**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**





**Washington,
      D.C. 20549**





**FORM
      10-QSB**








(Mark
      One)


x
            **QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934**





For
      the
      quarterly period ended September 30, 2005





or





 ̈
            **TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) of the SECURITIES EXCHANGE ACT OF
                1934**




For
      the
      Transition Period from  to





Commission
      File No. 000-50508




**NUVIM,
      INC.**


**(Exact
      Name of Small Business Issuer as Specified in Its Charter)**







**Delaware**
            
            **13-4083851****(State
                or Other Jurisdiction of**
              **Incorporation
                or Organization)**
            
            **(I.R.S.
                Employer**
              **Identification
                No.)****12
                North State Route 17**
              **Paramus,
                NJ**
            
            **07652****(Address
                of Principal Executive Offices)**
            
            **(Zip
                Code)**








**(201)
      556-1000**


**(Issuers
      Telephone Number Including Area Code)**





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 report(s), and (2) has been
      subject to such filing requirements for the past 90 days. Yes  x  No
o





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





At
      November 12, 2005, 5,034,994 shares of the registrant’s Common Stock, par value
      $0.00001 per share, were outstanding.








Transitional
      Small Business Disclosure Format: Yes o  No x





**NUVIM,
      INC.**





**Quarterly
      Report on Form 10-QSB**





**Quarterly
      Period Ended September 30, 2005**





**Table
      of Contents**


**Part
                I - Financial Information**Item
                1. Financial Statements (Unaudited)Balance
                Sheet - September 30, 2005
            3Statements
                of Operations - For the three and nine months ended September 30,
                2005 and
                2004
            4Statement
                of Changes in Stockholders’ Deficit for the nine months ended September
                30, 2005
            5Statements
                of Cash Flows for the nine months ended September 30, 2005 and 2004
            6Notes
                to Financial Statements
            7Item
                2. Management’s Discussion and Analysis or Plan of Operation
            14Item
                3. Controls and Procedures
            24**PART
                II - Other Information**Item
                1. Legal Proceedings
            25Item
                2. Unregistered Sales of Equity Securities and Use of Proceeds
            25Item
                6. Exhibits and Reports on Form 8-K
            25Signatures
            26








2


**Part
      I. Financial Information**





**Item
      1. Financial Statements**





**NUVIM,
      INC.**


**BALANCE
      SHEET**


**(UNAUDITED)**


**September
                30, 2005**ASSETSCurrent
                Assets:Cash
                and cash equivalents
            
            $
            413,286Accounts
                receivable, net
            
            
            1,842Inventory
            
            
            187,569Prepaid
                expenses and other current assets
            
            
            93,179Total
                Current Assets
            
            
            695,876Equipment
                and furniture, net
            
            
            7,398Deposits
                and other assets
            
            
            8,546TOTAL
                ASSETS
            
            $
            711,820LIABILITIES
                AND STOCKHOLDERS DEFICITCurrent
                Liabilities:Stockholder
                loans - subordinated convertible promissory notes
            
            $
            225,000Accrued
                interest stockholder loans
            
            
            24,191Accounts
                payable
            
            
            1,079,024Accounts
                payable and accrued expenses to related parties
            
            
            255,450Accrued
                expenses
            
            
            152,966Accrued
                compensation
            
            
            163,939Rescinded
                series B offering payable
            
            
            18,920Other
                note payable
            
            
            141,000Total
                Current Liabilities
            
            
            2,060,490Senior
                notes payable - related parties
            
            
            500,000Accrued
                interest - senior notes payable - related party
            
            
            105,118Commitments
                and ContingenciesStockholders’
                Deficit:Preferred
                Stock - 65,000,000 shares authorized:Preferred
                Stock Series A, convertible, non cumulative, participating, par value
                $.00001 per share; 4,875,850 shares designated, 0 shares issued and
                outstanding
            
            
            —Preferred
                Stock Series C, convertible, non cumulative, participating, par value
                $.00001 per share; designated 50,000,000 shares, 0 issued and outstanding
            
            
            —Common
                Stock, 120,000,000 shares authorized, $.00001 par value, 4,630,297
                shares
                issued and outstanding
            
            
            4
                6Additional
                paid-in capital
            
            
            17,731,040Accumulated
                deficit
            
            
            (19,684,874
            )Total
                Stockholders’ Deficit
            
            
            (1,953,788
            )TOTAL
                LIABILITIES AND STOCKHOLDERS’DEFICIT
            
            $
            711,820









The
      Notes
      to Financial Statements are an integral part of these statements.


3


**NUVIM,
      INC.**


**STATEMENTS
      OF OPERATIONS**


**(UNAUDITED)**


**For
                  the Three Months Ended September 30,**
              
              **For
                  the Nine Months Ended September 30,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Gross
                  Sales
              
              $
              261,888
              
              $
              335,650
              
              $
              911,396
              
              $
              1,068,564Less:
                  Discounts, Allowances and Promotional Payments
              
              
              103,452
              
              
              90,866
              
              
              395,130
              
              
              276,696Net
                  Sales
              
              
              158,436
              
              
              244,784
              
              
              516,266
              
              
              791,868Cost
                  of Sales
              
              
              138,939
              
              
              182,532
              
              
              516,449
              
              
              571,953Gross
                  Profit (Loss)
              
              
              19,497
              
              
              62,252
              
              
              (183
              )
              
              219,915Selling,
                  General and Administrative Expenses
              
              
              529,045
              
              
              577,570
              
              
              1,583,100
              
              
              1,271,253Loss
                  from Operations
              
              
              (509,548
              )
              
              (515,318
              )
              
              (1,583,283
              )
              
              (1,051,338
              )Other
                  Income (Expense):Interest
                  Expense
              
              
              (18,042
              )
              
              (239,349
              )
              
              (406,921
              )
              
              (503,379
              )Interest
                  Income
              
              
              5,936
              
              
              —
              
              
              6,089
              
              
              —Gain
                  on Forgiveness of Accounts Payable
              
              
              —
              
              
              —
              
              
              148,525
              
              
              60,258Total
                  Other Income (Expense) - Net
              
              
              (12,106
              )
              
              (239,349
              )
              
              (252,307
              )
              
              (443,121
              )Net
                  Loss Before Income Tax Benefit
              
              
              (521,654
              )
              
              (754,667
              )
              
              (1,835,590
              )
              
              (1,494,459
              )Income
                  Tax Benefit (Expense)
              
              
              -
              
              
              —
              
              
              (1,125
              )
              
              —Net
                  Loss
              
              $
              (521,654
              )
              $
              (754,667
              )
              $
              (1,836,715
              )
              $
              (1,494,459
              )Basic
                  and Diluted Loss Per Share
              
              $
              (.11
              )
              $
              (4.08
              )
              $
              (.80
              )
              $
              (9.24
              )Weighted
                  Average Number of Common Shares Outstanding - Basic and Diluted
              
              
              4,630,297
              
              
              185,073
              
              
              2,287,950
              
              
              161,726








The
      Notes
      to Financial Statements are an integral part of these statements.





4




**NUVIM,
      INC.**


**STATEMENTS
      OF CHANGES IN STOCKHOLDERS’ DEFICIT**


**FOR
      THE NINE MONTHS ENDED SEPTEMBER 30, 2005 (UNAUDITED)**





**Preferred
                Stock****Series
                A**
            
            **Preferred
                Stock**
              **Series
                C**
            
            **Common
                Stock**
            
            **Additional**
              **Paid-In**
              **Capital**
            
            **Accumulated**
              **Deficit**
            
            **Total**
              **Stockholders’**
              **Deficit****Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**
            
            **Shares**
            
            **Amount**Balance
                at December 31, 2004
            
            
            4,875,850
            
            
            
            
            $
            49
            
            
            3,623,000
            
            
            
            
            $
            36
            
            
            414,073
            
            
            
            
            $
            4
            
            
            
            
            $
            8,377,140
            
            
            
            
            $
            (17,848,159
            )
            
            
            
            $
            (9,470,930
            )Common
                stock issued in payment of convertible promissory notes - related
                parties
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            461,700
            
            
            
            
            
            5
            
            
            
            
            
            6,141,522
            
            
            
            
            
            
            
            
            
            
            
            6,141,527Common
                stock issued in payment of accrued salaries
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            250,696
            
            
            
            
            
            3
            
            
            
            
            
            593,747
            
            
            
            
            
            
            
            
            
            
            
            593,750Common
                stock issued in payment of senior notes payable - related parties
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            250,000
            
            
            
            
            
            2
            
            
            
            
            
            499,998
            
            
            
            
            
            
            
            
            
            
            
            500,000Common
                Stock issued in payment of stockholder loans, subordinated convertible
                promissory notes payable and accrued interest
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            88,882
            
            
            
            
            
            1
            
            
            
            
            
            118,113
            
            
            
            
            
            
            
            
            
            
            
            118,114Common
                stock issued in payment of advances - related party
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            23,000
            
            
            
            
            
            
            
            
            
            
            
            69,000
            
            
            
            
            
            
            
            
            
            
            
            69,000Common
                stock issued in payment of accounts payable
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            42,333
            
            
            
            
            
            
            
            
            
            
            
            109,000
            
            
            
            
            
            
            
            
            
            
            
            109,000Common
                stock issued upon conversion of convertible promissory note - related
                party
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            245,000
            
            
            
            
            
            2
            
            
            
            
            
            244,998
            
            
            
            
            
            
            
            
            
            
            
            245,000Common
                stock issued, conversion of Series A preferred stock
            
            
            (4,875,850
            )
            
            
            
            
            (49
            )
            
            
            
            
            
            
            
            
            
            
            88,732
            
            
            
            
            
            1
            
            
            
            
            
            48
            
            
            
            
            
            
            
            
            
            
            
            -Common
                stock issued, conversion of Series C preferred stock
            
            
            
            
            
            
            
            
            
            
            
            3,623,000
            
            
            
            
            
            (36
            )
            
            65,881
            
            
            
            
            
            1
            
            
            
            
            
            35
            
            
            
            
            
            
            
            
            
            
            
            -Issuance
                of common stock, initial public offering
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            2,700,000
            
            
            
            
            
            27
            
            
            
            
            
            1,577,439
            
            
            
            
            
            
            
            
            
            
            
            1,577,466Net
                loss for the nine months ended September 30, 2005
            
            
            —
            
            
            
            
            
            —
            
            
            —
            
            
            
            
            
            —
            
            
            —
            
            
            
            
            
            —
            
            
            
            
            
            —
            
            
            
            
            
            (1,836,715
            )
            
            
            
            
            (1,836,715
            )Balance
                at September 30, 2005
            
            
            —
            
            
            
            
            $
            —
            
            
            —
            
            
            
            
            $
            —
            
            
            4,630,297
            
            
            
            
            $
            46
            
            
            
            
            $
            17,731,040
            
            
            
            
            $
            (19,684,874
            )
            
            
            
            $
            (1,953,788
            )





The
      Notes
      to Financial Statements are an integral part of these statements.


5


**NUVIM,
      INC.**


**STATEMENTS
      OF CASH FLOWS**


**(UNAUDITED)**





**For
                the Nine Months Ended September 30,****2005**
            
            **2004**Cash
                Flow From Operating Activities:Net
                Loss
            
            $
            (1,836,715
            )
            $
            (1,494,459
            )Adjustment
                to reconcile net loss to net cash used in operating
                activities:Depreciation
            
            
            14,044
            
            
            31,590Beneficial
                conversion of notes payable
            
            
            49,755Gain
                on forgiveness of accounts payable
            
            
            (148,525
            )
            
            (60,258
            )Provision
                for sales returns and allowances
            
            
            395,130
            
            
            276,696Changes
                in Operating Assets and Liabilities:Accounts
                receivable
            
            
            (389,999
            )
            
            (255,467
            )Inventory
            
            
            (103,085
            )
            
            45,994Prepaid
                expenses and other current assets
            
            
            (31,413
            )
            
            31,515Accounts
                payable
            
            
            120,037
            
            
            111,895Accrued
                compensation
            
            
            206,384
            
            
            387,495Accrued
                expenses
            
            
            18,592
            
            
            180,449Accrued
                interest
            
            
            336,795
            
            
            408,385Accounts
                payable to related parties
            
            
            (433,550
            )
            
            (243,000
            )Net
                Cash Used in Operating Activities
            
            
            (1,802,550
            )
            
            (579,165
            )Cash
                Flow From Investing Activities:Purchase
                of equipment and furniture
            
            
            (442
            )
            
            (1,394
            )Net
                Cash Used in Investing Activities
            
            
            (442
            )
            
            (1,394
            )Cash
                Flow From Financing Activities:Net
                proceeds from issuance of common stock
            
            
            1,577,466
            
            
            —Reimbursement
                (payment),reduction in deferred offering costs
            
            
            441,243
            
            
            (117,800
            )Proceeds
                from senior note payable - related party
            
            
            
            
            
            500,000Repayment
                of Shareholder loan
            
            
            (35,000
            )Proceeds
                from, (repayment of) notes payable
            
            
            (9,000
            )
            
            120,000Repayment
                of Series B advances
            
            
            (23,080
            )Proceeds
                from underwriter advance - related party
            
            
            200,000
            
            
            —Proceeds
                from (repayment of) underwriter advance - related party
            
            
            (200,000
            )Repayment
                of related party advances
            
            
            (13,000
            )
            
            55,000Net
                Cash Provided By Financing Activities
            
            
            1,938,629
            
            
            557,200Increase
                (Decrease) in Cash and Cash Equivalents
            
            
            135,637
            
            
            (23,359
            )Cash
                and Cash Equivalents at Beginning of Period
            
            
            277,649
            
            
            54,609Cash
                and Cash Equivalents at End of Period
            
            $
            413,286
            
            $
            31,250








The
      Notes
      to Financial Statements are an integral part of these statements.


6





**NUVIM,
      INC.**


**NOTES
      TO FINANCIAL STATEMENTS**


**(Unaudited)**








**NOTE
      1 - BUSINESS AND BASIS OF PRESENTATION**





**A.     Business**





NuVim,
      Inc. (the “Company”) markets and distributes dietary supplement beverages, which
      enhance the immune system, promote sturdy joints muscle flexibility and muscle
      recovery. The Company distributes its products through supermarkets in
      approximately 13 states, predominantly on the East Coast, and the District
      of
      Columbia. The Company’s beverage products contain certain micronutrients which
      Stolle Milk Biologics, Inc. (“SMBI”) has patented. Spencer Trask Specialty
      Group, LLC (“ST”) is the controlling stockholder of SMBI. SMBI and ST
      collectively are significant stockholders of the Company. The Company has
      entered into supply and licensing agreements with SMBI for these patented
      micronutrients, which can be terminated by SMBI under certain conditions.





**B.     Going
      Concern**





The
      accompanying financial statements have been prepared assuming the Company will
      continue as a going concern. As shown in the accompanying financial statements,
      the Company incurred net losses of $521,654 and $754,667 for the three months
      ended September 30, 2005 and 2004, and $1,836,715 and $1,494,459 for the nine
      months ended September 30, 2005 and 2004, respectively. Management also expects
      operating losses to continue in 2005 and 2006. The Company has negative working
      capital of $1,364,614 and an accumulated deficit of $1,953,788 at September
      30,
      2005. The Company’s continued existence is dependent upon its ability to secure
      adequate financing to fund future operations and commence profitable operations.
      To date, the Company has supported its activities through equity investments,
      the sale of preferred and common stock, a demand note payable to a bank and
      cash
      advances from related parties and stockholders. It is the Company’s intention to
      raise additional capital through additional borrowings and sales of its equity
      securities. No assurance can be given that these funding strategies will be
      successful in providing the necessary funding to finance the operations of
      the
      Company. Additionally, there can be no assurance, even if successful in
      obtaining financing, the Company will be able to generate sufficient cash flows
      to fund future operations. These conditions raise substantial doubt about the
      Company’s ability to continue as a going concern. The accompanying financial
      statements do not include any adjustments relating to the recoverability and
      classification of recorded assets or amounts and classification of liabilities
      that might be necessary related to this uncertainty.





**C.   
      Basis of Presentation**





The
      unaudited consolidated financial statements included herein have been prepared
      by the Company pursuant to the rules and regulations of the Securities and
      Exchange Commission. Accordingly, they do not include all of the information
      and
      footnotes required by accounting principles generally accepted in the United
      States for complete financial statements. The unaudited interim consolidated
      financial statements as of September 30, 2005 and 2004 reflect all adjustments
      (consisting of normal recurring accruals) which, in the opinion of management,
      are considered necessary for a fair presentation of its financial position
      as of
      September 30, 2005 and as of the results of its consolidated operations and
      its
      consolidated cash flows for the periods ended September 30, 2005 and 2004.





The
      Unaudited Consolidated Statements of Operations for the nine months ended
      September 30, 2005 and 2004 are not necessarily indicative of results for the
      full year.





While
      the
      Company believes that the disclosures presented are adequate to make the
      information not misleading, these financial statements should be read in
      conjunction with the financial statements and accompanying notes included in
      the
      Company's Current Report on Form SB-2 for the years ended December 31, 2004
      and
      2003 filed June 20, 2005.





**NOTE
      2 - SIGNIFICANT ACCOUNTING POLICIES**





**A.     Stock-Based
      Compensation**





The
      Company accounts for employee stock-based compensation in accordance with
      Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued
      to Employees”, using an intrinsic value approach to measure compensation
      expense, if any. Under this method, compensation expense is recorded on the
      grant date only if the current market price of the underlying stock exceeds
      the
      exercise price. Options and warrants issued to non-employees are accounted
      for
      in accordance with SFAS No. 123, “Accounting for Stock-Based Compensation”, and
      EITF Issue No. 96-18, “Accounting for Equity Instruments That Are Issued to
      Other Than Employees for Acquiring, or in Conjunction with Selling, Goods and
      Services” using a fair value approach.





7





SFAS
      No.
      123 established accounting and disclosure requirements using a fair value-basis
      method of accounting for stock-based employee compensation plans. As allowed
      by
      SFAS No. 123, the Company has elected to continue to apply the intrinsic
      value-based method of accounting described above, and has adopted the disclosure
      requirements of SFAS No. 123. Had the Company elected to recognize compensation
      cost based on fair value of the stock options at the date of grant under SFAS
      No.123, such costs would have been recognized ratably over the vesting period
      of
      the underlying instruments and the Company’s net loss and net loss per common
      share would have increased to the pro forma amounts indicated in the table
      below.





**Three
                Months Ended September 30,**
            
            **Nine
                Months Ended September 30,****2005**
            
            **2004**
            
            **2005**
            
            **2004**Net
                loss, as reported
            
            $
            521,654
            
            $
            754,667
            
            $
            1,836,715
            
            $
            1,494,459Net
                loss, pro forma
            
            $
            818,719
            
            $
            710,206
            
            $
            2,611,274
            
            $
            1,521,718Net
                loss per share, as reported
            
            $
            (.11
            )
            $
            (4.08
            )
            $
            (.80
            )
            $
            (9.24
            )Net
                loss per share, pro forma
            
            $
            (.18
            )
            $
            (3.83
            )
            $
            (1.14
            )
            $
            (9.41
            )








The
      pro
      forma results above are not intended to be indicative of or a projection of
      future results.





**B.     Debt
      Extinguishments**





The
      Company accounts for debt extinguishments in accordance with Financial
      Accounting Standards Board Statement 15 “Accounting by Debtors and Creditors for
      Troubled Debt Restructurings”. Related party debt extinguishments are recorded
      as increases to paid in capital in accordance with Accounting Principles Board
      Opinion 26. ****





**C.     Use
      of Estimates**





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States requires management to make estimates
      and assumptions that affect the amounts reported in the financial statements
      and
      accompanying notes. These estimates include, but are not necessarily limited
      to,
      accounts receivable allowances, depreciation and coupon liability estimates.
      Actual results could differ from those estimates.





**D.     Reclassifications**





Certain
      reclassifications were made to the 2004 financial statements in order to conform
      to the 2005 financial statements.





**E.     Loss
      Per Share**





Loss
      per
      share is presented in accordance with the provisions of SFAS No. 128, Earnings
      Per Share. Basic EPS is calculated by dividing the income or loss available
      to
      common stockholders by the weighted number of common shares outstanding for
      the
      period. Diluted EPS reflects the potential dilution that could occur if
      securities or other contracts to issue common stock were exercised or converted
      into common stock. These common stock equivalents have been omitted from
      earnings per share because they are anti-dilutive, accordingly, basic and
      diluted EPS were the same for the nine months ended September 30, 2005 and
      2004.
      Common stock equivalents outstanding at September 30, 2005 consisted of
      1,625,316 incentive stock options and warrants to purchase 6,831,387 shares
      of
      common stock at September 30, 2005.





**F. 
      Recent Accounting Pronouncements**





In
      December 2004, the FASB issued Statement No. 151 which revised FASB Statement
      No. 123, Accounting for Stock-Based Compensation. This Statement supersedes
      APB
      Opinion No. 25, Accounting for Stock Issued to Employees, and its related
      implementation guidance. This Statement establishes standards for the accounting
      for transactions in which an entity exchanges its equity instruments for goods
      or services. It also addresses transactions in which an entity incurs
      liabilities in exchange for goods or services that are based on the fair value
      of the entity's equity instruments or that may be settled by the issuance of
      those equity instruments. This Statement focuses primarily on accounting for
      transactions in which an entity obtains employee services in share-based payment
      transactions. This Statement does not change the accounting guidance for
      share-based payment transactions with parties other than employees provided
      in
      Statement 123 as originally issued and EITF 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." It applies to the Company’s first
      reporting period in 2006. The adoption of Statement No. 123 (revised 2004)
      is
      not expected to have a material impact on the Company's financial position,
      liquidity, or results of operations.





**NOTE
      3 - INITIAL PUBLIC OFFERING**





In
      June
      2005, the Company completed an initial public offering (“IPO”) selling 2,700,000
      units at a price of $1.00 per unit to the public. Each unit consisted of one
      share of common stock, one Class A redeemable public warrant to purchase one
      share of common stock, and one Class B non-redeemable public warrant to purchase
      one share of common stock. The net proceeds from the sale of the 2,700,000
      units
      were approximately $1,577,000 after deducting the underwriting discount and
      offering expenses.


8








The
      common stock and Class A and Class B public warrants traded only as a unit
      until
      July 21, 2005 when the unit separated, after which the common stock, the Class
      A
      public warrants and the Class B public warrants began trading separately.





*Class
      A public warrants* .
      The
      Class A public warrants included in the units became exercisable on July 21,
      2005. The exercise price of a Class A public warrant is $1.50. The Class A
      public warrants expire on June 20, 2010, the fifth anniversary of the effective
      date of the IPO.





The
      Company has the right to redeem the Class A public warrants at a redemption
      price of $0.25 per warrant, subject to adjustment in the event of stock splits,
      reverse stock splits and other similar events of recapitalization. The
      redemption right arises if the last reported sale price of the Company’s common
      stock equals or exceeds $2.00 for five consecutive trading days ending prior
      to
      the date of the notice of redemption. The Company is required to provide 30
      days
      prior written notice to the Class A public warrant holders of the Company’s
      intention to redeem the warrants.





*Class
      B public warrants* .
      The
      Class B public warrants included in the units became exercisable on July 21,
      2005. The exercise price of a Class B public warrant is $2.00. The Class B
      public warrants expire on June 20, 2010, the fifth anniversary of the closing
      of
      the IPO. The Company does not have the right to redeem the Class B public
      warrants.





**NOTE
      4 - NOTES PAYABLE - UNDERWRITER**





In
      May
      2005, the Company borrowed $200,000 from the investment bank that managed the
      initial public offering. The note was repaid upon the closing of the stock
      offering on June 24, 2005. The note did not bear any interest. The Company
      also
      paid $21,874 of principal and accrued interest on an advance from the
      underwriter made in July of 2004.





**NOTE 5
      - ASSIGNMENT OF SENIOR NOTES PAYABLE**





On
      May
      22, 2005 the bank holding a $2,500,000 note receivable from the Company assigned
      the note to the holder guarantor of the note, a holder of the Company’s
      preferred stock and senior secured convertible promissory notes. The note was
      extinguished in exchange for common stock upon closing of the initial public
      offering (see note 6).





**NOTE 6
      - DEBT EXTINGUISHMENTS**





On
      June
      24, 2005, the Company issued 1,116,611 shares of common stock in payment of
      notes payable, accrued interest, accounts payable, and accrued salaries due
      to
      executive officers at a debt conversion value per share of $1.00 to $13.00.
      The
      debt conversion transactions were contingent on the Company completing a public
      offering of its common stock. The shares issued are subject to lock-up
      agreements with the Company’s underwriter of six months to one year. The fair
      market value of the shares issued is assumed to be equal to the initial public
      offering price of one “Unit” in the initial public offering completed on June
      24, 2005. The excess of the amount of indebtedness extinguished in excess of
      the
      fair value of shares issued was recorded as gain on extinguishment of debt
      in
      accordance with the provisions of SFAS No. 15, Troubled Debt Restructurings.
      The
      excess of the amount of related party indebtedness extinguished in excess of
      the
      fair value of shares issued was recorded as additional paid in capital in
      accordance with APB 26, paragraph 20. The table below summarizes debt
      extinguishments consummated concurrently with the initial public offering of
      the
      Company’s common stock. ****


**Excess
                of****Extinguished
                Debt****Over
                Fair Value****Shares
                Issued**
            
            **Fair
                Value**
            
            **Debt
                Extinguishment**
            
            **Paid
                In  Capital**
            
            **Gain**Senior
                secured notes-related parties
            
            
            461,700
            
            $
            461,700
            
            $
            6,141,527
            
            $
            5,679,827Accrued
                salaries
            
            
            250,696
            
            
            250,696
            
            
            593,750
            
            
            343,054Senior
                secured notes payable-related parties
            
            
            250,000
            
            
            250,000
            
            
            500,000
            
            
            250,000Subordinated
                notes payable and accrued interest
            
            
            88,882
            
            
            88,882
            
            
            266,639
            
            
            95,899
            
            
            81,858Related
                party advances
            
            
            23,000
            
            
            23,000
            
            
            69,000
            
            
            46,000Accounts
                payable
            
            
            42,333
            
            
            42,333
            
            
            109,000
            
            
            
            
            
            66,667Total
            
            
            1,116,611
            
            $
            1,116,611
            
            $
            7,679,916
            
            $
            6,414,780
            
            $
            148,525








9




**NOTE
      7 - CONVERTIBLE NOTE**





On
      July
      26, 2004, the Company issued a convertible promissory note in the amount of
      $175,000 in payment of accounts payable owed to the Company’s spokesperson and
      in consideration for his forbearance until a “maturity date,” as defined in the
      note. The note accrued interest at the rate of 10% per annum until its original
      maturity date of January 1, 2005, and 15% thereafter. On June 24, 2005, the
      note
      automatically converted into 245,000 unregistered units substantially identical
      to the units sold at the initial public offering. In accordance with EITF 98-5,
      “Accounting for Convertible Securities with Beneficial Conversion Features on
      Contingently Adjustable Conversion Ratios,” the Company had not recorded the
      beneficial conversion feature prior to the closing of the initial public
      offering because its terms change based on the occurrence of future events
      outside the control of the holder of the convertible note. Upon completion
      of
      the public offering on June 24, 2005, the Company recorded interest expense
      of
      $49,755 to reflect the beneficial conversion feature of the note.





**NOTE
      8 - SENIOR NOTE PAYABLE - RELATED PARTY**





On
      May
      31, 2005, holders of senior secured notes - related party agreed to extend
      the
      due date on $500,000 of outstanding notes payable to the earlier of the
      completion of a subsequent stock sale, sale of assets, change of control or
      financing by the Company, or November 30, 2006. The notes accrue interest at
      8%.





**NOTE
      9 - STOCKHOLDER LOANS - SUBORDINATED CONVERTIBLE PROMISSORY NOTES**





In
      May
      2005, holders of stockholder loans - subordinated convertible promissory notes
      agreed to extend the due date on $225,000 of outstanding notes payable to the
      completion of a stock sale subsequent to the initial public offering in June
      2005 by the Company. The notes accrue interest at 10% per annum.





On
      July
      25, 2005 the Company paid outstanding principal and interest on a subordinated
      convertible promissory note with a face amount of $35,000.





**NOTE
      10 - NOTE PAYABLE**





In
      June
      2005, holders of notes payable with a face amount of $150,000 agreed to extend
      the due date to the completion of a stock sale subsequent to the initial public
      offering in June 2005 by the Company, if progress payments of $5,000 upon the
      completion of the initial public stock offering, and $2,000 each month
      thereafter, are made. As of September 30, 2005 these payments have been made.
      The notes accrue interest at 10%.





**NOTE
      11 - PREFERRED STOCK CONVERSION**





On
      June
      24, 2005, 4,875,850 shares of the Company’s series A preferred stock and
      3,623,000 shares of Series C preferred stock automatically converted into 88,732
      and 65,881 shares of common stock, respectively, upon closing of the Company’s
      initial public offering.





**NOTE
      12 - WARRANTS**





On
      June
      24, 2005, the Company issued warrants to the managing underwriter for its
      initial public offering to purchase 270,000 units identical to those issued
      in
      the IPO. The warrants become exercisable December 20, 2005 and expire five
      years
      from the date of the IPO at a price of $1.20 per unit.





Also,
      on
      June 24, 2005, debtholders cancelled warrants to purchase 63,792 shares of
      common stock and 4,500,000 shares of preferred stock in connection with the
      extinguishment of debt.


10





The
      following is a summary of warrants outstanding at September 30, 2005:





**Date
                Issued**
            
            **Basis
                for Warrant Issuance**
            
            **Number
                of Shares of Common Stock Pertaining to Warrant**
            
            **Exercise
                Price per Share**November
                2000
            
            
            Placement
                agent fees for series A preferred stock (a) (b)
            
            
            8,714
            
            $
            55.00June
                2001
            
            
            Stockholder
                demand notes payable (e)
            
            
            8,823
            
            $
            55.00November
                2002
            
            
            Placement
                agent fees for series C preferred stock (b) (f)
            
            
            1,273
            
            $
            11.00March
                2003
            
            
            Accrued
                compensation
            
            
            2,577
            
            $
            11.00September
                2004
            
            
            Second
                amended services agreement (g) (b)
            
            
            650,000
            
            $
            1.00July
                2004
            
            
            Amended
                services agreement (h)
            
            
            —
            
            
            —June
                2005
            
            
            Conversion
                of note payable(d)
            
            
            245,000
            
            $
            1.50June
                2005
            
            
            Conversion
                of note payable(d)
            
            
            245,000
            
            $
            2.00June
                2005
            
            
            Class
                A warrants IPO (c) (d)
            
            
            2,700,000
            
            $
            1.50June
                2005
            
            
            Class
                B warrants IPO(d)
            
            
            2,700,000
            
            $
            2.00June
                2005
            
            
            Underwriters
                warrant(d)
            
            
            270,000
            
            $
            1.20








(a)
            Expires
                November 2007


(b)
            Includes
                anti-dilution agreement and cashless exercise right.


(c)
            Callable
                at $.25 if common stock trades at $2.00 for five days.


(d)
            Expires
                June 24, 2010.


(e)
              Expires
                  September 2006.
 (f)
              Expires
                  the June 20, 2008.
 (g)
              Expires
                  September 14, 2014.
 (h)
              Warrant
                  to purchase an amount of common stock to bring spokesperson’s total
                  holdings to 9.9% of outstanding fully-diluted common shares of
                  the Company
                  immediately after its initial public offering. The spokesperson’s holdings
                  exceeded 9.9% immediately after the offering. Therefore, no additional
                  shares were issuable under the
                  warrant.


**NOTE
      13 - EMPLOYEE STOCK OPTIONS**





In
      January 2005, the Board of Directors approved the 2005 Incentive Stock Option
      Plan for the benefit of its officers, employees and consultants. The Board
      also
      approved the 2005 Directors’ Stock Option Plan for the Company’s board members.
      These plans became effective concurrently with the closing of the Company’s
      initial public offering. The Plans expire ten years from the date of adoption.
      The Company is authorized to grant options for up to 1,500,000 common shares
      under the employee plan, and 200,000 under the directors plan. Under each Plan,
      the option price of an ISO may not be less than the fair market value of a
      share
      of common stock on the date of grant. An ISO may not be granted to a “ten
      percent stockholder” (as such term is defined in Section 422 of the Internal
      Revenue Code) unless the exercise price is at least 110% of the fair market
      value of the common stock and the term of the option may not exceed five years
      from the date of grant. Nonqualified stock options under both plans may be
      granted at exercise prices equal to or greater than 85% of the fair market
      value
      on the date of grant. The maximum term of each stock option granted to persons
      other than ten percent stockholders is ten years from the date of the grant.
      The
      Company may also grant up to options to purchase up to 35,373 shares of common
      stock under three plans adopted in 2000, 2001 and 2003, which have similar
      terms.


11





A
      summary
      of the activity in the Plans is as follows:


**Number
                  of Shares**
              
              **Weighted-
                  Average Exercise Price**Outstanding
                  December 31, 2004
              
              
              13,116
              
              $
              14.04Cancelled
              
              
              —
              
              
              —Issued
              
              
              1,619,000
              
              $
              .92Outstanding
                  September 30, 2005
              
              
              1,632,116
              
              $
              1.08




The
      options generally expire 10 years from the date of grant. However, in the event
      a participant’s employment is terminated for any reason other than the result of
      death, disability or retirement, as defined, the options expire 90 days after
      termination.





If
      a
      participant’s employment is terminated as a result of death, permanent
      disability or retirement, the options expire one year from the date of
      termination.





The
      weighted-average remaining contractual life of options outstanding was 6 and
      9.9
      years as of December 31, 2004 and September 30, 2005, respectively.





Pro-forma
      information regarding net loss is required by SFAS No. 123 and has been
      determined as if the Company had accounted for its employee stock options under
      the fair value method of SFAS No. 123. Since there is no trading history for
      the
      Company’s stock, the fair value of the Company’s issued options and warrants
      were estimated at the date of grant using the fair value method with the
      following assumptions:


Assumptions:Risk-free
                rate
            
            3.5%-4.85
            %Dividend
                yield
            
            0Volatility
                factor of the expected market
            
            82
            %Price
                of the Company’s common stock
            
            1.00Average
                life
            
            7 years





The
      Black-Scholes option valuation model was developed for use in estimating the
      fair value of traded options, which have no vesting restrictions and are fully
      transferable. In addition, option valuation models require the input of highly
      subjective assumptions, including the expected stock price volatility. Because
      the Company’s employee stock options have characteristics significantly
      different from those of traded options, and because changes in the subjective
      input assumptions can materially affect the fair value estimate, in management’s
      opinion, the existing models do not necessarily provide a reliable single
      measure of the fair value of its employee stock options.





**NOTE
      14 - SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES**





**Nine
                Months Ended September 30,****2005**
            
            **2004**Assignment
                of senior secured notes payable and accrued interest to related
                party
            
            $
            2,679,498
            
            
            —Automatic
                conversion of notes payable
            
            $
            245,000
            
            
            —Debt
                extinguished through issuance of common stock - see note 6
            
            $
            7,679,916
            
            
            —Interest
                Paid
            
            
            —
            
            
            —





**NOTE
      15 - DEFERRED COMPENSATION**





Three
      Executive Officers of the Company have agreed to defer payment of monthly
      salaries aggregating $12,500 per month, for the six months ending December
      31,
      2005. The amount is being recorded as deferred compensation as it is earned
      by
      the officers.




**NOTE
      16 - SUBSEQUENT EVENTS**





On
      November 3, 2005 the Company issued 50,000 shares of common stock in payment
      of
      outstanding legal fees of $105,794. The Company also issued 10,000 shares as
      payment for legal fees in the third quarter of 2005 and 10,000 shares as an
      advance payment for legal fees for the fourth quarter of 2005.





On
      November 3, 2005 the Company issued 250,000 shares of common stock and a warrant
      to purchase 250,000 shares of common stock at $1.50 and 250,000 shares of common
      stock at $2.00 with terms substantially the same as its class A and Class B
      warrants, in payment for a one year media advertising program.





On
      November 3, 2005 the Company issued 34,697 shares of common stock in payment
      of
      outstanding legal fees aggregating $15,614.


12








On
      November 3, 2005 the Company issued 50,000 shares of common stock as
      compensation for the Company’s corporate secretary for the six month period
      ending December 31, 2005.





**NOTE
      17 - INCOME TAXES**





As
      of
      December 31, 2004 the Company had net operating losses of approximately
      $14,000,000, which expire though the year 2024. Due to the Company’s initial
      public offering there is a change in ownership in accordance with relevant
      provisions of the Internal Revenue Code, which are expected to limit the
      realization of certain net operating losses.


13








**Item
      2.*****MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS***





The
      following discussion and analysis of our financial condition and results of
      operations should be read in conjunction with our financial statements and
      related notes included elsewhere in this Quarterly Report on Form 10-QSB. This
      discussion contains forward-looking statements that are based on our
      management’s beliefs and assumptions and on information currently available to
      our management. Forward-looking statements include, but are not limited to,
      statements regarding:


·
              possible
                  or assumed future results of operations, including statements regarding
                  revenue mix, cost of revenues, promotion of our products through
                  advertising, sampling and other programs, changes to our internal
                  financial controls, trends in our operating expenses and provision
                  for
                  income taxes, increased costs as a result of becoming a public
                  company and
                  expenses related to stock-based
                  compensation;





·
            financing
                plans, including the adequacy of financial resources to meet future
                needs;





·
            business
                strategies, including any expansion into new
                products;





·
            our
                industry environment, including our relationships with our significant
                customers and suppliers;





·
            potential
                growth opportunities; and





·
            the
                effects of competition.





Some
      of
      our forward-looking statements can be identified by use of words such as “may,” “will,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes” and “estimates.”





Forward-looking
      statements involve many risks, uncertainties and assumptions. Actual results
      may
      differ materially from those expressed in the forward-looking statements for
      a
      number of reasons, including those appearing under the caption “Factors
      Affecting Operating Results” and elsewhere in this Quarterly Report on Form
      10-QSB. The cautionary statements contained or referred to in this report should
      be considered in connection with any subsequent written or oral forward-looking
      statements that may be issued by us or persons acting on our behalf. We
      undertake no obligation to release publicly any revisions to any forward-looking
      statements to reflect events or circumstances after the date hereof or to
      reflect the occurrence of unanticipated events.





**Overview**





We
      produce, market and distribute NuVim dietary supplement beverages, which contain
      two proprietary micronutrients derived from cow’s milk, known as AccuFlex and
      MunePro. These micronutrients have been clinically proven to enhance the immune
      system, muscle flexibility and athletic performance. We focus on developing
      brand awareness, and trial and repeat purchases through advertising , product
      sampling, coupon distribution and promotional price discounts. These marketing
      expenditures help to enhance distribution and availability of our products
      as
      well as increase consumer awareness and preference for our brands. We believe
      that these marketing and promotional activities are critical to the growth
      of
      our business and expect to continue these programs in the future.





We
      have
      distributed our refrigerated beverages since the year 2000 in approximately
      2,500 Supermarkets in the Eastern United States. However, we eliminated most
      advertising and marketing support for our product in the second half of 2002
      due
      to a lack of funding. We recapitalized our company in June of 2005 through
      the
      conversion of approximately $7.7 million of indebtedness into common stock
      and
      an initial public offering of our common stock. Since that time we have
      concentrated our limited financial resources on developing and supporting
      distribution opportunities that we believe will provide the greatest sales
      expansion potential. We increased our distribution through Wal-Mart Supercenters
      from two flavors in approximately 44 stores to three flavors in approximately
      120 stores. We also developed a powder version of our product to be sold through
      direct distribution such as the internet and infomercials, and retail outlets.
      We expect to begin marketing the powder product through an internet affiliate
      marketing program in November, 2005. We also plan to launch an equity funded
      print and radio news media campaign to educate consumers of the benefits of
      NuVim and create market awareness for our product. In November, 2005 we issued
      250,000 shares of common stock, warrants to purchase 250,000 shares of common
      stock at $1.50 and 250,000 shares of common stock at $2.00 as payment for a
      contract to provide $3,000,000 worth of nationally syndicated print and radio
      features at standard rates, at a discounted amount. The media program will
      begin
      in November 2005 and continue for twelve months.





Case
      shipments declined in the third quarters of 2005 when compared to the
      immediately preceeding quarter by 6% to 14,187, as increased case shipment
      to
      Wal-Mart Supercenters of approximately 1,380 cases were offset by decreased
      shipments to the Publix Supermarkets chain in the Southeast, and to a lesser
      extent, decreased sales in the New York/New Jersey markets. During the second
      and third quarter of 2005 we have had limited funding to support product
      sampling and advertising programs, which we believe are critical to maintain
      and
      increase sales of our products. Therefore, we have focused our spending on
      product sampling in accounts that we believe will offer the greatest potential
      for sales growth and expansion opportunities, such as Wal-Mart, until we are
      able to raise funding for additional marketing programs.





In
      August
      of 2004 we began a test program with Wal-Mart supercenters in northern Florida.
      We distributed two flavors of our refrigerated product to one distribution
      center servicing approximately 44 supercenter stores. Same store sales increased
      in the test market in each quarterly period through August 2005, primarily
      through product sampling and advertising programs. In August 2005 Wal-Mart
      increased our distribution to three flavors and a total of three distribution
      centers servicing approximately 120 stores. This resulted in sales of
      approximately 4,332 cases in the third quarter 2005. We believe Wal-Mart
      operates approximately 2000 supercenters across the United States.


14








The
      table set forth below discloses selected data regarding sales for the three
      and
      nine month periods ended September 30, 2005 and 2004. Data from any one or
      more
      quarters is not necessarily indicative of annual results or continuing trends.





Sales
      of beverages are expressed in unit case volume. A “unit case” means a unit of
      measurement equal to 512 U.S. fluid ounces of finished beverage (eight 64-ounce
      servings). Unit case volume means the number of unit cases (or unit case
      equivalents) of beverages directly or indirectly sold by us. Gross cases sold
      to
      the customer represents the number of cases shipped to the customer prior to
      any
      returned cases for product that has not been sold by its expiration date.




**Unit
      Case Volume/Case Sales**


**Three
                  Months Ended**
                **September
                  30,**
              
              **Nine
                  months ended**
                **September
                  30,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Gross
                  Cases Sold
              
              
              14,187
              
              
              18,333
              
              
              49,846
              
              
              58,483Gross
                  Sales
              
              $
              261,888
              
              $
              335,650
              
              $
              911,396
              
              $
              1,068,564Net
                  Sales
              
              $
              158,437
              
              $
              277,348
              
              $
              516,266
              
              $
              824,432








Gross
      sales are the amount invoiced to customers, while net sales deduct from gross
      sales any payment or discount terms, promotional allowances, slotting fees,
      warehouse damage and returned goods in accordance with the Financial Accounting
      Standards Board Emerging Issues Task Force Issue No. 01-09, Accounting For
      Consideration Given By a Vendor to a Customer. In some accounts we pay slotting
      fees when our products are initially introduced to a new account and run price
      feature promotions to encourage trials of our product. As brand loyalty grows
      in
      a market, we anticipate that we will be able to run fewer price promotions
      and
      will not incur additional slotting fees. Cases sold decreased 4,146, or 22%,
      for
      the three months ended September 30, 2005, when compared to the same quarter
      in
      2004 and 8,637 or 15% for the nine months ended September 30, 2005 when compared
      to the same period last year. As discussed above, we believe that the number
      of
      cases sold is directly impacted by the effectiveness of advertising, sampling
      and marketing activities we are able to fund in support of our refrigerated
      product. We have not had funding available to fund advertising and marketing
      programs on a sustained basis across the majority of the stores our products
      are
      distributed in since mid 2002. This has caused sales to decline in those
      markets. Since we recapitalized our Company in June of 2005 we have concentrated
      our marketing programs on selected growth opportunities for our refrigerated
      product and the introduction of our Nuvim Powder product line. We believe these
      initiatives will provide better opportunity for long term growth and increase
      sales in our existing markets by creating market awareness for our product.





**Results
      of Operations**





*Results
      of operations for the three months ended September 30, 2005 compared to the
      three months ended September 30, 2004*





*Gross Sales.* For
      the
      three months ended September 30, 2005, gross sales were $261,888, a decrease
      of
      $73,762, or 22% lower than gross sales of $335,650 for the three months ended
      September 30, 2004. The decrease in gross sales is primarily attributable to
      a
      decrease in case volume in stores in New York, New Jersey, Pennsylvania,
      Virginia and Maryland, and decreased sales to the Publix supermarket chain,
      partially offset by increased sales at Wal-Mart Supercenters. We have not had
      funds to support advertising and sampling of our products in our existing stores
      since mid 2002, including the Publix Supermarket chain which we added in August
      of 2004, resulting in declining sales. In June of 2005, we restructured our
      balance sheet through the issuance of common stock, but were only able to raise
      a limited amount of funds for advertising and sampling programs. We have focused
      these limited resources on selected opportunities with future expansion
      potential, such as Wal-Mart and introduction of a powder product, until such
      time as we are able to fund programs across all of our markets.





*Discounts, Allowances and Promotional Payments* .
      For the
      three months ended September 30, 2005, promotional allowances and discounts
      were
      $103,452, an increase of $12,586 or 14%, over the promotional allowances and
      discounts of $90,866 for the three months ended September 30, 2004. This
      increase is primarily attributable to increased promotional price allowances,
      coupons and other incentives of $5,897, product returned after its expiration
      date of $2,343 and slotting fees of $5,998. Promotional price allowances,
      coupons and other incentives increased primarily due to increased promotional
      price programs in the New York and New Jersey and Philadelphia markets. We
      distributed coupons and offered promotional prices to customers in those markets
      to maintain distribution until we are able to fund advertising and other
      consumer awareness programs in those markets. We record the price reductions,
      which are reimbursed by us to the retailers, in accordance with Financial
      Accounting Standards Board Emerging Issues Task Force, No. 01-09, Accounting
      for
      Consideration Given by a Vendor to a Customer. We expect to continue to use
      price promotions and coupon distribution as a means to promote consumer sampling
      and trial of our product into the foreseeable future. As the product matures
      and
      a higher percentage of users of our product are repeat purchasers, we expect
      coupon expense, relative to gross sales, to decline. Product returned after
      its
      expiration date increased primarily due to the lower sales volume discussed
      above. Slotting fees increased due to fees paid to gain distribution in stores
      supplied by distributor serving the Mid-Atlantic region of the United States.
      Total Discounts, Allowances and Promotional payments as a percentage of gross
      sales increased from 27% for the three months ended September 30, 2004 to 39%
      for the three months ended September 30, 2005, primarily due to the increased
      expired product and coupons and price discounts discussed above. Discounts,
      Allowances and Promotional Payments are comprised of the following:


15








**Three
                Months Ended**
              **September
                30,****2004**
            
            **2005**
            
            **Increase
                (Decrease)**
            
            **Percentage**Discounts
                for timely payment
            
            $
            5,397
            
            $
            3,745
            
            $
            (1,652
            )
            
            (31
            )%Product
                returned after its expiration date
            
            
            28,945
            
            
            31,288
            
            
            2,343
            
            
            8
            %Promotional
                price allowances, coupons and other incentives
            
            
            53,911
            
            
            59,808
            
            
            5,897
            
            
            11
            %Slotting
                fees
            
            
            2,613
            
            
            8,611
            
            
            5,998
            
            
            230
            %Total
                Discounts, Allowances and Promotional Payments
            
            $
            90,866
            
            $
            103,452
            
            $
            12,586
            
            
            14
            %








*Net Sales* .
      Net
      sales for the three months ended September 30, 2005 were $158,347, a decrease
      of
      $86,437, or 35% lower than net sales of $244,784 for the three ended September
      30, 2004. The decrease in net sales is primarily attributable to the decreased
      case sales and promotional pricing discussed above.





*Cost of Sales* .
      For the
      three months ended September 30, 2005, cost of sales were $138,939, a decrease
      of $43,953, or 24% lower than cost of sales of $182,532 for the three months
      ended September 30, 2004. Cost of sales as a percentage of gross sales decreased
      from 53% for the three months ended September 30, 2005, compared to 54% for
      the
      three months ended September 30, 2004. The decrease in cost of sales was
      primarily the result of lower case volume in 2005 and a write off of obsolete
      packaging and ingredient inventory in 2004.





*Gross Profit (Loss)* .
      Gross
      profit (Loss) was $(19,498) for the three months ended September 30, 2005,
      a
      decrease of $42,754 from the $62,252 gross profit for the three months ended
      September 30, 2004. Gross profit (loss) as a percentage of gross sales was
      7%
      for the three months ended September 30, 2005 compared to gross profit of 17%
      for the three months ended September 30, 2004. The decrease in gross profit
      as a
      percentage of gross sales was primarily due to the to promotional pricing and
      above.





*Selling, General and Administrative Expenses* .
      Selling, general and administrative expenses were $529,045 for the three months
      ended September 30, 2005, a decrease of $48,525, or 8%, from selling, general
      and administrative expenses of $577,570 for the three months ended September
      30,
      2004. Selling, general and administrative expenses exceeded net sales in both
      periods as we are in an early stage of our development and have not achieved
      sales volumes sufficient to generate net sales in excess of our selling, general
      and administrative expenses. The decrease in selling, general and administrative
      expenses was primarily attributable to decreased advertising media spending
      of
      $168,000 offset by increased administrative salaries of approximately $40,000
      due to the addition of a full time chief financial officer, increased product
      sampling program expense of $25,000, primarily due to sampling programs at
      Wal-Mart, and increased shipping charges of $20,000 related to distribution
      to
      the Southeast markets from the warehouse facility in Pennsylvania.





*Loss from Operations* .
      Loss
      from operations was $509,547 for the three months ended September 30, 2005
      compared to $515,318 for the three months ended September 30, 2004. The $5,771
      decrease in loss from operations was primarily attributable to the decreased
      gross profit and decreased operating expenses described above.





*Interest Expense* .
      Interest expense was $18,042 for the three months ended September 30, 2005,
      an
      decrease of $221,307, or 92%, from interest expense of $239,349 for the three
      months ended September 30, 2004. The decrease in interest expense is primarily
      attributable to the retirement of indebtedness. On June 24, 2005, in connection
      with the closing of our initial public offering, we extinguished approximately
      $7.7 million of indebtedness through the issuance of common stock.





*Net Loss* .
      Net
      loss was $521,654 for the three months ended September 30, 2005 compared to
      $754,667 for the three months ended September 30, 2004. The $233,013 decrease
      in
      net loss was primarily attributable to the lower interest expense discussed
      above.





*Results
      of operations for the nine months ended September 30, 2005 compared to the
      nine
      months ended September 30, 2004*





*Gross
      Sales* .
      For the
      nine months ended September 30, 2005, gross sales were $911,396, a decrease
      of
      $157,168, or 15% lower than gross sales of $1,068,564 for the nine months ended
      September 30, 2004. The decrease in gross sales is primarily attributable to
      a
      decrease in case volume in stores New York, New Jersey, Pennsylvania, Virginia
      and, partially offset by increased sales at Wal-Mart Supercenters. We have
      not
      had funds to maintain advertising and sampling of our products on a consistent
      basis in our existing stores since mid 2002 resulting in declining sales. In
      June of 2005, we restructured our balance sheet through the issuance of common
      stock, but were only able to raise a limited amount of funds for advertising
      and
      sampling programs. We have focused these limited resources on selected growth
      opportunities for our refrigerated product and introduction of a powder product,
      until such time as we are able to fund programs across all of our markets.


16








*Discounts,
      Allowances and Promotional Payments* .
      For the
      nine months ended September 30, 2005, promotional allowances and discounts
      were
      $395,130, an increase of $118,434 or 43% higher than the promotional allowances
      and discounts of $276,696 for the nine months ended September 30, 2004. This
      increase is primarily attributable to increased Promotional price allowances,
      coupons and other incentives of $93,013, Product returned after its expiration
      date of $40,986, and slotting fee’s of $8,422. Promotional price allowances,
      coupons and other incentives increased due to sampling programs at Publix stores
      in the first quarter of 2005 where $1.00 coupons were distributed in store
      locations, and promotional price discounts in the New York and New Jersey
      markets in the second quarter of 2005. We record the estimated redemptions
      based
      on our historical experience at the time the coupon is distributed in accordance
      with Financial Accounting Standards Board Emerging Issues Task Force, No. 01-09,
      Accounting for Consideration Given by a Vendor to a Customer. We also record
      reimbursements given to retailer for consumer price promotions in accordance
      with EITF 01-09. We expect to continue to use coupon distribution and price
      promotions as a means to promote consumer sampling and trial of our product
      into
      the foreseeable future. Slotting fees increased due to fees paid to gain
      distribution in approximately 400 stores supplied by distributor serving the
      Mid-Atlantic region of the United States. Product returned after its expiration
      date increased primarily due to the lower sales volume discussed above.
      Discounts, Allowances and Promotional payments as a percentage of gross sales
      increased from 26% for the nine months ended September 30, 2004 to 43% for
      the
      nine months ended September 30, 2005, primarily due to the increased coupons
      and
      price discounts discussed above. Discounts, Allowances and Promotional Payments
      are comprised of the following:





**Nine
                months ended September 30,****2004**
            
            **2005**
            
            **Increase
                (Decrease)**
            
            **Percentage**Discounts
                for timely payment
            
            $
            20,079
            
            $
            12,733
            
            $
            (7,346
            )
            
            (36
            )%Product
                returned after its expiration date
            
            
            107,958
            
            
            116,380
            
            
            8,422
            
            
            8
            %Promotional
                price allowances, coupons and other incentives
            
            
            140,530
            
            
            233,543
            
            
            93,013
            
            
            54
            %Slotting
                fees
            
            
            8,129
            
            
            32,474
            
            
            24,345
            
            
            300
            %Total
                Discounts, Allowances and Promotional Payments
            
            $
            276,696
            
            $
            395,130
            
            $
            118,434
            
            
            43
            %








*Net
      Sales* .
      Net
      sales for the nine months ended September 30, 2005 were $516,266, a decrease
      of
      $279,602, or 35% lower than net sales of $791,868 for the nine months ended
      September 30, 2004. The decrease in net sales is primarily attributable to
      the
      decrease in cases sold and increased Discounts, allowances and promotional
      payments discussed above.





*Cost
      of Sales* .
      For the
      nine months ended September 30, 2005, cost of sales were $516,449, a decrease
      of
      $55,504 or 10% lower than cost of sales of $571,953 for the nine months ended
      September 30, 2004. The decrease in cost of sales was primarily attributable
      to
      a 15% decrease in cases sold discussed above, offset by higher ingredient costs
      due to increased pricing for certain ingredients. Cost of sales as a percentage
      of gross sales was approximately 57% for the nine months ended September 30,
      2005 and 54% for the nine months ended September 30, 2004.





*Gross
      Profit (loss)* .
      Gross
      profit (loss) was $(183) for the nine months ended September 30, 2005, a
      decrease of $220,098, from the $219,915 gross profit for the nine months ended
      September 30, 2004. Gross profit (loss) as a percentage of gross sales was
      (0)%
      for the nine months ended September 30, 2005, compared to a gross profit as
      a
      percentage of gross sales of 20% for the nine months ended September 30, 2004.
      The decrease in gross profit as a percentage of gross sales was primarily due
      to
      the increased coupons and price incentives discussed above.





*Selling,
      General and Administrative Expenses* .
      Selling, general and administrative expenses were $1,583,100 for the nine months
      ended September 30, 2005, an increase of $311,847 or 25%, from selling, general
      and administrative expenses of $1,271,253 for the nine months ended September
      30, 2004. Selling, general and administrative expenses exceeded net sales in
      both periods as we are in an early stage of our development and have not
      achieved sales volumes sufficient to generate net sales in excess of our
      selling, general and administrative expenses. The increase in selling, general
      and administrative expenses was primarily attributable to increased advertising
      and in-store sampling expenses of $187,000 and increased administrative salaries
      of $47,000, primarily due to the addition of a Chief Financial Officer in 2005,
      increased shipping costs of $39,000 resulting from increased shipments to the
      Florida markets from our warehouse in Pennsylvania and insurance costs of
      $24,000 because of higher directors and officers liability premiums.





*Loss
      from Operations* .
      Loss
      from operations was $1,583,283 for the nine months ended September 30, 2005
      compared to $1,051,338 for the nine months ended September 30, 2004. The
      $531,945 increase in loss from operations was primarily attributable to the
      increased operating expenses described above.





*Interest
      Expense* .
      Interest expense was $406,921 for the nine months ended September 30, 2005,
      a
      decrease of $96,458, or 19%, from interest expense of $503,379 for the nine
      months ended September 30, 2004. The decrease in interest expense is primarily
      attributable to a reduction in indebtedness resulting from the conversion of
      debt to common stock. On June 24, 2005, in connection with the closing of our
      initial public offering, we extinguished approximately $7.7 million of
      indebtedness through the issuance of common stock. Therefore we expect interest
      expense to decline in future periods due to lower outstanding borrowings.


17





*Gain
      on Forgiveness of Accounts Payable* .
      In
      2004, Gain on forgiveness of accounts payable represents the difference between
      the invoiced amount and the amount in the form of a note payable for fees to
      a
      law firm incurred and expensed in 2002. In 2005, Gain on forgiveness of accounts
      payable represents the difference between the principal and accrued interest
      due
      on notes payable and the fair value of common stock issued to retire those
      obligations.





*Net
      Loss* .
      Net
      loss was $1,836,715 for the nine months ended September 30, 2005 compared to
      $1,494,459 for the nine months ended September 30, 2004. The $342,256 increase
      in net loss from operations was primarily attributable to the lower gross profit
      and higher operating expenses discussed above.





**Liquidity
      and Capital Resources**





Our
      operations to date have generated significant operating losses that have been
      funded through the issuance of common stock, preferred stock and external
      borrowings. We will require additional sources of outside capital to continue
      our operations and currently have no identifiable source.





On
      June 24, 2005, we completed an initial public offering of 2,700,000 units,
      with
      each unit consisting of one share of common stock, one redeemable Class A
      warrant, and one Class B warrant to purchase common stock. The offering resulted
      in net proceeds to the Company of $1,577,000 after deducting underwriting
      discounts and offering expenses. We expect the net proceeds, along with product
      revenues and expected proceeds from the sale of State of New Jersey Tax benefits
      of approximately $250,000 expected to be received in December 2005, to be
      adequate to fund our operations through December of 2005. However, we will
      need
      additional funding to continue operations beyond that date, or to fund
      advertising and promotional programs to maintain and increase sales.





In
      May 2005, we borrowed $200,000 from the investment bank that managed the initial
      public offering. The note was repaid upon the closing of the stock offering
      on
      June 24, 2005. The note did not bear any interest. We also paid $21,874 of
      principal and accrued interest on an advance from the underwriter made in July
      of 2004.





On
      June
      24, 2005, we issued 1,116,611 shares of common stock in settlement of $7,684,000
      of notes payable, accrued interest, accounts payable, and accrued salaries
      due
      to executive officers at a debt conversion value per share ranging from $1.00
      to
      $13.00 per share of common stock. The table below summarizes the debt
      extinguishments transactions:




Shares
                  Issued
              
              
              Debt
                  ExtinguishmentSenior
                  secured notes-related parties
              
              
              461,700
              
              $
              6,141,527Accrued
                  salaries
              
              
              250,696
              
              
              593,750Senior
                  secured notes payable - related parties
              
              
              250,000
              
              
              500,000Subordinated
                  notes payable and accrued interest
              
              
              88,882
              
              
              266,639Related
                  party advances
              
              
              23,000
              
              
              69,000Accounts
                  payable
              
              
              42,333
              
              
              109,000Total
              
              
              1,116,611
              
              $
              7,679,916





On
      June
      24, 2005, a convertible note payable with a face value of $175,000 automatically
      converted into 245,000 unregistered units substantially identical to the units
      sold at the initial public offering. In accordance with EITF 98-5, “Accounting
      for Convertible Securities with Beneficial Conversion Features on Contingently
      Adjustable Conversion Ratios,” the Company had not recorded the beneficial
      conversion feature prior to the closing of the initial public offering because
      its terms change based on the occurrence of future events outside the control
      of
      the holder of the convertible note. Upon completion of the public offering
      on
      June 24, 2005, we recorded interest expense of $49,755 to reflect the beneficial
      conversion feature of the note.





On
      November 3, 2005 the Company issued 50,000 shares of common stock in payment
      of
      outstanding legal fees of $105,794. The Company also issued 10,000 shares as
      payment for legal fees in the third quarter of 2005 and 10,000 shares as an
      advance payment for legal fees for the fourth quarter of 2005.





On
      November 3, 2005 the Company issued 250,000 shares of common stock and a warrant
      to purchase 250,000 shares of common stock at $1.50 and 250,000 shares of common
      stock at $2.00 with terms substantially the same as its class A and Class B
      warrants, in payment for a one year media advertising program discussed
      above.





On
      November 3, 2005 the Company issued 34,697 shares of common stock in payment
      of
      outstanding legal fees aggregating $15,614 and 50,000 shares of common stock
      as
      compensation for the Corporations secretary for the six month period ending
      December 31, 2005.


18








Additionally,
      we have extended the due date on $500,000 of outstanding senior secured notes
      payable to the earlier of the completion of an a subsequent stock sale, sale
      of
      assets, change of control or financing by the Company, or November 30, 2006.





As
      of
      September 30, 2005, we had cash on hand of $412,286 and a working capital
      deficit of $1,364,615. We have negotiated with certain noteholders and vendors
      to defer payment or accept progress payments on approximately $400,000 of
      accounts payable, and $436,000, of notes payable and accrued interest thereon
      until we are able to raise additional financing. We owe $200,000 to SMBI, an
      affiliate of one of our investors and the provider of the exclusive whey protein
      concentrate used in our product, which is due on January 15, 2006. If we do
      not
      pay this amount, we risk losing the exclusive right to the ingredient. As of
      October 31, 2005, we had remaining cash on hand of approximately $200,000.
      we
      expect to receive approximately $250,000 of proceeds from the sale of State
      of
      New Jersey tax benefits in the fourth quarter of 2005. We will need to raise
      additional financing to pay our past due obligations, fund operating losses
      and
      to support sales and marketing programs to increase sales of our products.
      If we
      are not able to identify additional sources of financing, we may not be able
      to
      continue operations beyond January 2006.





Net
      cash used in operating activities for the nine months ended September 30, 2005
      was $1,817,576 compared to cash used in operating activities of $524,165 during
      2004. The increase in cash used by operating activities of $1,293,411 was
      primarily attributable to an increased net loss of $342,256 and payments of
      related party accounts payable of 190,550, including $250,000 to SMBI, our
      exclusive provider of whey protein concentrate.





Net
      cash provided by financing activities was $1,938,629 for the nine months ended
      September 30, 2005, compared to $502,200 for the nine months ended September
      30,
      2004. The increase of $1,436,429 is due to net proceeds from the initial public
      offering of the our common stock.





**Application
      of Recent and Critical Accounting Policies and Pronouncements**





***Recent
      Accounting Pronouncements***





In
      December 2004, the FASB revised FASB Statement No. 123 and issued FASB Statement
      No. 151, Accounting for Stock-Based Compensation. This Statement supersedes
      APB
      Opinion No. 25, Accounting for Stock Issued to Employees, and its related
      implementation guidance. This Statement establishes standards for the accounting
      for transactions in which an entity exchanges its equity instruments for goods
      or services. It also addresses transactions in which an entity incurs
      liabilities in exchange for goods or services that are based on the fair value
      of the entity's equity instruments or that may be settled by the issuance of
      those equity instruments. This Statement focuses primarily on accounting for
      transactions in which an entity obtains employee services in share-based payment
      transactions. This Statement does not change the accounting guidance for
      share-based payment transactions with parties other than employees provided
      in
      Statement 123 as originally issued and EITF 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." It applies in the Company’s first
      reporting period in 2006. The adoption of Statement No. 123 (revised 2004)
      is
      not expected to have a material impact on the Company's financial position,
      liquidity, or results of operations





***Critical
      Accounting Estimates***





The
      discussion and analysis of our financial condition and results of operations
      are
      based upon our financial statements, which have been prepared in accordance
      with
      accounting principles generally accepted in the United States of America. The
      preparation of these financial statements requires us to make estimates and
      judgments that affect the reported amount of assets and liabilities, revenues
      and expenses, and related disclosure on contingent assets and liabilities at
      the
      date of our financial statements. Actual results may differ from these estimates
      under different assumptions and conditions.





Critical
      accounting policies are defined as those that are reflective of significant
      judgments, estimates and uncertainties and potentially result in materially
      different results under different assumptions and conditions. For a detailed
      discussion on the application of these and other accounting policies, see Note
      2
      to our annual financial statements for the year ended December 31, 2004.





**Placement
      and Promotional Allowances and Credits for Product Returns**





As
      an inducement to our customers to promote our products in preferred locations
      of
      their stores, we provide placement and promotional allowances to certain
      customers. We also provide credits for customer coupon redemptions, consumer
      price reductions, and product which has not been sold by its expiration date.
      These allowances and credits are reflected as a reduction of revenue in
      accordance with Emerging Issues Task Force (“EITF”) No. 01-9, which requires
      certain sales promotions and customer allowances previously classified as
      selling, general and administrative expenses to be classified as a reduction
      of
      sales or as cost of goods sold. Provisions for promotional allowances are
      recorded upon shipment and are typically based on shipments to the retailer
      during an agreed upon promotional period. We expect to offer promotional
      allowances at historical levels in the near future as an incentive to our
      customers. Slotting or placement fees are deducted from revenue in the period
      paid. Provisions for coupon redemptions and product returned that has reached
      its expiration date are based on historical trends. Information such as the
      historical number of cases returned per unit shipped, product shelf life,
      current sales volume, and coupons distributed during the period are used to
      derive estimates of the required allowance. As we expand production and
      introduce new products, we may incur increased levels of returned goods. Also,
      our estimates assume we will continue as a going concern and maintain
      distribution with wholesalers and supermarkets that currently carry our product.
      If a supermarket or wholesaler discontinues our product, we may experience
      return rates in excess of our historical trend. This could result in material
      charges to future earnings for reimbursements to our customers for returned,
      unsold product.


19








**Accounts
      Receivable**





We
      evaluate the collectibility of our trade accounts receivable based on a number
      of factors. Accounts receivable are unsecured, non-interest bearing obligations
      that are typically due from customers within 30 days of the invoice date. We
      apply collections in accordance with customer remittance advices or to the
      oldest outstanding invoice if no remittance advice is presented with payment.





We
      estimate an allowance for doubtful accounts and revenue adjustments based on
      historical trends and other criteria. Further, as accounts receivable
      outstanding are deemed uncollectible or subject to adjustment, these allowances
      are adjusted accordingly. In circumstances where we become aware of a specific
      customer’s inability to meet its financial obligations to us, a specific reserve
      for bad debts is estimated and recorded which reduces the recognized receivable
      to the estimated amount we believe will ultimately be collected. In addition
      to
      specific customer identification of potential bad debts, bad debt charges are
      recorded based on our recent past history and an overall assessment of past
      due
      trade accounts receivable outstanding. We also estimate the amount of credits
      for product placement, promotion and expired product that are expected to be
      issued for product sold based on an evaluation of historical trends and record
      an allowance when the sale is recorded.





**Inflation**





We
      do not believe that inflation had a significant impact on our results of
      operations for the periods presented.





**Off-Balance
      Sheet Transactions**





At
      September 30, 2005, we did not have any relationships with unconsolidated
      entities or financial partnerships, such as entities often referred to as
      structured finance or special purpose entities, which would have been
      established for the purpose of facilitating off-balance sheet arrangements
      or
      other contractually narrow or limited purposes.








**Factors
      Affecting Operating Results**




*Investing
      in our shares involves a high degree of risk. You should carefully consider
      the
      following risks, as well as the other information in this report, before
      deciding whether to invest in our shares. If any of the following risks actually
      occur, our business, financial condition, results of operations and liquidity
      could suffer. In that event, the trading price of our shares could decline
      and
      you might lose all or part of your investment.*





**We
      will need to raise additional capital.**





We
      are currently operating at a loss and expect our expenses to continue to
      increase as we expand our product line as well as our geographic presence
      throughout the United States. To date, we have relied primarily on financing
      transactions to fund operations. We raised net proceeds of approximately
      $1,577,000 from our initial public offering, which, together with revenues
      from
      product sales, and proceeds from the sale of State of New Jersey Tax benefits,
      we believe will be sufficient to fund our operations for the remainder of 2005,
      and our projections could be wrong. We could face unforeseen costs such as
      an
      increase in transportation costs resulting from the recent significant increases
      in the cost of fuel; or our revenues could fall short of our projections because
      retail outlets discontinue ordering our products or for reasons unrelated to
      our
      products, such as a revenue decline due to changes in consumer habits and
      preferences or we may achieve lower margins than planned on our products due
      to
      cost increases or competitive pricing pressure. We will need another infusion
      of
      capital to continue to fund our operations in 2006. However, we do not have
      any
      currently identified sources of additional capital. New sources of capital
      may
      not be available to us when we need it or may be available only on terms we
      would find unacceptable. If such capital is not available on satisfactory terms,
      or is not available at all, we will be unable to continue to fully develop
      our
      business, and our operations and financial condition will be materially and
      adversely affected. Such a lack of additional funding could force us to cease
      operations altogether. Debt financing, if obtained, could increase our expenses
      and would be required to be repaid regardless of operating results. In addition,
      if we raise additional funds through the issuance of equity, equity-related
      or
      convertible debt securities, these securities may have rights, preferences
      or
      privileges senior to those of the rights of our ordinary shares and our
      shareholders may experience additional dilution. Any such developments can
      adversely affect your investment in our company, harm our financial and
      operating results, and cause our share price to decline.





**Our
      auditors have substantial doubt about our ability to continue as a going
      concern.**





In
      their report in connection with our 2004 financial statements, our auditors
      included an explanatory paragraph stating that, because we have incurred net
      losses and have a net capital deficiency for the years ended December 31, 2003
      and 2004, and, as of May 30, 2005, we were in default on approximately $8.1
      million of notes payable and stockholder loans and accrued interest, there
      is
      substantial doubt about our ability to continue as a going concern. Our
      continued existence will depend in large part upon our ability to successfully
      secure additional financing to fund future operations. Our initial public
      offering was not sufficient to completely alleviate these concerns. If we are
      not able to achieve positive cash flow from operations or to secure additional
      financing as needed, we will continue to experience the risk that we will not
      be
      able to continue as a going concern.


20








**We
      have approximately $1.3 million of indebtedness that is payable out of proceeds
      of additional financing that we secure.**





We
      have not had sufficient capital to operate our business for approximately three
      years, and as a result, we have negotiated extended payment terms on
      approximately $1,028,000 of notes payable, and $450,000 of accounts payable
      which are due and payable upon receipt of additional financing. Additionally,
      we
      owe SMBI, the exclusive provider of the whey protein concentrate used in our
      product $200,000 on the earlier of securing additional financing, or January
      16,
      2006. These outstanding obligations may make it difficult to raise additional
      financing.





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





We
      have a limited operating history and have encountered, and expect to continue
      to
      encounter, many of the difficulties and uncertainties often faced by early
      stage
      companies. We commenced our business operations in 1999 and began marketing
      our
      initial products in 2000 on a limited basis. Accordingly, we have only a limited
      operating history with which you can evaluate our business and prospects. An
      investor in our units must consider our business and prospects in light of
      the
      risks, uncertainties and difficulties frequently encountered by early stage
      companies, including limited capital, delays in product development, possible
      marketing and sales obstacles and delays, inability to gain customer acceptance
      or to achieve significant distribution of our products to customers and
      significant competition. We cannot be certain that we will successfully address
      these risks. If we are unable to address these risks, our business may not
      grow,
      our stock price may suffer and/or we may be unable to stay in business.





**We
      have a history of losses and we expect to continue to operate at a loss for
      the
      foreseeable future.**





Since
      our inception in 1999, we have incurred net losses in every year, including
      net
      losses of $2,239,440 for the year ended December 31, 2003, $2,131,581 for the
      year ended December 31, 2004 and $1,315,061 for the nine months ended September
      30, 2005. We had a working capital deficit of $857,649 at September 30, 2005
      and
      have negative cash flows from operations. As a result of ongoing operating
      losses, we also had an accumulated deficit of $19,163,220 and a stockholders’
      deficit of $1,432,134 at the same date. We expect to incur losses until at
      least
      2007 and may never become profitable. We also expect that our expenses will
      increase substantially for the foreseeable future as we seek to expand our
      product line and sales and distribution network, implement internal systems
      and
      infrastructure and comply with the legal, accounting and corporate governance
      requirements imposed upon public companies. These ongoing financial losses
      may
      adversely affect our stock price.





**Our
      success substantially depends on maintaining our relationships with SMBI.**





SMBI
      is the holder of certain patents and trademarks that cover the micronutrients
      that we use in our products and is our only supplier of those micronutrients.
      We
      have a license agreement and a supply agreement with SMBI, both of which are
      critical to our business and expire in 2014. Under the SMBI license agreement,
      we have the right to use SMBI’s intellectual property for the production and
      distribution of carbonated and noncarbonated beverages incorporating the
      micronutrients that provide the health benefits of our products. SMBI also
      supplies the key ingredient in our products under the terms of the supply
      agreement. These agreements contain cross-termination provisions, and therefore,
      we risk losing both our rights to the licensed use of the micronutrients and
      other SMBI intellectual property needed for our business, as well as our sole
      source of supply, if either agreement is terminated in accordance with its
      terms. Furthermore, any exclusive rights we enjoy under the license and supply
      agreements may be jeopardized if we fail to satisfy certain minimum purchase
      requirements. In addition, SMBI and its affiliate, Spencer Trask Specialty
      Group, LLC (“Spencer Trask”), are founders and significant stockholders of our
      company and, as such, SMBI has provided us with favorable terms under the supply
      contract. However, due to our relationship with Spencer Trask, there is a
      potential for conflicts of interest between SMBI and us. If we are unable to
      obtain the whey protein concentrate from SMBI for any reason, our manufacturing
      and distribution processes could be severely disrupted, and our operations
      could
      be adversely affected. We are aware of only one other source that might be
      able
      to provide an immune enhancement whey protein but it does not contain LactoActin
      and LactoMune, which are proprietary to SMBI, and we are not certain of its
      effectiveness. Moreover, it is our understanding that this ingredient would
      not
      provide the muscle flexibility health benefit that we achieve by using the
      SMBI
      whey protein concentrate. In addition, even if we are able to find acceptable
      alternative sources of supply, the new terms would likely be less favorable
      than
      those that we receive from SMBI. Accordingly, it is critical that we continue
      to
      meet all of our material obligations under both the license agreement and the
      supply agreement. In the past, we have not always been able to do so because
      of
      a lack of financial resources, and we paid SMBI $250,000 of past due payables
      out of the net proceeds of our initial public offering. An additional payment
      of
      $200,000 is due in January 2006. If we do not make that payment on time, the
      NuVim trademark will revert to SMBI, and we will be in default under our license
      and supply agreements.





**Our
      business depends on the acceptance of our products in both existing and new
      marketing areas.**





We
      intend to expand into new geographic areas and broaden our product offerings
      to
      generate additional sales. Our refrigerated beverage products are currently
      available in the northeastern United States and, recently, portions of the
      south, but our beverage products have not yet been widely distributed. We do
      not
      know whether the level of market acceptance we have received in the northeastern
      United States for our initial products will be matched or exceeded in the
      geographic locations we are newly serving, or in other areas of the country
      as
      we expand our distribution in the future. We also will need to raise additional
      financing to support this expansion.





As
      we
      expand our product line to include additional flavors of the refrigerated
      beverage, as well as the shelf-stable sports drink and the powder mix, we will
      face the additional uncertainty of whether these new products will gain market
      acceptance in any market. We can give no assurance that we will expand into
      new
      geographic areas or successfully expand our product line. It is unlikely that
      we
      will achieve profitability and otherwise have a successful business unless
      we
      are able to gain market acceptance of our existing and future products over
      a
      wide geographic area.


21





**Consumers
      who try our products may not experience the health benefits we claim, which
      may
      cause them to discontinue using our products.**





There
      have been approximately 20 independent clinical studies that have demonstrated
      the health benefits of the micronutrient components of our products. However,
      there has been only one, small-scale study of the effects of NuVim beverages
      directly. That study required the subjects to consume 12 ounces of NuVim daily
      for six weeks. While the study did validate the positive health claims we
      believe our products provide, it did not consider whether a smaller quantity
      of
      the beverage or a shorter period of continued usage might provide similar
      benefits. Therefore, we currently cannot confirm that the health benefits of
      our
      products will be evident to casual consumers of our products. Consumers may
      determine that drinking 12 ounces of NuVim per day for a minimum of six weeks
      requires more discipline and expense than they are willing to devote. If
      consumers do not use our product in the quantity or for the duration we
      recommend, they may not achieve the health benefits we claim, which may cause
      them to make alternative nutritional beverage and/or dietary supplement
      purchasing decisions.





**Our
      business may suffer from lack of diversification.**





Our
      business is centered on nutritional beverages. The risks associated with
      focusing on a limited product line are substantial. If consumers do not accept
      our products or if there is a general decline in market demand for, or any
      significant decrease in, the consumption of nutritional beverages, we are not
      financially or operationally capable of introducing alternative products within
      a short time frame. As a result, such lack of acceptance or market demand
      decline could cause us to cease operations.





**Expansion
      of our business is dependent on our ability to expand production.**





We
      currently manufacture our entire product line at Clover Farms Dairy in Reading,
      Pennsylvania. Our ability to expand beyond our current marketing areas depends
      on, among other things, the ability to produce our product in commercial
      quantities sufficient to satisfy the increased demand. Although our present
      production capacity is sufficient to meet our current and short-term future
      production needs, production capacity may not be adequate to supply future
      needs. If additional production capacity becomes needed, it will be necessary
      to
      engage additional co-packers or to expand production capacity at our present
      co-packer facility. If we expand production at Clover Farms Dairy, we risk
      having to pay significantly greater transportation costs to transport our
      products to warehouses in other regions of the United States. Any new co-packing
      arrangement raises the additional risk of higher marginal costs than we
      currently enjoy since we would be required to negotiate new terms with any
      new
      co-packer. We may not be able to pass along these higher costs to our customers.
      If we are unable to pass along the higher production costs imposed by new
      co-packers to our customers, we either will suffer lower gross margins and
      lower
      profitability, once achieved, or we may be unable to expand our business as
      we
      have planned, which could disappoint our stockholders.





**Our
      business contains risks due to the perishable nature of our product.**





Our
      current refrigerated product is a perishable beverage that has a limited
      shelf-life of approximately 83 days. This restricted shelf life means that
      we do
      not have any significant finished goods inventory and our operating results
      are
      highly dependent on our ability to accurately forecast near term sales in order
      to adjust our raw materials sourcing and production needs. When we do not
      accurately forecast product demand, we are either unable to meet higher than
      anticipated demand or we produce excess inventory that cannot be profitably
      sold. Additionally, our customers have the right to return products that are
      not
      sold by their expiration date. Therefore, inaccurate forecasts that either
      mean
      that we are unable meet higher than anticipated demand or that result in excess
      production, or significant amounts of product returns on any of our products
      that are not sold by the expiration date could cause customer dissatisfaction,
      unnecessary expense and a possible decline in profitability.





**Government
      regulation may adversely affect our business.**





Our
      business is subject to government regulation, principally the United States
      Food
      and Drug Administration (the “FDA”), which regulates the processing,
      formulation, packaging, labeling and advertising of dietary products, and to
      a
      lesser extent, state governments, where state attorneys general have authority
      to enforce their state consumer protection acts. Specifically, we are subject
      to
      the Dietary Supplement and Health Education Act (“DSHEA”). Under DSHEA, dietary
      supplements are permitted to make “statements of nutritional support” with
      notice to the FDA, but without FDA pre-approval. The FDA does not allow claims
      that a dietary product may mitigate, treat, cure or prevent disease. There
      can
      be no assurance that at some future time the FDA will not determine that the
      statement of nutritional support we make on our packaging is a prohibited claim
      rather than an acceptable nutritional support statement. Such a determination
      by
      the FDA would require deletion of the treatment, cure or prevention of disease
      claim, or, if it is to be used at all, submission by our company and the
      approval by the FDA of a new drug application, which would entail costly and
      time-consuming clinical studies, or revision to a health claim, which would
      require demonstration of substantiated scientific evidence to support such
      claim
      and would also consume considerable management time and financial resources.





Our
      advertising of dietary supplement products is also subject to regulation by
      the
      Federal Trade Commission (the “FTC”) under the Federal Trade Commission Act,
      which prohibits unfair or deceptive trade practices, including false or
      misleading advertising. The FTC in recent years has brought a number of actions
      challenging claims made by companies that suggest that their products are
      dietary supplements. No assurance can be given that actions will not be brought
      against us by the FTC or any other party challenging the validity of our product
      advertising claims.





22


**Our
        business may be subject to product liability claims relating to consumer
        use of
        our products.**





As
      a marketer of beverages that are ingested by consumers, we face an inherent
      risk
      of exposure to product liability claims if the use of our products results
      in
      injury or our labeling contains inadequate warnings concerning potential side
      effects. With respect to product liability claims, we have obtained a $2.0
      million liability insurance policy ($2.0 million per occurrence), which we
      believe is adequate for our kind of business activity. The policy contains
      certain exclusions that would pertain to food products such as the additional
      products exclusion for bodily injury or property damage arising out of the
      manufacture, handling, distribution, sale, application or use of certain
      specified products ( *e.g* .,
      silicone, latex, and dexfenfluramine, among others), the intended injury and
      the
      willful and intentional acts exclusions. There can be no assurance that such
      insurance will continue to be available at a reasonable cost, or, if available,
      that it will be adequate to cover potential liabilities. If we are found liable
      for product liability claims that exceed our coverage or are subject to a policy
      exclusion, such liability could require us to pay financial losses for which
      we
      have not budgeted and may not have adequate resources to cover. If the uninsured
      losses were significantly large enough to impact our ability to continue our
      then-existing level of operations, we might experience a decline in net income
      and earnings per share, and our stock price might suffer. In an effort to limit
      any liability, we generally obtain contractual indemnification from parties
      supplying raw materials or marketing our products. Such indemnification is
      limited, however, by the terms of each related contract and, as a practical
      matter, by the creditworthiness of the indemnifying party.





Despite
      the insurance coverage that we plan on maintaining, it is possible that we
      may
      be sued if one or more consumers believe our products have caused them harm.
      While no such claims have been made to date, the results of any such suit could
      result in significant financial damages to us, as well as serious damage to
      the
      reputation and public perception of our company, even if we are ultimately
      found
      not to be at fault.


23


**Item 3.
      Controls and Procedures.**





The
      Company’s President and Chief Executive Officer and the Company’s Chief
      Financial Officer have reviewed the disclosure controls and procedures relating
      to the Company at September 30, 2005 and concluded that such controls and
      procedures were effective to provide reasonable assurance that all material
      information about the financial and operational activities of the Company was
      made known to them. There were no changes in the Company’s internal control over
      financial reporting during the nine months ended September 30, 2005 that
      materially affected, or are reasonably likely to materially affect, the
      Company’s internal control over financial reporting.





24





**PART
      II. OTHER INFORMATION**





**Item 1.
      Legal Proceedings.**




There
      are
      at present no legal proceedings pending against the Company.




**Item 2.
      Unregistered Sales of Equity Securities and Use of Proceeds.**




**Use
      of Proceeds From Sales of Registered Securities**




On
      June
      20, 2005, the SEC declared effective our Registration Statement on Form SB-2
      (Reg. No. 333-120938), and we closed our initial public offering of 2,700,000
      units on June 24, 2005. Each unit consisted of one share of common stock, one
      Class A redeemable public warrant and one Class B non-redeemable public warrant.
      The managing underwriter of our initial public offering was Paulson Investment
      Company, Inc. The initial public offering price was $1.00 per unit. The gross
      proceeds of the offering were $2,700,000. Our net proceeds from the offering,
      after deducting the underwriter’s discount of $243,000 and other fees and
      expenses, aggregated $1,577,466.




As
      of
      September 30, 2005, we had applied proceeds from the initial public offering
      as
      follows:


Payment
                  to SMBI for assignment of NuVim trademark and payable
              
              $
              250,000Paymrnt
                  of shareholder loans
              
              
              35,000Repayment
                  of short-term loans from the representative
              
              
              200,000Operations
                  and working capital
              
              
              679,180Available
                  for working capital and future operations
              
              
              413,286Total
              
              $
              1,092,486




**Item 6.
      Exhibits**




(a)
      The
      following exhibits are filed as part of this report:





**Exhibit No.**
            
            **Description**31.1
            
            Certification
                of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as
                Adopted
                Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
            
            Certification
                of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as
                Adopted
                Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
            
            Certification
                of the Chief Executive pursuant to 18 U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
            
            Certification
                of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
                as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.





25








**SIGNATURES**








In
      accordance with the requirements of the Securities Exchange Act of 1934, the
      registrant caused this report to be signed on its behalf by the undersigned,
      thereunto duly authorized.














NUVIM,
                INC.Date:
                November 14 ,2005
            
            By:
            
            /s/
                RICHARD P. KUNDRATRichard
                P. Kundrat
              Chief
                Executive Officer and Chairman of the Board
              (Principle
                Executive Officer)Date:
                November 14, 2005
            
            By:
            
            /s/
                MICHAEL VESEYMichael
                Vesey
              Chief
                Financial Officer
              (Principal
                Financial and Accounting Officer)


26