Yes
|
X
|
No
|
Yes
|
No
|
X
|
Yes
|
No
|
X
|
Part
I Financial Information
|
3
|
Item
1. Financial Statements
|
3
|
Consolidated
Balance Sheets
|
3
|
Consolidated
Statements of Operations
|
4
|
Consolidated
Statements of Cash Flows
|
5
|
Notes
to Consolidated Financial Statements
|
6
|
Report
of Independent Registered Public Accounting Firm
|
20
|
Item
2. Management’s Discussion and Analysis or Plan of
Operation
|
21
|
Item
3. Controls and Procedures
|
28
|
Part
II -Other Information
|
29
|
Item
1. Legal Proceedings
|
29
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds
|
29
|
Item
3. Defaults Upon Senior Securities
|
29
|
Item
4. Submission of Matters to a Vote of Security Holders
|
29
|
Item
5. Other Information
|
29
|
Item
6. Exhibits
|
30
|
March
31,
|
December
31,
|
||||||
ASSETS
|
2007
|
2006
|
|||||
(Unaudited)
|
|||||||
CURRENT
ASSETS:
|
|||||||
Cash
|
$
|
223,388
|
$
|
269,726
|
|||
Marketable
securities, available for sale, at fair value
|
500,000
|
793,183
|
|||||
Receivables
|
16,653
|
44,576
|
|||||
Inventory,
net
|
853,262
|
700,664
|
|||||
Other
assets
|
77,368
|
77,319
|
|||||
Current
assets of discontinued operations
|
56,025
|
110,521
|
|||||
Total
current assets
|
1,726,696
|
1,995,989
|
|||||
RESTRICTED
SECURITIES
|
79,628
|
78,723
|
|||||
RECEIVABLES
|
28,994
|
28,374
|
|||||
PROPERTY
AND EQUIPMENT, net
|
2,684,450
|
2,794,393
|
|||||
COVENANTS
NOT TO COMPETE and other intangibles, net
|
305,099
|
324,553
|
|||||
OTHER
ASSETS
|
412,957
|
457,344
|
|||||
NONCURRENT
ASSETS OF DISCONTINUED OPERATIONS
|
1,207,926
|
1,253,480
|
|||||
TOTAL
|
$
|
6,445,750
|
$
|
6,932,856
|
|||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
CURRENT
LIABILITIES:
|
|||||||
Accounts
payable
|
$
|
724,474
|
$
|
559,920
|
|||
Accrued
commissions and bonuses
|
265,761
|
268,717
|
|||||
Accrued
other expenses
|
235,553
|
400,204
|
|||||
Accrued
sales tax liability
|
235,013
|
200,481
|
|||||
Deferred
compensation
|
97,129
|
96,378
|
|||||
Notes
payable
|
507,542
|
257,542
|
|||||
Capital
lease obligations
|
97,393
|
104,591
|
|||||
Current
liabilities of discontinued operations
|
302,336
|
360,582
|
|||||
Total
current liabilities
|
2,465,201
|
2,248,415
|
|||||
LONG-TERM
LIABILITIES:
|
|||||||
Notes
payable
|
480,096
|
625,220
|
|||||
Capital
lease obligations
|
73,418
|
95,527
|
|||||
Deferred
compensation
|
259,012
|
281,101
|
|||||
Lease
abandonment liability
|
5,158
|
55,123
|
|||||
Liabilities
of discontinued operations
|
1,489,712
|
1,570,359
|
|||||
Total
liabilities
|
4,772,597
|
4,875,745
|
|||||
COMMITMENT
AND CONTINGENCIES (Note 8)
|
|||||||
STOCKHOLDERS'
EQUITY
|
|||||||
Common
stock - $.0001 par value; authorized 495,000,000 shares; issued
9,107,419
and 9,107,419 shares; outstanding 8,515,824 and 8,515,824 shares,
respectively
|
905
|
905
|
|||||
Paid-in
capital
|
23,636,243
|
23,609,734
|
|||||
Notes
receivable for exercise of options
|
(31,000
|
)
|
(31,000
|
)
|
|||
Accumulated
deficit
|
(19,300,216
|
)
|
(18,889,749
|
)
|
|||
Total
capital and accumulated deficit
|
4,305,932
|
4,689,890
|
|||||
Less
cost of treasury stock (591,595 shares)
|
(2,632,779
|
)
|
(2,632,779
|
)
|
|||
Total
stockholders' equity
|
1,673,153
|
2,057,111
|
|||||
TOTAL
|
$
|
6,445,750
|
$
|
6,932,856
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2007
|
2006
|
||||||
Net
sales
|
$
|
2,435,342
|
$
|
2,425,474
|
|||
Cost
of sales
|
1,556,705
|
1,565,154
|
|||||
Gross
profit
|
878,637
|
860,320
|
|||||
Marketing,
distribution and administrative expenses:
|
|||||||
Marketing
|
282,996
|
141,144
|
|||||
Distribution
and administrative
|
897,465
|
689,520
|
|||||
Total
marketing, distribution and administrative expenses
|
1,180,461
|
830,664
|
|||||
Income
(loss) from operations
|
(301,824
|
)
|
29,656
|
||||
Other
income (expense):
|
|||||||
Interest
and dividends, net
|
(143,174
|
)
|
3,842
|
||||
Other,
net
|
27,005
|
59,664
|
|||||
Total
other income (expense)
|
(116,169
|
)
|
63,506
|
||||
Income
(loss) from continuing operations before taxes
|
(417,993
|
)
|
93,162
|
||||
Income
tax expense (benefit)
|
-
|
-
|
|||||
Income
(loss) from continuing operations
|
(417,993
|
)
|
93,162
|
||||
Discontinued
operations (Note 11)
|
|||||||
Income
(loss) from discontinued operations, net of tax
|
7,654
|
(335,715
|
)
|
||||
Net
loss
|
$
|
(410,339
|
)
|
$
|
(242,553
|
)
|
|
Net
loss per share:
|
|||||||
Basic:
|
|||||||
Income
(loss) from continuing operations
|
$
|
(0.05
|
)
|
$
|
0.01
|
||
Income
(loss) from discontinued operations net of tax
|
-
|
(0.04
|
)
|
||||
Net
loss per share
|
$
|
(0.05
|
)
|
$
|
(0.03
|
)
|
|
Diluted:
|
|||||||
Income
(loss) from continuing operations
|
$
|
(0.05
|
)
|
$
|
0.01
|
||
Income
(loss) from discontinued operations net of tax
|
-
|
(0.04
|
)
|
||||
Net
loss per share
|
$
|
(0.05
|
)
|
$
|
(0.03
|
)
|
|
Shares
used in computing net loss per share:
|
|||||||
Basic
|
8,515,824
|
7,766,574
|
|||||
Diluted
|
8,515,824
|
7,766,574
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2007
|
2006
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
Net
Loss
|
$
|
(410,339
|
)
|
$
|
(242,553
|
)
|
|
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities
|
|||||||
Net
(income) loss from discontinued operations
|
(7,654
|
)
|
335,715
|
||||
Depreciation
and amortization
|
188,922
|
164,859
|
|||||
Amortization
of note valuation discount
|
104,877
|
-
|
|||||
Bad
debt recovery
|
(1,452
|
)
|
(11,319
|
)
|
|||
Stock
option compensation expense
|
26,509
|
2,937
|
|||||
Gain
on sale of assets
|
-
|
(46,617
|
)
|
||||
Gain
on lease cancellation
|
(120,755
|
)
|
-
|
||||
Realized
gain on sale of marketable securities
|
-
|
(234
|
)
|
||||
Changes
in operating assets and liabilities:
|
|||||||
Receivables
|
26,686
|
(15,379
|
)
|
||||
Inventory
|
(152,598
|
)
|
215,240
|
||||
Other
assets
|
3,930
|
850
|
|||||
Accounts
payable and accrued expenses
|
132,700
|
(127,491
|
)
|
||||
Lease
abandonment liability
|
(30,561
|
)
|
(17,007
|
)
|
|||
Deferred
compensation
|
(21,337
|
)
|
(23,594
|
)
|
|||
Net
operating activities of discontinued operations
|
39,404
|
(95,899
|
)
|
||||
Net
cash provided by (used) in operating activities
|
(221,668
|
)
|
139,508
|
||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchase
of property and equipment
|
(19,118
|
)
|
(97,822
|
)
|
|||
Sales
of property and equipment
|
-
|
47,950
|
|||||
Receipts
on notes receivable
|
2,070
|
10,412
|
|||||
Purchase
of marketable securities, available for sale
|
(8,336
|
)
|
(281,450
|
)
|
|||
Sales
marketable securities, available for sale
|
300,613
|
404,452
|
|||||
Net
investing activities of discontinued operations
|
12,756
|
-
|
|||||
Net
cash provided by investing activities
|
287,985
|
83,542
|
|||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Bank
overdrafts
|
-
|
(203,500
|
)
|
||||
Principal
payment on capital lease obligations
|
(29,306
|
)
|
(30,228
|
)
|
|||
Net
financing activities of discontinued operations
|
(83,350
|
)
|
(34,809
|
)
|
|||
Net
cash used in financing activities
|
(112,656
|
)
|
(268,537
|
)
|
|||
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
(46,339
|
)
|
(45,487
|
)
|
|||
CASH
AND CASH EQUIVALENTS, BEGINNING
|
269,727
|
118,805
|
|||||
CASH
AND CASH EQUIVALENTS, ENDING
|
$
|
223,388
|
$
|
73,318
|
1.
|
UNAUDITED
INTERIM FINANCIAL
STATEMENTS
|
2.
|
SHARE-BASED
COMPENSATION
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2007
|
2006
|
||||||
Expected
volatility
|
79.34
|
%
|
74.49
|
%
|
|||
Expected
term (in years)
|
5
|
5
|
|||||
Risk-free
interest rate
|
4.39
|
%
|
4.80
|
%
|
|||
Expected
dividend yield
|
0
|
%
|
0
|
%
|
Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Term (Years)
|
Aggregate
Intrinsic Value
|
||||||||||
Options
outstanding at December 31, 2006
|
2,715,009
|
$
|
2.42
|
||||||||||
Granted
|
50,000
|
$
|
0.65
|
$
|
1,000
|
||||||||
Exercised
|
-
|
-
|
-
|
||||||||||
Expired
|
(2,000
|
)
|
$
|
2.00
|
-
|
||||||||
Canceled
|
-
|
-
|
-
|
||||||||||
Options
outstanding at March 31, 2007
|
2,763,009
|
$
|
2.39
|
4.54
|
$
|
13,000
|
|||||||
Option
exercisable at March 31, 2007
|
2,113,009
|
$
|
3.11
|
3.91
|
$
|
-
|
|||||||
Options
vested and options expected to vest at March 31, 2007
|
2,763,009
|
$
|
2.39
|
4.54
|
$
|
-
|
3.
|
MARKETABLE
SECURITIES
|
4.
|
RESTRICTED
INVESTMENTS
|
March
31,
|
December
31,
|
||||||
2007
|
2006
|
||||||
Laurus
term note
|
$
|
2,000,000
|
$
|
2,000,000
|
|||
Partial
conversion, issuance of 350,000 shares
|
(159,125
|
)
|
(159,125
|
)
|
|||
Valuation
discount
|
(1,176,904
|
)
|
(1,176,904
|
)
|
|||
Accretion
of discount to interest expense
|
323,668
|
218,791
|
|||||
Total
secured financing
|
$
|
987,638
|
$
|
882,762
|
|||
Current
|
$
|
507,542
|
$
|
257,542
|
|||
Long-term
|
$
|
480,096
|
$
|
625,220
|
6.
|
LOSS
PER SHARE
|
Income
(Loss)
|
Shares
|
Per
Share
|
||||||||
(Numerator)
|
(Denominator)
|
Amount
|
||||||||
Weighted
average common shares outstanding:
|
||||||||||
For
the three months ended March 31, 2007:
|
||||||||||
Loss
per common share:
|
||||||||||
Loss
available to common stockholders
|
$
|
(410,339
|
)
|
8,515,824
|
$
|
(0.05
|
)
|
|||
Loss
per common share - assuming dilution:
|
||||||||||
Options
|
-
|
-
|
||||||||
Loss
available to common stockholders plus assumed conversions
|
$
|
(410,339
|
)
|
8,515,824
|
$
|
(0.05
|
)
|
|||
For
the three months ended March 31, 2006:
|
||||||||||
Loss
per common share:
|
||||||||||
Loss
available to common stockholders
|
$
|
(242,553
|
)
|
7,766,574
|
$
|
(0.03
|
)
|
|||
Loss
per common share - assuming dilution:
|
||||||||||
Options
|
-
|
-
|
||||||||
Loss
available to common stockholders plus assumed conversions
|
$
|
(242,553
|
)
|
7,766,574
|
$
|
(0.03
|
)
|
7.
|
DEFERRED
TAXES
|
8.
|
COMMITMENTS,
CONTINGENCIES AND
GUARANTEES
|
9.
|
DEFERRED
COMPENSATION
|
10.
|
LEASE
ABANDONMENT
|
11.
|
DISCONTINUED
OPERATIONS
|
Three
Months Ended
|
|||||||
March
31,
|
|||||||
2007
|
2006
|
||||||
Net
sales
|
$
|
1,931
|
$
|
513,445
|
|||
Other
income - lease revenue
|
78,000
|
-
|
|||||
Revenues
|
$
|
79,931
|
$
|
513,445
|
|||
Income
(loss) from operations of discontinued operations
|
$
|
7,654
|
$
|
(315,715
|
)
|
||
Estimated
cost to sell
|
-
|
(20,000
|
)
|
||||
Income
tax effect
|
-
|
-
|
|||||
Loss
from operations of discontinued operations, net of tax
|
$
|
7,654
|
$
|
(335,715
|
)
|
March
31,
|
|||||||
2007
|
2006
|
||||||
Current
assets of discontinued operations:
|
|||||||
Cash
|
$
|
1,252
|
$
|
1,113
|
|||
Accounts
Receivable
|
16,560
|
171,933
|
|||||
Inventory
|
38,213
|
203,931
|
|||||
Total
|
$
|
56,025
|
$
|
376,977
|
|||
Noncurrent
assets of discontinued operations:
|
|||||||
Other
assets
|
$
|
5,092
|
$
|
471
|
|||
Property
and equipment, net
|
1,202,834
|
1,347,977
|
|||||
Total
|
$
|
1,207,926
|
$
|
1,348,448
|
|||
Current
liabilities of discontinued operations:
|
|||||||
Accounts
payable
|
$
|
13,933
|
$
|
227,225
|
|||
Current
portion of long-term debt
|
293,774
|
444,434
|
|||||
Other
current liabilities
|
22,495
|
30,656
|
|||||
Total
|
$
|
302,336
|
$
|
702,315
|
|||
Long-term
liabilities of discontinued operations:
|
|||||||
Long-term
debt
|
$
|
1,485,134
|
$
|
1,607,626
|
13.
|
CURRENT
FINANCIAL CONDITION
|
·
|
The
impact of several material non-recurring events, including the
one-time
impairment of goodwill, the accrual of deferred compensation related
to
the employment contract of the Company’s founder and then CEO, the
implementation of a free trial program, the write off of the Company’s
deferred tax asset, and a lease abandonment charge related to the
abandonment of the executive
offices;
|
·
|
Excessive
expenses incurred in the Heartland operations;
and
|
·
|
Recurring
loses due to the FDA’s ban on ephedra
products.
|
·
|
Reductions
in force, encompassing all departments within the
Company;
|
·
|
The
termination of a discount sales program, designed to give customers
a cash
discount after purchasing a certain dollar amount of product;
and
|
·
|
The
termination of several extra employee benefits, including vehicle
allowances and social and country-club
privileges.
|
14.
|
CORRECTION
OF ERROR IN REPORTING NET
SALES
|
2006
Quarters Ended,
|
||||||||||
March
31,
|
June
30,
|
September
30,
|
||||||||
Net
Sales
|
$
|
2,351,713
|
$
|
2,397,975
|
$
|
2,323,583
|
||||
Adjustment
|
73,761
|
82,900
|
86,668
|
|||||||
Adjusted
net sales
|
$
|
2,425,474
|
$
|
2,480,875
|
$
|
2,410,251
|
||||
Net
loss from operations as previously reported
|
$
|
(316,314
|
)
|
$
|
(152,900
|
)
|
$
|
(635,774
|
)
|
|
Adjusted
net loss from operations
|
$
|
(242,553
|
)
|
$
|
(70,000
|
)
|
$
|
(549,106
|
)
|
·
|
Sell
Heartland Cup
|
·
|
Use
additional capital to build a foundation that will allow us
to grow.
Because of our consecutive years of losses, we have not had
the funds to
develop marketing, training and support tools, and programs
to support our
independent associates’ efforts in the field. On June 28, 2006, we
raised $2,000,000 in additional financing. We used these funds to
start an aggressive sales and marketing campaign, which we
believe will
increase our top line revenues. We intend to produce better
product
videos, business builder videos, printed material and other
materials for
use by our independent associates in their marketing efforts. In
addition we intend to upgrade our back office to provide our
independent
associates with the most current management tools available
in network
marketing.
|
·
|
Establish
a new binary commission system and allow our independent associates
to
choose to use our existing commission system or the new binary
commission
system depending on their primary method of generating revenues.
This will
allow our independent associates to tailor their commission system
to
their operating methods.
|
·
|
Enter
the international markets.
|
·
|
Commissions
and bonuses, consisting of commission payments to associates based
on
their current associate level within their organization, and other
one-time incentive cash bonuses to qualifying
associates;
|
·
|
Cost
of products, consisting of the prices we pay to our manufacturers
for
products, and royalty overrides earned by qualifying associates
on sales
within their associate organizations; and
|
·
|
Cost
of shipping, consisting of costs related to shipments, duties and
tariffs,
freight expenses relating to shipment of products to associates
and
similar expenses.
|
For
the Three Months Ended
|
|||||||||||||
March
31,
|
|||||||||||||
2007
|
2006
|
||||||||||||
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||
Net
sales
|
$
|
2,435,342
|
100.0
|
%
|
$
|
2,425,474
|
100.0
|
%
|
|||||
Cost
of Sales:
|
|||||||||||||
Commissions
and bonuses
|
804,945
|
33.1
|
827,815
|
34.1
|
|||||||||
Cost
of products
|
482,302
|
19.8
|
458,070
|
18.9
|
|||||||||
Cost
of shipping
|
269,458
|
11.1
|
279,269
|
11.5
|
|||||||||
Total
cost of sales
|
1,556,705
|
63.9
|
1,565,154
|
64.5
|
|||||||||
Gross
profit
|
878,637
|
36.1
|
860,320
|
35.5
|
|||||||||
Marketing,
distribution and administrative expenses:
|
|||||||||||||
Marketing
|
282,996
|
11.6
|
141,144
|
5.8
|
|||||||||
Distribution
and administrative
|
897,465
|
36.9
|
689,520
|
28.4
|
|||||||||
Total
marketing, distribution and administrative expenses
|
1,180,461
|
48.5
|
830,664
|
34.2
|
|||||||||
Income
(loss) from operations
|
(301,824
|
)
|
(12.4
|
)
|
29,656
|
1.2
|
|||||||
Other
income (expense):
|
|||||||||||||
Interest
and dividends, net
|
(143,174
|
)
|
(5.9
|
)
|
3,842
|
0.2
|
|||||||
Other
income (expense)
|
27,005
|
1.1
|
59,664
|
2.4
|
|||||||||
Total
other income (expense)
|
(116,169
|
)
|
(4.8
|
)
|
63,506
|
2.6
|
|||||||
Income
(loss) from continuing operations before taxes
|
(417,993
|
)
|
(17.2
|
)
|
93,162
|
3.8
|
|||||||
Income
tax
|
-
|
-
|
-
|
-
|
|||||||||
Income
(loss) from continuing operations
|
(417,993
|
)
|
(17.2
|
)
|
93,162
|
3.8
|
|||||||
Discontinued
operations:
|
|||||||||||||
Income
(loss) from operations of Heartland Cup
|
7,654
|
0.3
|
(335,715
|
)
|
(13.8
|
)
|
|||||||
Income
tax benefit
|
-
|
-
|
-
|
-
|
|||||||||
Income
(loss) from discontinued operations
|
7,654
|
0.3
|
(335,715
|
)
|
(13.8
|
)
|
|||||||
Net
loss
|
$
|
(410,339
|
)
|
(16.8
|
)%
|
$
|
(242,553
|
)
|
(10.0
|
)%
|
·
|
A
decrease of approximately $22,900 in associate commissions and
bonuses;
and
|
·
|
A
decrease of approximately $10,000 in the shipping
costs.
|
·
|
An
increase of approximately $24,000 in cost of
products.
|
·
|
An
increase in promotional cost of approximately $78,000, related
primarily
to the 2007 national convention;
and
|
·
|
An
increase in professional services of approximately $125,000 related
to
consulting fees for the branding of the new SABA
division.
|
·
|
A
decrease in employee costs of approximately $37,000 related to
reductions
in staff; and
|
·
|
A
decrease in travel costs of approximately $21,000 related to outside
travel of marketing.
|
·
|
An
increase in employee costs of approximately $103,000 related primarily
to
two additional executive headcount and vehicle allowance bonuses
for
executives;
|
·
|
An
increase in professional expenses of approximately $23,000 related
to a
consulting agreement and staff recruitment
fees;
|
·
|
An
increase in amortization expense of approximately $43,000 due to
deferred
financing costs related to the
debt;
|
·
|
An
increase in promotional expenses of approximately $37,000 related
to
website expenses; and
|
·
|
An
increase in general and administrative expense of approximately
$14,000
related to postage, supplies, telephone,
etc.
|
·
|
A
decrease in gain on sale of assets of approximately $47,000 related
to the
sale of motorcoach and an excess vehicle in 2006;
and
|
·
|
An
increase in interest expense of approximately $161,000 related
to the
Laurus debt executed in 2006.
|
·
|
A
increase in interest income of approximately $8,000 related to
the notes
receivables; and
|
·
|
An
increase in other income of approximately $15,000 related to the
collection of a class action suit
settlement.
|
·
|
The
increase in gross profit to $878,637 during 2007 from $860,320
during
2006;
|
·
|
The
increase in marketing and administrative expense to $1,180,461
during 2007
from $830,664 during 2006; and
|
·
|
The
decrease in other income (expense) to expense of ($116,169) during
2007
from income of $63,506 during 2006.
|
·
|
Excessive
expenses incurred in the Heartland operations;
and
|
·
|
Recurring
losses due to the FDA’s ban on ephedra
products.
|
·
|
Reductions
in force, encompassing all departments within the
Company;
|
·
|
The
termination of a discount sales program, designed to give customers
a cash
discount after purchasing a certain dollar amount of product;
and
|
·
|
The
termination of several extra employee benefits, including vehicle
allowances and social and country-club
privileges.
|
3.1
|
The
Registrant's Certificate of Incorporation, incorporated by reference
to
the Registration Statement on Form SB-2 (Registration No. 333-47801)
filed
with the Commission
on March 11, 1998.
|
3.2
|
The
Registrant's Bylaws, incorporated by reference to the Registration
Statement on Form SB-2 (Registration No. 333-47801) filed with
the
Commission on March 11, 1998.
|
10.1
|
Stock
Option Agreement of Advantage Marketing Systems dated January 3,
2001,
incorporated by reference to Form 8-K filed with the Commission
on January
8, 2001.
|
10.2*
|
The
Advantage Marketing Systems, Inc. 1995 Stock Option Plan, incorporated
by
reference to Form SB-2 Registration Statement (No. 33-80629), filed
with
the Commission on November 20,
1996.
|
10.3*
|
Employment
Agreement by and between Steven G. Kochen and Registrant dated
effective
as of August 9, 2005, incorporated by reference to Form 8-K filed
with the
Commission on August 12, 2005.
|
10.4*
|
Employment
Agreement by and between Jerry W. Grizzle and Registrant dated
effective
as of January 25, 2006, incorporated by reference to Form 10-KSB
filed with the Commission on April 3,
2006.
|
10.5*
|
Employment
Agreement by and between Robin L. Jacob and Registrant dated effective
as
of February 12, 2006, incorporated by reference to Form 8-K filed
with the
Commission on April 12, 2006.
|
10.6
|
Consulting
Agreement by and between TVC Consulting and Registrant dated effective
as
of March 1, 2006, incorporated by reference to Form 10-QSB filed
with the
Commission on May 15, 2006
|
10.7
|
Securities
Purchase Agreement dated June 28, 2006 by and between the Company
and
Laurus Master Fund, Ltd., incorporated by reference to the Form
10-QSB
filed with the Commission on August 14,
2006.
|
10.8
|
Secured
Convertible Term Note dated June 28, 2006 by the Company in favor
of
Laurus Master Fund, Ltd., incorporated by reference to the Form
10-QSB
filed with the Commission on August 14,
2006.
|
10.9
|
Common
Stock Purchase Warrant dated June 29, 2006 by the Company in favor
of
Laurus Master Fund, Ltd., incorporated by reference to the Form
10-QSB
filed with the Commission on August 14,
2006.
|
10.10
|
Registration
Rights Agreement dated June 28, 2006 by and between the Company
and Laurus
Master Fund, Ltd., incorporated by reference to the Form 10-QSB
filed with
the Commission on August 14, 2006.
|
10.11
|
Stock
Pledge Agreement dated June 28, 2006 by and among the Company,
AMS
Manufacturing, Inc. and Laurus Master Fund, Ltd., incorporated
by
reference to the Form 10-QSB filed with the Commission on August
14,
2006.
|
10.12
|
Master
Security Agreement dated June 28, 2006 by and among the Company,
AMS
Manufacturing, Inc. and Laurus Master Fund, Ltd., incorporated
by
reference to the Form 10-QSB filed with the Commission on August
14,
2006.
|
10.13
|
Mortgage
dated June 28, 2006 by and between the Company and Laurus Master
Fund,
Ltd., incorporated by reference to the Form 10-QSB filed with the
Commission on August 14, 2006.
|
10.14
|
Grant
of Security Interest in Patents and Trademarks dated June 28, 2006
by and
between the Company and Laurus Master Fund, Ltd., incorporated
by
reference to the Form 10-QSB filed with the Commission on August
14,
2006.
|
10.15
|
Common
Stock Purchase Warrant dated June 28, 2006 by the Company in favor
of
Ascendiant Securities, LLC, incorporated by reference to the Form
10-QSB
filed with the Commission on August 14,
2006.
|
10.16
|
Engagement
Letter between the Company and Ascendiant Securities, LLC, incorporated
by
reference to the Form 10-QSB filed with the Commission on August
14,
2006.
|
10.17*
|
Employment
Agreement by and between Dennis P. Loney and Registrant dated effective
as
of September 19, 2006, incorporated by reference to Form 8-K filed
with
the Commission on September 25,
2006.
|
15
|
Letter
of independent accountants as to unaudited interim financial information,
filed herewith.
|
31.1
|
Chief
Executive Officer Certification, filed
herewith.
|
31.2
|
Chief
Financial Officer Certification, filed
herewith.
|
32.1
|
Section
1350 Certification of our Chief Executive Officer, filed
herewith.
|
32.2
|
Section
1350 Certification of our Chief Financial Officer, filed
herewith.
|
REGISTRANT:
|
|
AMS
HEALTH SCIENCES, INC.
|
|
By:
/S/
ROBIN L. JACOB
|
|
Dated:
May 10, 2007
|
Robin
L. Jacob, Vice President and Chief
Financial
Officer
|
(Duly
Authorized Officer of Registrant and
Principal
Financial Officer)
|
3.1
|
The
Registrant's Certificate of Incorporation, incorporated by reference
to
the Registration Statement on Form SB-2 (Registration No. 333-47801)
filed
with the Commission
on March 11, 1998.
|
3.2
|
The
Registrant's Bylaws, incorporated by reference to the Registration
Statement on Form SB-2 (Registration No. 333-47801) filed with
the
Commission on March 11, 1998.
|
10.1
|
Stock
Option Agreement of Advantage Marketing Systems dated January 3,
2001,
incorporated by reference to Form 8-K filed with the Commission
on January
8, 2001.
|
10.2*
|
The
Advantage Marketing Systems, Inc. 1995 Stock Option Plan, incorporated
by
reference to Form SB-2 Registration Statement (No. 33-80629),
filed with
the Commission on November 20,
1996.
|
10.3*
|
Employment
Agreement by and between Steven G. Kochen and Registrant dated
effective
as of August 9, 2005, incorporated by reference to Form 8-K filed
with the
Commission on August 12,
2005.
|
10.4*
|
Employment Agreement by and between Jerry W. Grizzle and Registrant dated effective as of January 25, 2006, incorporated by reference to Form 10-KSB filed with the Commission on April 3, 2006. |
10.5*
|
Employment
Agreement by and between Robin L. Jacob and Registrant dated effective
as
of February 12, 2006, incorporated by reference to Form 8-K filed
with the
Commission on April 12, 2006.
|
10.6
|
Consulting
Agreement by and between TVC Consulting and Registrant dated effective
as
of March 1, 2006, incorporated by reference to Form 10-QSB filed
with the
Commission on May 15, 2006.
|
10.7
|
Securities
Purchase Agreement dated June 28, 2006 by and between the Company
and
Laurus Master Fund, Ltd., incorporated by reference to the Form
10-QSB
filed with the Commission on August 14,
2006.
|
10.8
|
Secured
Convertible Term Note dated June 28, 2006 by the Company in favor
of
Laurus Master Fund, Ltd., incorporated by reference to the Form
10-QSB
filed with the Commission on August 14,
2006.
|
10.9
|
Common
Stock Purchase Warrant dated June 29, 2006 by the Company in favor
of
Laurus Master Fund, Ltd., incorporated by reference to the Form
10-QSB
filed with the Commission on August 14,
2006.
|
10.10
|
Registration
Rights Agreement dated June 28, 2006 by and between the Company
and Laurus
Master Fund, Ltd., incorporated by reference to the Form 10-QSB
filed with
the Commission on August 14, 2006.
|
10.11
|
Stock
Pledge Agreement dated June 28, 2006 by and among the Company,
AMS
Manufacturing, Inc. and Laurus Master Fund, Ltd., incorporated
by
reference to the Form 10-QSB filed with the Commission on August
14,
2006.
|
10.12
|
Master
Security Agreement dated June 28, 2006 by and among the Company,
AMS
Manufacturing, Inc. and Laurus Master Fund, Ltd., incorporated
by
reference to the Form 10-QSB filed with the Commission on August
14,
2006.
|
10.13
|
Mortgage
dated June 28, 2006 by and between the Company and Laurus Master
Fund,
Ltd., incorporated by reference to the Form 10-QSB filed with the
Commission on August 14, 2006.
|
10.14
|
Grant
of Security Interest in Patents and Trademarks dated June 28, 2006
by and
between the Company and Laurus Master Fund, Ltd., incorporated
by
reference to the Form 10-QSB filed with the Commission on August
14,
2006.
|
10.15
|
Common
Stock Purchase Warrant dated June 28, 2006 by the Company in favor
of
Ascendiant Securities, LLC, incorporated by reference to the Form
10-QSB
filed with the Commission on August 14,
2006.
|
10.16
|
Engagement
Letter between the Company and Ascendiant Securities, LLC, incorporated
by
reference to the Form 10-QSB filed with the Commission on August
14,
2006.
|
10.17*
|
Employment
Agreement by and between Dennis P. Loney and Registrant dated effective
as
of September 19, 2006, incorporated by reference to Form 8-K filed
with
the Commission on September 25,
2006.
|
15
|
Letter
of independent accountants as to unaudited interim financial information,
filed herewith.
|
31.2
|
Chief
Financial Officer Certification, filed
herewith.
|
32.1
|
Section
1350 Certification of our Chief Executive Officer, filed
herewith.
|
32.2
|
Section
1350 Certification of our Chief Financial Officer, filed
herewith.
|