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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-K
 x
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 Commission file number: 000-51161
 ODIMO INCORPORATED
 (Exact name of registrant as specified in its charter)
 Delaware
    
    22-3607813(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification Number)
 14051 N.W. 14th Street, Sunrise, Florida
    
    33323(Address of principal executive offices)
    
    (Zip Code)
 (954) 993-4703  (Registrants telephone number, including area code)
 Securities registered under Section 12(b) of the Exchange Act: None
 Securities registered under Section 12(g) of the Exchange Act: Common Stock, par value $0.001 per share
 o x
 o x
 x o
 x




Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting
company x(Do not check if a smaller reporting company)


x o






DOCUMENTS INCORPORATED BY REFERENCE
None










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##### 



ODIMO INCORPORATED
FORM 10-K  ANNUAL REPORT
For the Fiscal Year Ended December 31, 2007
TABLE OF CONTENTS
 PagePART IFORWARD-LOOKING STATEMENTS
    
    
    1ITEM 1. Business
    
    
    1Item 1A. Risk factors
    
    
    2Item 2. Properties
    
    
    6Item 3. Legal Proceedings
    
    
    6Item 4. Submission of Matters to a Vote of Security Holders
    
    
    6PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    7Item 6. Selected Financial Data
    
    
    8Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    8Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    14Item 8. Financial Statements and Supplementary Data
    
    
    14Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures
    
    
    14Item 9A(T). Controls and Procedures
    
    
    14Item 9B. Other Information
    
    
    15PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    16Item 11. Executive Compensation
    
    
    17Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    19Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    21Item 14. Principal Accountant Fees and Services
    
    
    21PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    22SIGNATURES
    
    
    25EX-10.34 Amended & Restated 8% Promissory NoteEX-23.1 Consent of Rachlin LLPEX-31.1 Section 302 CEO CertificationEX-31.2 Section 302 CFO CertificationEX-32.1 Section 906 CEO CertificationEX-32.2 Section 906 CFO Certification




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PART I
 
 FORWARD-LOOKING STATEMENTS
 This report contains various forward-looking statements regarding our business, financial
condition, results of operations and future plans and projects. Forward-looking statements discuss
matters that are not historical facts and can be identified by the use of words such as believes,
expects, anticipates, intends, estimates, projects, can, could, may, will,
would or similar expressions. In this report, for example, we make forward-looking statements
regarding, among other things, our expectations about our ability to continue as a going concern.
 Although these forward-looking statements reflect the good faith judgment of our management,
such statements can only be based upon facts and factors currently known to us. Forward-looking
statements are inherently subject to risks and uncertainties, many of which are beyond our control.
As a result, our actual results could differ materially from those anticipated in these
forward-looking statements as a result of various factors, including those set forth below under
the caption Risk Factors. For these statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You
should not unduly rely on these forward-looking statements, which speak only as of the date on
which they were made. They give our expectations regarding the future but are not guarantees. We
undertake no obligation to update publicly or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, unless required by law.
 
 ITEM 1. BUSINESS
 Non-Operating Shell Company
  Cessation of Online Retailing Business of the Company
   Going Concern
  1




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Available Information
  
 ITEM 1A. RISK FACTORS
 Some of the statements in this report and in particular, statements found in Managements
Discussion and Analysis of Financial Condition and Results of Operations, that are not historical
in nature may constitute forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are often identified by the words will, should,
anticipate, believe, expect, intend, estimate, hope, or similar expressions. These
statements reflect managements current views with respect to future events and are subject to
risks and uncertainties. There are important factors that could cause actual results to differ
materially from those in forward-looking statements, many of which are beyond our control. These
factors, risks and uncertainties include, but are not limited to, the factors described below.
 Our actual results, performance or achievement could differ materially from those expressed
in, or implied by, these forward-looking statements, and accordingly, we can give no assurances
that any of the events anticipated by the forward-looking statements will transpire or occur, or if
any of them do so, what impact they will have on our results of operations or financial condition.
In view of these uncertainties, investors are cautioned not to place undue reliance on these
forward-looking statements. We expressly disclaim any obligation to publicly revise any
forward-looking statements that have been made to reflect the occurrence of events after the date
hereof.
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You should carefully consider the risks and uncertainties described below, together with all
other information included in this report, including the consolidated financial statements and the
related notes herein, as well as in our other public filings, before making any investment decision
regarding our stock. If any of the following risks actually occurs, our business, financial
condition, results of operations and future prospects would likely be materially and adversely
affected. In that event, the market price of our stock could decline and you could lose all or part
of your investment.
 We are a non-operating shell company.
   We do not intend to pay dividends on our common stock, and, consequently, your only opportunity to
achieve a return on your investment is if the price of our common stock appreciates.
  Our common stock is currently quoted for trading on the Over the Counter Bulletin Board which may
adversely impact the liquidity of our shares and reduce the value of an investment in our stock.
  Because our common stock is considered a penny stock any investment in our common stock is
considered to be a high-risk investment and is subject to restrictions on marketability.
  3




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Our stock price has been and may continue to be volatile.
  Future sales of our common stock may cause our stock price to decline.
   Anti-takeover provisions in our organizational documents and Delaware law may discourage or prevent
a change in control, even if an acquisition would be beneficial to our stockholders, which could
affect our stock price adversely and prevent attempts by our stockholders to replace or remove our
current management.
  4




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
    
    Our board of directors has the exclusive right to elect directors to fill a vacancy created
by the expansion of the board of directors or the resignation, death or removal of a director,
which prevents stockholders from being able to fill vacancies on our board of directors;
    
    Our stockholders may not act by written consent. As a result, a holder or holders
controlling a majority of our capital stock would be able to take certain actions only at a
stockholders meeting;
    
    No stockholder may call a special meeting of stockholders. This may make it more difficult
for stockholders to take certain actions;
    
    Our stockholders may not remove a director without cause, and our certificate of
incorporation provides for a classified board of directors with staggered, three-year terms. As a
result, it could take up to three years for stockholders to replace the entire board;
    
    Our certificate of incorporation does not provide for cumulative voting in the election of
directors. This limits the ability of minority stockholders to elect director candidates;
    
    Stockholders must provide advance notice to nominate individuals for election to the board
of directors or to propose matters that can be acted upon at a stockholders meeting. These
provisions may discourage or deter a potential acquirer from conducting a solicitation of proxies
to elect the acquirers own slate of directors or otherwise attempting to obtain control of our
company; and
    
    Our board of directors may issue, without stockholder approval, shares of undesignated
preferred stock. The ability to authorize undesignated preferred stock makes it possible for our
board of directors to issue preferred stock with voting or other rights or preferences that could
impede the success of any attempt to acquire us.
  A significant portion of our voting power is concentrated and, as a result, our other stockholders
ability to influence corporate matters may be limited.
  Our ability to use net operating loss carryforwards may be limited.
  5




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Our limited resources make it impracticable to conduct a complete and exhaustive search for a
business combination.
  
 ITEM 2. PROPERTIES
  
 ITEM 3. LEGAL PROCEEDINGS
   
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  6




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##### Table of Contents



PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
 Market Information
  High
    
    
    LowFirst Quarter 2006 (from February 15, 2005)
    
    
    6.10
    
    
    
    2.05Second Quarter 2006
    
    
    3.76
    
    
    
    1.67Third
Quarter 2006 (through August 13, 2006)
    
    
    1.45
    
    
    
    1.24Third
Quarter 2006 (from August 14, 2006)
    
    
    1.26
    
    
    
    0.75Fourth Quarter
    
    
    0.24
    
    
    
    0.06First Quarter 2007
    
    
    0.29
    
    
    
    0.08Second Quarter 2007
    
    
    0.30
    
    
    
    0.20Third Quarter 2007
    
    
    0.20
    
    
    
    0.16Fourth Quarter 2007
    
    
    0.29
    
    
    
    0.11First Quarter 2008 (through March 25, 2008)
    
    
    0.16
    
    
    
    0.05
  Dividend Policy
  7




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Equity Compensation Plan
  2007 EQUITY COMPENSATION PLAN INFORMATION
 (a)
    
    
    (b)
    
    
    (c)Number ofsecuritiesremaining availableNumber of
    
    
    
    
    
    
    for future issuancesecurities to be
    
    
    
    
    
    
    under equityissued upon
    
    
    Weighted-average
    
    
    compensation planexercise of
    
    
    exercise price of
    
    
    (excludingoutstanding
    
    
    outstanding
    
    
    securitiesoptions, warrants
    
    
    options, warrants
    
    
    reflected inPlan Category
    
    and rights
    
    
    and rights
    
    
    column (a))Equity compensation
plans approved by
security holders
    
    
    26,000
    
    
    $
    24.48
    
    
    
    533,391Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    26,000
    
    
    $
    24.48
    
    
    
    533,391
 Recent Sales of Unregistered Securities
  Repurchases of Equity Securities
  
 ITEM 6. SELECTED FINANCIAL DATA.
  
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 The following discussion contains forward-looking statements, which involve risks and
uncertainties. Our actual results could differ materially from those anticipated in these
forward-looking statements as a result of various factors, including those set forth previously
under the caption Risk Factors. This Managements Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with our consolidated financial statements
and related notes included elsewhere in this report.
 Overview
   8




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Basis of Presentation
     Results of Operations
 Comparison of Years Ended December 31, 2007 and 2006
 Total Revenue
 Net Sales.
 Gross Profit.
 General and Administrative Expenses.
 Gain on Sale of Assets
 Interest Expense, Net.
 Liquidity and Capital Resources
  9




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Discussion of Cash Flows
    Liquidity Sources
     10




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Contractual Obligations
  Off Balance Sheet Arrangements
  Outstanding Stock Options
  Critical Accounting Policies and Estimates
   Revenue Recognition
  11




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Inventories
  Goodwill and Other Long-Lived Assets
 Goodwill and Other Intangible Assets
 Accounting for the Impairment or Disposal
of Long-Lived Assets
 Income Taxes
  Stock-Based Compensation
  12




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Recently Issued Accounting Standards
     13




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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
  
 ITEM 9A(T). CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures.
   14




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Changes in Internal Control Over Financial Reporting.
  Management Report On Internal Control Over Reporting.
     
 ITEM 9B. OTHER INFORMATION
  15




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PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  Name
    
    Age
    
    PositionAlan Lipton
    
    
    57
    
    
    Chairman of the Board, Class III DirectorAmerisa Kornblum
    
    
    46
    
    
    Chief Executive Officer, Chief Financial
Officer, Secretary and TreasurerSidney Feltenstein(1)
    
    
    67
    
    
    Class III DirectorStanley Stern(2)
    
    
    50
    
    
    Class I DirectorSteven Tishman(3)
    
    
    51
    
    
    Class II Director
 
 (1)
    
    Member of the Audit Committee, the Compensation Committee and the Nominating Committee(2)
    
    Member of the Compensation Committee and Nominating Committee(3)
    
    Member of the Audit Committee Alan Lipton
 Amerisa Kornblum
 Sidney Feltenstein
 Stanley Stern
 16




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Steven Tishman
 Section 16(a) Beneficial Ownership Reporting Compliance
  Code of Conduct and Ethics
  Audit Committee Financial Experts
  
 ITEM 11. EXECUTIVE COMPENSATION
 COMPENSATION DISCUSSION AND ANALYSIS
  17




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SUMMARY COMPENSATION TABLE
  Change inPension Value &Non QualifiedNon Equity
    
    
    DeferredStock
    
    
    Option
    
    
    Incentive Plan
    
    
    Compensation
    
    
    All OtherName and Principal Position
    
    Year
    
    
    Salary
    
    
    Bonus
    
    
    Awards
    
    
    Awards
    
    
    Compensation
    
    
    Earnings
    
    

Compensation
    
    
    TotalAlan Lipton
    
    
    2007
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Chief Executive Officer
    
    
    2006
    
    
    
    159,336
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,574
    (1)
    
    
    178,910and President from November
1999 through May 11, 2006Jeff Kornblum
    
    
    2007
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    50,000
    (2)
    
    $
    Chief Operating Officer from
    
    
    2006
    
    
    
    241,812
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,917
    (1)
    
    
    266,729November 1999 through January
15, 2007, Chief Executive
Officer and
President from May 11, 2006
through January 15, 2007Amerisa Kornblum
    
    
    2007
    
    
    
    30,000
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    50,000
    (3)
    
    $
    80,000Chief Financial Officer
    
    
    2006
    
    
    
    212,019
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,673
    (1)
    
    
    230,692and Treasurer since November
1999, Secretary since
November 2005 and Chief
Executive
Officer since January 15, 2007
 
 (1)
    
    Includes lease payments, insurance and maintenance expenses for one automobile and
medical insurance premiums.(2)
    
    Represents amounts paid in January 2007 in connection with a
Separation Agreement entered between the Company and Mr. Kornblum.(3)
    
    Represents amounts paid in January 2007 in connection with a
Termination Agreement entered between the Company and
Ms. Kornblum. Stock Options /Equity Awards
  Pension Benefits
  Nonqualified Deferred Compensation
  Stock Ownership Guidelines
  Compensation Committee Interlocks and Insider Participation
  Director Compensation
  18




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Communications with Directors
 Stockholder Communication.
 Compensation Committee Report
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
 Stock Ownership of Certain Beneficial Owners and Management
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PRINCIPAL STOCKHOLDERS
 SharesBeneficiallyBeneficial Owner
    
    Owned
    
    
    Percentage5% STOCKHOLDERSELAO, LLC(1)
    
    
    3,096,058
    
    
    
    39.93
    %c/o Odimo Incorporated14051 NW 14th Street, Sunrise, FL 33323Lily Maya Lipton Family Trust (1)
    
    
    3,274,629
    
    
    
    42.24
    %c/o Odimo Incorporatedc/o Alan Lipton, Trustee14051 NW 14th Street, Sunrise, FL 33323Austin W. Marxe(2)
    
    
    537,756
    
    
    
    6.94
    %527 Madison Avenue, Suite 2600, New York, NY 10022David M. Greenhouse(2)
    
    
    537,756
    
    
    
    6.94
    %527 Madison Avenue, Suite 2600, New York, NY 10022Rima Management, LLC(3)
    
    
    436,619
    
    
    
    5.63
    %Richard Mashaal110 East 55th Street, Suite 1600, New York, NY 10022Bruce Galloway(5)
    
    
    1,078,115
    
    
    
    13.91
    %c/o Galloway Capital Management, LLC720 Fifth Avenue, New York, NY 10019DIRECTORS AND EXECUTIVE OFFICERSAlan Lipton(1)(4)
    
    
    3,274,629
    
    
    
    42.24
    %14051 NW 14th Street, Sunrise, FL 33323Amerisa Kornblum(6)
    
    
    178,571
    
    
    
    2.3
    %14051 NW 14th Street, Sunrise, FL 33323Stanley Stern
    
    
    4,000
    
    
    
    *c/o Odimo Incorporated14051 NW 14th Street, Sunrise, FL 33323Sidney Feltensteinc/o Odimo Incorporated
    
    
    2,498
    
    
    
    *14051 NW 14th Street, Sunrise, FL 33323Steven Tishman
    
    
    
    
    
    
    c/o Rothschild Inc.1251 Avenue of the Americas, New York, NY 10020All directors and executive officers as a group (5 persons)
    
    
    3,459,698
    
    
    
    44.62
    %
 
 *
    
    Denotes less than 1%.(1)
    
    Lily Maya Family Trust (the Lily Trust) is the sole member of Elao, LLC, a Florida
limited liability company. Alan Lipton is the sole trustee of the Lily Trust and his minor daughter
Lily Maya Lipton is the sole lifetime beneficiary. Both the Lily Trust and Alan Lipton have shared
voting and dispositive power over the shares owned by Elao, LLC. Alan Lipton has shared voting and dispositive over the shares owned by the Lily Trust.(2)
    
    Messrs. Marxe and Greenhouse have shared voting and investment power over 119,042 shares
of Common Stock owned by Special Situations Cayman Fund, L.P., 33,737 shares of Common Stock owned
by Special Situations Fund III, L.P. and 384,977 shares of Common Stock owned by Special Situations
Fund III QP, L.P. Messrs. Marxe and Greenhouse are the controlling principals of AWM Investment
Company, Inc. (AWM), the general partner of and investment adviser to Special Situations Cayman
Fund, L.P. AWM also serves as the general partner of MGP Advisers Limited Partnership, the general
partner of and investment adviser to Special Situations Fund III, L.P. and general partner of
Special Situations Fund III QP, L.P.(3)
    
    Rima Management, LLC and Richard Mashaal have shared voting and dispositive power over these
shares.(4)
    
    Includes 1,682 shares held by Lipton Partnership, a general partnership in which Alan Lipton
has a beneficial interest.(5)
    
    Represents 747,382 shares of Common Stock held by Mr. Galloways Individual Retirement
Account which Mr. Galloway had sole power to vote and dispose and 91,462 shares of Common Stock
held by Finvest Yankee, LP and 239,271 shares of Common Stock held by Strategic Turnaround Equity
Partners, LP (Cayman) (STEP) for which Mr. Galloway has the shared power to vote and dispose. Mr.
Galloway is a managing member of Galloway Capital Management, LLC, the general partner of STEP. Mr.
Galloway disclaims beneficial ownership of the shares of Common Stock directly beneficially owned
by STEP except for: (i) indirect interests therein by virtue of being a member of Galloway Capital
Management LLC, and (ii) the indirect interests of Mr. Galloway by virtue of being a limited
partner of STEP.(6)
    
    Does not include shares held by Elao, LLC. Ms. Kornblum has a contingent contractual
right to receive 33.3% of the proceeds upon sale of these shares. Changes In Control
  20




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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
     Director Independence
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 Audit and Non-Audit Fees
  2007
    
    
    2006Audit Fees
    
    $
    77,000
    
    
    $
    216,215Audit Related Fees
    
    
    0
    
    
    
    0Tax Fees
    
    
    0
    
    
    
    0All Other Fees
    
    
    0
    
    
    
    0Total
    
    $
    77,000
    
    
    $
    216,215
 Audit Fees.
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##### Table of Contents



Audit-Related Fees.
 Tax Fees.
 All Other Fees.
 Audit Committee Pre-Approval Policies And Procedures
  
 PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a) Documents filed as part of this report.
  PageReport of Independent Registered Public Accounting Firm
    
    F-1Consolidated Balance Sheets
    
    F-2Consolidated Statements of Operations
    
    F-3Consolidated Statements of Stockholders Equity
    
    F-4Consolidated Statements of Cash Flows
    
    F-5Notes to Consolidated Financial Statements
    
    F-6
    (b) Exhibits . The following exhibits are filed as a part of this report:
 Exhibit Number
    
    Description2.1(1)
    
    Asset Purchase Agreement among registrant and Ashford.com, Inc. dated December 6,
20023.1(1)
    
    Amended and Restated Certificate of Incorporation3.2(1)
    
    Amended and Restated Bylaws4.1(1)
    
    Form of Specimen Stock Certificate4.2.1(1)
    
    Investors Rights Agreement dated November 18, 1999 by and between the registrant
and certain holders of the registrants capital stock4.2.2(1)
    
    Amended and Restated Registration Rights Agreement dated March 30, 2004 by and
between the registrant and certain holders of the registrants capital stock
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Exhibit Number
    
    Description10.1.1(1)
    
    Odimo Incorporated Amended and Restated Stock Incentive Plan10.1.2(1)
    
    Form of Stock Option Agreement pursuant to the Odimo Incorporated Stock Incentive
Plan10.2(1)
    
    Amended and Restated Series C Convertible Preferred Stock Purchase Agreement dated
as of March 30, 2004 between the registrant and SDG Marketing, Inc.10.3.1(1)
    
    Promissory Note dated December 6, 2002 by the registrant in favor of GSI Commerce
Solutions, Inc.10.3.2(1)
    
    Security Agreement dated December 6, 2002 between the registrant and GSI Commerce
Solutions, Inc., as assignee10.3.3(1)
    
    Patents, Trademarks, Copyrights and Licenses Security Agreement dated December 6,
2002 between the registrant and GSI Commerce Solutions, Inc., as assignee10.4.1(1)
    
    Lease Agreement dated December 14, 1999 between the registrant and MDR Fitness Corp.10.4.2(1)
    
    Lease Amendment and Extension Agreement dated January 8, 2003 between the
registrant and MDR Fitness Corp.10.5.1(1)
    
    Employment Agreement dated July 12, 2004 between the registrant and Alan Lipton10.5.2(1)
    
    Employment Agreement dated July 12, 2004 between the registrant and Jeff Kornblum10.5.3(1)
    
    Employment Agreement dated July 12, 2004 between the registrant and Amerisa Kornblum10.5.4(1)
    
    Employment Agreement dated July 12, 2004 between the registrant and George Grous10.5.5(1)
    
    Lock-up Agreement dated July 12, 2004, between the registrant and Alan Lipton10.5.6(1)
    
    Lock-up Agreement dated July 12, 2004, between the registrant and Jeff Kornblum10.5.7(1)
    
    Lock-up Agreement dated July 12, 2004, between the registrant and Amerisa Kornblum10.5.8(1)
    
    Lock-up Agreement dated July 12, 2004, between the registrant and George Grous10.5.9(1)
    
    Lock-up Agreement dated July 12, 2004, between the registrant and Michael
DellArciprete10.5.10(1)
    
    Amended and Restated Employment Agreement dated August 27, 2004 between the
registrant and Alan Lipton10.6(1)
    
    Form of Indemnification Agreement between the registrant and each of its directors
and executive officers10.7(1)
    
    Supply Agreement dated March 30, 2004 between the registrant and SDG Marketing, Inc.10.8.1(1)
    
    Loan and Security Agreement dated as of July 31, 2004 by and among Silicon Valley
Bank, the registrant and its subsidiaries Ashford.com, Inc. and D.I.A. Marketing,
Inc.10.8.2(1)
    
    Revolving Promissory Note dated as of July 31, 2004 in favor of Silicon Valley
Bank, by the registrant and its subsidiaries Ashford.com, Inc. and D.I.A.
Marketing, Inc.10.8.3(1)
    
    Intellectual Property Security Agreements dated as of July 31, 2004 in favor of
Silicon Valley Bank, by each of the registrant and Ashford.com, Inc.10.8.4(1)
    
    Unconditional Guaranties dated as of July 31, 2004 of Softbank Capital LP, Softbank
Capital Partners LP and Softbank Capital Advisors Fund LP10.9(1)
    
    Commercial Lease dated as of January 1, 2006 between the registrant and IBB Realty,
LLC10.10(1)
    
    First Loan Modification Agreement dated as of November 13, 2004 by and among
Silicon Valley Bank, the registrant and its subsidiaries Ashford.com, Inc. and
D.I.A. Marketing, Inc.10.11(1)
    
    First Amended and Restated Note dated as of November 13, 2004 in favor of Silicon
Valley Bank by the registrant and its subsidiaries Ashford.com, Inc. and D.I.A.
Marketing, Inc.10.12(1)
    
    Amendment and Reaffirmation of Guaranty dated as of November 13, 2004 of Softbank
Capital, LP, Softbank Capital Partners, LP and Softbank Capital Advisors Fund LP10.13(1)
    
    Second Loan Modification Agreement dated as of January 7, 2005 by and among Silicon
Valley Bank, the registrant and its subsidiaries Ashford.com, Inc. and D.I.A.
Marketing, Inc.10.14(1)
    
    Second Amended and Restated Note dated as of January 7, 2005 in favor of Silicon
Valley Bank, by the registrant and its subsidiaries Ashford.com, Inc. and D.I.A.
Marketing, Inc.10.15(1)
    
    Second Amendment and Reaffirmation of Guaranty dated as of January 7, 2005 of
Softbank Capital, L.P., Softbank Capital Partners, LP and Softbank Capital Advisors
Fund LP10.16(1)
    
    Confirmation letter dated January 7, 2005 from Softbank Capital Partners LP,
regarding financial support.10.17(5)
    
    Termination Agreement dated March 29, 2006 by and between Odimo Incorporated and
SDG Marketing, Inc.10.18(5)
    
    Third Amendment to Loan and Security Agreement dated March 30, 2006, by and among
Silicon Valley Bank, Odimo Incorporated, Ashford.com, Inc. and D.I.A. Marketing,
Inc.
 23




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##### Table of Contents



Exhibit Number
    
    Description10.19(6)
    
    Asset Purchase Agreement dated as of May 11, 2006 by and among Ice.com, Inc., Ice
Diamond, LLC, and Odimo Incorporated.10.20(6)
    
    Transition Services Agreement dated as of this May 11, 2006, by and between Ice
Diamond, LLC, Ice.com, Inc., and Odimo Incorporated.10.21(6)
    
    Separation Agreement dated May 11, 2006 by Odimo Incorporated and Alan Lipton.10.22(6)
    
    Amendment No. 1 to Employment Contract dated as of May 11, 2006, by and among Odimo
Incorporated and Jeffrey Kornblum.10.23(7)
    
    Modification and Settlement Agreement dated November 6, 2006 by and between IBB
Realty, LLC and Odimo Incorporated.10.24(8)
    
    Asset Purchase Agreement dated as of December 1, 2006 by and among Odimo
Incorporated, Worldofwatches.com, Inc. and ILS Holdings, LLC.10.25(9)
    
    Separation Agreement dated as of January 16, 2007 by and among Odimo Incorporated
and Jeff Kornblum.10.26(9)
    
    Separation Agreement dated as of January 16, 2007 by and among Odimo Incorporated
and George Grous.10.27(9)
    
    Termination Agreement dated as of January 15, 2007 by and among Odimo Incorporated
and Amerisa Kornblum.10.30(11)
    
    8% Secured Promissory Note in the Principal Amount of $300,00010.31(11)
    
    Amended and Restated 8% Promissory Note in the Principal Amount of $500,00010.32(11)
    
    8% Demand Promissory Note in the Principal Amount of $30,00010.33(10)
    
    Asset Purchase Agreement dated as of April 6, 2007 by and among Odimo Incorporated,
Ashford.com, Inc. and Luxi Group, LLC.10.34(4)
    
    Amended and Restated 8% Promissory Note in the Principal Amount of $525,00014.1(2)
    
    Code of Business Conduct and Ethics16.1(3)
    
    Letter of Deloitte & Touche LLP dated September 2, 200516.2 (3)
    
    Letter of Rachlin Cohen & Holtz LLP dated September 2, 200521.1(1)
    
    Subsidiaries of Odimo Incorporated23.1(4)
    
    Consent of Rachlin LLP31.1(4)
    
    Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a)
promulgated pursuant to the Securities Exchange Act of 1934, as amended31.2(4)
    
    Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a)
promulgated pursuant to the Securities Exchange Act of 1934, as amended32.1(4)
    
    Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 200232.2(4)
    
    Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
 
 (1)
    
    This exhibit was previously filed as an exhibit to the Registration
Statement on Form S-1 (File No. 333-117400) originally filed with the
Securities and Exchange Commission on July 16, 2004, as amended
thereafter, and is incorporated herein by reference.(2)
    
    This exhibit was previously filed as an exhibit to the Annual Report
on Form 10-K for the year ended December 31, 2004 filed with the
Securities and Exchange Commission on March 31, 2005 and is
incorporated herein by reference.(3)
    
    This exhibit was previously filed as an exhibit to the Form 8-K dated
August 31, 2005 filed with the Securities and Exchange Commission on
September 2, 2005 and is incorporated herein by reference.(4)
    
    Filed herewith.(5)
    
    This exhibit was previously filed as an exhibit to the Annual Report
on Form 10-K for the year ended December 31, 2005 filed with the
Securities and Exchange Commission on March 31, 2006 and is
incorporated herein by reference.(6)
    
    This exhibit was previously filed as an exhibit to the Form 8-K dated
May 11, 2006 filed with the Securities and Exchange Commission on May
12, 2006 and is incorporated herein by reference.(7)
    
    This exhibit was previously filed as and exhibit to the Quarterly
Report on form 10-Q for the period ended September 30, 2006 filed
with the Securities and Exchange Commission on November 14, 2006 and
is incorporated herein by reference.(8)
    
    This exhibit was previously filed as an exhibit to the Form 8-K dated
December 1, 2006 filed with the Securities and Exchange Commission on
December 4, 2006 and is incorporated herein by reference.(9)
    
    This exhibit was previously filed as an exhibit to the Form 8-K dated
January 11, 2007 filed with the Securities and Exchange Commission on
January 18, 2007 and is incorporated herein by reference.(10)
    
    This exhibit was previously filed as an exhibit to the Form 8-K dated
April 11, 2007 filed with the Securities and Exchange Commission on
April 12, 2007 and is incorporated herein by reference.(11)
    
    This exhibit was previously filed as an exhibit to the Annual Report
on Form 10-K for the year ended December 31, 2006 filed with the
Securities and Exchange Commission on April 2, 2007 and is
incorporated herein by reference.
incorporated herein by reference. 24




---



##### Table of Contents



SIGNATURES
  ODIMO INCORPORATEDDated: March 31, 2008
    By:
    /s/ Amerisa KornblumName:
    Amerisa KornblumTitle:
    Chief Executive Officer and Chief Financial Officer  Name
    
    Title
    
    Date/s/ Amerisa Kornblum

Amerisa Kornblum
    
    Chief Executive Officer and Chief
Financial Officer
(Principal Executive and Principal
Financial and Accounting Officer)
    
    March 31, 2008/s/ Alan Lipton

Alan Lipton
    
    Chairman of the Board of Directors
    
    March 31, 2008/s/ Sidney Feltenstein

Sidney Feltenstein
    
    Director
    
    March 31, 2008/s/ Stanley Stern

Stanley Stern
    
    Director
    
    March 31, 2008/s/ Steven Tishman

Steven Tishman
    
    Director
    
    March 31, 2008
 25




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM













RACHLIN LLP





F-1



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##### Table of Contents



ODIMO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
 December 31,2007
    
    
    2006ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    1
    
    
    $
    75Deposits with credit card processing company
    
    
    
    
    
    
    108Escrow deposit
    
    
    
    
    
    
    30Prepaid expense and other current assets
    
    
    17
    
    
    
    67Total current assets
    
    
    18
    
    
    
    280Property and Equipment, Net
    
    
    
    
    
    
    294Intangible and Other Assets, Net
    
    
    
    
    
    
    24Total
    
    $
    18
    
    
    $
    598LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)Current Liabilities:Accounts payable
    
    $
    304
    
    
    $
    728Accrued interest to related party
    
    
    38
    
    
    
    Accrued liabilities
    
    
    25
    
    
    
    46Total liabilities
    
    
    367
    
    
    
    774Note Payable to Related Party
    
    
    515
    
    
    
    300Commitments, Contingencies and Subsequent EventsStockholders Equity (Deficiency):Preferred stock, $0.001 par value, 50 million shares
authorized, none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value, 300 million shares
authorized, 7,039 shares issued and outstanding
    
    
    7
    
    
    
    7Additional paid-in capital
    
    
    103,705
    
    
    
    103,705Accumulated deficit
    
    
    (104,576
    )
    
    
    (104,188
    )Total stockholders equity (deficiency)
    
    
    (864
    )
    
    
    (476
    )Total
    
    $
    18
    
    
    $
    598
  F-2




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##### Table of Contents



ODIMO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 Year Ended December 31,2007
    
    
    2006Net Sales
    
    $
    
    
    
    $
    18,984Commissions
    
    
    14
    
    
    
    Total Revenues
    
    
    14
    
    
    
    18,984Costs and Expenses:Cost of goods sold
    
    
    
    
    
    
    15,854Fulfillment
    
    
    
    
    
    
    1,414Marketing
    
    
    
    
    
    
    2,160General and administrative
    
    
    744
    
    
    
    9,566Depreciation and amortization
    
    
    44
    
    
    
    3,598Impairment of long-lived assets
    
    
    
    
    
    
    5,385Total costs and expenses
    
    
    788
    
    
    
    37,977Loss from Operations
    
    
    (774
    )
    
    
    (18,993
    )Other Income (Expense):Gain on sale of assets
    
    
    424
    
    
    
    7,185Interest expense, net
    
    
    (38
    )
    
    
    (16
    )Other income (expense)
    
    
    386
    
    
    
    7,169Net Loss
    
    $
    (388
    )
    
    $
    (11,824
    )Net Loss per Common ShareBasic and diluted
    
    $
    (0.06
    )
    
    $
    (1.65
    )Weighted Average Number of Shares:Basic and diluted
    
    
    7,039
    
    
    
    7,155
  F-3




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##### Table of Contents



ODIMO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIENCY)
(in thousands, except per share data)
 Additional
    
    
    
    
    
    
    TotalPreferred Stock
    
    
    Common Stock
    
    
    Paid-In
    
    
    Accumulated
    
    
    StockholdersShares
    
    
    Par Value
    
    
    Shares
    
    
    Par Value
    
    
    Capital
    
    
    Deficit
    
    
    Equity (Deficiency)BALANCEDecember 31, 2005
    
    
    
    
    
    $
    
    
    
    
    7,163
    
    
    $
    7
    
    
    $
    103,705
    
    
    $
    (92,364
    )
    
    $
    11,348Forfeiture of common stock
    
    
    
    
    
    
    
    
    
    
    (124
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,824
    )
    
    
    (11,824
    )BALANCEDecember 31, 2006
    
    
    
    
    
    
    
    
    
    
    7,039
    
    
    
    7
    
    
    
    103,705
    
    
    
    (104,188
    )
    
    
    (476
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (388
    )
    
    
    (388
    )BALANCEDecember 31, 2007
    
    
    
    
    
    $
    
    
    
    
    7,039
    
    
    $
    7
    
    
    $
    103,705
    
    
    $
    (104,576
    )
    
    $
    (864
    )
  F-4




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##### Table of Contents



ODIMO INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
 Year Ended December 31,2007
    
    
    2006Cash Flows from Operating Activities:Net loss
    
    $
    (388
    )
    
    $
    (11,824
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation and amortization
    
    
    44
    
    
    
    3,598Interest on note payable to related party
    
    
    38
    
    
    
    Gain on sale of assets
    
    
    (424
    )
    
    
    (7,185
    )Impairment of long lived assets
    
    
    
    
    
    
    5,385Provision for bad debts
    
    
    
    
    
    
    432Amortization of supply agreement
    
    
    
    
    
    
    206Changes in operating assets and liabilities:(Increase) decrease in:Deposits with credit card processing company
    
    
    108
    
    
    
    646Escrow deposit
    
    
    30
    
    
    
    (30
    )Accounts receivable
    
    
    
    
    
    
    (124
    )Inventories
    
    
    
    
    
    
    6,915Prepaid expenses and other current assets
    
    
    50
    
    
    
    589Other assets
    
    
    24
    
    
    
    134Increase (decrease) in:Accounts payable
    
    
    (424
    )
    
    
    (7,154
    )Accrued liabilities
    
    
    (21
    )
    
    
    (2,124
    )Net cash used in operating activities
    
    
    (963
    )
    
    
    (10,536
    )Cash Flows from Investing Activities:Proceeds from sale of assets, net of expenses
    
    
    674
    
    
    
    7,185Purchase of property and equipment
    
    
    
    
    
    
    (705
    )Net cash provided by investing activities
    
    
    674
    
    
    
    6,480Cash Flows from Financing Activities:Proceeds from notes payable to related party
    
    
    245
    
    
    
    300Payments on stockholder notes
    
    
    (30
    )
    
    
    Net cash provided by financing activities
    
    
    215
    
    
    
    300Net (Decrease) in Cash and Cash Equivalents
    
    
    (74
    )
    
    
    (3,756
    )Cash and Cash Equivalents, Beginning
    
    
    75
    
    
    
    3,831Cash and Cash Equivalents, Ending
    
    $
    1
    
    
    $
    75Supplemental Disclosures of Cash Flow Information:Cash paid during the year for:Interest
    
    $
    
    
    
    $
    28
  F-5




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##### Table of Contents



ODIMO INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Business www.ashford.com
  Basis of Presentation
 Use of Estimates
 Concentration of Risk
  Other Risks
 F-6




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##### Table of Contents



Cash and Cash Equivalents
 Deposits with Credit Card Processing Company
 Inventories
 Property and Equipment
 Software and Website Development Costs Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use Accounting for Web Site Development Costs
 Long-Lived Assets
 Intangible Assets
 Warranty Costs
 Revenue Recognition Reporting Revenue Gross as a Principal versus Net as an Agent,
 Cost of Sales
 F-7




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##### Table of Contents



Fulfillment Expenses
 Marketing Expenses
 General and Administrative Expenses
 Stock-Based Compensation Accounting for Stock Issued to Employees Accounting for Certain
Transactions involving Stock Compensation, an interpretation of APB Opinion No. 25
 Accounting for Stock-Based Compensation Share-Based Payments
 Income Taxes Accounting for Income Taxes.
 Loss Per Share
 Segments
 Recently Issued Accounting Standards
 F-8




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##### Table of Contents



2. GOING CONCERN CONSIDERATIONS
  F-9




---



##### Table of Contents



3. SALE OF ASSETS
 Sale of Diamond.com URL and Certain Assets
     F-10




---



##### Table of Contents



Sale
of Worldofwatches.com URL and Certain Assets
 Sale
of Computer Equipment
 Sale
of Ashford.com URL and Certain Assets
 4. PROPERTY AND EQUIPMENT
  EstimatedUseful Lives
    
    
    December 31,
    
    
    December 31,(in Years)
    
    
    2007
    
    
    2006Computers, software and equipment
    
    
    3
    
    
    $
    
    
    
    $
    315Less: accumulated depreciation
    
    
    
    
    
    
    
    
    
    
    (21
    )$
    
    
    
    $
    294
   5. INTANGIBLE AND OTHER ASSETS
  December 31,2006Marketing-related:www.ashford.comdomain name
    
    $
    7,1867,186Less: accumulated amortization
    
    
    (7,186
    )Intangibles
 net
    
    
    Other assets
    
    
    24Total
    
    $
    24
 F-11




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##### Table of Contents



www.diamond.com
 6. STOCK OPTION PLAN
 i.e.,
   December 31, 2007
    
    
    December 31, 2006Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    ExerciseOptions
    
    
    Price
    
    
    Options
    
    
    PriceOutstanding at beginning of year
    
    
    131
    
    
    $
    24.43
    
    
    
    404
    
    
    $
    9.90Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Canceled
    
    
    (105
    )
    
    
    (8.99
    )
    
    
    (273
    )
    
    
    (8.50
    )Outstanding at December 31, 2007
    
    
    26
    
    
    $
    24.48
    
    
    
    131
    
    
    $
    24.43Options exercisable at
December 31, 2007
    
    
    26
    
    
    $
    24.48
    
    
    
    131
    
    
    $
    24.43
  7. INCOME TAXES
  2007
    
    
    2006Amount
    
    
    Rate
    
    
    Amount
    
    
    RateIncome taxes at statutory rate
    
    $
    (132
    )
    
    
    34.0
    %
    
    $
    (4,020
    )
    
    
    34.0
    %State income taxes, net of federal benefit
    
    
    (14
    )
    
    
    3.6
    
    
    
    (406
    )
    
    
    3.4Increase in taxes:Penalties and fines
    
    
    0.7
    
    
    
    (0.2
    )
    
    
    2
    
    
    
    0.0Meals and entertainment
    
    
    0.3
    
    
    
    0.0
    
    
    
    5
    
    
    
    0.0Intangible amortization
    
    
    
    
    
    
    0.0
    
    
    
    210
    
    
    
    (1.8
    )Adjustment
of deferred balances
    
    
    (91.0
    )
    
    
    23.6
    
    
    
    
    
    
    
    0.0Other
    
    
    
    
    
    
    0.0
    
    
    
    12
    
    
    
    (0.1
    )Valuation allowance
    
    
    236
    
    
    
    (61.0
    )
    
    
    4,197
    
    
    
    (35.5
    )$
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
 F-12




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##### Table of Contents



December 31,2007
    
    
    2006Deferred tax assets (liabilities):Noncurrent:Net operating loss carryforwards
    
    $
    29,413
    
    
    $
    27,961Property and equipment
    
    
    
    
    
    
    (16
    )Intangible assets
    
    
    
    
    
    
    1,233Gross deferred tax assets
    
    
    29,413
    
    
    
    29,178Valuation allowance
    
    
    (29,413
    )
    
    
    (29,178
    )Net deferred tax assets
    
    $
    
    
    
    $
    
   8. COMMITMENTS AND CONTINGENCIES
 Asset
Purchase
 Leases
  F-13




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##### Table of Contents



Employment Agreements
    9. LEGAL PROCEEDINGS
   F-14




---



##### Table of Contents



10. RELATED PARTY TRANSACTIONS
 Diamond and Jewelry Purchases and Sales
 Stock Purchase and Supply Agreement
 Note
Payable to Related Party
 Sale
of Common Stock
 F-15