Exchange Ratio. See Note 9.





Conversion,
      voting and other rights - Shares of Series A, B and C Preferred Stock were
      convertible into shares of the Company’s common stock on a one-share for
      one-share basis, had voting rights on an as-converted basis, had certain
      registration rights and rights of first refusal on future financings, and in
      certain circumstances, the right, as holders of preferred stock, to elect 25%
      of
      the Company’s Board of Directors.





Dividends
      - Terms of Series A, B and C Preferred Stock provided for non-cumulative
      dividends at non-Exchange Ratio adjusted rates of $0.05, $0.0585 and $0.0585
      per
      annum per share, respectively, when, as, and if declared by the Board of
      Directors.





Liquidation
      Preference - The liquidation preference value of Series A, B and C Preferred
      Stock was $1.00, $1.17 and $1.17 per share, respectively, representing
      liquidation preference amounts of approximately $3.1 million, $1.4 million
      and
      $4.5 million, respectively, at December 31, 2006.





Voting
      -
      Except as otherwise provided, preferred stock had no voting rights. In any
      situation in which, by the articles of incorporation or the bylaws, the holders
      of preferred stock have the right to vote, they will vote together with the
      common stock as a single class on all actions to be taken by the stockholders
      of
      the Company, including, but not limited to, actions amending the articles of
      incorporation to increase the number of shares of common stock, with each share
      of preferred stock entitling the holder to one vote.





Redemption
      - The Board of Directors of the Company has the right at any time there are
      Company funds legally available for redemption of shares of preferred stock,
      to
      redeem any or all of the outstanding shares of Series A, B or C preferred stock
      by payment of the liquidation price of the shares redeemed. If fewer than all
      of
      the outstanding shares of Series A or Series B preferred stock are to be
      redeemed, shares redeemed will be pro rata from the holders of Series A, B
      or C
      Preferred Stock. No shares of Series B Preferred Stock can be redeemed until
      all
      of the outstanding and issued shares of Series A Preferred Stock have been
      redeemed and paid in full in cash.





Warrants
      - In conjunction with various financing related agreements, including issuances
      of debt and equity securities, the Company issued warrants to purchase
      approximately 978,000 shares of the Company’s Series C Preferred Stock at an
      Exchange Ratio adjusted exercise price of approximately $1.68 per share, of
      which approximately 966,000 expire approximately five years from issuance and
      12,000 expire in 2015. In addition, the Company issued warrants to purchase
      approximately 1,354,000 shares of the Company’s common stock at an Exchange
      Ratio adjusted exercise price of approximately $1.68 per share, which expire
      in
      2011. No warrants have been exercised. The Series C Preferred Stock warrants
      issued in connection with borrowings were recorded at their estimated fair
      value
      of approximately $1.07 per share for 10 year warrants, and $0.77 for 5 year
      warrants as determined utilizing the black-scholes valuation model with
      assumptions of 50% volatility, risk-free interest rate of 5.1%, dividend yield
      of 0% and contractual lives. The total value of approximately $556,000 has
      been
      recorded as an increase in additional paid-in capital and approximately $544,000
      has been amortized to interest expense on the basis of the term of related
      borrowings. The common stock warrants issued in connection with borrowings
      were
      recorded at their estimated fair value of approximately $0.01 per share as
      determined utilizing the black-scholes valuation model with assumptions of
      50%
      volatility, risk-free interest rate of 5.1%, dividend yield of 0% and
      contractual lives. The total value of approximately $91,000 has been recorded
      as
      an increase in additional paid-in capital and approximately has been amortized
      to interest expense on the basis of the term of related borrowings.





Stock
      options - In 2006, the Company’s Board of Directors approved grants of 10 year
      options to purchase approximately 655,500 shares of Company common stock to
      the
      Company’s directors and certain of its officers and consultants. Options were
      granted with an exercise price of $0.17 per share, the estimated fair value
      of
      common stock on the grant dates as determined by the Board of Directors.
      Subsequently, in 2007, the Board of Directors determined that the estimated
      fair
      values of common stock for certain stock option grants were $0.34 and $1.43
      per
      share, and in this regard has entered into agreements to reprice those certain
      stock option grants to have exercise prices of $0.34 and $1.43.




F-15





The
      Company determines the fair value of options granted using the Black-Scholes
      option-pricing model. The determination of the fair value of stock-based awards
      on the date of grant using an option pricing model is affected by the stock
      price as well as assumptions regarding a number of highly complex and subjective
      variables. These variables include, among others, the expected life of the
      award, expected stock price volatility over the term of the award and actual
      and
      projected exercise behaviors. Although the fair value of stock-based awards
      is
      determined in accordance with SFAS 123R and SAB 107, the Black-Scholes option
      pricing model requires the input of highly subjective assumptions, and other
      reasonable assumptions could provide differing results. The weighted average
      fair value of stock options granted in 2006 was approximately $0.27 determined
      using the Black-Scholes option pricing model with the following assumptions:
      dividend yield of 0%; expected volatility of 50% (based on the volatilities
      of
      common stock of comparable public companies); risk-free interest rates of
      approximately 5%, and estimated lives of 5 years.





Compensation
      expense recognized for stock options of approximately $60,000 has been based
      on
      the revised exercise prices and the following information is presented on the
      basis of the revised exercise prices. As of December 31, 2006, there was
      approximately $104,000 of unrecognized compensation cost related to unvested
      stock options granted, which is expected to be recognized as expense over a
      period of approximately 1.3 years. The intrinsic value of stock options
      outstanding and exercisable at December 31, 2006 is based on an estimated fair
      value of common stock of $1.43 on that date, and is calculated by aggregating
      the difference between $1.43 and the exercise price of vested and unvested
      stock
      options which have an exercise price less than $1.43. The
      following summarizes activity for stock options: ****


Outstanding
              
              
              Weighted
                  average
                  exercise
                    price
              
              
              Weighted
                  average
                  remaining
                      contractual life
                      in years
              
              
              Aggregate
                  intrinsic
                  value
                      (in
                      thousands)Balance
                  at December 31, 2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -Granted
              
              
              655,545
              
              $
              0.54Exercised
              
              
              -Expired/
                  Cancelled
              
              
              -
              
              
              -Balance
                  at December 31, 2006
              
              
              655,545
              
              $
              0.54
              
              
              9.4
              
              $
              585Exercisable
                  at December 31, 2006
              
              
              157,648
              
              $
              0.43
              
              
              9.3
              
              $
              158





Additional
      information regarding stock options outstanding as of December 31, 2006, is
      as
      follows:


Weighted
                  averageExercise
                  prices
              
              Shares
              
              remaining
                  life$
                  0.17
              
              
              349,254
              
              
              9.2
                  years$
                  0.34
              
              
              132,584
              
              
              9.5
                  years$
                  1.43
              
              
              173,707
              
              
              9.8
                  yearsTotal
              
              
              655,545
              
              
              9.4
                  years




**Note
      6. Asset Purchase Agreements**





In
      April
      2005, pursuant to terms of an asset purchase agreement, the Company acquired
      for
      cash of $750,000 and a $600,000 convertible promissory note, among other things,
      all inventory, furniture, fixtures, equipment, leases and leasehold
      improvements, lease deposits, and owned vehicles used in connection with the
      seller’s prepared food retail cafes in the Seattle market (6 cafes) and in the
      Los Angeles County and Orange Country market (6 cafes). Other than future lease
      obligations and deferred rent, no liabilities were assumed. The total purchase
      price of approximately $1.6 million, including related acquisition costs, was
      allocated to assets acquired based on relative estimated fair values, which
      resulted in the majority being allocated to leasehold improvements, and which
      is
      summarized as follows (in thousands):




F-16


Inventory
              
              $
              156Furniture,
                  fixtures and equipment
              
              
              283Leasehold
                  improvements
              
              
              914Leasehold
                  interests, deposits, customer lists and other
              
              
              217$
              1,570


In
      October 2006, pursuant to terms of an asset purchase agreement, the Company
      acquired for $1 million cash, among other things, all inventory, furniture,
      fixtures, equipment, customer lists, leasehold improvements, and owned vehicles
      used in connection with a catering business in California. Other than the notes
      payable on the vehicles, no liabilities were assumed by the buyer. The buyer
      also entered in to a one year lease agreement for the building owed by the
      seller. The total purchase price of approximately $1.1 million, including
      related acquisition costs, was allocated to assets acquired based on relative
      estimated fair values, which resulted in the majority being allocated to
      customer based identifiable intangible assets, and which is summarized as
      follows (in thousands):


Inventory
              
              $
              12Furniture,
                  fixtures and equipment
              
              
              29Customer
                  based intangible assets
              
              
              860Covenant
                  not to compete intangible asset
              
              
              150Note
                  payable
              
              
              (9
              )$
              1,042





Operating
      results for the acquired business are included in the Company’s operating
      results from the date of acquisition. The following supplemental pro forma
      information has been presented on the basis as if the asset acquisition of
      the
      catering business had occurred at the beginning of the year presented for the
      years ended December 31 (in thousands):


2005
              
              2006Sales
              
              $
              8,576
              
              $
              11,465Net
                  loss
              
              $
              (6,272
              )
              $
              (8,465
              )Net
                  loss per share
              
              $
              (2.18
              )
              $
              (2.95
              )





**Note
      7. Commitments and Contingencies**





The
      Company leases its cafes, central kitchens and office facilities under
      non-cancelable operating leases, some with renewal options. Rents are fixed
      base
      amounts, some with escalating rents and some with contingent rents based on
      sales. Lease provisions also require additional payments for maintenance and
      other expenses. Rent is expensed on a straight-line basis over the term of
      the
      lease. The difference between amounts paid and expensed is recorded as a
      deferred credit. The Company also rented office facilities during 2005 on a
      month-to-month basis. Rent expense was approximately $578,000 and $926,000
      during 2005 and 2006, respectively. The Company also leases certain
      point-of-sale computer hardware and software pursuant to capital leases. Minimum
      annual future lease obligations at December 31, 2006 are as follows (in
      thousands):


Operating
              
              Capital2007
              
              $
              493
              
              $
              632008
              
              
              339
              
              
              632009
              
              
              137
              
              
              622010
              
              
              54
              
              
              262011
              
              
              36
              
              
              -$
              1,059
              
              
              214Less:
                  amount representing interest
              
              
              
              
              
              27Present
                  value of future minimum lease payments
              
              
              
              
              
              187Current
              
              
              
              
              
              50$
              137




From
      time
      to time, the Company is subject to various legal proceedings and claims that
      may
      arise in the ordinary course of business. Further, in the past, certain vendors
      have taken legal action against the Company as a result of untimely payment
      of
      invoices. In some cases, the courts have stipulated judgment requiring the
      Company to pay interest and comply with payment schedules. In addition, a former
      employee has brought suit against the Company with what management believes
      are
      unfounded claims. Management currently believes that resolution of such legal
      matters will not have a material adverse impact on the Company’s financial
      statements.




F-17





**Note
      8. Income Taxes**





The
      Company has recorded no provision for income taxes due to net losses incurred.
      A
      valuation allowance has been recorded against deferred tax assets as it has
      not
      been determined that it is more likely than not that these deferred tax assets
      will be realized. As of December 31, 2006, the Company has net operating loss
      carryforwards of approximately $13 million and $6 million for federal and state
      income tax purposes, respectively, which expire beginning in 2024 (federal)
      and
      2014 (state). As a result of ownership changes, the Company may be subject
      to
      annual limitations on the amount of net operating loss, which can be utilized
      in
      any tax year.




Deferred
                  income taxes consist of the following at December 31 (in
                  thousands):
              
              2005
              
              2006Net
                  operating loss carryforwards
              
              $
              2,042
              
              $
              4,689Other
              
              
              246
              
              
              521Total
                  deferred tax assets
              
              
              2,288
              
              
              5,210Less:
                  valuation allowance
              
              
              (
                  2,288
              )
              
              (
                  5,210
              )Deferred
                  tax assets, net of valuation allowance.
              
              $
              -
              
              $
              -


The
      difference between the expected benefit computed using the statutory tax rate
      and the recorded benefit of zero is primarily due to the change in the valuation
      allowance. The change in the valuation allowance was approximately $2 million
      and $3 million in 2005 and 2006, respectively.





**Note
      9. Subsequent Events**





On
      February 12, 2007, pursuant to an Agreement and Plan of Merger and
      Reorganization by and among the SP Holding Corporation, Organic Acquisition
      Corporation and Organic, Organic became a wholly owned operating subsidiary
      of
      SP Holding Corporation. Those persons holding shares of Organic capital stock,
      warrants and options to purchase shares of Organic capital stock, and certain
      promissory notes convertible into shares of Organic capital stock, received
      shares of SP Holding Corporation common stock, $.001 par value per share (“SP
      Holding Common Stock”) and warrants and options to purchase shares of SP Holding
      Common Stock.




Under
      the
      terms of the merger, each share of Organic common stock and Organic preferred
      stock (which included certain issued and outstanding convertible promissory
      notes on an “as converted” basis) outstanding immediately prior to the closing
      of the merger was converted into the right to receive 0.69781 shares of SP
      Holding Common Stock. Under the terms of the merger, each then convertible
      promissory note whose holder had not previously elected to convert to Organic
      common stock, became convertible for shares of SP Holding Common Stock, provided
      that (i) the face value of each such convertible note remained unchanged, (ii)
      each such convertible note became convertible for such number of shares of
      SP
      Holding Common Stock as was determined by multiplying the number of Organic
      shares underlying said convertible note by the Exchange Ratio, with the
      resulting product rounded down to the nearest whole number of shares, and (ii)
      the per share conversion price for each convertible note determined by dividing
      the conversion price per share for said convertible note by the Exchange Ratio,
      with the resulting quotient rounded down to the nearest whole cent.




Under
      the terms of the merger, each then outstanding
      option and warrant to purchase shares of Organic common stock, whether or not
      exercisable, was converted into an option or warrant to purchase shares of
      SP
      Holding Common Stock upon the same terms and conditions as the corresponding
      Organic options and warrants, provided that (i) each such Organic option and
      warrant related to such number of shares of SP Holding Common Stock as was
      determined by multiplying the number of shares of Organic common stock
      underlying such Organic option or warrant by the Exchange Ratio, with the
      resulting product rounded down to the nearest whole number of shares, and (ii)
      the per share exercise price for the newly-issued SP Holding Corporation options
      or warrants was determined by dividing the exercise price per share of such
      Organic options or warrants by the Exchange Ratio, with the resulting quotient
      rounded down to the nearest whole cent.




F-18




Consummation
      of the merger occurred concurrently with the completion of a private placement
      of 138 Units for an aggregate of approximately $6.9 million, issued by SP
      Holding Corporation. Each Unit is comprised of (i) 40,000 shares of SP Holding
      Common Stock, and (ii) a detachable five-year warrant to purchase 8,000 shares
      of SP Holding Common Stock, at an exercise price of $2.50 per share (the “SP
      Holding Warrants”). The purchase price per Unit was $50,000. At the closing of
      the private placement, SP Holding Corporation issued to investors an aggregate
      of 5,523,000 shares of SP Holding Common Stock and SP Holding Warrants to
      purchase 1,104,600 shares of SP Holding Common Stock.




Organic
      engaged Burnham Hill Partners, a division of Pali Capital, Inc., as the
      placement agent (the “Placement Agent”) in connection with the private
      placement. Pursuant to the terms of the engagement with the Placement Agent,
      the
      Placement Agent, or its registered assignees or designees, received a cash
      commission of 10% of the gross proceeds from the Units sold in the private
      placement. In addition, SP Holding Corporation issued to the Placement Agent
      or
      its registered assignees or designees, warrants to purchase up to 888,899 shares
      of SP Holding Common Stock (the “Placement Agent Warrants”).




The
      Placement Agent Warrants are exercisable at any time at a price equal to 110%
      of
      the price paid by the investors in the private placement, on a net-issuance
      or
      cashless basis. The Placement Agent Warrants will have registration rights
      similar to the registration rights afforded to the holders of SP Holding
      Warrants. The Placement Agent Warrants are fully vested and have a term of
      five
      years.




After
      the
      merger and private placement, former SP Holding Corporation stockholders own
      approximately 5% of the common stock of SP Holding Corporation, former Organic
      stockholders and convertible bridge note holders own approximately 70% of SP
      Holding Corporation, and the investors purchasing Units in the private placement
      own approximately 25% of SP Holding Corporation.




The
      issuance of SP Holding Common Stock to the Organic stockholders and the
      investors in the private placement is intended to be exempt from registration
      under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to
      Section 4(2) thereof. As such, the SP Holding Common Stock received by the
      Organic stockholders pursuant to the merger and issued to the investors in
      the
      private placement may not be offered or sold in the United States unless they
      are registered under the Securities Act, or an exemption from the registration
      requirements of the Securities Act is available. No registration statement
      covering these securities has been filed with the SEC or with any state
      securities commission in respect of the merger or the private
      placement.




SP
      Holding Corporation has agreed to register for public re-sale the shares of
      SP
      Holding Common Stock underlying the Units and the shares of SP Holding Common
      Stock issuable to each investor and the Placement Agent pursuant to the exercise
      of the SP Holding Warrants and the Placement Agent Warrants. SP Holding
      Corporation may be required to pay a penalty to the investors in the private
      placement, with the maximum amount of the penalty capped at 24% of the amount
      raised pursuant to the private placement, if SP Holding Corporation fails to
      have a registration statement with respect to the shares of SP Holding Common
      Stock issued to the investors (including the shares underlying the SP Holding
      Warrants) pursuant to the private placement filed with the SEC within 90 days
      after the closing of the private placement or if SP Holding Corporation fails
      to
      have such registration statement declared effective with respect to the shares
      of SP Holding Common Stock issued to the investors (excluding, however, the
      shares underlying the SP Holding Warrants) within 150 days after the filing
      of
      such registration statement with the SEC.




SP
      Holding Corporation is currently authorized under its Amended and Restated
      Certificate of Incorporation to issue 500,000,000 shares of SP Holding Common
      Stock and 10,000,000 shares of SP Holding Preferred Stock. Prior to closing
      of
      the merger and private placement, there were 439,403 shares of SP Holding Common
      Stock issued and outstanding and 60 shares of preferred stock of SP Holding
      Corporation issued and outstanding. At the closing of the merger and private
      placement and after giving effect thereto, there were 19,595,671 shares of
      SP
      Holding Common Stock issued and outstanding and no shares of preferred stock
      of
      SP Holding Corporation issued and outstanding (the 60 shares of preferred stock
      of SP Holding Corporation issued and outstanding prior to the merger having
      automatically converted into 687,271 shares of SP Holding Common Stock upon
      closing of the merger).




F-19




From
      an
      accounting perspective, the merger transaction is considered a recapitalization
      of Organic accompanied by the issuance of securities by Organic for the net
      liabilities of SP Holding Corporation, as a result of SP Holding Corporation
      not
      having operations immediately prior to the merger. After the merger and private
      placement, former SP Holding Corporation stockholders own approximately 5%
      of SP
      Holding Corporation, and former Organic stockholders and convertible bridge
      note
      holders own approximately 70% of SP Holding Corporation. The board of directors
      and executive offices are comprised of former Organic directors and executive
      officers. In these circumstances, the merger transaction is accounted for as
      a
      capital transaction rather than as a business combination, because the
      transaction is equivalent to the issuance of securities by Organic for the
      assets and liabilities of SP Holding Corporation, accompanied by a
      recapitalization. The accounting is identical to that resulting from a reverse
      acquisition, except that no goodwill or other intangibles are recorded.




The
      following unaudited pro forma condensed consolidated balance sheet has been
      presented giving effect to the merger, the private placement and conversion
      of
      the bridge notes, including the write-off of related deferred debt issue costs
      and debt discount (in thousands):


Organic
                    Holding Company, Inc.
              
              SP
                    Holding
                  Corporation
              
              Private
                  Placement
              
              pro
                    forma
                  adjustments
              
              pro
                  formaCash
              
              $
              865
              
              $
              13
              
              $
              6,150
              
              
              
              
              $
              7,028Other
                  current assets
              
              
              790
              
              
              -
              
              
              -
              
              
              
              
              
              790Total
                  current assets
              
              
              1,655
              
              
              13
              
              
              6,150
              
              
              
              
              
              7,818Property
                  and equipment
              
              
              2,148
              
              
              
              
              
              
              
              
              
              
              
              2,148Intangible
                  and other assets
              
              
              1,474
              
              
              -
              
              
              -
              
              $
              (483
              )
              
              991$
              5,277
              
              $
              13
              
              $
              6,150
              
              $
              (483
              )
              $
              10,957Accounts
                  payable
              
              $
              1,389
              
              $
              78
              
              
              
              
              
              
              
              $
              1,467Accrued
                  liabilities and other
              
              
              879
              
              
              
              
              
              
              
              
              
              
              
              879Notes
                  payable, current
              
              
              6,281
              
              
              -
              
              
              
              
              $
              (5,111
              )
              
              1,170Total
                  current liabilities
              
              
              8,549
              
              
              78
              
              
              
              
              
              (5,111
              )
              
              3,516Notes
                  payable, net of current
              
              
              592
              
              
              
              
              
              
              
              
              
              
              
              592Other
                  liabilities
              
              
              137
              
              
              -
              
              
              
              
              
              -
              
              
              137Total
                  liabilities
              
              
              9,278
              
              
              78
              
              
              
              
              
              (5,111
              )
              
              4,245Preferred,
                  common and paid in capital
              
              
              10,422
              
              
              25,641
              
              $
              6,15
              
              
              (21,078
              )
              
              21,135Accumulated
                  deficit
              
              
              (14,423
              )
              
              (25,706
              )
              
              -
              
              
              25,706
              
              
              (14,423
              )Total
                  stockholders’ equity (deficit)
              
              
              (
                4,001
              )
              
              (65
              )
              
              6,150
              
              
              4,628
              
              
              6,362$
              5,277
              
              $
              13
              
              $
              6,150
              
              $
              (483
              )
              $
              10,957


Effective
      January 1, 2007, the Company entered into an employment agreement with a
      three-year term with its founder and chief executive officer, pursuant to which,
      the executive officer will receive a base salary at an annual rate of $225,000,
      subject to annual increases as determined by the Company’s Board of Directors.
      The Company’s executive officer is also eligible for cash bonuses and other
      typical employment benefits. In addition, effective upon the closing of the
      merger, the executive officer received options to purchase shares of SP Holding
      Common Stock in an amount equal to 5% of the outstanding shares of SP Holding
      Common Stock as of the closing of the merger determined on a fully-diluted
      basis.  Options granted vest 25% after 12 months of employment, with the
      remainder vesting over the next 36 months, subject to accelerated vesting in
      the
      event of a “Change in Control,” as defined in the employment agreement, or in
      certain other circumstances, and are exercisable at any time at a price equal
      to
      110% of the price paid by the investors in the private placement, on a
      net-issuance or cashless basis. Under certain departure circumstances, the
      Company’s executive officer could be eligible to receive payments of one year’s
      salary and benefits.


In
        March
        2007, pursuant to terms of an asset purchase agreement, the Company acquired
        for
        cash of approximately $630,000, a $150,000 promissory note and 400,000 shares
        of
        its common stock, among other things, all inventory, furniture, fixtures,
        equipment, leasehold improvements, customer lists and other intangible assets
        used in connection with Jackrabbit, LLC, a Seattle-based catering business.
        Other than a facilities lease and equipment lease, no liabilities were assumed
        by the Company. Substantially all of the purchase price will be recorded
        as
        intangible assets.




F-20




**EXHIBIT
      INDEX**




**Exhibit**
              **Number**
            
            **Description**2.1
            
            Agreement
                and Plan of Merger and Reorganization, dated as of January 11, 2007
                (1)2.2
            
            First
                Amendment to Agreement and Plan of Merger and Reorganization and
                Company
                Disclosure Schedule, dated as of February 12, 2007 (2)3.1
            
            Amended
                and Restated Certificate of Incorporation (3)3.2
            
            Amended
                and Restated Bylaws (4)4.1
            
            Specimen
                Stock Certificate for Shares of SP Holding Corporation Common Stock
                (2)4.2
            
            Form
                of SP Holding Corporation Warrant (2)10.1
            
            Placement
                Agent Agreement, dated December 18, 2006, by and between Organic
                Holding
                Company, Inc. and Burnham Hill Partners, a division of Pali Capital,
                Inc.
                (2)10.2
            
            Form
                of Subscription Agreement by and between SP Holding Corporation and
                the
                Investors (2)10.3
            
            Employment
                Agreement by and between Jason Brown and Organic Holding Company,
                Inc.
                (2)10.4
            
            Asset
                Purchase Agreement by and among Vinaigrettes LLC, Dan Karzen and
                Organic
                Holding Company, Inc. (2)10.5
            
            Asset
                Purchase Agreement by and between Organic Holding Company, Inc. and
                Briazz
                Inc. (2)16.1
            
            Letter
                from De Leon & Company, P.A. to the Securities and Exchange
                Commission, dated March 7, 2007 (5)21.1
            
            List
                of Subsidiaries (2)31.1
            
            Certifications
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
                *31.2
            
            Certifications
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
                *32.1
            
            Certifications
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                *


*
                Filed
                    herewith




(1)
            
            Filed
                on February 7, 2007 as an exhibit to our Current Report on Form 8-K
                and
                incorporated herein by reference.(2)
            
            Filed
                on February 13, 2007 as an exhibit to our Current Report on Form
                8-K dated
                February 13, 2006 and incorporated herein by reference.(3)
            
            Filed
                on December 13, 2003 as an exhibit to our Current Report on Form
                8-K and
                incorporated herein by reference.(4)
            
            Filed
                on May 14, 2001 as an exhibit to our report on Form 10-QSB and
                incorporated herein by reference.(5)
            
            Filed
                on March 9, 2007 as an exhibit to our Current Report on Form 8-K
                and
                incorporated herein by reference.