UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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, 2013
	FOR THE FISCAL YEAR ENDED DECEMBER 31, 2011
[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO _________
[ ]	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: 000-52158

SMOKY MARKET FOODS, INC. ~~(Exact name of registrant as specified in its charter)~~

(Exact name of registrant as specified in its charter)

Nevada

20-4748589

(State or other jurisdiction

of incorporation or organization)

(IRS Employer

Identification No.)

1511 E. 2nd St. ~~Webster City, IA 50595 (Address of principal executive offices, including zip code)~~

~~Registrant’s telephone number~~Webster City, ~~including~~IA ~~area code: (866) 851-7787~~50595

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (515) 724-7976

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Shares, par value $.001

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES [ ] NO [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

YES [ ] NO [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES [X ] NO [ X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES [X ] NO [ X]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

Indicate by by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller ~~reporting~~ reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller ~~reporting~~ reporting company” in Rule 12b-2 of the Exchange Act (Check one):

[ ] Large Accelerated filer

[ ] Accelerated filer

[ ] Non-accelerated filer

(Do not check if a smaller reporting company)

[X] Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): YES [ ] NO [X]

The aggregate market value of approximately 58129,~~928~~070,~~852~~650 shares held by nonaffiliates of the registrant on June 30, ~~2011~~2014, based ~~upon~~ upon the average bid and asked price of the common shares on the OTC Bulletin Board of $0.0802 per share on June 30, ~~2011~~2014, was ~~approximately~~ approximately $42,~~714~~581,~~316~~413. Common Shares held by each officer and director and by each other person who may be deemed to be an affiliate of the registrant have been excluded.

As of ~~March~~November 3115, ~~2012~~2014, the registrant had ~~104~~191,~~321~~233,~~861~~345 common shares outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.

Table of Contents

FORWARD LOOKING STATEMENTS	3	3
EXPLANATORY NOTE
PART I	3	3
Item 1. Business.		3
Item 1. Business	3
Item 1A. Risk Factors.		9
Item 1A. Risk Factors	9
Item 1B. Unresolved Staff Comments.		16
Item 1B. Unresolved Staff Comments	15
Item 2. Properties.		16
Item 2. Properties	15
Item 3. Legal Proceedings.		17
Item 3. Legal Proceedings	16
Item 4. Mine Safety Disclosures	16	17
PART II	16	17
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.		17
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	16
Item 6. Selected Financial Data.		19
Item 6. Selected Financial Data	17
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		19
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.		26
Revenue Recognition	23
Item 8. Financial Statements.		26
Item 7A. Quantitative and Qualitative Disclosures about Market Risk	24
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.		26
Item 8. Financial Statements	24
Item 9A. Controls and Procedures.		26
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	24
Item 9B. Other Information.		27
Item 9A. Controls and Procedures	24
PART III		28
Item 9B. Other Information	25
Item 10. Directors, Executive Officers and Corporate Governance.		28
PART III	26
Item 11. Executive Compensation.		30
Item 10. Directors, Executive Officers and Corporate Governance	26
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.		33
Item 11. Executive Compensation	28
Item 13. Certain Relationships and Related Transactions, and Director Independence.		34
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	30
Item 14. Principal Accountant Fees and Services.		35
Item 13. Certain Relationships and Related Transactions, and Director Independence	31
Item 15. Exhibits and Financial Statement Schedules.		36
Item 14. Principal Accountant Fees and Services	32
Item 15. Exhibits and Financial Statement Schedules	33

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements can be identified by the use of forward-looking words such as “anticipate,” “estimate,” “project,” “likely,” “believe,” “intend,” “expect,” or similar words. These statements relate to our, and, in some cases, our clients’ or business partners’ future plans, objectives, expectations, intentions and financial performance and the assumptions that underlie these statements. All forward-looking statements included in this Report are made as of the date hereof, based on information available to us as of such date, and we assume no obligation to update any forward-looking statements. It is important to note that such statements may not prove to be accurate and that our actual results and future events will differ, and could differ materially, from those anticipated in such statements. Among the factors that could cause actual results to differ materially from our expectations are those described under “Item 1A. Risk Factors.” You are also encouraged to review our other filings with the Securities and Exchange Commission (the “SEC”) describing other factors that may affect our future results. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this section and other factors included elsewhere in this Report.

PART I

Item 1. Business.

Overview

Organization & Business Model

We are a Nevada corporation incorporated in April 2006, with our principal office at 1511 E. 2nd Street, Webster City, Iowa 50595. Our telephone number is (~~866~~515) ~~851~~724-~~7787~~7976. We ~~are~~own aproprietary ~~development~~wood-burning ~~stage~~oven ~~company~~technology and ~~have~~process ~~minimal~~technique, ~~revenue~~which toproduces artisan ~~date~~quality ~~from~~of ~~wholesale~~“Smoke-BakedTM” ~~foodservice~~fish ~~distribution~~and ofmeat ~~our~~that ~~product.~~we ~~We plan~~believe to ~~increase~~be ~~our~~superior ~~revenue~~in flavor, purity and nutritional wholesomeness to all “value-~~producing~~added” ~~operations~~smoked infood ~~2012~~products currently being produced by commercial smoked food processors.

We ~~use USDA-approved, custom-engineered,~~ ~~proprietary~~are ~~wood-burning oven technology to produce~~ a ~~complete~~development ~~line~~stage ~~of fully cooked~~company, ~~Smoke-BakedTM~~with ~~meat~~the ~~and~~intent ~~fish.~~to ~~We plan~~procure capital to ~~sell~~execute our ~~line~~branded ofmarketing ~~smoked~~business ~~foods~~plan. ~~under~~Having ~~the~~encountered financial ~~Smoky~~and ~~Market~~operational ~~brand~~difficulties ~~through multiple channels of foodservice~~ and ~~retail~~failures ~~distribution. These~~relating ~~distribution~~to ~~channels~~the ~~include~~consumer ~~retail~~trends ~~sales~~and ~~through~~economics ~~point-~~of~~-sale~~ ~~display~~our ~~merchandising~~specialized ~~in both traditional and non-traditional~~industry ~~high-traffic venues~~segment, ~~over~~we ~~the~~have ~~Internet,~~generated ~~and~~very ~~foodservice~~minimal ~~sales~~revenue to ~~wholesale~~date ~~distributors.~~from ~~Additionally,~~wholesale ~~we intend to produce certified kosher smoked foods~~ and toretail ~~distribute~~distribution ~~this line~~ of ~~products~~our ~~under the “Smoky Kosher” brand through the same distribution channels~~product. ~~In the future~~However, we ~~intend~~have enhanced toour ~~develop~~business amodel ~~national~~through ~~chain~~creation of ~~fast-casual,~~strategic ~~gourmet~~operating ~~barbecue restaurants under the name “BarBQ Diner” that would operate without having to handle~~ and ~~cook~~financial ~~raw~~affiliations, ~~product on site. We produce our smoked foods at a centralized location~~ and we ~~expect~~intend to begrow ~~able~~our torevenue in ~~deliver food of consistent size, taste and quality~~2015.

~~Our focus of operations at this~~We ~~time~~plan isto ~~the~~sell ~~expansion~~our line of ~~our~~smoked ~~wholesale~~foods ~~foodservice~~principally ~~distribution~~under ~~and~~ the ~~development~~Smoky ofMarket ~~our~~brand ~~retail~~through multiple channels ~~through~~wholesale ~~display~~and ~~merchandising~~retail ~~and~~distribution ~~Internet~~that ~~operations.~~include ~~Once~~sales ~~revenues~~to ~~from~~food ~~these~~distributors, ~~primary~~direct ~~distribution~~to ~~channels~~commercial ~~have~~end-users ~~gained~~and ~~traction~~grocery retailers, weand ~~intend~~certain toof ~~pursue development~~our ofproducts ~~the~~will ~~BarBQ~~be ~~Diner~~sold ~~restaurant~~retail ~~concept~~over the Internet. We expect ~~that operating dual channels of distribution for our smoked foods will enable us~~ to ~~maximize~~also ~~the~~produce ~~operating~~a ~~and~~certain ~~financial~~amount ~~efficiencies~~ of ~~our~~product ~~production~~for ~~capacity~~private label distribution.

Additionally, in the foreseeable future we intend to produce certified kosher smoked foods and to distribute this line of products under our “Smoky Kosher” brand through mostly the same distribution channels. In the future, when our earnings grow, we intend to develop a national chain of fast-casual, gourmet smoked food restaurants under the name “SmokeChefTM” that we believe would be an innovative concept of franchise operation within the restaurant industry.

Market Opportunity

~~Our~~Within the ~~goal~~value-added, isprepared tofood ~~build~~marketplace, ~~three~~we ~~nationally recognized~~see ~~gourmet-quality~~a ~~brands~~significant ~~for~~lack ~~sales~~ of ~~our~~artisan ~~wood-~~smoked ~~meat~~fish and ~~fish~~meat products that are ~~prepared~~truly wholesome, ~~authentically~~naturally ~~and~~wood-smoked ~~without~~by ~~the~~burning ~~use of sodium~~wood, ~~sugar,~~and free of additives and chemical preservatives. AtWe ~~this time, we~~ believe ~~the~~this specialized marketplace ~~for~~to ~~our~~be ~~unique~~virtually ~~quality of Smoke-Baked food is largely~~ untapped and without any major smoked food brand orcomparable ~~national~~in ~~restaurant~~quality. ~~franchise~~We ~~company;~~believe our ~~three~~two packaged food brand concepts, ~~are~~ “Smoky Market” and “Smoky Kosher”, ~~for~~will enable us to penetrate national markets for sales ~~into~~to ~~the~~wholesale and retail customers in the value-added packaged food sector,. ~~and~~We ~~“BarBQ~~believe ~~Diner” representing~~ our ~~franchise~~business ~~concept~~model to ~~penetrate~~be ~~the~~a ~~fast~~niche ~~casual~~market opportunity ~~restaurant~~to ~~sector~~produce and distribute artisan quality smoked foods, at competitive prices, within a highly processed, commercial prepared food marketplace.

We believe that our two retail brands and our restaurant concept will succeed where other food companies have not because of these principal aspects: (i) our quality of smoked food under USDA production is believed to be the most authentic and healthful of any commercial smoked food on the market; (ii) our regionalized operating organization should enable us to market our food to fit the regional demographic profiles of our customer audience, and (iii) we believe that for the quality and convenience of our smoked foods, our planned retail and restaurant prices are very competitive. As we begin to expand operations from our launch, we intend to recruit five regional presidents who are each familiar with the food demographic profile of the customers within their respective region relative to types or cuts of meat, sauces and other dining aspects. Each regional president will be charged with customizing the recipes, marketing program and other aspects of our business in order to meet the food profile demographics of that region.

Food Production & Distribution

Proprietary Wood-burning ~~Smoking~~Oven Technology ~~and~~ ~~Ovens~~& Process Technique

~~The~~Our custom-engineered, wood-burning ~~smoker-~~oven ~~system used~~delicately ~~to produce our line of wood-smoked foods uniquely “~~Smoke-Bakes~~”TMmeat~~ fish and ~~fish~~meat with anaturally moist smoke-heat~~-vapor that~~, which is ~~generated~~produced by the ~~slow~~ burning of freshly-cut hickory and ~~apple~~without ~~timber, after which~~ the ~~fully-cooked~~use ~~smoked~~of ~~foods~~curing ~~are~~or ~~portion-cut~~brining ~~and vacuum-packaged~~process, ~~for~~or ~~freshness.~~injection ~~The~~of ~~smoke-heat-vapor~~other ~~infuses~~forms ~~the~~of ~~meat~~ additives and ~~fish~~chemical ~~with~~preservatives. anOur ~~authentic~~products ~~smoky~~include ~~taste~~fish, ~~but with delicate flavor that is not over-powering. No additives (water~~beef, ~~sugar~~pork, ~~high~~poultry ~~amounts~~and oflamb ~~sodium,~~that ~~liquid~~are ~~smoke,~~fully ~~etc.)~~cooked and ~~no preservatives~~vacuum-packaged ~~are~~for ~~used in the process; only garlic~~convenience, ~~natural~~freshness ~~spices,~~ and ~~very~~ease ~~little~~of ~~sea~~preparation ~~salt~~by ~~are~~foodservice ~~applied~~operators asand ~~seasoning~~home consumers alike.

~~In July 2011~~By contrast, ~~we entered into a Purchase and Lease Agreement (~~the ~~“Sale/Lease~~smoked ~~Agreement”)~~food ~~with~~produced ~~SMKY~~by ~~Asset~~commercial ~~Fund~~processors ~~LLC~~using ~~(the~~standardized ~~“Lessor”) related to our smoker~~smokehouse-~~oven~~type ~~system.~~ovens ~~Pursuant~~is toessentially ~~the~~that ~~Sale/Lease~~of ~~Agreement, we sold the smoker~~smoke-~~oven system to the Lessor for a purchase price~~flavoring ~~equal of $240~~product,~~000.~~ Inas ~~addition,~~these weovens ~~are~~use ~~required~~smoke togenerators ~~issue~~that tosmolder ~~Lessor~~hickory asawdust ~~warrant~~ to ~~purchase~~create ~~a share of common stock for each $1~~smoke.~~00 in~~ ~~purchase price paid.~~ The ~~warrants~~fish ~~have an exercise price of $0.50 per share, a five-year term~~ and ~~include~~meat ~~net~~are ~~exercise~~smoked ~~provisions.~~while Webeing ~~leased~~cooked ~~back~~by ~~the~~gas ~~smoker-oven~~or ~~system~~electric ~~for~~heat ~~rent~~with ~~equal~~added ~~to the lesser of (a) $0.20 per pound of product produced using the smoker-oven~~moisture, or ~~(b)~~and ~~the~~high ~~amount~~concentrations ~~necessary to generate a 30% return on the sum~~ of ~~the purchase price and $5~~water,~~000.~~ ~~The Sale/Lease Agreement has a 10-year term~~sodium, ~~provided that we may repurchase the smoker-oven system at any time after July 25~~sugar, ~~2014~~and ~~that~~various ~~the~~forms ~~market price for our common stock has exceeded $0.50 for thirty trading days. The repurchase price is a number~~ of ~~shares of common stock with a~~ ~~fair~~additives ~~market~~and ~~value~~preservatives ~~equal~~(brining to& 20curing ~~times~~solutions) ~~the~~are ~~sum~~used ofin ~~(a)~~ the ~~purchase price, plus (b) $5,000~~process.

In July 2011, we entered into a Purchase and Lease Agreement (the “Sale/Lease Agreement”) with SMKY Asset Fund LLC (the “Lessor”) related to our smoker-oven system. Pursuant to the Sale/Lease Agreement, we sold the smoker-oven system to the Lessor for a purchase price equal of $240,000 (the “Sale Price”). In addition, we are required to issue to Lessor a warrant to purchase a share of common stock for each $1.00 of the Lease Price. The warrants have an exercise price of $0.50 per share, a five-year term and include net exercise provisions. We leased back the smoker-oven system for rent equal to $0.20 per pound of product produced using the smoker-oven up to a maximum annual return of 30% on the sum of the Sale Price ($240,000) or $72,000. The Sale/Lease Agreement has a 10-year term and includes a provision that we must repurchase the smoker-oven system at any time after July 25, 2014 providing that the market price for our common stock has exceeded $0.50 for thirty trading days. The repurchase price is a number of shares of common stock with a fair market value equal to 20 times the Sale Price, plus $5,000.

On July 1, 2014, Smoky Market Foods, Inc. (the “Company”) entered into a Business Development License Agreement (the “Agreement”) with Mary Ann’s Specialty Foods, Inc. (“Mary Ann’s”). Pursuant to the terms of the Agreement, the Company granted to Mary Ann’s (a) an exclusive right to develop, manufacture, label, package, store, and distribute, under the Company’s trademarks and trade names (the “Marks”), the Company’s meat and fish products, and to process orders and collect sales; and (b) a non-exclusive, non-transferable license to the Marks. Mary Ann’s also agreed to (a) generate sales for the Company’s products, with the billing of such sales to be invoiced and proceeds collected solely by Mary Ann’s; and (b) provide a minimum of $650,000 of financing for inventory and receivables for the Company to be able to grow sales of its products. Mary Ann’s will retain a portion of sales proceeds as compensation for its processing (cost of raw product, materials, labor & profit), financing and brokerage services, and remit the remaining proceeds to the Company, which represent the Company’s margin of gross profit. As additional consideration, the Company agreed to issue to Mary Ann’s and its designees 5,000,000 shares of the Company’s common stock. The Agreement has a one-year term, which will renew automatically each year for an additional period of one year unless either party provides written notice of non-renewal.

USDA-Inspected Meat Production and Availability of Raw Materials

We presently outsource, and for the foreseeable future, expect to continue to outsource, our commercial smoked food processing to Mary Ann’s Specialty Foods (“Specialty Foods”). Specialty Foods is a USDA-approved contract food processing company located in Webster City, Iowa and operates ana 8070,000 square foot processing facility, which sits on 15 acres of family-owned land, and is expected to be responsible for our food production and distribution requirements. In order to establish production capability and complete the development of our smoked food products, we entered into an Amended and Restated Processing Agreement dated July 1, 2006 with Specialty Foods, which agreement was further modified by a Second Amended and Restated Processing Agreement dated October 30, 2009.

Pursuant to the processing agreement, Specialty Foods has agreed to process the smoked meats for our business in return for a processing fee based on its actual costs of production, labor costs, packaging materials costs, allocated overhead costs, and a set amount of profit based on the amount of packaged products produced. We agreed that Specialty Foods would be our exclusive processor for meat products, subject to certain limitations. The agreement is based upon a single oven capable of producing at least 100,000 pounds of smoked meat and/or fish per month or more depending upon the production item mix, and we have the option to construct an addition building adjacent to Specialty Foods’ processing facility to install additional smoker-oven systems. The term of the agreement is ten years from October 30, 2009, with an option to extend the agreement for three additional 10-year periods (subject to early termination in the event of default).

With respect to meat, fish and other raw materials used to make our products, we require that all of our raw beef, pork, lamb and poultry be raised without growth hormones, steroids and antibiotics, and our salmon is farmed naturally in “open-pen” ~~farmed naturally from Canadian rivers~~ocean waters. Market prices for meat, fish and other food items are subject to constant fluctuation and frequent shortages of item availability, which we expect to mitigate through contract purchasing. We have established strategic supply relationships with Special Foods and Coast Seafood, a supplier of fish products, that we believe will enable lower market prices as we grow and achieve economies-of-scale from increased production.

~~Canadian &~~ Kosher ~~Meat~~ ~~& Fish Production~~Line

We have ~~intend~~created tothe ~~form~~Smoky ~~two~~Kosher ~~subsidiary companies~~brand tofor ~~handle~~ production ~~of meat~~ and ~~fish~~marketing ~~for~~of ~~specific~~a ~~channels~~line of ~~distribution.~~fully-certified Wekosher ~~intend~~smoked tofoods, ~~install~~which ~~a smoker-oven system~~will ~~into~~be ~~the~~distributed ~~processing~~wholesale ~~facility~~to ofcommercial aend-users ~~fish~~and ~~company~~grocery ~~located in Canada~~retailers, ~~which~~and ~~will~~retail ~~enable~~to usconsumers toover ~~produce~~the ~~and~~Internet. ~~market~~To ~~“wild”~~produce ~~salmon~~our ~~and~~kosher ~~other~~line, ~~fish~~we ~~for~~intend ~~distribution~~to ~~into~~affiliate ~~the~~with ~~Canadian~~an ~~region~~established asUSDA ~~well~~processor asof ~~into~~kosher ~~Asia~~foods and ~~Europe.~~install Wean ~~expect~~oven ~~this~~for ~~Canadian~~contract ~~processing~~production ~~arrangement~~in toprincipally bethe ~~consummated~~same ~~during~~manner ~~2012,~~as ~~subject~~we toare ~~the~~doing ~~availability~~with ofSpecialty ~~capital~~Foods.

We have created the Smoky Kosher brand for production and marketing of a line of fully-certified kosher smoked foods, which will be distributed by in-store retail merchandising and Internet sales, as well as export sales to Israel and other international regions. To produce our kosher line, we plan to build an addition to the facility of Specialty Foods subject to our being able to raise sufficient capital to exercise our option to acquire the property.

Co-Pack Production

We plan to use co-packing affiliates to produce a selection of specialty gourmet items, including one-dish meals of smoked meat/fish pasta, casseroles, quiches, and ~~pizzas~~ soup. We have not entered into agreements with any co-packing facilities, but have entered into discussions with several and believe that suitable arrangements can be reached when we are ready to commence such operations. Our plan is to cause Specialty Foods to bulk-ship smoked meat and fish ingredients to the co-packers. There, the various menu items will be packaged, and shipped to our planned regional distribution centers.

Process & Price Value

Our wood-smoking process is expensive. Costs include obtaining freshly cut timber, labor associated with the smoking process, and having to absorb a 25% to 30% cook shrinkage loss in the process. Consequently, Smoky Market brand smoked foods cost more to produce and have higher price points than many competing smoked food products. However, the existence of a market for higher-priced organic foods and other prepared foods that are advertised as 100% natural, low-sodium and/or free of additives suggests that customers will pay ~~slightly~~ more for products they know to be of premium quality, especially prepared foods that are ~~natural~~nutritionally wholesome, tasty, and convenient. Based upon our review of the nutritional labels of our competitors, we believe that the absence of any preservatives, brining solutions, liquid smoke and similar additives in Smoky Market brand smoked meats foods distinguishes our product from smoked meat products currently on the market.

Smoked Food Products

Below is our line of smoked foods that we expect to produce and market under the Smoky Market ~~retail and foodservice brands~~brand, with certain of these items intended to also be ~~featured~~ inproduced and sold under our ~~BarBQ~~Smoky ~~Diner~~Kosher ~~concept~~brand, and ~~Smoky~~featured ~~Kosher~~in ~~marketing~~our ~~operations~~SmokeChef restaurant concept.

Our line of wood-smoked foods presently includes the following:

Entrée Items (Individual serving portions that are ready to “heat’n serve”)

● Pork Loin Baby Back Ribs ● Pork Country-Style Ribs & Loin Chops ● Beef Spare Ribs ● Carved Boneless Chicken Breast ● Cornish Game Hen ● Turkey Breast, Thigh & Leg ● Rack Of Lamb & Lamb Chops ● Duck ● Salmon & other fish

●Sliced, Pulled ~~Pork~~or ~~Country-Style~~Cut ~~Ribs~~Smoked Foods (Sliced, pulled or cut from the bone and packaged in portion servings for sandwiches, or to add to salads, tacos, casseroles & soups)

● Beef Sirloin Tri-Tip & Brisket ● Pork Loin ~~Chop~~& Shoulder Roast ● Carved Chicken Strips ● Turkey Breast

● Beef Spare Ribs

● Carved Boneless Chicken Breast

● Jumbo Chicken Thigh

● Cornish Game Hen

● Turkey Breast, Thigh & Leg

● Rack Of Lamb & Lamb Chops

● Duck

● Salmon & Trout

Sliced, Pulled or Cut Smoked Foods(Sliced, pulled or cut from the bone and packaged in portion servings for sandwiches, or to add to salads, tacos, casseroles & soups)

● Beef Sirloin Tri-Tip

● Beef Brisket

● Corned Beef Brisket

● Pork Loin Roast

● Pork Shoulder

● Boneless Pork Leg

● Carved Chicken Strips

● Turkey Breast

Smoked Finger Foods (Delicate smoky treats for snacking fun & entertainment)

● Beef & Pork Meatballs

● Pork Country Rib Strips

● Pork Ribletts

● Carved Chicken Strips

● Chicken Drummies (Regular & Teriyaki)

● Lamb Ribletts Teriyaki

Side Order Foods

● Hickory Smoke-BakedTM Beans ● Creamy-Garlic Coleslaw Dressing & Veggie Dip ● Southern-Style Barbecue Dipping Sauce

~~● Creamy-Garlic Coleslaw Dressing & Veggie Dip~~6

● Southern-Style Barbecue Dipping Sauce

Marketing & Operations

We have completed a re-branding design of the Smoky Market ~~Retail~~logo, ~~Distribution~~which depicts a more contemporary, gourmet quality appeal to the brand image. Our website, at www.smokymarket.com, while now only featuring general product and company information, is expected to become live for on-line ordering of certain of our smoked foods for both our wholesale and retail customers in January 2015.

We ~~have completed a re-branding~~ ~~design~~believe of the ~~Smoky~~achievement ~~Market~~of ~~logo~~approximately ~~and~~30% ~~website,~~usage ~~which~~of ~~depicts~~our aexisting ~~more~~smoker-oven’s ~~contemporary,~~production ~~gourmet~~capacity ~~quality~~will ~~appeal~~enable us to ~~the brand image. Our~~attain ~~website,~~a atpositive ~~www.smokymarket.com,~~cash isflow ~~live~~and ~~for~~we ~~on-line~~plan ~~ordering~~to ofmarket our Smoke-Baked ~~Salmon,~~salmon ~~which~~as is our primary introductory product, to demonstrate our brand ~~and~~quality given what we ~~expect~~perceive to ~~feature~~be ~~more~~the ~~items~~uniqueness asof ~~our~~this ~~production~~product ~~capacity~~in isthe ~~expanded~~smoked fish marketplace. WeEntering ~~consider~~2015, ~~the~~we ~~smoked~~plan ~~salmon~~to produce other meat and poultry items to beextend ~~the~~our ~~most~~line ~~unique~~of distribution. Since we are producing “portion-packaged” product for commercial end-users, we ~~produce~~can very easily and ~~consumer~~efficiently ~~market~~integrate ~~trends~~precise ~~show~~packaging into the ~~consumption~~distribution of ~~salmon~~our foods tothrough bewholesale ~~growing~~channels ~~substantially~~for ~~due~~grocery toretail ~~its~~sales ~~healthful benefits~~and for direct consumer sales over the Internet.

~~Fulfillment~~Strategic Development ~~&Distribution~~Agreement

~~Product~~On July ~~produced~~1, at2014 ~~our~~we ~~Iowa~~entered ~~facility~~into a Business Development License Agreement (the “Agreement”) with Specialty Foods. Pursuant isto ~~shipped~~the terms of the Agreement, we granted Specialty Foods (a) an exclusive right to ~~Neesvig~~develop, ~~Inc.~~manufacture, ~~our~~label, ~~fulfillment~~package, ~~partner~~store, and indistribute, ~~Wisconsin~~under the Company’s trademarks and trade names (the “Marks”), ~~for~~the ~~fulfillment~~Company’s ofmeat and fish products, and to process orders ~~placed~~and oncollect ~~our~~sales; ~~website.~~and We(b) ~~have~~a ~~no fixed~~non-exclusive, ~~expense~~non-transferable ~~relative~~license to ~~production~~the ofMarks. ~~product~~Specialty ~~and~~Foods also ~~fulfillment~~agreed ofto ~~Internet~~(a) ~~orders~~generate sales for our products, ~~which~~with ~~serves~~the billing of such sales to ~~substantially~~be ~~limit~~invoiced ~~our~~and ~~costs~~proceeds collected solely ~~while~~by ~~revenues~~Specialty ~~begin~~Foods; and (b) provide a minimum of $650,000 of financing for inventory and receivables for the Company to be able to grow sales of our products. ~~When~~Specialty weFoods ~~begin~~will toretain ~~establish~~a ~~distribution~~portion ~~into~~of ~~retail~~sales ~~store~~proceeds as compensation for its processing (cost of raw product, materials, labor & profit), financing and ~~chain~~brokerage ~~venues~~services, ~~our~~and ~~plan~~remit isthe remaining proceeds to ~~ship~~us, which ~~product~~represents our margin of gross profit. As additional consideration, we agreed to ~~regional~~issue ~~distributors~~to ~~that~~Specialty Foods and its designees 5,000,000 shares of the Company’s common stock. The Agreement has a one-year term, which will ~~provide~~renew ~~distribution~~automatically ~~services~~each toyear ~~these~~for ~~outlets~~an additional period of one year unless either party provides written notice of non-renewal.

InSpecialty Foods ~~the~~has ~~months~~begun to ~~come,~~produce weand ~~expect to~~sell ~~place~~product ~~our~~under ~~attractive~~the ~~point-~~terms of~~-sale~~ ~~display~~the ~~merchandisers~~Agreement ~~into~~and ~~selected~~we ~~traditional~~expect ~~and~~sales ~~non-traditional~~of ~~food~~our ~~buying~~smoked ~~venues~~foods ~~that~~to grow through ~~include~~the ~~supermarkets,~~efforts ~~chain~~of ~~beverage~~Specialty ~~stores,~~Foods’ ~~truck~~marketing ~~stops,~~organization ~~corporate~~as ~~office~~they ~~complexes,~~introduce ~~drug~~our ~~and~~smoked ~~convenience~~salmon ~~store~~to ~~chains,~~their ~~and~~existing ~~fitness gyms~~customers.

~~Smoky~~Regional Sales ~~Market~~& ~~Foodservice Distribution~~Fulfillment Operations

In ~~November 2011, we established~~ aaddition ~~brokerage~~to ~~relationship~~sales ~~with SYSCO Foodservice~~ of ~~Iowa~~our ~~for wholesale distribution of selected~~ products to ~~commercial~~be ~~and~~generated ~~institutional end-users~~through ~~throughout~~ the ~~State~~efforts of ~~Iowa.~~Specialty ~~Initially,~~Foods ~~SYSCO-Iowa~~under isour ~~featuring~~development ~~three~~agreement, ~~items~~we ofintend to ~~our~~establish ~~Smoke-Baked~~regional ~~Salmon~~sales ~~including~~and afulfillment ~~6 oz.~~operations ~~entrée~~that ~~fillet,~~will 6enable ~~oz.~~us ~~package~~to ofhave ~~flaked~~dedicated ~~salmon,~~sales ~~and~~agents ain 3concentrated ~~lb.~~market areas ~~whole~~that ~~fillet~~only ~~for~~sell ~~buffet~~Smoky ~~catering~~Market brand products. InThese ~~2012,~~regional weoperations ~~expect~~will ~~to expand~~be ~~our~~a ~~offering~~combination of ~~items~~company-operated ~~through foodservice~~ facilities and, ~~subject~~facilities tothat ~~financing,~~are weoperated ~~further~~under ~~intend~~contract towith ~~affiliate~~an ~~with~~established ~~many~~food ~~more~~sales oforganization. ~~the 150~~We ~~SYSCO~~have ~~divisions~~determined inthat the USgreatest level ~~for~~and ~~distribution~~speed of ~~our~~national ~~products.~~market Inpenetration ~~particular,~~of our ~~foodservice~~brand ~~marketing~~lines ~~plan~~can ~~focuses~~be onachieved ~~specialized licensed~~by ~~menu~~directly ~~systems~~selling ~~that~~to ~~are~~commercial ~~designed~~end-users, and ~~for~~that ~~the~~our ~~operations~~most ofcompetitive ~~caterers,~~pricing ~~convenience~~structure ~~stores,~~can ~~coffee~~be ~~and~~realized ~~deli~~by ~~shops,~~shipping inwholesale ~~addition to~~product ~~sales~~orders offor ~~product~~next-day toground ~~general~~delivery by ~~commercial~~UPS ~~and~~from ~~institutional~~these ~~end-users~~regional facilities. We ~~believe~~expect ~~the~~this ~~healthcare~~sales ~~segment~~and ~~offers~~distribution ~~substantial~~model ~~marketing opportunity~~to ~~for~~be ~~our~~considerably ~~products~~cost-efficient ~~given~~and the ~~healthfulness~~most effective ofapplication for our ~~Smoke-Baked~~capital ~~quality~~and human resource.

In connection with our development agreement with Specialty Foods and the capital they are providing for inventory and receivable financing, and with additional capital we intend to raise, we plan to begin our direct selling and fulfillment operations in January 2015 from our facility in Webster City, IA, which will enable sales and provide next-day ground delivery to commercial end-users and grocery retailers within a surrounding territory of seven Mid-West states. Additionally, we are currently negotiating with food sales contractors for regional facility operations in the Pacific Northeast, central California, Florida and the Northeast. We foresee the success of our regionalized sales and fulfillment platform becoming a viable revenue- and income-generating model that may be duplicated for continued entrepreneurial market launch operations in regional territories across the country.

General Information

Intellectual Property

We own the recipes for substantially all of our products, certain registered and unregistered trademarks and tradenames, including Smoky Market®, Smoke-Baked™, Smoky Kosher™, and ~~BarBQ Diner~~SmokeChef™, along with design features related to the ovens used for smoking our products. We have not registered any patents, but we expect to be able to secure certain patent rights for the diffusing system attached to our smoker-oven from the firebox.

Government Regulation

As a distributor of food products and planned restaurant operator, we are subject to regulation by the U.S. Food and Drug Administration, or FDA, the U.S. Department of Agriculture, or USDA, and to licensing and regulation by state and local health, sanitation, building, zoning, safety, fire and other authorities. In addition, the operations of our food processor are subject to regulation under the Federal Food, Drug and Cosmetic Act, the Federal Meat Inspection Act, the Poultry Products Inspection Act, the Perishable Agricultural Commodities Act, the Nutrition Labeling and Education Act of 1990, and the rules issued under these laws. The FDA regulates standards of identity for specified foods and prescribes the format and content of information on food product labels. The USDA imposes standards for product quality and sanitation including the inspection, labeling and compliance of meat and poultry products and the grading and commercial acceptance of shipments from our suppliers.

Costs of compliance with such laws and regulations are presently insignificant. If we or our food processor were to be found to be out of compliance with such laws, particularly those related to the production, labeling and handling of food, we could be subject to significant fines and forced to discontinue our operations until all material violations were addressed. Were our relationship with our food processor to terminate, we would have to find another USDA-approved meat processor or qualify as such ourselves. There are a limited number of USDA-approved meat processors and barriers to entry are significant (with an estimated start-up cost of not less than $2 million dollars and required time of at least one year for qualification).

Environmental Laws

We are not required to obtain any environmental permits and do not use any hazardous materials in connection with the operation of our business. Accordingly, we have not incurred, and do not expect to incur, any material expenses associated with environmental compliance.

Competition

~~We plan to compete principally~~In in the retail packaged food ~~industry until such time as we launch our BarBQ Diner foodservice operations. In the retail packaged food~~ segment, we expect our competitors will include the hundreds of established companies selling their smoked foods ~~salmon~~ over the Internet and in supermarkets. Our food will compete on the basis of price, flavor, healthfulness and brand recognition. We believe that our food will compete favorable with competing products in terms of flavor and healthfulness. With respect to price, we expect our prices to be competitive with those of specialty stores and Internet sellers, but slightly above that of major retail chains that sell typical smoked meats with high concentrations of sodium, sugar and additives. Many of our competitors will have stronger brand recognition than we do.

Research and Development

We do not have any historical research and development expenses. We plan to add products to our lines as our business develops and expect that research, developing and testing of new or improved recipes and products will be an ongoing part of our business.

Employees

We currently have atwo ~~total of four~~ paid full-time employees ~~and~~that ~~two paid part-time contractors, which~~ include ~~two officers (~~Edward C. Feintech, our CEO and ~~Marli Craig, our Secretary),~~ a controller, aand ~~quality-control~~three ~~operator~~paid ofpart-time ~~our~~people who ~~smoker-oven~~are ~~system,~~officers ~~and~~including ~~two~~Shane ~~executives~~Campbell, CPA, our Chief Financial Officer, ~~and~~Dennis Harrison, PhD, our Chief Information Officer, and ~~providing~~Marli Craig, our Secretary, who provide services on a part-time basis as consultants for which they are paid in cash and/or stock.

~~Execution~~We believe the execution of our business plan as set forth above ~~would,~~will ~~we believe,~~ require the hiring of approximately 30 to 50 people over the next three years to staff our corporate ~~management team, our regional offices,~~ and ~~our~~field ~~expanded~~management ~~production facility operations~~team. The actual number of employees we will hire in the next 12 months depends upon our success in obtaining capital and how rapidly we can expand our operations.

Item 1A. Risk Factors.

Investing in our common stock involves a high degree of risk. You should carefully consider the risks described below, and all of the other information set forth in this prospectus before deciding to invest in shares of our common stock. In addition to historical information, the information in this prospectus contains forward-looking statements about our future business and performance. Our actual operating results and financial performance may be different from what we expect as of the date of this prospectus. The risks described in this prospectus represent the risks that management has identified and determined to be material to our company. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also materially harm our business operations and financial condition.

We have generated only a nominal amount of revenue and may be unable to generate significant revenue in the future.

We were incorporated in April 2006 and ~~are~~remain in the process of commencing sustainable revenue-generating operations. As a result, we have generated only a nominal amount of revenue, and all of our plans are speculative. We may be unable to generate or expand revenue at the rate anticipated. If we do not generate significant revenue in the future, or if costs of expansion and operation exceed revenues, we will not be profitable. We may be unable to execute our business plan, generate significant revenue or be profitable.

The inexperience of our key management, and our limited operating history and evolving business plan, make it difficult to evaluate our performance and forecast our future.

We were formed in April 2006. Our key management individuals have experience in the restaurant industry, but have limited or no experience in internet retailing, establishing a national food service business (directly or through franchise arrangements) or operating a reporting issuer. Our limited operating history and limited experiencemake it difficult to evaluate our ability to generate revenues, manage growth, obtain necessary capital, manage costs, create profits, and generate cash from operations. Specifically, our ability to do the following may be impaired:

● implement our business plan (which may be based upon faulty assumptions and expectations arising from our limited experience);

● obtain capital necessary to continue operations and implement our business plan;

● comply with SEC rules and regulations and manage market expectations;

● differentiate ourselves from our competitors; and

● establish a significant retail and restaurant customer base.

The inexperience of our key management, and our limited operating history and evolving business plan, make it difficult to evaluate our performance and forecast our future.

Our key management individuals have experience in the restaurant industry, but have limited or no experience in internet retailing, establishing a national food service business (directly or through franchise arrangements) or operating a reporting issuer. Our limited operating history and limited experience make it difficult to evaluate our ability to generate revenues, manage growth, obtain necessary capital, manage costs, create profits, and generate cash from operations. Specifically, our ability to do the following may be impaired:

	●	implement our business plan (which may be based upon faulty assumptions and expectations arising from our limited experience);

	●	obtain capital necessary to continue operations and implement our business plan;

	●	comply with SEC rules and regulations and manage market expectations;

	●	differentiate ourselves from our competitors; and

	●	establish a significant retail and restaurant customer base.

If we fail to successfully manage these risks, we may never expand our business or become profitable and our business may fail.

We will be unable to implement our business plan if we cannot raise sufficient capital and may be required to pay a high price for capital.

As of December 31, ~~2011~~2013, we had $171,~~614~~128 in cash and cash equivalents. We need to obtain a significant amount of additional capital to implement our business plan and meet our financial obligations as they become due. We may not be able to raise the additional capital needed or may be required to pay a high price for capital. Factors affecting the availability and price of capital may include the following:

● the availability and cost of capital generally; ● our financial results, including our liquidity situation; ● the market price of our common stock; ● the experience and reputation of our management team; ● market interest, or lack of interest, in our industry and business plan; ● the trading volume of, and volatility in, the market for our common stock; ● our ongoing success, or failure, in executing our business plan; ● the amount of our capital needs; and ● the amount of debt, options, warrants and convertible securities we have outstanding.

● our financial results, including our liquidity situation;

● the market price of our common stock;

● the experience and reputation of our management team;

● market interest, or lack of interest, in our industry and business plan;

● the trading volume of, and volatility in, the market for our common stock;

● our ongoing success, or failure, in executing our business plan;

● the amount of our capital needs; and

● the amount of debt, options, warrants and convertible securities we have outstanding.

We may be unable to meet our current or future obligations or to adequately exploit existing or future opportunities if we cannot raise sufficient capital. If we are unable to obtain capital for an extended period of time, we may be forced to discontinue operations.

Our auditors have included an explanatory paragraph in our financial statements regarding our status as a going concern.

Our audited financial statements included in this prospectus were prepared on the assumption that we will continue as a going concern. Our independent registered public accounting firm has stated that it substantially doubts our ability to continue as a going concern in a report dated ~~April~~October 1630, ~~2012~~2014. This doubt is based on the fact that we have had ~~losses~~minimal ~~since inception~~revenues, have had negative working acapital ~~stockholders’~~at ~~deficit~~December 31, 2012 and 2013, have ~~had~~incurred norecurring ~~material~~losses ~~revenue~~and ~~generating~~recurring ~~operations~~negative ~~since~~cash ~~inception~~flow from operating activities, and have an accumulated deficit.

The packaged food market is competitive, and we may be unable to successfully capture retail customers.

The market for packaged meat products, and competing packaged products, is highly competitive. We propose to sell packaged meat products over the Internet and at retail locations. We may be unable to differentiate ourselves in the marketplace and compete successfully against existing or future competitors of our business. In order to succeed, we will be required to take customers away from established smoked meat and fish brands and alternative food products sold over the Internet or at retail stores. Our retail products will be sold at higher prices than some of our competitor’s products, and consumers may not differentiate the quality of our products or may not be willing to pay higher prices. If we fail to establish customers for our packaged food business, it is unlikely that we will generate significant revenue or become profitable, and in the long run our business will likely fail.

We may be unable to establish a significant number of restaurant-stores or kiosks.

Many factors may affect our ability to establish new restaurant-stores and kiosks, including:

● identification and availability of suitable locations;

● negotiation of favorable lease or purchase arrangements;

● management of the costs of construction and development;

● securing required governmental approvals and permits and complying with governmental regulations;

● recruitment of qualified operating personnel;

● labor disputes;

● shortages of materials and skilled labor;

● environmental concerns; and

● other increases in costs, any of which could give rise to delays or cost overruns.

If we are not able to establish and expand our restaurant-store or kiosk business, our revenues will not grow as expected, which would inhibit our ability to continue operations in the long term.

The risk of product contamination and recall may harm our public image and result in decreased revenues and harm to our business.

There is a risk that our food processor could produce contaminated meat or other products that we would ship or serve at our restaurant-markets or kiosks. If such an event occurs, we may be required to recall our products from retail stores, affiliate warehouses and from the restaurant outlets being served. A product recall would increase costs, result in lost revenues and harm our public relations image, in addition to exposing us to liability for any personal injury resulting from such contamination.

The availability of raw meat, fish and other food products may change without notice, and the fluctuating cost of these products may unexpectedly increase our operating costs and harm our business.

The costs of obtaining the meat, fish and other food products required for our products are subject to constant fluctuations and frequent shortages of item availability. Adequate supplies of raw meat, fish and other food products may not always be available, and the price of raw meat, fish and other food products may rise unexpectedly, resulting in increased operating costs, potential interruptions in our supply chain, and harm to our business.

Adverse publicity regarding fish, poultry or beef could negatively impact our business.

Our business can be adversely affected by reports regarding mad cow disease, Asian bird flu, meat contamination within the U.S. generally or food contamination generally. In addition, concerns regarding hormones, steroids and antibiotics may cause consumers to reduce or avoid consumption of fish, poultry, or beef. Any reduction in consumption of fish, poultry, or beef by consumers, would harm our revenues, financial condition and results of operations.

Our supply chain may be subject to shipping losses, various accidents, or spoilage, which would decrease revenues and potentially lead to a loss of customers.

We have contracted with a food processor that will be responsible for shipping our processed products, restaurant-stores or consumers to distribution centers or marketing affiliates. Shipping losses, various accidents and product spoilage during this process may lead to decreased sales, potentially disgruntled commercial customers and possible shortages at our distribution centers and retail locations. Repeated or extensive problems of this nature would harm our reputation and revenues.

We may lose our processor affiliation or experience a breakdown in our single processing oven system, substantially harming our ability to generate revenues until another processor is located.

We are completely dependent upon Mary Ann’s Specialty Foods, Inc., and upon a single oven-system located at ~~Specialty~~their ~~Foods~~facility, to produce our smoked foods in order to operate the business and generate revenue. If our oven system breaks down, becomes contaminated or is removed from Specialty Foods’ facility, we would experience an interruption in our ability ~~tosupply~~to supply products to customers. This would harm our relationships with our customers and Internet affiliates, and harm our revenues in the short run. Any long-term interruptions in our ability to produce smoked foods would significantly limit our ability to continue operations.

We have entered into a sale/leaseback transaction with respect to our smoker-oven, which creates risk of loss if we default and may inhibit our cash flow.

In July 2011, we entered into a Purchase and Lease Agreement with SMKY Asset Fund LLC, or the Lessor, related to our smoker-oven system. Pursuant to this Purchase and Lease Agreement we sold the smoker-oven system to the Lessor and are required to pay rent equal ~~to the lesser~~ of ~~(a)~~ $0.20 per pound of product produced using the smoker-oven, orup ~~(b)~~to ~~the~~a maximum amount ~~necessary~~of toannual ~~generate~~rent equal to a 30% return on the sum of the purchase price and $5,000. This rent will diminish our cash flow as we begin to generate revenue, and there is some risk that we ~~will~~may default under the lease and forfeit any right to use the smoker-ovens, ~~that~~which ~~are~~is the foundation of our business.

We cannot repurchase the smoker-oven system until the first date after July 25, 2014 that the market price of our common stock has remained ~~exceeded~~at $0.50 for thirty trading days. The repurchase price is a number of shares of common stock with a fair market value equal to 20 times the sum of ~~(a)~~ the purchase price ($240,000) , plus (b) $5,000. If our market price does not exceed $0.50 for thirty trading days we will be unable to repurchase our smoker-oven system (and will be required to continue to pay rent),. ~~and~~Any ~~any~~ repurchase of the smoker-oven system will be dilutive to our shareholders.

We are dependent upon key personnel to manage business, and the loss of such personnel could significantly impair our ability to implement our business plan.

We are highly dependent upon the efforts of management, particularly Edward C. Feintech, our Chairman, President and Chief Executive Officer. The number of qualified managers in the smoked-food industry is limited. As our business grows, we will need to recruit executive and regional managers who are capable of implementing our business plan. The e-commerce and restaurant industries are highly competitive, and we may be unable to attract qualified management personnel. If we are unsuccessful in retaining or attracting such employees, our ability to grow and service capacity will be harmed.

In addition, as we expand into different geographic regions the success of our BarBQ Diner fast casual concept will be largely dependent upon the efforts of our regional presidents and local management. We may be unable to locate qualified persons willing to be regional presidents or to manage local stores under the terms we expect to offer. We may be required to increase salaries, benefits, and ownership beyond that anticipated, or management personnel we hire may have limited qualifications and may not perform as anticipated. We may also experience rapid turnover and unexpected legal and other costs associated with our compensation and/or ownership programs for local management. If we are unable to hire and maintain qualified, capable regional presidents and local management, we may experience lower revenues and higher costs than expected.

We expect to be dependent on third party affiliates to provide design, advertising, foodservice operations management, and franchising assistance in relation to our BarBQ Diners and to assist in development of our general operating and marketing plan.

We intend to engage well-established consulting firms for design, advertising, operations management and franchising to assist us in the development and execution of our BarBQ Diner plan. If we are unable to engage and sustain long-term agreements with these operating affiliate firms, our ability to generate revenue will be delayed or reduced, and we may incur substantial costs in obtaining the necessary services to execute the roll out for our restaurants and kiosks.

Labor disputes affecting common carriers and foodservice distributors may hamper our ability to deliver our product to customers and harm our business.

We will be dependent upon UPS and other package delivery contractors and foodservice distributors to ship internet orders to customers and products to our foodservice concept outlets. Labor disputes involving package delivery contractors, or other events creating delays, unpredictability or lost increases in the express delivery market may significantly damage our shipping and delivery capability. This would increase our costs, likely cause us to fail to comply with delivery commitments to our customers, and eventually harm our ability to generate revenues.

Our business may be affected by increased compensation and benefits costs.

We expect labor costs to be a significant expense for our business. We may be negatively affected by increases in workers’ wages and costs associated with providing benefits, particularly healthcare costs. Such increases can occur unexpectedly and without regard to our efforts to limit them. If such increases occur, we may be unable to pass them along to the consumer through product price increases, resulting in decreased operating results.

Changes in general economic and political conditions affect consumer spending and may harm our revenues and operating results.

Our country’s economic condition affects our customers’ levels of discretionary spending. A decrease in discretionary spending due to a recession or decreases in consumer confidence in the economy could affect the frequency with which our customers choose to purchase smoked-foods or dine out or the amount they spend on smoked-food or meals while dining out. This would likely decrease our revenues and operating results.

Failure to comply with governmental regulations could harm our business and our reputation.

We will be subject to regulation by federal agencies and regulation by state and local health, sanitation, building, zoning, safety, fire and other departments relating to the development and operation of our proposed BarBQ Diners. These regulations include matters relating to:

● the environment;

● building construction;

● zoning requirements;

● worker safety;

● the preparation and sale of food and alcoholic beverages; and

● employment.

Our facilities will need to be licensed and will be subject to regulation under state and local fire, health and safety codes. The construction of modular BarBQ Diners will be subject to compliance with applicable zoning, land use, and environmental regulations. We may not be able to obtain necessary licenses or other approvals on a cost-effective and timely basis in order to construct and develop modular BarBQ Diners in the future.

If we elect to serve alcohol to our customers, we will be required to comply with the alcohol licensing requirements of the federal, state, and municipal governments having jurisdiction where our BarBQ Diners are located. Alcoholic beverage control regulations require applications to state authorities and, in certain locations, county and municipal authorities for a license and permit to sell alcoholic beverages. Typically, licenses must be renewed annually and may be revoked or suspended for cause at any time. Alcoholic beverage control regulations relate to numerous aspects of the daily operations of BarBQ Diners, including minimum age of guests and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling, storage and dispensing of alcoholic beverages. If we fail to comply with federal, state, or local regulations, our licenses may be revoked and we may be forced to terminate the sale of alcoholic beverages at one or more of our BarBQ Diners.

The Americans with Disabilities Act prohibits discrimination on the basis of disability in public accommodations and employment. We will likely be required to comply with the Americans with Disabilities Act and regulations relating to accommodating the needs of the disabled in connection with the construction of new facilities and with significant renovations of existing facilities.

Failure to comply with these and other regulations could increase our cost structure, slow our expansion, and harm our reputation, any of which would harm our operating results.

Compliance with existing and new regulations of corporate governance and public disclosure may result in additional expenses.

Compliance with changing laws, regulations, and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and other SEC regulations, requires large amounts of management attention and external resources. This may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

Our directors, executive officers and principal stockholders have effective control of the company, preventing non-affiliate stockholders from significantly influencing our direction and future.

Our directors, officers, and 5% stockholders and their affiliates control a significant ~~percentageof~~percentage of our outstanding shares of common stock and are expected to continue to control a significant percentage of our outstanding common stock following any financing transactions projected for the foreseeable future. These directors, officers, 5% stockholders and affiliates effectively control all matters requiring approval by the stockholders, including any determination with respect to the acquisition or disposition of assets, future issuances of securities, declarations of dividends and the election of directors. This concentration of ownership may also delay, defer, or prevent a change in control and otherwise prevent stockholders other than our affiliates from influencing our direction and future.

There is a public market for our stock, but it is thin and subject to manipulation.

The volume of trading in our common stock is limited and can be dominated by a few individuals. The limited volume can make the price of our common stock subject to manipulation by one or more stockholders and will significantly limit the number of shares that one can purchase or sell in a short period of time. An investor may find it difficult to dispose of shares of our common stock or obtain a fair price for our common stock in the market.

The market price of our common stock may be harmed by our need to raise capital.

We need to raise additional capital in order to roll out our business plan and expect to raise such capital through the issuance of preferred stock, common stock and/or convertible debt. Because securities in private placements and other transactions by a company are often sold at a discount to market prices, this need to raise additional capital may harm the market price of our common stock. In addition, the re-sale of securities issued in such capital-raising transactions, whether under Rule 144 or a re-sale registration statement, may harm the market price of our common stock.

The market price for our common stock is volatile and may change dramatically at any time.

The market price of our common stock, like that of the securities of other early-stage companies, is highly volatile. Our stock price may change dramatically as the result of announcements of our quarterly results, the rate of our expansion, significant litigation or other factors or events that would be expected to affect our business or financial condition, results of operations and other factors specific to our business and future prospects. In addition, the market price for our common stock may be affected by various factors not directly related to our business, including the following:

● intentional manipulation of our stock price by existing or future stockholders; ● short selling of our common stock or related derivative securities; ● a single acquisition or disposition, or several related acquisitions or dispositions, of a large number of our shares; ● the interest, or lack of interest, of the market in our business sector, without regard to our financial condition or results of operations; ● the adoption of governmental regulations and similar developments in the United States or abroad that may affect our ability to offer our products and services or affect our cost structure; ● developments in the businesses of companies that purchase our products; or ● economic and other external market factors, such as a general decline in market prices due to poor economic indicators or investor distrust.

● short selling of our common stock or related derivative securities;

● a single acquisition or disposition, or several related acquisitions or dispositions, of a large number of our shares;

● the interest, or lack of interest, of the market in our business sector, without regard to our financial condition or results of operations;

● the adoption of governmental regulations and similar developments in the United States or abroad that may affect our ability to offer our products and services or affect our cost structure;

● developments in the businesses of companies that purchase our products; or

● economic and other external market factors, such as a general decline in market prices due to poor economic indicators or investor distrust.

Our ability to issue preferred stock and common stock may significantly dilute ownership and voting power, negatively affect the price of our common stock and inhibit hostile takeovers.

Under our Articles of Incorporation, as amended, we are authorized to issue up to 10 million shares of preferred stock and 200 million shares of common stock without seeking stockholder approval. Our board of directors has the authority to create various series of preferred stock with such voting and other rights superior to those of our common stock and to issue such stock without stockholder approval. Any issuance of such preferred stock or common stock would dilute the ownership and voting power of existing holders of our common stock and may have a negative effect on the price of our common stock. The issuance of preferred stock without stockholder approval may also be used by management to stop or delay a change of control, or might discourage third parties from seeking a change of control of our company, even though some stockholders or potential investors may view possible takeover attempts as potentially beneficial to our stockholders.

We are unlikely to pay dividends on our common stock in the foreseeable future.

We have never declared or paid dividends on our stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business. We do not anticipate paying any cash dividends in the foreseeable future, and it is unlikely that investors will derive any current income from ownership of our stock. This means that your potential for economic gain from ownership of our stock depends on appreciation of our stock price and will only be realized by a sale of the stock at a price higher than your purchase price.

1514

Our common stock is a “low-priced stock” and subject to regulation that limits or restricts the potential market for our stock.

Shares of our common stock are “low-priced” or “penny stock,” resulting in increased risks to our investors and certain requirements being imposed on some brokers who execute transactions in our common stock. In general, a low-priced stock is an equity security that:

● Is priced under five dollars; ● Is not traded on a national stock exchange; ● Is issued by a company that has less than $5 million in net tangible assets (if it has been in business less than three years) or has less than $2 million in net tangible assets (if it has been in business for at least three years); and ● Is issued by a company that has average revenues of less than $6 million for the past three years.

● Is not traded on a national stock exchange;

● Is issued by a company that has less than $5 million in net tangible assets (if it has been in business less than three years) or has less than $2 million in net tangible assets (if it has been in business for at least three years); and

● Is issued by a company that has average revenues of less than $6 million for the past three years.

We believe that our common stock is presently a “penny stock.” At any time the common stock qualifies as a penny stock, the following requirements, among others, will generally apply:

● Certain broker-dealers who recommend penny stock to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to a transaction prior to sale. ● Prior to executing any transaction involving a penny stock, certain broker-dealers must deliver to certain purchasers a disclosure schedule explaining the risks involved in owning penny stock, the broker-dealer’s duties to the customer, a toll-free telephone number for inquiries about the broker-dealer’s disciplinary history and the customer’s rights and remedies in case of fraud or abuse in the sale. ● In connection with the execution of any transaction involving a penny stock, certain broker-dealers must deliver to certain purchasers the following:

● ~~Prior~~bid toand ~~executing~~offer ~~any~~price ~~transaction~~quotes ~~involving~~and avolume ~~penny~~information; ~~stock,~~● ~~certain~~the broker-~~dealers~~dealer’s ~~must~~compensation ~~deliver~~for tothe ~~certain~~trade; ~~purchasers~~● ~~a disclosure schedule explaining~~ the ~~risks~~compensation ~~involved~~received inby ~~owning~~certain ~~penny~~salespersons ~~stock,~~for the ~~broker-dealer’s~~trade; ~~duties~~● tomonthly ~~the~~accounts ~~customer,~~statements; aand ~~toll-free~~● ~~telephone~~a ~~number~~written ~~for~~statement ~~inquiries~~of ~~about~~ the ~~broker-dealer~~customer’s ~~disciplinary~~financial ~~history~~situation and ~~the~~investment ~~customer’s rights and remedies in case of fraud or abuse in the sale~~goals.

● In connection with the execution of any transaction involving a penny stock, certain broker-dealers must deliver to certain purchasers the following:

o bid and offer price quotes and volume information;

o the broker-dealer’s compensation for the trade;

o the compensation received by certain salespersons for the trade;

o monthly accounts statements; and

o a written statement of the customer’s financial situation and investment goals.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

We use office and cold storage warehouse space in the facility of Specialty Foods for free. We have no lease with respect to such space, and our informal arrangement could be terminated at any time.

Pursuant to an Option Agreement dated October 30, 2009, we have an option to purchase from Specialty Foods an approximately 15-acre parcel of real estate on which Specialty Foods is located in Webster City, Iowa during an approximately seven-year term at a purchase price equal to the greater of $3,000,000 (plus the cost of additional improvements) and the appraised value of property at the time the option is exercised. If we exercise the option, we would be required to lease back to Specialty Foods the buildings in which it conducts its operations in exchange for rent of $10,000 per month, subject to certain adjustments.

1615

In January 2008, we entered into an agreement relating to the 29 East Main Cafe, located at 29 East Main Street, Los Gatos, California 95030. Under the terms of the purchase agreement, we acquired the existing leasehold improvements and equipment and assumed the existing lease. We remodeled this location and opened it as a Smoky Market restaurant, but in March 2010 we closed the restaurant. We have since ceased paying the rent payments on this property. We understand that the property was subsequently leased out by the fee owner effective February 2011. A liability for the remaining lease payments due under the lease agreement has been recorded in the financial statements as part of the impairment loss described below.

Item 3. Legal Proceedings.

We are not engaged in any legal proceedings, nor are we aware of any pending or threatened legal proceedings that, singly or in the aggregate, would reasonably be expected to have a material adverse effect on our business, financial condition or results of operations.

Item 4. Mine Safety Disclosures

This item is not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Price

The ~~table~~ table below sets forth the high and low bid quotations for our common stock as reported on the ~~OTC Bulletin Board and the~~ Pink Sheets for the periods indicated. ~~Until November 2010, our common stock was quoted on the OTC Bulletin Board under the symbol SMKY. Since that time, our common stock has been quoted on the Pink Sheets.~~

	High	~~High~~	Low	~~Low~~
Fiscal Year Ended December 31, 2011
Fiscal Year Ended December 31, 2013
Quarter ended December 31, 2011	$	0.33	$	0.10
Quarter ended December 31, 2013	$	0.00	$	0.00
Quarter ended September 30, 2011	$	0.50	$	0.10
Quarter ended September 30, 2013	$	0.01	$	0.00
Quarter ended June 30, 2011	$	0.08	$	0.01
Quarter ended June 30, 2013	$	0.00	$	0.00
Quarter ended March 31, 2011	$	0.02	$	0.01
Quarter ended March 31, 2013	$	0.01	$	0.00
Fiscal Year Ended December 31, 2010
Fiscal Year Ended December 31, 2012
Quarter ended December 31, 2010	$	0.01	$	0.005
Quarter ended December 31, 2012	$	0.01	$	0.00
Quarter ended September 30, 2010	$	0.08	$	0.07
Quarter ended September 30, 2012	$	0.07	$	0.01
Quarter ended June 30, 2010	$	0.10	$	0.01
Quarter ended June 30, 2012	$	0.12	$	0.02
Quarter ended March 31, 2010	$	0.05	$	0.01
Quarter ended March 31, 2012	$	0.20	$	0.06

The ~~quotations~~ quotations set forth above reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions. ~~Our common stock began quotation on the OTC Bulletin Board on September 11, 2007 and was removed from quotation thereon on November 16, 2010, but has since been up-listed back to quotation status.~~

Outstanding Shares and Number of Stockholders

As of ~~March 31~~November 15, ~~2012~~2014, there were ~~104~~191,~~321~~233,~~861~~345 shares of common stock issued and outstanding, which were held by approximately 300 holders of record and no shares of preferred stock outstanding.

Dividends

We have never declared or paid dividends on any class of equity securities, and we currently intend to retain any future earnings for use in our business and do not anticipate paying any dividends on our outstanding common stock in the foreseeable future.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets forth information with respect to compensation plans (including individual compensation arrangements) under which equity securities of the company are authorized for issuance as of December 31, ~~2011~~2013:

Plan Category

Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))

(a)

(b)

(c)

Equity compensation plans approved by security holders

1425,~~887,500~~000

$0.10

~~742~~2,~~500~~205,000

Equity compensation plans not approved by security holders

N/A

Total

1425,~~887,500~~000

0.10

~~742~~2,~~500~~205,000

Recent Sales of Unregistered Securities

Other than transactions previously reported, the Company offered and sold the following securities without being registered under the Securities Act.

In March ~~October 2011~~2013, ~~(i)~~ in exchange for ~~services,~~conversion ~~we offered and sold to an entity a total~~ of ~~10,000~~existing ~~shares of common stock with a fair market value of $3~~debt,~~000~~ ~~(or $0.30 per share); (ii) in exchange for services,~~ we offered and sold to an entity a total of ~~185~~35,~~000 shares of common stock with a fair market value of $42~~660,~~550~~568 ~~(or $0.23 per share); and (iii) in exchange for services, we offered and sold to an entity a total of 115,000~~ shares of common stock with a fair market value of $2635,~~450~~660.57 (or $0.23001 per share). The offer and sale of such shares of our common stock were effected in reliance upon the exemptions for sales of securities not involving a public offering, as set forth in Section 4(2) of the Securities Act, based upon the following: (a) each investor confirmed to us that the investor was an “accredited investor,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to each offering; (c) the investors were provided with certain ~~disclosure~~ disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all ~~securities~~ securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer ~~such~~ such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration ~~under~~ under the Securities Act.

In November 2011,(i) in exchange for services, we offered and sold to an individual a total of 250,000 shares of common stock with a fair market value of $37,500 (or $0.15 per share); and (ii) in exchange for debt, we offered and sold to an individual warrants to purchase 250,000 shares of common stock at $0.25 per share, exercisable over three years.The offer and sale of such shares of our common stock and warrants to purchase shares of our common stock were effected in reliance upon the exemptions for sales of securities not involving a public offering, as set forth in Section 4(2) of the Securities Act, based upon the following: (a) each investor confirmed to us that the investor was an “accredited investor,” as defined in Rule 501 of Regulation D promulgated under the Securities Act and had such background, education and experience in financial and business matters as to be able to evaluate the merits and risks of an investment in the securities; (b) there was no public offering or general solicitation with respect to each offering; (c) the investors were provided with certain disclosure materials and all other information requested with respect to our company; (d) the investors acknowledged that all securities being purchased were “restricted securities” for purposes of the Securities Act, and agreed to transfer such securities only in a transaction registered under the Securities Act or exempt from registration under the Securities Act; and (e) a legend was placed on the certificates representing each such security stating that it was restricted and could only be transferred if subsequently registered under the Securities Act or transferred in a transaction exempt from registration under the Securities Act.

Item 6. Selected Financial Data.

Because we are a smaller reporting company, we are not required to provide the information called for by this item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the financial condition and results of operations of the Company should be read in conjunction with the consolidated financial statements and notes thereto. This section may include projections and other forward-looking statements regarding management’s expectations regarding our performance. You should not place undue reliance on such projections and forward looking statements, and, when considering such projections and forward-looking statements, you should keep in mind the risk factors noted throughout this prospectus. You should also keep in mind that all projections and forward-looking statements are based on management’s existing beliefs about present and future events outside of management’s control and on assumptions that may prove to be incorrect. See “Item 1A. Risk Factors.”

Overview

We use proprietary, custom-engineered, USDA-approved wood-burning oven technology to produce a complete line of fully-cooked Smoke-BakedTM fish ~~meat~~ and ~~fish~~meat, and special recipe dishes. From a 15-acre food production campus located in central Iowa and owned by our exclusive meat processor, Mary Ann’s Specialty Foods, Inc. (“Specialty Foods”), we plan to sell our line of smoked foods through multiple channels of ~~foodservice and retail~~ distribution under the Smoky Market brand. These distribution channels include retail sales through point-of-sale display merchandising in traditional and non-traditional high-traffic venues, over the Internet, and foodservice sales to wholesale distributors. Additionally, we intend to produce certified kosher smoked foods and to distribute this line of products under the “Smoky Kosher” brand through the same marketing channels. In the future, we intend to develop a national chain of fast-casual, gourmet barbecue restaurants under the name “BarBQ Diner” that would operate without having to handle and cook raw product on site.

19Within the value-added, prepared food marketplace, we see a significant lack of artisan smoked fish and meat products that are truly wholesome, naturally wood-smoked by burning wood, and free of additives and chemical preservatives. We believe this specialized marketplace to be virtually untapped and without any major smoked food brand comparable in quality. We believe our two packaged food brand concepts, “Smoky Market” and “Smoky Kosher”, will enable us to penetrate national markets for sales to wholesale and retail customers in the value-added packaged food sector. We believe our business model to be a niche market opportunity to produce and distribute artisan quality smoked foods, at competitive prices, within a highly processed, commercial prepared food marketplace.

~~Our focus of operations at this~~We ~~time~~produce ~~is the expansion of~~ our ~~wholesale~~smoked ~~foodservice~~foods ~~distribution~~under ~~and~~an ~~development~~agreement ofwith ~~our~~Specialty ~~retail~~Foods, ~~channels~~a ~~through~~commercial ~~display~~meat ~~merchandising and~~processor ~~Internet~~in ~~operations.~~whose ~~Once~~USDA ~~revenues~~facility ~~from~~we ~~our~~placed out ~~primary~~first ~~distribution~~wood-burning ~~channels~~oven ~~have gained traction~~system, wewhich ~~intend~~is tocapable ~~pursue development~~ of ~~the~~producing ~~BarBQ~~approximately ~~Diner~~100,000 ~~restaurant~~pounds ~~concept.~~of ~~We expect that operating dual distribution channels for~~ our smoked ~~foods~~salmon ~~will~~per ~~enable us~~month toand ~~maximize~~a ~~the~~slightly ~~operating~~lesser ~~and~~amount ~~financial efficiencies~~ of ~~our~~smoked ~~production~~meat ~~capacity~~items.

We have ~~produce~~generated ~~our~~net ~~smoked~~losses ~~foods~~in ~~under an~~each ~~agreement~~fiscal ~~with~~year ~~Specialty~~since ~~Foods,~~our ainception ~~commercial meat processor~~ in ~~whose~~the ~~USDA~~development ~~facility~~of weour ~~placed~~business ~~out~~model. ~~first~~In ~~wood-burning~~October ~~oven system~~2009, we ~~which~~generated isa ~~capable~~small amount of ~~producing~~revenue afrom ~~minimum~~food ofsales ~~approximately~~at ~~100~~a prototype Los Gatos,~~000~~ ~~pounds~~CA ofrestaurant ~~smoked~~where ~~meat~~we ~~and~~were ~~fish~~testing ~~per~~our ~~month.~~foodservice system, Tobut ~~demonstrate~~subsequently closed the ~~systemization~~ ofrestaurant ~~our~~due ~~foodservice~~principally ~~menu~~to ~~operation,~~poor weeconomic ~~opened~~conditions ain ~~1,000~~the ~~square~~area. ~~foot~~As ~~Smoky~~discussed ~~Market~~in ~~restaurant~~“Liquidity and Capital Resources” below, in ~~October~~June 2009, ~~which was~~we ~~located~~received $1.5 million in ~~Los~~capital ~~Gatos~~financing, ~~California~~which ~~and~~we ~~featured~~used atoward ~~selection~~debt ofrepayment, the ~~certain~~opening of the Los Gatos restaurant to test our ~~smoked~~foodservice ~~meat~~system, and ~~fish~~for ~~that~~our ~~was~~website ~~prepared~~to ~~within~~ launch a ~~kitchen~~test ~~area~~with ofInternet ~~150 square feet~~sales. We ~~However,~~estimate ~~after~~that ~~less~~we ~~than~~will ~~five~~need ~~months~~a minimum of ~~testing~~$500,000 weof ~~chose~~additional financing in order to ~~close~~accomplish the ~~restaurant~~initial ~~due~~launch toof ~~insufficient~~our regional ~~traffic~~sales inand ~~the~~fulfillment ~~area~~plan. ~~resulting~~Because ~~from~~of the ~~down-turn~~$650,000 of inventory and receivable financing being provided by Specialty Foods in connection ~~the~~with ~~economy.~~our Asdevelopment agreement, we believe a ~~result~~minimum of ~~this experience~~$500,000 wewill ~~plan~~enable us to ~~launch~~grow our ~~restaurant~~sales revenue to a point ~~concept~~where ~~using~~we ~~only~~generating ~~pre-fabricated~~a ~~modular~~positive ~~buildings~~cash ~~that~~flow. ~~can~~We ~~easily~~expect such proceeds to be ~~relocated~~provided ~~should~~through a ~~property~~private ~~venue~~transaction ~~not~~of ~~turn~~sales ~~out~~of toeither our beavailable ~~a viable~~common ~~location~~or preferred stock.

We have generated net losses in each fiscal year since our inception in the development of our business model. In October 2009, we began to generate initial revenue from food sales at our Los Gatos, CASmoky Market restaurant, but subsequently closed the restaurant. As discussed in “Liquidity and Capital Resources” below, in June 2009 we received $1.5 million in capital financing, which we used toward debt repayment, the opening the Los Gatos restaurant to test our foodservice system, and for our website to launch our Internet business. We estimate that we will need up to $5 million of additional financing in order to accomplish our plans as follows: $1 million for expansion of Smoky Market foodservice operations and launch of retail merchandising, and $4 million for expansion of production capacity relative to Specialty Foods and the Canadian and kosher smoker oven systems to be installed. We expect such proceeds to be provided by our forthcoming private financing transaction.18

Liquidity and Capital Resources

As of December 31, ~~2011~~2013, we had cash and cash equivalents of $171,~~614~~128 and a working capital deficit of $12,~~381~~078,~~738~~266, as compared to cash and cash equivalents of $10380 and a working capital deficit of $12,~~114~~165,~~905as~~847 as of December 31, ~~2010~~2012.

To finance the expansion of our wholesale, distribution, and Internet retail operations, we intend to seek additional financing in ~~the first half of~~ ~~2012~~2014. Given that we are not yet in a positive cash flow or earnings position, the options available to us are fewer than to a positive cash flow company and generally do not include bank financing. To raise additional capital, we expect to issue ~~equity~~ equity securities, including preferred stock, common stock, warrants and/or convertible securities. We do not have any commitments from any party to provide required capital and may, or may not, be able to obtain such capital on reasonable terms or at all.

In a March 2010 transaction with 70 Limited LLC, we received $150,000 in cash for a promissory note in the amount of $150,000 together with a warrant to purchase up to 450,000 shares of our common stock. Under the terms of the promissory note, we were obligated to make payment on the full principal amount, plus interest accruing at 10% per year, by March 5, 2011, and we could prepay any amount of principal or interest at any time without penalty.

20In August 2010, the Company and 70 Limited LLC agreed to refinance the note. Pursuant to the agreement, both loans were combined, along with accrued interest, forming a new loan with a maturity date of August 18, 2020. The note will accrue interest at a 10% annual rate until repaid. Prior warrants were revised to allow for exercise at $.05 per warrant as opposed to the previous $.15. The new warrants were valued based on the Black-Scholes method using a risk-free rate of return of .15% and volatility of 347%.

In July ~~August 2010~~2011, ~~the~~we ~~Company~~entered into a Purchase and 70 ~~Limited~~Lease Agreement (the “Sale/Lease Agreement”) with SMKY Asset Fund LLC ~~agreed~~(the “Lessor”) related to ~~refinance~~our ~~the~~smoker-oven ~~note~~system. Pursuant to the ~~agreement~~Sale/Lease Agreement, ~~both~~we ~~loans~~sold ~~were~~the ~~combined~~smoker-oven system to the Lessor for a purchase price equal of $240,000 ~~along~~(the ~~with~~“Sale ~~accrued~~Price”). ~~interest~~In addition, we are required to issue to ~~forming~~Lessor a ~~new~~warrant ~~loan~~to ~~with~~purchase a ~~maturity~~share ~~date~~of common stock for each $1.00 of ~~August~~the ~~18,~~Lease ~~2020~~Price. The ~~note~~warrants ~~will~~have ~~accrue~~an ~~interest~~exercise atprice of $0.50 per share, a ~~10%~~five-year ~~annual~~term ~~rate~~and ~~until~~include ~~repaid~~net exercise provisions. ~~Prior warrants~~We ~~were~~leased ~~revised~~back tothe ~~allow~~smoker-oven system for ~~exercise~~rent atequal to $0.0520 per ~~warrant~~pound asof ~~opposed~~product produced using the smoker-oven up to a maximum annual return of 30% on the ~~previous~~sum of the Sale Price ($240,000) or $72,000.~~15.~~ The Sale/Lease Agreement has a 10-year term ~~for~~and ~~exercising~~includes a provision that we must repurchase the ~~warrants~~smoker-oven system ~~was~~at ~~adjusted~~any totime ~~ten~~after ~~years~~July as25, ~~opposed~~2014 toproviding ~~five~~that ~~years~~the onmarket ~~the~~price ~~cancelled~~for ~~warrants.~~our ~~The~~common ~~new~~stock ~~warrants~~has ~~were~~exceeded ~~valued~~$0.50 ~~based~~for onthirty ~~the~~trading ~~Black-Scholes~~days. ~~method~~The ~~using~~repurchase aprice ~~risk-free~~is ~~rate~~a number of ~~return~~shares of ~~.15%~~common ~~and~~stock ~~volatility~~with ofa ~~347%~~fair market value equal to 20 times the Sale Price, plus $5,000.

InThe Company ~~July~~received ~~2011,~~funding wefrom ~~entered~~Asher ~~into~~Enterprises, ~~a Purchase~~Inc. ~~and~~in ~~Lease~~return ~~Agreement~~for ~~(the~~promissory ~~“Sale/Lease~~notes. ~~Agreement”)~~Aggregate ~~with~~principal ~~SMKY~~outstanding ~~Asset~~on ~~Fund LLC (~~the ~~“Lessor”) related~~notes towas ~~our~~$57,800 ~~smoker-oven~~and ~~system.~~$115,000 ~~Pursuant~~as toof ~~the~~December ~~Sale/Lease Agreement~~31, we2013 ~~sold~~and ~~the~~2012, ~~smoker-oven~~respectively ~~system~~The tonotes ~~the~~accrue ~~Lessor~~interest ~~for~~at aan ~~purchase~~annual ~~price equal~~rate of ~~$240,000.~~8% Inuntil repaid ~~addition,~~and we are ~~required~~due to180 ~~issue~~days toafter ~~Lessor a warrant to purchase a share of common stock for each $1~~inception.~~00 in~~ ~~purchase price paid.~~ The ~~warrant~~notes ~~has~~are anconvertible ~~exercise~~into ~~price~~shares of ~~$0.50~~our ~~per~~common ~~share,~~stock aat ~~five-year~~conversion ~~term~~prices ~~and includes net exercise provisions.~~equal Weto ~~leased~~a ~~back~~discount ~~the~~of ~~smoker-oven~~45% ~~system for rent equal~~ to the ~~lesser~~then ofcurrent ~~(a)~~market $0price.20 ~~per~~As ~~pound~~ of ~~product~~December ~~produced~~31, ~~using the smoker-oven~~2013, or ~~(b)~~two ~~the amount necessary to generate a 30% return on the sum~~ of the ~~purchase~~notes, ~~price~~aggregating ~~and~~ $568,~~000.~~695 ~~The~~in ~~Sale/Lease Agreement has~~principal aand ~~10-year~~accrued ~~term~~interest, ~~provided~~were ~~that~~in wedefault ~~may~~as ~~repurchase~~they ~~the~~had ~~smoker-oven~~not ~~system~~been atconverted ~~any~~nor ~~time~~retired ~~after~~before ~~July~~coming ~~25,~~due ~~2014~~and ~~that~~therefore ~~the~~began ~~market price for~~accruing ~~our~~interest ~~common~~at ~~stock has exceeded $0~~22%.50 ~~for~~Both ~~thirty~~of ~~trading~~these ~~days.~~remaining ~~The~~notes ~~repurchase~~were ~~price~~retired isin athe ~~number~~third ofquarter ~~shares~~ of ~~common~~2014 ~~stock~~and ~~with a fair market value equal to 20 times~~ the ~~sum~~total amount of ~~(a)~~accrued ~~the~~interest was ~~purchase~~waived ~~price,~~and ~~plus~~not ~~(b) $5,000~~paid.

~~In October and December 2011~~During 2013, ~~the Company~~principal ~~received~~uses ~~an aggregate~~ of ~~$77,500 in~~ cash ~~from~~were ~~Asher~~approximately ~~Enterprises, Inc. in return for two promissory notes in the amounts of~~ $4215,~~500 and $35,~~000, respectively. The notes accrue interest at an annual rate of 8% until repaid and carry a maturity date of July 11, 2012 and September 15, 2012, respectively. The notes are convertible into shares of our common stock at conversion prices equal to afinance ~~discount of 45% to the then current market price~~operations.

~~During 2011, principal uses of~~There ~~cash~~are ~~were~~no ~~approximately~~major ~~$340,000~~expected tocapital ~~finance~~expenditures ~~operating~~during ~~losses~~the ~~and approximately $3,200 for equipment~~2014.

~~There are no expected capital expenditures during the first part of 2012.~~19

Assuming the success of our wholesale foodservice distribution and development of our retail channels through display merchandising and Internet operations, which are expected to utilize a substantial portion of our existing production capacity, we anticipate the need to invest as much as $1,500,000 to create additional production capacity at Specialty Food’s production facility to support our expanded marketing operations. This will most likely require the construction of an additional building adjacent to Specialty Food’s existing production space for more ovens and packaging equipment. We have entered into agreements with Specialty Foods under which we were granted an option to construct an up to 80 thousand square foot building on its property to accommodate additional smoker ovens and equipment and an option to purchase the 15-acre campus on which Specialty Foods operates if needed to accommodate growth of the Company’s business (subject to an obligation to lease back to Specialty Foods its processing facility). We anticipate that the financing to pay for the proposed building addition will be generated from a combination of our sales and additional financing transactions involving debt or equity securities. If we are unable to obtain financing to construct the building addition as planned, we will be forced to significantly curtail our proposed expansion, and our ability to grow revenue will be halted until increased capacity can be created.

Results of Operations

Our revenues from operations and our operating expenses decreased in ~~2011~~2013. The revenue decrease was due primarily to a less revenue generated from wholesale and internet activities in ~~2011~~2013 than revenue generated from restaurant and internet activities in ~~2010~~2012. The operating expense decrease was due primarily to lower costs associated with wholesale and internet activities in ~~2011~~2013 (as compared to restaurant costs in ~~2010~~ 2012) and to decreases in ~~depreciation~~general and ~~amortization,~~administrative ~~rent~~ expenses, ~~other expenses, and an impairment loss taken in 2010 with no corresponding loss in 2011,~~ as ~~summarized~~discuss ~~and discussed~~ below. ~~Also, our working capital deficiency increased from 2010 to 2011 as summarized and discussed below.~~

Revenues and Expenses. Our operating results for the years ended December 31, 2010 and 2009 are summarized as follows:

	For the years ended
	December 31, 2011			December 31, 2010
	December 31, 2013			December 31, 2012
Sales	$	103,~~669~~222		$	1418,~~313~~019
Cost of Sales	$	~~104,975~~0		$	~~180~~17,~~803~~459
Gross Profit (loss)	$	~~(94~~3,~~306~~222	)	$	~~(166,490~~560	)
General & Administrative Expenses
Salaries, Wages & Benefits	$	~~218~~184,~~377~~000		$	~~235~~250,~~047~~487
Professional Fees	$	83,608		$	227,181
Depreciation and Amortization	$	92,023		$	170,074
Marketing	$	69,610		$	12,143
Professional Fees	$	12,033		$	143,468
Depreciation/amortization	$	66,793		$	125,587
Marketing	$	2,585		$	17,314
Rent	$	5,~~320~~131		$	718,~~846~~342
Impairment loss on assets		-		$	995,493
Stock based compensation
Salaries, Wages & Benefits – related parties	$	187,875		$	72,562
Financing	$	803			66,508
Professional	$	324,222		$	55,159
Salaries, Wages and benefits-Related Parties	$	3,080		$	26,657
Financing	$	411,444		$	39,561
Professional	$	0		$	9,259
Other	$	~~109~~17,~~537~~551		$	8279,~~392~~692
Total General & Administrative Expenses	$	1317,~~476,786~~206		$	1771,~~916,971~~801
Operating Loss	$	(1313,~~571,092~~984	)	$	(2771,~~083,461~~241	)
Other Expense – Net	$	(343,804	)	$	(237,295	)
Other Income – Net	$	17,349		$	888,995
Net (Loss)	$	(1,914,896	)	$	(2,320,756	)
Net Income (Loss)	$	(296,635	)	$	117,754

Sales decreased by $314,~~644~~797, from $1418,~~313~~019 in ~~2010~~2012 to $103,~~669~~222 in ~~2011~~2013, and costs of sales decreased by $7517,~~827~~459, from $~~180~~17,~~802~~459 in ~~2010~~2012 to $~~104,975~~0. The decrease in costs of sales was due primarily to ~~lower~~the ~~costs~~write-off ~~associated~~of ~~with~~inventory ~~wholesale~~in ~~and~~2012 ~~internet~~as ~~activities~~impaired ~~conducted~~due into ~~2011~~slow sales, as compared to ~~costs~~2013 ~~associated~~in which we were able to sell a minor amount of impaired inventory with ~~our~~no ~~restaurant~~associated ~~activities~~cost inof ~~2010~~sales as such inventory had already been written off. Our general and administrative expenses decreased by $~~440~~454,~~185~~595, from $1771,~~916,971~~801 in ~~2010~~2012 to $1317,~~476,786~~ 206 in ~~2011~~2013. Our operating loss decreased by $~~512~~457,~~369~~257, from $2771,~~083,461~~241 in ~~2010~~2012 to $1317,~~571,092~~206 in ~~2011~~2013.

The decrease in general & administrative expenses was due primarily to an impairment loss on restaurant assets and decreases in salaries, wages and benefits, professional fees, depreciation and amortization, and rent expenses. We incurred an impairment of restaurant assets in the amount of $995,493 in 2010, with no such impairment in 2011. This impairment related to the closure of the Company’s restaurant in Los Gatos, California in 2010. Fees relating to salaries, wages and benefits decreased by $16,670, from $235,047 in 2010 to $218,377 in 2011, due primarily to decreases in staffing associated with the Company’s restaurant operations as such operations have ceased. Professional fees decreased by $143,573, from $227,181 in 2010 to $83,608 in 2011, primarily due to consulting fees incurred in 2010 with no similar fees incurred in 2011. Depreciation and amortization expenses decreased by $58,794, from $125,587 in 2010 to $66,793 in 2011, due primarily to the impairment loss recognition on restaurant and related assets, wherein such assets are immediately written off and depreciation is no longer recorded. Rent expenses decreased by $66,526, from $71,846 in 2010 to $5,320 in 2011, due primarily to the closing of our Los Gatos restaurant in 2010.20

22The decrease in general and administrative expenses was due primarily to decreases in salaries, wages and benefits, depreciation and amortization, professional fees, expenses relating to stock based compensation for financing activities, expenses relating to stock based compensation for salaries, wages and benefits for related parties, and other expenses. Fees relating to salaries, wages and benefits decreased by $66,487, from $250,487 in 2012 to $184,000 in 2013, due primarily to the curtailing of operations during 2013. Depreciation and amortization expenses decreased by $78,051, from $170,074 in 2012 to $92,023 in 2013, due primarily to the full amortization of loan discounts during 2013, causing amortization to diminish. Professional fees decreased by $131,435, from $143,468 in 2012 to $12,033 in 2013, primarily due to the absence of public filings, which could not be completed due to the lack of cash. Expenses related to stock based compensation for financing activities decreased by $65,705, from $66,508 in 2012 to $803 in 2013, due primarily to less stock-based compensation given due to diminished financing activities. Expenses related to stock based compensation for salaries, wages and benefits for related parties decreased by 23,577, from $26,657 in 2012 to $3,080 in 2013, due primarily to diminished operations whereby less stock-based compensation was provided to employees. Other general and administrative expenses decreased by $62,141, from $79,692 in 2012 to $17,551 in 2013, due primarily to diminished operations. The foregoing decreases were not offset by increases in any other general and administrative expenses.

~~The decreases described~~Our ~~above were partially offset by increases in marketing expenses, stock-based compensation, and~~ other ~~expenses.~~income ~~Marketing expenses~~decreased ~~increased~~ by $57871,~~467~~646, from $12888,~~143~~995 in ~~2010~~2012 to $6917,~~610~~349 in ~~2011, due primarily to a marketing initiative with Weight Watchers in 2011 to promote Internet sales, with no similar expense in 2010~~2013. ~~Stock-based~~This ~~compensation~~decrease ~~for salaries, wages and benefits increased by $115,313, from $72,562~~ in ~~2010~~other toincome ~~$187,875~~was ~~in 2011, primarily~~ due primarily to ~~the~~a ~~granting~~decrease of ~~warrants~~$874,129 ~~to staff~~ in ~~2011~~our ~~when~~gains ~~salaries~~on ~~had to be accrued. Stock-based compensation in the category of professional services increased by $269~~derivatives,~~063,~~ from $551,~~159~~157,832 in ~~2010~~2012 to $~~324~~283,~~222 in 2011, primarily due to the granting of warrants for professional services~~703. ~~Stock-based~~ ~~compensation~~This indecrease ~~the category of financing activities increased by $371,883, from $39,561~~ in ~~2010~~gains toon ~~$411,444 in~~derivatives ~~2011,~~is ~~primarily~~ due primarily to the ~~granting~~retirement of ~~warrants~~convertible ~~for~~debt ~~financing services. Overall~~securities, ~~total~~which ~~stock-based~~previously ~~compensation~~led ~~expense increased by $756,259, from a total of $167,282 in 2010~~ to athe ~~total~~recording of ~~$923,541~~derivative ~~in 2011~~liabilities. ~~Other expenses increased by $27,145, from $82,392 in 2010 to $109,537 in 2011, due primarily to higher repairs and maintenance costs related to our smoker oven as well as increased travel costs.~~

In the opinion of our management, inflation has not and will not have a material effect on our operations in the immediate future. Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.

Working Capital. Our working capital for the years ended December 31, ~~2011~~2013 and ~~2010~~2012 is summarized in the table below. For the categories of current assets and current liabilities, the line items included in the table below represent selected components of each category that are material to an understanding of our working capital deficiency. For a complete listing of all components of each category please refer to the financial statements accompanying this Report.

	As of December 31:
	December 31, 2011			December 31, 2010
	December 31, 2013			December 31, 2012
Current Assets
Cash	$	171,~~614~~128		$	10380
Inventory	$	16,816			-
Total Current Assets	$	1,128		$	380
Total Current Assets	$	34,430			10
Current Liabilities
Accounts payable	$	~~524~~538,~~338~~677		$	~~501~~530,~~960~~843
Accounts payable – related parties	$	~~145~~186,~~933~~638		$	~~125~~175,~~107~~038
Due to employees	$	602,489		$	396,348
Accrued Payroll Costs	$	975,309		$	791,309
Short-term advances	$	94108,~~700~~805		$	9197,~~500~~850
Convertible debt	$	48,708			-
Derivative Liability	$	201,270		$	484,973
Total Current Liabilities	$	1,416,168		$	1,114,915
Convertible debt, including accrued interest, less amortized discount	$	68,695		$	86,214
Working Capital Deficiency	$	(1,381,738	)	$	(1,114,905	)
Total Current Liabilities	$	2,079,394		$	2,166,227
Working Capital Deficiency	$	(2,078,266	)	$	(2,165,847	)

Our working capital deficiency increased by $266,833, from $1,114,905 in 2010 to $1,381,738 in 2011. The increase in our working capital deficiency was primarily due to (i) an increase in liabilities due to employees of $206,141, from $396,348 in 2010 to $602,489 in 2011, and (ii) an increase in convertible debt, with no convertible debt in 2010 and $48,708 in convertible debt in 2011. The increase in liabilities due to employees is due primarily to the accrual of unpaid salaries due to corporate officers, and the increase in convertible debt is due to our issuing a convertible note in 2011 with no corresponding note in 2010.21

23Our working capital deficiency decreased by $87,581, from $2,165,847 in 2012 to $2,078,266 in 2013. The decrease in our working capital deficiency was primarily due to a decrease in derivative liabilities of $283,703, from $484,973 in 2012 to $201,270 in 2013. The decrease in derivative liabilities is due primarily to the retirement of convertible debt securities, which previously led to the recording of derivative liabilities. The decrease in derivative liabilities was partially offset by an increase in accrued payroll costs of $184,000, from $791,309 in 2012 to $975,309 in 2013. The increase in accrued payroll costs is due primarily to the recording of payroll liabilities owing to corporate officers, which could not be paid during the year due to a lack of cash.

Cash Flows. Our cash flows for the years ended December 31, ~~2011~~2013 and ~~2010~~2012 are summarized as follows:

	For the years ended
	December 31, 2011			December 31, 2010
	December 31, 2013			December 31, 2012
Net Cash (Used) in Operating Activities	$	(~~339~~15,~~829~~207	)	$	(~~301~~240,~~217~~983	)
Net Cash (Used) by Investing Activities	$	(3,017	)	$	6,581
Cash Provided by Financing Activities	$	15,955		$	223,749
Cash Provided by Financing Activities	$	360,450		$	184,000
Net Increase (Decrease) in Cash	$	748		$	(17,234	)
Net Increase (Decrease) in Cash	$	17,604		($	110,636	)
Cash, Beginning of Year	$	380		$	17,614
Cash, Beginning of Year	$	10		$	110,646
Cash, End of Year	$	1,128		$	380
Cash, End of Year	$	17,614		$	10

In ~~2011~~ 2013, we used $~~339~~15,~~829~~207 in cash in our operating activities, primarily relating to ~~cover~~the ~~operating~~financing ~~expenses~~of ~~while little revenue was earned~~operations; ~~we used $3,017 in cash in our investing activities, primarily relating to obtain a motor vehicle;~~ and we generated $~~360~~15,~~450~~955 in cash from financing activities, primarily due to ~~the~~advances ~~issuance~~from ofindividuals aand ~~new~~additional ~~promissory~~borrowing ~~note~~under ~~and~~the ~~advances~~SMKY Asset ~~from~~Fund ~~individuals~~agreement.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon financial statements which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our critical accounting policies and estimates, including those related to long-lived assets, share-based compensation, revenue recognition, overhead allocation, allowance for doubtful accounts, inventory, and deferred income tax. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies affect the more significant judgments and estimates used in the preparation of our consolidated financial statements. These judgments and estimates affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting periods. Changes to these judgments and estimates could adversely affect the Company’s future results of operations and cash flows.

Impairment of Long-Lived Assets

The ~~Company~~ Company periodically reviews the carrying amount of property and equipment and its identifiable intangible assets to determine ~~whether~~ whether current events or circumstances warrant adjustments to such carrying amounts. If an impairment adjustment is deemed necessary, such loss is measured by the amount that the carrying value of such assets exceeds their fair value. Considerable management judgment is necessary to estimate the fair value of assets; accordingly, actual results could vary significantly from such estimates. Management estimated and recorded an impairment loss at March 31, 2010 relating to the closure of a restaurant in Los Gatos, California. The loss calculation was based on a pending offer on the property. During the three months ended June 30, 2010, the offer was rescinded, so Management recorded an additional impairment loss for the three months ended June 30, 2010. During the last half of the year ended December 31, 2010, the Company recorded additional impairment losses for all operating assets due to the uncertainty of future operating cash flows from such assets. Additionally, the Company sold certain items, receiving $9,125. The total impairment loss was $0 and $995,493 for the years ended December 31, 2011 and 2010, respectively.

Revenue Recognition

Sales are recognized upon shipment.

Net (Loss) Per Common Share

Basic earnings (loss) per common share calculations are determined by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per common share calculations are determined by dividing net income (loss) by the weighted average number of common shares, outstanding stock options, and the equivalent number of common shares that would have been outstanding had the convertible debt holders converted their debt instruments to common stock. All potential dilutive securities have been excluded from the computation, as their effect is anti-dilutive.

Stock-Based Compensation

The Company has issued its common shares as compensation to directors, officers, and non-employees (“recipients”). The Company measures the amount of stock-based compensation based on the fair value of the equity instrument issued or the services or goods provided as of the earlier of (1) the date at which an agreement is reached with the recipient as to the number of shares to be issued for performance, or (2) the date at which the recipient’s performance is complete.

Occasionally, the Company sells shares below market value to raise cash to fund operations. The discounts from market are treated as compensation for officers and directors. For non-officers and directors, the discounts are netted against proceeds as a “cost of issue.”

Income Taxes

Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

Uncertainty in income taxes is recognized in the Company’s financial statements. Specifically, the accounting policy determines (a) a consistent recognition threshold and (b) a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides related guidance on derecognition, classification, interest and penalties, accounting interim periods, disclosure and transition. To the extent interest and penalties would be assessed by taxing authorities on any underpayment of income taxes, such amounts would be accrued and classified as a component of income tax expenses on the consolidated statement of operations. The Company has evaluated the presence of any such tax uncertainties and determined that they do not have a material impact on the financial statements.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk.

Because we are a smaller reporting company, we are not required to provide the information called for by this item.

Item 8. Financial Statements.

Our financial statements and associated notes are set forth following the signature page beginning on Page F-1.

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

The information required by this Item was previously reported.

Item 9A. Controls and Procedures.

Disclosure Controls and Procedures

Under ~~the~~ the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 as of December 31, ~~2011~~2013. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are not effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. This conclusion is based in part on the fact that the Company did not complete certain reports within required time periods.

Internal Controls

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that the records of the Company accurately and fairly reflect the transactions and dispositions of the Company’s assets; assets are safeguarded against loss from unauthorized use or disposition; and that transactions are executed in accordance with management’s authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with United States generally accepted accounting principles. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, ~~2010~~2013. Our management has concluded that, as of December 31, ~~2011~~2013, our internal control over financial reporting is not effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with United States generally accepted accounting principles. Our management’s finding of ineffective internal control over financial reporting results primarily from the fact that the Company has only two full time employees, which is not a sufficient number to implement industry-standard internal controls. Subject to the Company’s ability to obtain financing and hire additional employees, the Company expects to be able to design and implement effective internal controls in the near future.

Changes in Internal Controls

During the last fiscal quarter ended December 31, ~~2011~~2013, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.

Item 9B. Other Information.

None.

2725

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

Identification of Directors and Executive Officers

Certain information regarding our executive officers and directors is set forth below. Our executive officers are appointed by, and continue to serve at the will of, our board of directors. Our directors are elected or appointed for terms that continue, absent resignation, death or removal by our stockholders, until the later of the next annual meeting of stockholders or until a replacement is duly appointed or elected and qualified. Among our officers, Edward C. Feintech devotes substantially all of his time to our business, Shane A. Campbell devotes approximately 10% of his time to our business, and Dennis Harrison currently devotes less than 5% of his time to our business.

Name	Age	Position
Edward C. Feintech	6567	Founder, Promoter, President, Chief Executive Officer and Chairman of the Board
Scott L. Bargfrede	5557	Director
Shane A. Campbell	5456	Director and Chief Financial Officer*
Dennis A. Harrison	6567	Chief Information Officer*
* Such officer is not a full time employee of our company.

* Such officer is not a full time employee of our company.

Edward C. Feintech has been the Chairman of our Board of Directors, and our President and Chief Executive Officer since our incorporation in April 2006. Mr. Feintech operated full-service barbecue restaurants and tested quick-service barbecue operations in Des Moines, Iowa (1977-1984) before closing his enterprise and moving on toward development of our custom-engineered, USDA-approved wood-burning oven system technology. Since organizing Smoky Systems, LLC, in December 2000, Mr. Feintech has been its manager and directed the development phase of the intellectual property that we license from Smoky Systems.

Mr. Feintech has been appointed as a director in light of his experience in the smoked-meat and restaurant industries, his role as our Chief Executive Office and his company-specific knowledge.

Scott L. Bargfrede has served as a director of our company since May 2006. Mr. Bargfrede has been the President and CEO of First American Bank in Webster City, Iowa since October 18, 1999. First American Bank is our primary bank. Mr. Bargfrede graduated from the University of Minnesota in 1979 with a Bachelor of Arts degree in Ag-Business Finance. In 1992, he graduated from the University of Wisconsin Graduate School of Banking.

Mr. Bargfrede has been appointed as a director in light of his experience in financial and banking industry.

Shane A. Campbell has been our Chief Financial Officer (acting as a consultant) since our incorporation in April 2006. Mr. Campbell has served as a business advisor to numerous small and medium sized businesses over his twenty-two years of public and private practice. From April 2004 through the present, Mr. Campbell has functioned as the chief financial officer of Smoky Systems, LLC, and other small companies as chief financial officer on a consultant contract basis consultant contractor. Mr. Campbell worked from January 2001 to April 2004 as chief financial officer for MarketLive, Inc. (previously Multimedia Live, Inc.), an e-commerce software company located in Petaluma, California. Prior to that time, from January 1990 through January 2002, Mr. Campbell was an employee and then a partner at Jones, Schiller & Company, LLC, an accounting firm located in San Francisco. Mr. Campbell earned a Bachelor of Science degree from California State University, Chico in December 1981.

Mr. Campbell has been appointed as a director in light of his experience in financial, auditing and related business matters and his company-specific knowledge.

Dennis A. Harrison, PhD, has been our Chief Information Officer (acting as a consultant) since our inception in April 2006; however, he is expected to become a full-time employee when and as our financial situation permits. Since January 2000, Dr. Harrison has held senior level management positions as vice president of business development for CSF-Telequest from 2000 to 2003, vice president of business development for CallTech Communications from April 2003 to April 2004, and vice president of business development for Effective Teleservices from April 2004 to present. Dr. Harrison received a Bachelor of Arts degree in Philosophy & Classical Languages from the Seminary of St. Pius X, an affiliate of Catholic University, a Master of Arts degree in Counseling from Loyola College, and a Doctor of Philosophy degree in Human Development from the University of Maryland.

Audit Committee

Our entire board of directors presently serves as our audit committee. None of the members of the audit committee satisfy the independence requirements applicable to audit committees of listed companies. In addition, the board of directors has determined that the audit committee does not have a member qualifying as an audit committee financial expert, as defined in Item 401(d)(5) of Regulation S-K. To save limited capital over the last several years, we have chosen not to expand the size of our Board of Directors or to offer cash compensation to our directors. The absence of cash compensation makes recruiting persons who are not otherwise interested in our company more difficult. For these reasons, we do not have on our board of directors a person who would qualify as an audit committee financial expert.

We do not presently have a standing nominating committee or compensation committee, and we do not have a nominating committee charter or a compensation committee charter.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s officers and directors to file reports concerning their ownership of Common ~~Shares~~ Shares with the SEC and to furnish the Company with copies of such reports. Based solely upon the Company’s review of the ~~reports~~ reports required by Section 16 and amendments thereto furnished to the Company, the Company believes that all reports required to be filed pursuant to Section 16(a) of the Exchange Act during 2010, were filed with the SEC on a timely basis ~~except as follows: a Form 4 for Edward Feintech, an officer and director, was due on February 15, 2011, but was filed on August 26, 2011~~.

Code of Ethics

We have not adopted a code of ethics. Although we expect to adopt a code of ethics during 2011, we have not done so to date because we believe that, in light of our limited capital and operations, expending the resources on developing a formal code of ethics would not be in the best interest of shareholders. As we obtain the capital to establish more significant operations, we expect to begin developing more comprehensive policies and procedures appropriate to our size and stage.

2927

Item 11. Executive Compensation.

Summary Compensation Table

The ~~following~~ following table summarizes the compensation for the fiscal years ended December 31, ~~2009~~2013 and December 31, ~~2010~~2012 paid or accrued by us to or on behalf of our Chief Executive Officer, as well as our two most highly compensated executive officers, if any, whose ~~aggregate~~ aggregate compensation for fiscal years ~~2009~~2012 or ~~2010~~2013 exceeded $100,000 (collectively, the “Named Executive Officers”).

Name and Principal Position	Year		Salary ($)	~~Salary~~Bonus ($)		Stock Awards ($)	~~Bonus~~Option Awards ($)		Non-Equity Incentive Plan Compensation ($)	~~Stock~~Nonqualified ~~Awards~~Deferred Compensation Earnings ($)		All Other Compensation ($)	~~Option~~Total ~~Awards~~ ($)		~~Non-Equity Incentive Plan Compensation($)~~		~~Nonqualified Deferred CompensationEarnings ($)~~		~~All Other Compensation($)~~		~~Total ($)~~
Edward C. Feintech, CEO,		2011			175,000			—			14,000			123,196		—		—		—		312,196
Edward C. Feintech, CEO, President and Director	2013 2012		175,000 175,000	-- --		-- --	-- --		-- --	-- --		-- --	175,000 175,000
President and Director		2010			175,000			—			31,500			—		—		—		—		206,500
Shane A. Campbell, CFO and Director(1)	2013 2012		13,400(1) 71,794(1)	-- --		-- --	607 2,334		-- --	-- --		-- --	14,007 74,128
Shane A. Campbell, CFO		2011			36,138	(1)		—			—			60,008		—		—		—		96,146
and Director(1)		2010			50,400	(1)		—			—			30,027		—		—		—		80,427

(1) Mr. Campbell is currently serving as a part-time Chief Financial Officer/Consultant; his services are provided on an as-needed basis. Compensation is accrued and then paid as cash becomes available.

3028

On May 10, 2007, Mr. Feintech signed an executive employment agreement. The agreement is for a three-year term and calls for him to receive a minimum base salary of $175,000 per year. The employment agreement also grants to him: (i) a one-time stock issuance of 1,500,000 shares of common stock upon execution of the agreement; (ii) an award of non-statutory stock options of 425,000 shares of common stock at an exercise price of $0.10 per share; and (iii) a bonus equal to an additional 1,000,000 shares of common stock upon the achievement of each incremental level of $50,000,000 in revenue, provided that cumulative net after-tax income is being maintained at a level not less than 7.5% on total revenue.

In addition, in May 2006, Mr. Feintech was issued 50,000 shares of common stock in exchange for the assignment of any intellectual property rights related to our business and granted an option to purchase 325,000 shares of common stock pursuant to our stock incentive plan at an exercise price of $0.10 at any time prior to May 13, 2013. The options vested 25% on May 31, 2007 and have continued to vest 1/48th each month thereafter until fully vested.

On June 21, 2010, Mr. Feintech was granted 2,250,000 shares of common stock as additional compensation. Such shares were valued at $0.14, for total compensation of $31,500.

On February 11, 2011, Mr. Feintech was granted 1,750,000 shares of common stock as additional compensation. Such shares were valued at $0.008, for total compensation of $14,000.

On February 13, 2011, Mr. Feintech was granted 400,000 warrants to purchase common stock at a strike price of $0.05. The warrant term extends five years through February 12, 2016. The warrants were valued at $3,212 using the Black-Scholes method, assuming a risk-free rate of return of 0.13% and volatility of 347%.

On September 30, 2011, Mr. Feintech was granted 500,000 warrants to purchase common stock at a strike price of $0.25. The warrant term extends five years through September 29, 2016. The warrants were valued at $119,984 using the Black-Scholes method, assuming a risk-free rate of return of 0.02% and volatility of 317%.

On May 17, 2010, Mr. Campbell was granted 1,500,000 warrants to purchase common stock at a strike price of $0.05. The fair value per common share was $0.02. The warrant term extends five years through May 16, 2015. The warrants were valued at $30,027 using the Black-Scholes method, assuming a risk-free rate of return of .12% to .15% and a volatility of 347%.

On September 30, 2011, Mr. Campbell was granted 250,000 warrants to purchase common stock at a strike price of $0.25. The warrant term extends five years through September 29, 2016. The warrants were valued at $60,008 using the Black-Scholes method, assuming a risk-free rate of return of 0.02% and volatility of 317%.

31On December 20, 2012, Mr. Campbell was granted 350,000 warrants to purchase common stock at a strike price of $.05. The warrant term extends three years through December 20, 2015. The warrants were valued at $2,334 using the Black-Scholes method, assuming a risk-free rate of return of .02% and volatility of 310%.

On December 31, 2013, Mr. Campbell was granted 350,000 warrants to purchase common stock at a strike price of $.05. The warrant term extends three years to December 31, 2016. The warrants were valued at $607 using the Black-Scholes method, assuming a risk-free rate of return of .78% and volatility of 307%.

Outstanding Equity Awards at Fiscal Year-End

The following table provides information regarding equity awards held by the Named Executive Officers as of December 31, ~~2011~~2013:

Option Awards

Stock Awards

~~Stock Awards~~

Name

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)

Option Exercise Price ($)

Option Expiration Date

~~Option Expiration Date~~

Number of Shares or Units of Stock That Have Not Vested (#)

Market Value of Shares or Units of Stock That Have Not Vested ($)

~~Number of Shares or Units of Stock That Have Not Vested (#)~~

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)

~~Market Value of Shares or Units of Stock That Have Not Vested ($)~~

~~Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)~~

~~Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)~~

Edward C. Feintech, CEO, President and Director

~~325~~425,000 (1)

~~(1)~~

—--

N/A

$0.10

~~0.10~~

5/30/2014

~~May 31, 2013~~N/A

N/A

~~N/A~~

Edward C. Feintech, CEO, President and Director

425,000

(1)

—

N/A

0.10

May 31, 2014

N/A

Shane A. Campbell, CFO and Director

162,500

(1)

—

N/A

0.10

May 31, 2014

N/A

Shane A. Campbell, CFO and Director

1,500,000

(2)

—

N/A

0.05

May 16, 2015

N/A

(1) Options vested 25% on May 31, 2007 and 1/48th each month thereafter until fully vested.

(2) No vesting requirement.

Compensation of Directors

Directors who are not officers of the Company do not receive any regular compensation for their service on the board of directors but are entitled to reimbursement of any actual expenses associated with the attendance of board meeting and other activities and to receive options and other awards under the Company’s stock incentive plan. Directors are entitled to receive compensation for services unrelated to their service as a director to the extent that they provide such unrelated services to the Company.

~~No directors received any compensation, including option awards, for their service as directors for the Company, during the fiscal year ended December 31, 2011.~~ Information with respect to the compensation of Edward C. Feintech, our Chief Executive Officer and President, is set forth in the tables above.

Executive Employment Agreements, Termination of Employment and Change of Control Arrangements

Except as described in following paragraph, we have not entered into employment agreements with any of our executive officers and, other than provisions in our stock incentive plan that permit acceleration of vesting of awards in connection with a change of control, have no arrangements or plans which provide benefits in connection with retirement, resignation, termination or a change of control.

3229

Pursuant to his executive employment agreement dated May 10, 2007, Edward C. Feintech is entitled to receive, as severance and following execution of a release of liabilities in favor of the Company, (i) if the termination was by the Company without cause or by the employee with good reason (except in connection with a change of control), base salary and medical benefits (plus any pro-rated bonus for which he otherwise qualified) for a period of 12-months following the termination, or (ii) if the termination was by the Company without cause or by the employee with good reason and occurred ~~90days~~90 days prior to or within one year after a change of control, base salary and medical benefits for a period of 24 months and acceleration of the vesting of any stock options granted under the employment agreement. Mr. Feintech is not entitled to such severance benefits if the termination is either by the Company for cause, by Mr. Feintech without good reason, or after May 10, 2010. A change of control includes (a) any capital reorganization, reclassification of the capital stock of Company, consolidation or merger of Company with another corporation in which Company is not the survivor (other than a transaction effective solely for the purpose of changing the jurisdiction of incorporation of Company), (b) the sale, transfer or other disposition of all or substantially all of the Company’s assets to another entity, and (c) the acquisition by a single person (or two or more persons acting as a group, as a group is defined for purposes of Section 13(d)(3) under the Exchange Act of 1934, as amended) of more than 40% of the outstanding shares of common stock of the Company.

Compensation Committee Interlocks and Insider Participation

The Company has no compensation committee or other board committee performing equivalent functions. Edward C. Feintech, an officer of the Company as well as chairman of the board of directors, participated in deliberations of the Company’s board of directors concerning executive officer compensation during 2011.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information with respect to the beneficial ownership of our common stock as of ~~February~~November, 2915, ~~2012~~2014 and as adjusted to reflect the sale of the shares of our common stock offered hereby, by:

● all persons known by us to beneficially own more than 5% of our common stock; ● each of our named executive officers; ● each of our directors; and ● all directors and executive officers as a group.

● each of our named executive officers;

● each of our directors; and

● all directors and executive officers as a group.

Beneficial ownership is determined according to the rules of the SEC and generally means that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power of that security, and includes options and warrants that are currently exercisable or exercisable within 60 days. Except as indicated by footnote, and subject to community property laws where applicable, we believe the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

3330

Name of Executive Officer or Director	Amount and Nature of Beneficial Owner			Percent (1)
Edward C. Feintech Chairman, President and CEO		18,~~080~~411,~~785~~934	~~(2)~~		169.741	%
Scott L. Bargfrede, Director		1,~~278~~396,~~916~~572	~~(3)~~		1*%	%
Shane A. Campbell, Director and CFO		2,~~047~~843,~~655~~511	~~(4)~~		21.4	%
Dennis Harrison, CIO		23,~~519~~162,~~442~~411	~~(5)~~		21.6	%
All Officers and Directors as a Group (4 persons)		2125,~~426~~814,~~798~~428	~~(6)~~		1912.849	%
Name of 5% Stockholder
70 Limited, LLC 3554 Wild Cherry Court, Las Vegas, NV 89121		17,190,426	~~(8)~~		148.6	%
Jason Zandri 35 Lincoln Dr., Wallingford, CT 06492		10,151,181			5.0	%

* Represents less than 1% of the outstanding shares of common stock.

(1) The percentages set forth above have been computed assuming the number of shares of common stock outstanding equals the sum of (a) 104,321,861, which is the number of shares of common stock actually outstanding on March 31, 2012, and (b) shares of common stock subject to options, warrants, convertible notes and similar securities exercisable or convertible for common stock within 60 days of such date held by the person with respect to percentage is computed (but not by any other person).

(1)	The percentages set forth above have been computed assuming the number of shares of common stock outstanding equals the sum of (a) 191,233,345, which is the number of shares of common stock actually outstanding on November 15, 2014, and (b) shares of common stock subject to options, warrants, convertible notes and similar securities exercisable or convertible for common stock within 60 days of such date held by the person with respect to percentage is computed (but not by any other person).

(2)	Includes, in addition to outstanding shares held by Mr. Feintech, 425,000 shares issuable upon exercise of non-statutory stock options. Also includes 257,521 shares of common stock held of record by Cheryl Feintech.

(3)	Includes 425,000 shares issuable upon the exercise of non-statutory stock options.

(4)	Based on the Company’s internal records reflecting the stock ownership of 70 Limited, LLC. Includes 2,602,500 shares issuable upon the exercise of warrants. Tertia Dvorchak is the manager of 70 Limited, LLC and, as such, has voting and investment control over these securities. Tertia Dvorchak disclaims beneficial ownership of the securities held by 70 Limited, LLC.

(5)	Based on the Company’s internal records reflecting the stock ownership of Jason Zandri. Includes 800,000 shares issuable upon conversion of Units owned in SMKY Asset Fund LLC and 420,000 shares issuable upon the exercise of warrants.

(2) Includes, in addition to outstanding shares held by Mr. Feintech,703,125 shares issuable upon exercise of non-statutory stock options. Also includes 257,521 shares of common stock held of record by Cheryl Feintech.

(3) Includes 152,344 shares issuable upon the exercise of non-statutory stock options.

(4) Includes 152,344 shares issuable upon the exercise of non-statutory stock options.

(5) Includes 457,031 shares issuable upon the exercise of non-statutory stock options.

(6) Includes 1,464,844 shares issuable upon the exercise of non-statutory stock options.

(7) Based on the Company’s internal records reflecting the stock ownership of Smoky Systems. Jeff Felts and Scott Peterson are co-managers of Smoky Systems, LLC, and, as such, have voting and investment control over these securities. Mr. Felts and Mr. Peterson disclaim beneficial ownership of the securities held by Smoky Systems, LLC.

(8) Based on the Company’s internal records reflecting the stock ownership of 70 Limited, LLC. Includes 2,302,500 shares issuable upon the exercise of warrants. Tertia Dvorchak is the manager of 70 Limited, LLC and, as such, has voting and investment control over these securities. Tertia Dvorchak disclaims beneficial ownership of the securities held by 70 Limited, LLC.

Securities Authorized for Issuance under Equity Compensation Plans

The information set forth above in Item 5 under “Securities Authorized for Issuance under Equity Compensation Plans” is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Arrangements with Officers, Directors and Promoters

Set forth below is a description of certain transactions entered into since January 1, ~~2011~~2013, or presently contemplated, with any officer, director, affiliate or other related person:

Our directors have set the initial salary or consulting fee of certain of our officers as follows (in each case pending availability of capital):

Name	Base Salary or Consulting Fee Per Annum
Edward C. Feintech, President & CEO	$~~175,000~~	175,000
Shane Campbell, CFO	as needed*	as needed	*
Dennis Harrison, CIO	~~as needed~~	as needed

* Currently serving as a part-time Chief Financial Officer/Consultant; services are provided on an as-needed basis and salary is being accrued and then paid as cash becomes available.

3431

Relationships with Significant Stockholder

Smoky Systems, LLC beneficially owns approximately 5% of our common stock as of March 31, 2012, and its co-managers are Jeff Felts and Scott Peterson. The following affiliates of our company own the following percentage of the outstanding equity interests of Smoky Systems:

Name of Person	Equity Interest
Edward C. Feintech, President, CEO and Chairman		30	%
Shane A. Campbell, CFO and Director		*
Scott L. Bargfrede, Director		*
* Less than 1%

Independence of Board of Directors and Committees

Our Board of Directors currently consists of Edward C. Feintech, our Chairman and Chief Executive Officer, Scott L. Bargfrede, and Shane A. Campbell, our Chief Financial Officer. The Board of Directors has determined that Mr. Bargfrede is independent, using the standards of independence applicable to companies listed on the NASDAQ Stock Market. We do not presently have a standing audit committee, nominating committee, or compensation committee, and we do not have a charter for any such committees. Our entire Board of Directors performs the functions generally performed by such committees. Mr. Bargfrede is independent using the standards of the NASDAQ Stock Market applicable to compensation and nominating committee but may not be independent for purposes of applicable audit committee standards because of the financial relationship disclosed below.

Mr. Bargfrede has been the President and CEO of First American Bank in Webster City, Iowa since October 18, 1999. First American Bank is our company’s primary bank.

Item 14. Principal Accountant Fees and Services.

Audit Fees

The Company’s independent auditor for the ~~years~~first, ~~ended~~second ~~December~~and ~~31,~~third ~~2010~~quarterly ~~and~~periods ~~2011~~in 2012 was ~~Seale~~Silberstein ~~and Beers~~Ungar, ~~CPAs~~PLLC, and the aggregate fee for auditing in those ~~years~~periods was $202,~~758~~500. The Company’s independent auditor for the fourth quarterly period in 2012 and ~~$14~~for the year ended December 31,~~115~~ 2013 was Huckfeldt & Smith, ~~respectively~~PLC, and the aggregate fee for auditing in those periods was $22,000.

Audit Related Fees

The aggregate fees for professional services for assurance and other audit related services was $205,~~758~~000 for the fiscal year ended December 31, ~~2010~~ 2012 and $~~14,115~~0 for the fiscal year ended December 31, ~~2011~~2013.

Tax Fees

There were no fees paid to ~~Seal and~~Silberstein ~~Beers~~Ungar, ~~CPAs~~PLLC or to Huckfeldt & Smith, PLC, for tax-related professional services for the year ended December 31, ~~2010~~2012 or the fiscal year ended December 31, ~~2011~~2013.

All Other Fees

~~Seale~~Neither Silberstein ~~and Beers~~Ungar, ~~CPAs~~PLLC nor Huckfeldt & Smith, ~~did~~PLC ~~not provide~~provided to the Company any other material services during the fiscal year ended December 31, ~~2010~~2012 or the fiscal year ended December 31, ~~2011~~2013.

Audit Committee Pre-Approval Policies

Under the pre-approval policies and procedures established by the Board of Directors, functioning as the Audit Committee, it would not permit engagement of accountants to render audit or non-audit services without prior approval of the Board of Directors, functioning as the Audit Committee. As a result, all engagements of the independent auditors to render audit or non-audit services were approved by the Board of Directors, functioning as the Audit Committee.

~~Item 15.Exhibits and Financial Statement Schedules.~~32

Exhibit No.	Exhibit	Incorporated by Reference/Filed Herewith
3.1	Amended and Restated Articles of Incorporation	Incorporated by reference to Amendment No. 3 to Registration Statement on Form SB-2 filed on August 24, 2007, File No. 333-143008
3.2	Bylaws	Incorporated by reference to Amendment No. 3 to Registration Statement on Form SB-2 filed on August 24, 2007, File No. 333-143008
4.1	Form of Common Stock Certificate	Incorporated by reference to Amendment No. 3 to Registration Statement on Form SB-2 filed on August 24, 2007, File No. 333-143008
4.2	Series 2008A Warrant dated September 8, 2008	Incorporated by reference to the Current Report on 8-K filed on September 10, 2008, File No. 000-52158
4.3	Series 2009B Warrant dated May 29, 2009	Incorporated by reference to the Current Report on 8-K filed on June 4, 2009, File No. 000-52158
4.4	Series 2009C Warrant dated October 30, 2009	Incorporated by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158
4.5	Warrant dated March 5, 2010	Incorporated by reference to the Current Report on 8-K filed on March 19, 2010, File No. 000-52158

Item 15. Exhibits and Financial Statement Schedules.

Exhibit No.	Exhibit	Incorporated by Reference/Filed Herewith
3.1	Amended and Restated Articles of Incorporation	Incorporated by reference to Amendment No. 3 to Registration Statement on Form SB-2 filed on August 24, 2007, File No. 333-143008
3.2	Bylaws	Incorporated by reference to Amendment No. 3 to Registration Statement on Form SB-2 filed on August 24, 2007, File No. 333-143008
4.1	Form of Common Stock Certificate	Incorporated by reference to Amendment No. 3 to Registration Statement on Form SB-2 filed on August 24, 2007, File No. 333-143008
4.2	Series 2008A Warrant dated September 8, 2008	Incorporated by reference to the Current Report on 8-K filed on September 10, 2008, File No. 000-52158
4.3	Series 2009B Warrant dated May 29, 2009	Incorporated by reference to the Current Report on 8-K filed on June 4, 2009, File No. 000-52158
4.4	Series 2009C Warrant dated October 30, 2009	Incorporated by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158
4.5	Warrant dated March 5, 2010	Incorporated by reference to the Current Report on 8-K filed on March 19, 2010, File No. 000-52158
4.6	Series 2011C Warrant dated August 25, 2011	Incorporated by reference to the Company’s Annual Report on Form 10-K filed on September 1, 2011, File No. 000-52158
10.1	2006 Stock Incentive Plan	Incorporated by reference to Registration Statement on Form 10-SB filed on February 16, 2007, File No. 000-52158
10.2	Form of NonStatutory Stock Option Agreement	Incorporated by reference to Registration Statement on Form 10-SB filed on February 16, 2007, File No. 000-52158

Exhibit No.	Exhibit	Incorporated by Reference/Filed Herewith
4.6	Series 2011C Warrant dated August 25, 2011	Incorporated by reference to the Company’s Annual Report on Form 10-K filed on September 1, 2011, File No. 000-52158
10.1	2006 Stock Incentive Plan	Incorporated by reference to Registration Statement on Form 10-SB filed on February 16, 2007, File No. 000-52158
10.2	Form of NonStatutory Stock Option Agreement	Incorporated by reference to Registration Statement on Form 10-SB filed on February 16, 2007, File No. 000-52158
10.3	Employment Agreement dated May 10, 2007 with Edward C. Feintech	Incorporated by reference to the Quarterly Report on Form 10-Q filed on May 14, 2007, File No. 000-52158
10.4	Consulting Agreement dated May 1, 2008 with International Monetary	Incorporated by reference to the Current Report on 8-K filed on May 8, 2008, File No. 000-52158
10.5	Promissory Note dated September 8, 2008	Incorporated by reference to the Current Report on 8-K filed on September 10, 2008, File No. 000-52158
10.6	Note and Share Purchase Agreement dated January 27, 2009 with 70 Limited LLC	Incorporated by reference to the Current Report on 8-K filed on February 2, 2009, File No. 000-52158
10.7	Note, Share and Warrant Purchase Agreement dated May 28, 2009 with 70 Limited LLC and The Jimma Lee Beam Revocable Trust	Incorporated by reference to the Current Report on 8-K filed on June 4, 2009, File No. 000-52158
10.8	Promissory Note dated May 29, 2009	Incorporated by reference to the Current Report on 8-K filed on June 4, 2009, File No. 000-52158
10.9	License Termination and Asset Transfer Agreement dated June 30, 2009 with Smoky Systems, LLC	Incorporated by reference to the Current Report on 8-K filed on July 7, 2009, File No. 000-52158
10.10	Option Agreement dated October 30, 2009 with Mary Ann’s Specialty Foods, Inc.	Incorporated by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158

Exhibit No.	Exhibit	Incorporated by Reference/Filed Herewith
10.3	Employment Agreement dated May 10, 2007 with Edward C. Feintech	Incorporated by reference to the Quarterly Report on Form 10-Q filed on May 14, 2007, File No. 000-52158

10.4	Consulting Agreement dated May 1, 2008 with International Monetary	Incorporated by reference to the Current Report on 8-K filed on May 8, 2008, File No. 000-52158
10.5	Promissory Note dated September 8, 2008	Incorporated by reference to the Current Report on 8-K filed on September 10, 2008, File No. 000-52158
10.6	Note and Share Purchase Agreement dated January 27, 2009 with 70 Limited LLC	Incorporated by reference to the Current Report on 8-K filed on February 2, 2009, File No. 000-52158
10.7	Note, Share and Warrant Purchase Agreement dated May 28, 2009 with 70 Limited LLC and The Jimma Lee Beam Revocable Trust	Incorporated by reference to the Current Report on 8-K filed on June 4, 2009, File No. 000-52158
10.8	Promissory Note dated May 29, 2009	Incorporated by reference to the Current Report on 8-K filed on June 4, 2009, File No. 000-52158
10.9	License Termination and Asset Transfer Agreement dated June 30, 2009 with Smoky Systems, LLC	Incorporated by reference to the Current Report on 8-K filed on July 7, 2009, File No. 000-52158
10.10	Option Agreement dated October 30, 2009 with Mary Ann’s Specialty Foods, Inc.	Incorporated by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158
10.11	Second Amended and Restated Processing Agreement dated October 30, 2009 with Mary Ann’s Specialty Foods, Inc.	Incorporated by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158
10.12	Consulting Agreement dated October 30, 2009 with William Korleski	Incorporated by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158
10.13	Note and Warrant Purchase Agreement dated March 5, 2010 with 70 Limited LLC	Incorporated by reference to the Current Report on 8-K filed on March 29, 2010, File No. 000-52158

Exhibit No.	Exhibit	Incorporated by Reference/Filed Herewith
10.11	Second Amended and Restated Processing Agreement dated October 30, 2009 with Mary Ann’s Specialty Foods, Inc.	Incorporated by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158
10.12	Consulting Agreement dated October 30, 2009 with William Korleski	Incorporated by reference to the Current Report on 8-K filed on November 6, 2009, File No. 000-52158
10.13	Note and Warrant Purchase Agreement dated March 5, 2010 with 70 Limited LLC	Incorporated by reference to the Current Report on 8-K filed on March 29, 2010, File No. 000-52158
10.14	Secured Promissory Note dated March 5, 2010	Incorporated by reference to the Current Report on 8-K filed on March 29, 2010, File No. 000-52158
10.15	Security Agreement dated March 5, 2010	Incorporated by reference to the Current Report on 8-K filed on March 29, 2010, File No. 000-52158
10.16	Executive Consulting Agreement dated March 25, 2010 with Harvey Hoffenberg	Incorporated by reference to the Annual Report on Form 10-K filed on April 15, 2010
10.17	Purchase and Lease Agreement dated July 25, 2011 with SMKY Asset Fund, LLC	Incorporated by reference to the Company’s Annual Report on Form 10-K filed on September 1, 2011, File No. 000-52158
23.1	Consent of Independent Registered Public Accountants	Filed herewith
24	Power of Attorney	Included on the signature page hereof
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer	Filed herewith
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer	Filed herewith
32.1	Section 1350 Certification of Chief Executive Officer	Filed herewith
32.2	Section 1350 Certification of Chief Financial Officer	Filed herewith
101.INS	XBRL Instance Document	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed herewith
101.PRE	XBRL Taxonomy Presentation Linkbase	Filed herewith

Exhibit No.	Exhibit	Incorporated by Reference/Filed Herewith
10.14	Secured Promissory Note dated March 5, 2010	Incorporated by reference to the Current Report on 8-K filed on March 29, 2010, File No. 000-52158
10.15	Security Agreement dated March 5, 2010	Incorporated by reference to the Current Report on 8-K filed on March 29, 2010, File No. 000-52158
10.16	Executive Consulting Agreement dated March 25, 2010 with Harvey Hoffenberg	Incorporated by reference to the Annual Report on Form 10-K filed on April 15, 2010
10.17	Purchase and Lease Agreement dated July 25, 2011 with SMKY Asset Fund, LLC	Incorporated by reference to the Company’s Annual Report on Form 10-K filed on September 1, 2011, File No. 000-52158
10.18	Business Development and License Agreement	Incorporated by reference to the Current Report on 8-K filed on July 18, 2014, File No. 000-52158
23.1	Consent of Independent Registered Public Accountants	Filed herewith
24	Power of Attorney	Included on the signature page hereof
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer	Filed herewith
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer	Filed herewith
32.1	Section 1350 Certification of Chief Executive Officer	Filed herewith
32.2	Section 1350 Certification of Chief Financial Officer	Filed herewith

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.

	SMOKY MARKET FOODS, INC.
	By:	/s/ Eddie Feintech
		Eddie Feintech
		Chief Executive Officer
	Date: April 16, 2012
	Date: November 18, 2014

POWER OF ATTORNEY AND ADDITIONAL SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Each person, whose signature to this Form 10-K appears below, hereby constitutes and appoints Eddie Feintech as his true and lawful attorney-in-fact and agent, with full power of substitution, to sign on his behalf individually and in the capacity stated below and to perform any acts necessary to be done in order to file all amendments and post-effective amendments to this Form 10-K, and any and all instruments or documents filed as part of or in connection with this Form 10-K or the amendments thereto and each of the undersigned does hereby ratify and confirm all that said attorney-in-fact and agent, or his substitutes, shall do or cause to be done by virtue hereof.

Signature	Title	Date
/s/ Edward C. Feintech	Chief Executive Officer, President and Chairman	~~April~~November 1618, ~~2012~~2014
Edward C. Feintech	~~and Chairman~~ (Principal Executive Officer)
/s/ Shane Campbell	Director, Chief Financial Officer	~~April~~November 1618, ~~2012~~2014
Shane Campbell	(Principal Financial and Accounting Officer)
/s/ Scott L. Bargfrede	Director	~~April~~November 1618, ~~2012~~2014
Scott L. Bargfrede

3936

SMOKY MARKET FOODS, INC.

Financial Statements

December 31, 2011 and 2010

SEALE AND BEERS, CPAs

PCAOB & CPAB REGISTERED AUDITORS

www.sealebeers.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Smoky Market Foods, Inc.

We have audited the accompanying balance sheets of Smoky Market Foods, Inc. as of December 31, 2011 and 2010, and the related statements of income, stockholders' equity and comprehensive income, and cash flows for each of the years in the two-year period ended December 31, 2011 and 2010. Smoky Market Foods, Inc.'s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Smoky Market Foods, Inc. as of December 31, 2011 and 2010, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2011 and 2010 in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that eh Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has had minimal revenues, has negative working capital at December 31, 2011, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also discussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Seale and Beers, CPAs,

Seale and Beers, CPAs

Las Vegas, Nevada

April, 16 2012

50 S. Jones Blvd. Suite 202 Las Vegas. NV 89107 Phone: (888)727-8251 Fax: (888)782-2351

F-1

SMOKY MARKET FOODS, INC.

Balance Sheets

	As of December 31:
	2011			2010
ASSETS:
Current Assets
Cash	$	17,614		$	10
Inventory		16,816			-
Total Current Assets		34,430			10
Property and Equipment, net of depreciation		2,844			-
Deposits		-			183
Total Assets	$	37,274		$	193
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT):
Current Liabilities
Accounts payable	$	524,338		$	501,960
Accounts payable - related parties		145,933			125,107
Accrued payroll costs		602,489			396,348
Short-term advances		94,700			91,500
Convertible debt, including accrued interest, less amortized discount		48,708			-
Total Current Liabilities		1,416,168			1,114,915
Long-term Liabilities
Convertible debt to a related party, less amortized discount		196,384			-
Promissory notes payable to a related party, including accrued interest, less amortized discount		2,452,196			2,137,819
Total Liabilities		4,064,748			3,252,734
Stockholders’ Equity (Deficit)
Preferred Stock, par value $.001, 10,000,000 shares
authorized; no shares issued and outstanding		-			-
Common Stock, par value $.001, 200,000,000 shares authorized:
issued and outstanding 104,213,527 and 93,977,246
at December 31, 2011 and December 31, 2010, respectively		104,214			93,978
Deferred Stock-Based Compensation		(28,571	)		(55,228	)
Other paid-in capital		7,335,079			6,232,009
Accumulated deficit		(11,438,196	)		(9,523,300	)
Total Stockholders’ Equity (Deficit)		(4,027,474	)		(3,252,541	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	37,274		$	193

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

F-2

SMOKY MARKET FOODS, INC.

Statements of Operations

	For the Years Ended December 31:
	2011			2010
Sales
Wholesale	$	7,008		$	-
Internet		3,661			347
Restaurant, net of discounts		-			13,966
Total Sales		10,669			14,313
Cost of Sales
Wholesale and internet		7,900			-
Restauarant		-			63,579
Write-off of obsolete inventory		97,075			117,224
Total Cost of Sales		104,975			180,803
Gross Profit (loss)		(94,306	)		(166,490	)
General & Administrative Expenses
Salaries, wages & benefits		218,377			235,047
Professional fees		83,608			227,181
Marketing		69,610			12,143
Depreciation and amortization		66,793			125,587
Rent		5,320			71,846
Loss on impairment of assets		-			995,493
Stock based compensation
Salaries, wages & benefits - related parties		187,875			72,562
Professional		324,222			55,159
Financing		411,444			39,561
Other		109,537			82,392
Total General and Administrative Expenses		1,476,786			1,916,971
Operating Loss		(1,571,092	)		(2,083,461	)
Other Income (Expense)
Other income (loss)		5,206			(776	)
Interest income					52
Loss on conversion of related party debt		(83,017	)		-
Interest expense to related parties		(259,000	)		(236,370	)
Interest expense		(6,993	)		(201	)
Other Expense - Net		(343,804	)		(237,295	)
Loss before Income Taxes		(1,914,896	)		(2,320,756	)
Income Taxes		-			-
Net (Loss)	$	(1,914,896	)	$	(2,320,756	)
(Loss) per Share:
Basic and Diluted	$	(0.02	)	$	(0.03	)
Weighted Average Number of Shares		101,529,382			90,480,413

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

F-3

SMOKY MARKET FOODS, INC.

Statements of Stockhoder’s Equity

					Deferred			Other
	Common Stock				Stock-Based			Paid-in		Accumulated			Total
	Shares		Amount		Compensation			Capital		Deficit			(Deficit)
Balance, January 1, 2010		86,963,746	$	86,964	$	(81,885	)	$	5,879,321	$	(7,202,544	)	$	(1,318,144	)
Common stock issued for:
Cash and cancellation of advances		3,100,000		3,100					14,400					17,500
Consideration for employee services		2,703,500		2,704					36,002					38,706
Consideration for professional services		510,000		510					14,240					14,750
Consideration in financing		700,000		700					8,700					9,400
Warrants issued in conjunction:														-
Professional services									58,603					58,603
Financing									220,743					220,743
Amortization of stock-based compensation						26,657								26,657
Net (Loss) for the Year Ended December 31, 2010											(2,320,756	)		(2,320,756	)
Balance, December 31, 2010		93,977,246		93,978		(55,228	)		6,232,009		(9,523,300	)		(3,252,541	)
Common stock issued for:
Cash		3,000,000		3,000					139,300				$	142,300
Settlement of advances		4,650,000		4,650					98,425					103,075
Employee compensation		1,750,000		1,750					12,250					14,000
Professional services		560,000		560					108,940					109,500
Financing		255,000		255					21,995					22,250
Settlement of accounts payable balances		21,281		21					7,427					7,448
Convertible debt financing									38,750					38,750
Warrants issued for:
Employee compensation									147,218					147,218
Professional services									214,723					214,723
Financing									273,394					273,394
Convertible debt financing									40,648					40,648
Amortization of stock-based compensation						26,657								26,657
Net (Loss) for the Year Ended December 31, 2011											(1,914,896	)		(1,914,896	)
Balance, December 31, 2011		104,213,527	$	104,214	$	(28,571	)	$	7,335,079	$	(11,438,196	)	$	(4,027,474	)

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

F-4

SMOKY MARKET FOODS, INC.

Statements of Cash Flows

	For the Years Ended December 31:
	2011			2010
Cash Flows from Operating Activities
Net Income (Loss)	$	(1,914,896	)	$	(2,320,756	)
Impairment loss		-			995,493
Stock-based financing and compensation costs		923,542			165,282
Loss on sale of assets		-			875
Proceeds from sale of assets		-			9,125
Loss on conversion of related party debt		83,017			-
Financing costs paid directly from loan proceeds		5,000			-
Depreciation and amortization		66,793			125,587
Current year interest capitalized as debt		259,930			236,370
Adjustments to reconcile net loss to cash used in operating activities:
(Increase) decrease in inventory		(16,816	)		117,270
(Increase) decrease in other current assets		-			11,609
Increase (decrease) in accounts payable		47,460			208,001
Increase (decrease) in due to employees		206,141			151,811
Increase (decrease) in other accrued liabilities		-			(1,884	)
Net Cash Provided (Used) by Operating Activities		(339,829	)		(301,217	)
Cash Flows from Investing Activities
(Deposits) refunds		183			11,433
Purchase of property and equipment		(3,200	)		(4,852	)
Net Cash Provided (Used) by Investing Activities		(3,017	)		6,581
Cash Flows from Financing Activities
Proceeds from issuance of common stock		26,500			17,500
Proceeds from convertible debt to a related party		235,000			-
Proceeds from issuance of convertible debt		72,500			150,000
Proceeds from (payments on) short term advances - net		26,450			16,500
Net Cash Provided (Used) by Financing Activities		360,450			184,000
Net Increase (Decrease) in Cash		17,604			(110,636	)
Cash, Beginning of Year		10			110,646
Cash, End of Year	$	17,614		$	10
Supplemental Information:
Interest paid	$	391		$	-
Income taxes paid	$	-		$	-
Non-cash Investing and Financing Activities
Common stock issued in settlement of advances	$	23,250		$	-
Warrants issued in connection with convertible debt	$	40,648		$	-

The interest disclosed in the cash flow from operating activities section above was interest accrued but unpaid on promissory notes as more fully disclosed in the notes to the financial statements. The accrued but unpaid interest is added to the principal balance of the promissory notes. This non-cash expense is added back in the cash flows from operating activities section above in order to arrive at cash flows from operating activities.

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

F-5

Smoky Market Foods, Inc.

Notes to Financial Statements

December 31, 2011 and 2010

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Smoky Market Foods, Inc., (the “Company”) was incorporated on April 18, 2006 under the laws of the State of Nevada.

The Company engages in the manufacture and sale of smoked meat products using a proprietary cooking technology which enables preservative-free production. Sales and distribution are presently accommodated through retail (internet) and whole sale distribution strategies intended to exploit the Smoky Market brand.The Company also intends to create a chain of franchised restaurants which also utilize the branded Smoky Market products.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. On an ongoing basis, management reviews those estimates, including those related to allowances for loss contingencies for litigation, income taxes, and projection of future cash flows used to assess the recoverability of long-lived assets.

Cash and Cash Equivalents

For purposes of balance sheet classification and the statements of cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts Receivable

Management monitors the liquidity and creditworthiness of accounts receivable due from customers on an ongoing basis, considering industry and economic conditions and other factors. These factors form the basis for calculating and recording an allowance for doubtful accounts, which is an estimate of future credit losses. The Company writes off individual accounts receivable against the bad debt allowance when the Company determines a balance is uncollectible. Management has determined that the bad debt allowance is appropriately established at $-0- and $-0-, as of December 31, 2011 and December 31, 2010, respectively.

F-6

Inventory

Inventory consists of Smoky Market food items and branded packaging. It is valued at the lower of cost or market using the average cost method. Inventory was as follows at:

	December 31, 2011		December 31, 2010
Raw materials		-		-
Finished goods		16,816		-
	$	16,816	$	-

Property and Equipment

Property and equipment are stated at cost and are being depreciated using the straight-line method over the assets’ estimated economic lives, which range from 3 to 25 years. Property and equipment were as follows as of:

	December 31, 2011		December 31, 2010
Transportation Equipment		3,200		-
Accumulated depreciation		356		-
	$	2,844	$	-

Leasehold improvements are capitalized and amortized over the remaining term of the leased facility. The Company recorded $356 and $-0- in depreciation expense relating to the assets above for the years ended December 31, 2011 and 2010, respectively.

All property and equipment was determined by Management to be impaired as of December 31, 2010, and was therefore written off as an impairment loss for the year ended December 31, 2010. Accordingly, $698,806 of net property and equipment was considered impaired and written off during the year ended December 31, 2010. See “Impairment of Long-Lived Assets”disclosure below.

Advances

As of December 31, 2011 and December 31, 2010, the Company was indebted to several individuals for non-interest bearing, unsecured advances in the amounts of $94,700 and $91,500, respectively. $82,500 of the advances are past due and in default as of December 31, 2011 and 2010, respectively. 2,035,000 shares of common stock and 150,000 warrants to purchase common stock were issued to the individuals as part of the advances still outstanding at December 31, 2011. Management intends to repay the advances upon the realization of additional debt/equity financing in 2012. Accordingly, the advances have been classified as current obligations.

F-7

Financial Instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2011 and 2010. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable. Fair values are assumed to approximate carrying values for these financial instruments because they are short term in nature, or are receivable or payable on demand, and their carrying amounts approximate fair value.

Impairment of Long-Lived Assets

The Company periodically reviews the carrying amount of property and equipment and its identifiable intangible assets to determine whether current events or circumstances warrant adjustments to such carrying amounts. If an impairment adjustment is deemed necessary, such loss is measured by the amount that the carrying value of such assets exceeds their fair value. Considerable management judgment is necessary to estimate the fair value of assets; accordingly, actual results could vary significantly from such estimates.

It was determined during 2010 that all assets other than cash and deposits, both tangible and intangible, were a part of the same asset group. That asset group involved the utilization of the smoker oven technology, and included the smoker oven, leased restaurant property, a real estate option to build another smoker oven, and a consulting contract with an individual who would assist the Company in deploying the smoker oven technology. Future cash flows from this asset group could not be assured. Accordingly, management decided to completely write-off these impaired assets during the year ended December 31, 2010.

Management estimated and recorded an impairment loss at March 31, 2010 relating to the closure of a restaurant in Los Gatos, California. The loss calculation was based on a pending offer on the property. During the three months ended June 30, 2010, the offer was rescinded, so Management recorded an additional impairment loss for the three months ended June 30, 2010.

During the last half of the year ended December 31, 2010, the Company recorded additional impairments losses for all operating assets due to the uncertainty of future operating cash flows from such assets. Additionally, certain of these were sold, receiving $9,125. The total impairment loss was $-0- and $995,493 for the years ended December 31, 2011 and 2010, respectively.

F-8

Detail of the impairment losses were as follows for the years ended December 31:

Description	2011		2010
Property and equipment	$	-	$	698,806
Rent on abandoned restaurant lease		-		175,853
Real estate option		-		75,000
Prepaid consulting contract		-		45,834
Total Impairment Loss	$	-	$	995,493

Revenue Recognition

Sales are recognized upon shipment.

Shipping and Handling (Internet Sales)

Shipping and handling charged to customers can vary depending on pricing strategies, market conditions, etc., and is not necessarily based on the recovery of cost. Accordingly, shipping and handling charges are recorded as a component of sales while the corresponding shipping and handling costs are reflected as a component of cost of goods sold.

Advertising Costs

All advertising costs are charged to expense as incurred or the first time the advertising takes place, unless it is direct-response advertising that results in probable future economic benefits. Advertising expenses were $25,200 and $-0- for the years ended December 31, 2011 and 2010, respectively.

Segment Information

Certain information is disclosed based on the way management organizes financial information for making operating decisions and assessing performance. The Company currently operates in one business segment and will evaluate additional segment disclosure requirements if it expands operations.

Net (Loss) Per Common Share

F-9

Stock-Based Compensation

Income Taxes

F-10

The provision for (benefit from) income taxes was comprised of the following for the years ended December 31:

	2011			2010
Federal
Current, less Federal benefit for State	$	(603,000	)	$	(741,000	)
Deferred		-			-
State:
Current		(191,000	)		(205,000	)
Deferred
		(794,000	)		(946,000	)
Less Valuation Allowance		794,000			946,000
	$	-		$	-

The differences between Smoky Market’s effective tax rate and the U.S. federal statutory regular tax rate are as follows:

	2011			2010
Expense (benefit) at U.S. federal statutory rate		35.0	%		35.0	%
Expense (benefit) at state statutory rate		10.0	%		8.8	%
Other		-3.5	%		-3.1	%
Valuation allowance		-41.5	%		-40.7	%
		0.0	%		0.0	%

Reclassifications

Certain balances as reported in previous periods have been reclassified. Elements of cost of goods sold in the 2010 presentation were combined in the statements of operations. Additionally, all additional paid-in capital accounts are now combined for financial reporting in the balance sheets and statements of shareholder’s equity. These reclassifications had no effect on reported losses.

Recent Accounting Pronouncements

The Company’s management has reviewed recent accounting pronouncements issued through the date of the issuance of these financial statements. In management’s opinion, except for the pronouncement detailed below, no other pronouncements apply or will have a material effect on the Company’s financial statements. In May 2009, the FASB issued ASC 855 Subsequent Events, which establishes principles and requirements for subsequent events. In accordance with the provisions of ASC 855, the Company currently evaluates subsequent events through the date the financial statements are available to be issued. Effective for the Company’s interim and annual reporting periods beginning January 1, 2010, or for certain disclosures, January 1, 2011, new guidance from the FASB ASC 2010-06 will require additional disclosures about transfers between the various levels of the fair value hierarchy, as well as activity in Level 3 fair value measurements. The new guidance also requires the disaggregation of asset and liability classes as well as the inputs and valuation techniques used to measure Level 2 fair value measurements as well as Level 3. The adoption of this new guidance will not have an impact on the Company’s financial position or results of operations. However, additional disclosure may be required.

F-11

NOTE 2. GOING CONCERN

Management believes that there is substantial doubt about the company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is contingent upon its ability to commence profitable operations and/or obtain additional debt and/or capital financing. Management is attempting to obtain additional financing with various parties, but the eventual success of such efforts can not be assured.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of the Company as a going concern.

The Company has experienced $11,438,196 in losses since inception. The Company has had minimal revenue generating operations since inception.

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

NOTE 3. NOTE PAYABLE TO RELATED PARTY

The Company is obligated under a promissory note payable to an LLC. The LLC has acquired over 10% of the common stock of the Company, and is therefore now deemed a related party. However, the LLC does not have management control. The note accrues interest at a 10% annual rate until repaid on or before its maturity date of August 18, 2020.

F-12

The net promissory note obligation was as follows as of:

	December 31, 2011			December 31, 2010
Face amount of note	$	2,568,900		$	2,568,900
Accrued interest		354,003			95,004
Less unamortized loan discount		(470,707	)		(526,084	)
	$	2,452,196		$	2,137,819

As discussed above, the LLC is considered a related party. Related party expenses relative to this loan were as follows for the years ended:

	December 31, 2011		December 31, 2010
Interest expense	$	258,999	$	236,370
Amortization of loan discount	$	55,377	$	74,969

NOTE 4. CONVERTIBLE DEBT – RELATED PARTY

The Company entered into a Purchase and Lease Agreement in June 2011 with SMKY Asset Fund LLC (the “Lender,” a related party) relating to the Company’s smoker-oven system. The substance of the transaction more closely resembles a convertible debt instrument and for that reason the Company has recorded this transaction as a convertible debt borrowing. Pursuant to the agreement, the Company received $210,000 in the third quarter of 2011, subject to increase prior to January 25, 2012, with a maximum borrowing of $500,000.

In addition, Smoky Market was required to issue warrants to the Lender to purchase a share of common stock for each $1.00 in debt provided. The warrants have an exercise price of $0.50 per share, a five-year term and include net exercise provisions. The warrants were valued using the Black-Scholes method assuming a risk-free annual rate of return of .02%, volatility of 317%, an exercise price of $.50 and a current stock price of $.24. The resulting value is reflected in the financial statements as a discount on the convertible debt and is being amortized over the ten-year life of the debt. Payments due on the debt are equal to the lesser of (a) $0.20 per pound of product produced using the smoker-oven, or (b) the amount necessary to generate a 30% return on the sum of the purchase price and $5,000.

The agreement has a 10-year term, provided that the Company must repay the debt at any time after July 25, 2014 that the market price for the Company’s common stock has exceeded $0.50 for thirty trading days. The repurchase price is a number of shares of common stock with a fair market value equal to 20 times the sum of (a) the purchase price, plus (b) $5,000. The conversion feature of the note was valued based on the same criteria as the warrant described above, and resulted in a calculation of $2,063,114. Since the conversion is contingent, the conversion feature was not recognized in the calculation of the debt discount.

F-13

The debt was as follows at December 31:

	2011			2010
Face amount of debt	$	235,000		$	-
Accrued interest
Less unamortized loan discount		(38,616	)		-
	$	196,384		$	-

As discussed above, the Lender is considered a related party. Related party expenses relative to this loan was as follows for the years ended December 31:

		2011				2010
Amortization of loan discount		$	2,032			$	-

NOTE 5. CONVERTIBLE DEBT – UNRELATED PARTY

The Company entered into two convertible debt arrangements with an unrelated financier (“Financier”) in the fourth quarter of 2011. The promissory notes carry interest at an 8% annual rate and are due nine months from the transaction date. The first note was in the principal amount of $42,500 and is due July 11, 2012. The second note was in the principal amount of $35,000 and is due September 15, 2012. Both notes have a conversion option which allows the Financier to convert the principal and accrued interest into common shares based on the average of the lowest three closing prices of the Companies stock over the prior ten days. That price is then discounted by 42% to arrive at the conversion price. The Company has the right to repurchase the notes during the first 180 days at a price which includes accrued interest plus the original principal amount multiplied by 150%.

The Company has recorded the conversion options as loan discounts using the Black-Scholes method. Since the number of shares is variable, the calculation of the discount assumed the stock price as of the transaction date as the base for calculations, a nine month term, risk-free discount rate of .01%, and stock volatility of 314%.

F-14

The outstanding combined debt was as follows as of December 31:

	2011			2010
Face amount of debt	$	77,500		$	-
Accrued interest		930			-
Less unamortized loan discount		(29,722	)		-
	$	48,708		$	-

NOTE 6. CAPITAL STOCK

Common Stock

On April 18, 2006, the State of Nevada authorized the Company to issue a maximum of 200,000,000 shares of the Company’s common stock. The assigned par value was $.001. On the same day, the Company issued 40,000,000 common shares to Smoky Systems, LLC, a Nevada LLC and related party, in exchange for certain assets.

Preferred Stock

In June 2006, the State of Nevada authorized the Company to issue a maximum of 10,000,000 shares of the Company’s preferred stock with a $.001 par value. Shares of Preferred Stock may be issued from time to time in one or more series as may from time to time be determined by the Board of Directors. Each series shall be distinctly designated. All shares of any one series of the Preferred Stock shall be a like in every particular, except that there may be different dates from which dividends thereon, if any, shall be cumulative, if made cumulative. The powers, preferences and relative, participating, optional and other rights of each such series, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding. No preferred shares had been issued as of December 31, 2011.

Stock Transactions:

The Company has engaged in numerous transactions whereby shares of common stock (description above) were issued in exchange for cash and/or services. The Statement of Stockholders’ Equity provides a summary of such transactions.

F-15

The following is a reconciliation of stock based compensation for the years ended December 31:

	2011			2010
Per Statement of Operations
Salaries, Wages & Benefits - related parties	$	187,875		$	72,562
Professional		324,222			55,159
Financing		411,444			39,561
		923,541			167,282
Less director amount reflected as salaries		-			(2,000	)
Warrant modification on debt		-			203,576
	$	923,541		$	368,858
Per Statement of Cash Flows
Stock based compensation	$	923,542		$	165,282
Modification of warrants capitalized as loan discount (non-cash)		-			203,576
Rounding		(1	)
	$	923,541		$	368,858
Per Statement of Shareholders Equity
Common stock issued for:
Consideration for employee services	$	14,000		$	38,706
Consideration for professional services		109,500			14,750
Consideration for financing services		22,250			9,400
Financing expense recognized on stock sold at price per share that was less than fair value		115,800			-
Warrants issued in conjunction:
Consideration for employee services		147,218
Consideration for professional services		214,723			58,603
Consideration for financing services		273,394			220,743
Amortization of stock-based compensation		26,657			26,657
Rounding		(1	)		(1	)
	$	923,541		$	368,858

NOTE 7. RELATED PARTY TRANSACTIONS

As of December 31, 2011 and 2010, the Company owed $145,933 and $125,107 to related parties, respectively, relating to professional services and vendor services. Such debt was reflected as related party trade payables on the balance sheets, bears no interest and has no formal repayment terms.

During the year ended December 31, 2011, the Company purchased an automobile from a related party (the CEO). The cost of the automobile was $3,200.

NOTE 8. COMMITMENTS AND CONTINGENCIES

Operating Lease Commitment

The Company has defaulted on a long-term operating lease of real property previously used as a restaurant operation in Los Gatos, California. All amounts due under the lease have been recognized as a liability and included in accounts payable. The liability is reflected at $187,307 as of both December 31, 2011 and 2010, respectively.

F-16

Employment Contracts

Chief Executive Officer

Effective May 1, 2007, the Company entered into a three-year employment contract with the Chief Executive Officer (“CEO”). Terms of the agreement included annual compensation of $175,000, a potential 80% bonus, a stock award of 1,500,000 common shares, 425,000 options to purchase common stock at $.10 per share, and an additional contingent 1,000,000 shares assuming that certain operating performance metrics are achieved. The employment contract expired and has not yet been renewed as of the date of these financial statements. The CEO and the Company have continued the same compensation structure subsequent to the expiration of the employment contract.

Chief Marketing Officer

Effective March 25, 2010, the Company retained an outsourced Chief Marketing Officer (“CMO”) under a cancelable five-year Executive Consulting Agreement. Under the terms of the agreement, the CMO was entitled to 350,000 common shares as a signing bonus and variable monthly compensation based on a percentage commission on internet sales. Other than the signing bonus, no compensation was earned or paid under this agreement prior to being cancelled in March 2011.

Real Estate Option and Consulting Agreement

The Company entered into an agreement with Mary Anne’s Specialty Foods, Inc. (“Supplier”) in October 2009. Under the terms of the agreement, the Company issued the Supplier 1,500,000 warrants to purchase the Company’s common stock at a $.15 exercise price, expiring in five years, in exchange for certain real property rights to purchase and build production facilities located on property presently owned by the Supplier. The transaction was valued at $75,000 using the Black-Scholes Method. The Company also issued 1,000,000 common shares to the Supplier in exchange for a three-year real estate related consulting contract that the Company may require in subsequent years in order to build the new facility described above. The transaction was valued at $50,000, and based on the $.05 per share fair value of the Company’s common shares on the date of the agreement. The values of the assets were considered impaired by Management and written off as an impairment loss at December 31, 2010

Dispute with Contractor

Smoky Market previously retained the services of an independent financial consultant contractor (the “Contractor”). The Contractor was terminated in 2009 and Company Management believes that a settlement was agreed to between the parties. The Contractor now disputes the agreement, claiming additional amounts are owed. The Company plans to contest the Contractor’s claim, but has recognized and recorded a liability in these financial statements equal to the full amount claimed by the Contractor. The amount in dispute is $123,720.

F-17

NOTE 9. COMMON STOCK OPTIONS AND WARRANTS

Common Stock Option Plan

The Company has reserved 6,500,000 common shares for the exercise of stock options to be issued pursuant to the 2006 Stock Option Plan. Information relating to options issued under this plan is as follows:

	Options and Stock Awards Available for Grant		Number of Shares		Weighted Average Option Exercise Price
Outstanding as of January 1, 2010		742,500		5,757,500	$	0.10
Shares reserved		-		-		-
Options granted		-		-		-
Stock awards granted		-		-		n/a
Options exercised		-		-		-
Options canceled		-		-		-
Outstanding as of December 31, 2010		742,500		5,757,500	$	0.10
Shares reserved		-		-		-
Options granted		-		-		-
Stock awards granted		-		-		n/a
Options exercised		-		-		-
Options canceled		-		-		-
Outstanding as of December 31, 2011		742,500		5,757,500	$	0.10

The following table summarizes information about stock options outstanding and exercisable at December 31, 2011:

Stock Options Outstanding
Number of Options Outstanding	Weighted- Average Remaining Contractual Life in Years		Weighted- Average Exercise Price
1,887,500		1.57	$	0.10

Stock Options Exercisable
Number of Options Exercisable	Weighted- Average Remaining Contractual Life in Years		Weighted- Average Exercise Price
1,887,500		1.57	$	0.10

F-18

The assumptions used in computing fair value of options is as follows:

Expected stock price volatility		186.0	%
Risk-free interest rate		4.7	%
Expected term (years)		7.00
Weighted-average fair value to stock options granted	$	0.099

Common Stock Warrants

The following is a summary of the status of all the Company’s stock warrants as of December 31, 2011:

	Number of Warrants		Weighted Average Exercise Price
Outstanding, January 1, 2010	1,000,000		0.15
Granted	8,702,500		0.05
Exercised	-		-
Cancelled	-		-
Outstanding, December 31,2010	9,702,500	$	0.06
Granted	9,246,834		0.13
Exercised	-		-
Cancelled	-		-
Outstanding, December 31,2011	18,949,334	$	0.09
Warrants exercisable at December 31, 2011	18,949,334	$	0.09

F-19

The following table summarizes information about stock warrants outstanding and exercisable at December 31, 2011:

Stock Warrants Outstanding
Number of Warrants Outstanding		Weighted- Average Remaining Contractual Life in Years		Exercise Price
	210,000		4.75	$	0.50
	1,771,834		4.34	$	0.25
	3,515,000		2.58	$	0.15
	13,452,500		4.95	$	0.05
	18,949,334

Stock Warrants Exercisable
Number of Warrants Exercisable		Weighted- Average Remaining Contractual Life in Years		Exercise Price
	210,000		4.75	$	0.50
	1,771,834		4.34	$	0.25
	3,515,000		2.58	$	0.15
	13,452,500		4.95	$	0.05
	18,949,334

Warrants were valued and recorded pursuant to the Black-Scholes Method. For warrants issued in 2011, the average risk-free rate of return of return was .01%. average stock price volatility of 314%, and a weighted average expected term of 3.48 years, and a weighted average fair value of $.07 per warrant. Assumptions used were an average risk-free rate of return of .12% to .15%, average expected stock price volatility of 347%, weighted average expected term of 6.01 years, and a weighted average fair value of $.01 per warrant.

NOTE 10. SUBSEQUENT EVENTS

Management has evaluated the period subsequent to December 31, 2011 up to and including the date of the issuance of the financial statements for material subsequent events to disclose, and has determined that no such subsequent events exist.

F-20

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