Innolog Holdings Corp. - FORM 10-K

Attached files

file	filename
EX-31.2 - Innolog Holdings Corp.	v181137_ex31-2.htm
EX-31.1 - Innolog Holdings Corp.	v181137_ex31-1.htm
EX-32.1 - Innolog Holdings Corp.	v181137_ex32-1.htm
EX-10.33 - Innolog Holdings Corp.	v181137_ex10-33.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______.

Commission File Number 333-140633

UKARMA CORPORATION

(Name of small business issuer in its charter)

NEVADA		68-048-2472
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)

499 North Canon Drive, Suite 308
Beverly Hills, CA		90210
(Address of principal executive offices)		(Zip Code)

Issuer's telephone number: (310) 998-8909

Securities registered under Section 12(b) of the Exchange Act: none

Securities registered under Section 12(g) of the Exchange Act: none

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

Yes o No þ

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 þ No o

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 o No þ

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period than the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained herein, 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. þ

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


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

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

At June 30, 2009, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was $625,447, based on a closing price of $0.03 per share and 20,848,253 shares of common stock.

Number of shares of common stock outstanding as of April 14, 2010: 52,794,482

TABLE OF CONTENTS

				Page
FORWARD-LOOKING STATEMENTS				1

PART I				1

		Item 1.	Business	1
		Item 2.	Properties	8
		Item 3.	Legal Proceedings	8
		Item 4.	Submission of Matters to a Vote of Security Holders	8

PART II				8

		Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	8
		Item 6.	Selected Financial Data	10
		Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	10
		Item 8.	Financial Statements and Supplementary Data	14
		Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	15
		Item 9A.	Controls and Procedures	15

PART III				16

		Item 10.	Directors, Executive Officers and Corporate Governance	16
		Item 11.	Executive Compensation	18
		Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	20
		Item 13.	Certain Relationships and Related Transactions, and Director Independence	21
		Item 14.	Principal Accounting Fees and Services	21

PART IV				21

	Item 15.		Exhibits, Financial Statement Schedules	21

SIGNATURES				23

FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K for the fiscal year ended December 31, 2009 contains “forward-looking” statements including statements regarding our expectations of our future operations. For this purpose, any statements contained in this Form 10-K that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” or “continue,” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include, but are not limited to, economic conditions generally and in the industries in which we may participate, competition within our chosen industry, including competition from much larger competitors, technological advances, and the failure by us to successfully develop business relationships. In light of these risks and uncertainties, you are cautioned not to place undue reliance on these forward-looking statements. Except as required by law, we undertake no obligation to announce publicly revisions we make to these forward-looking statements to reflect the effect of events or circumstances that may arise after the date of this report. All written and oral forward-looking statements made subsequent to the date of this report and attributable to us or persons acting on our behalf are expressly qualified in their entirety by this section.

When used in this annual report, the terms the “Company,” “uKarma,” “we,” “us,” “our,” and similar terms refer to uKarma Corporation, a Nevada corporation.

PART I

ITEM 1. BUSINESS

Overview

We were incorporated in Nevada on June 26, 2001 under the name “OM Capital Corporation,” and changed our name to “uKarma Corporation” on April 20, 2004.

We develop and market proprietary branded personal health and wellness products, including fitness DVDs and mind, body, and spirit goods and services, for fitness and health-conscious consumers. Our product lines target the rapidly growing tens of millions that are seeking to enrich their physical, spiritual, and mental wellness.

We launched our initial products, a fitness DVD series called Xflowsion, through an infomercial and other marketing initiatives. The goal of the infomercial, if it successfully generates consumer response and sales, is to generate initial working capital and build a community of loyal customers. From there, we plan on expanding our product offerings into proprietary branded products primarily within the fitness/well-being multimedia and nutraceutical markets. As our brand image builds, we intend to extend our brand systematically to other complementary consumer products that meet our stringent product guidelines and are consistent with our message of “total health and happiness for oneself and others.”

We began to generate revenue in the second quarter of 2007. Accordingly, we are no longer a development stage since April 1, 2007.

Recent Events

On October 19, 2009, the Company and its wholly owned subsidiary, GCC Merger Sub Corporation (“Merger Sub”), entered into a Merger Agreement with Galen Capital Corporation (“GCC”) dated as of October 15, 2009. This followed a previously executed Letter of Intent between the Company and GCC dated June 11, 2009.

Under the agreement, Merger Sub would merge with GCC such that following the merger (“Merger” or “Transaction”), GCC would be a wholly owned subsidiary of the Company. As consideration for the transaction, the Company would issue to GCC security holders that number of shares of common stock on a fully diluted basis (“Common Shares”) such that following such issuance, GCC security holders would hold 95% of the outstanding Company Common Shares on a fully diluted basis. GCC common stock would be exchanged for Company Common Shares. GCC convertible preferred stock, options, and warrants would be exchanged for equivalent Company preferred stock, options, and warrants.

On December 22, 2009, the Company amended the Merger Agreement with GCC. Pursuant to the terms of the amended agreement, the closing date was changed to on or before May 15, 2010. GCC has also agreed to pay Company an amount equal to $475,000 (“Cash Payment”) and replaced the previous agreement amount of $275,000. Through the date of this report, $375,000 of the Cash Payment has already been paid to the Company as a non-refundable deposit along with $23,500 worth of expenses. In addition, GCC must pay the Company a final payment of $100,000 on or before the latest of March 31, 2010 or the date the Company files the Form 10-K.

Principal Products and Services

Fitness and Relationship-oriented DVDs

We plan to offer complementary products within our target categories after we have enough customers (approximately 10,000 customers) to warrant such product extensions. We expect to develop additional bundles of DVDs within the fitness and personal development segments. The timing of this will depend on the timing of our market penetration with Xflowsion and being in a cash position to re-edit our infomercial and initiate other marketing programs. We anticipate, however, producing and marketing a series of other DVDs related to developing and maintaining healthy relationships sometime after we obtain at least 10,000 customers. As a result of Eric Paskel’s educational and clinical expertise in this area, including an advanced degree in clinical psychology and background in family therapy, he is extremely well-suited to cross-over effectively from his yoga/fitness DVDs to this arena. Each relationship DVD will likely have a retail price of $19.95, similar to the individual pricing for our fitness DVDs when not sold as part of a bundle of products.

Additional Multimedia Offerings

After we build a strong customer base and establish Xflowsion, we plan to extend our media offerings into pod casting, web broadcasting, and TV production. For TV productions, we will consider developing and producing original content of shows that are uplifting and inspirational, as well as fitness/workout formats and reality shows focusing on the behind-the-life of a yogi or guru. We previously engaged an agent for such a purpose and had interest in producing a TV show from production companies, along with Eric Paskel appearing on “The Amazing Race” in September 2009. However, we expect such TV opportunities to become more viable if and when our Xflowsion brand becomes more successful and attains a loyal following of consumers.

Acquisition/Re-brandings

We will seek out products and services that are consistent with our vision and business objectives for possible acquisition and re-branding through repackaging. This strategy may enable us to get to market more quickly with several product offerings, particularly complementary accessories and nutraceuticals. Moreover, we plan to identify and possibly acquire synergistic companies that have innovative complementary products, strong management, and solid distribution channels that will forward our growth.

Distribution and Sales

Once we are in a capital position to do so, we plan to continue to edit and test market our infomercial with the intention of obtaining the right formula to attract sales and make the economics of airing the infomercial nationally viable. If successful in doing so, we will build a customer base through our infomercial and other direct–to-consumer marketing. We would then expect to increase brand equity and growth through additional complementary product offerings, such as other DVD products and nutraceuticals. While infomercials will be the initial focus for our channel distribution strategy, we expect to sell our products through additional channels, including retail. We initially offered our Xflowsion DVD series for sale in May 2007 for $39.95 plus $9.95 shipping and handling. This pricing was made available to those who had previously registered on www.xflowsion.com. The pricing for the Xflowsion DVD series was offered for 3 payments of $19.95, or $59.85, plus $12.95 shipping and handling when our infomercial ran in May 2007. We began re-airing our updated and reedited Xflowsion infomercial nationally on June 27, 2008. Infomercials typically go through a period of on-air testing and other means such as focus groups to obtain feedback that can be used to make edits designed to elicit the greatest consumer response. We went through such a process and conducted a focus group during the 3rd quarter of 2008. We had a very high percentage (approximately 80%) of participants who were interested in buying our Xflowsion DVD series. Overall, the focus group feedback revealed a strong interest in the Xflowsion workout and instructor Eric Paskel and confirmed our potential for Xflowsion to be a big seller. However due to cash constraints, we have not edited or aired the infomercial since. Once we are in a position to do so, we plan to use the feedback we received from the focus group and on-air infomercial testing to tweak our branding and edit our infomercial so we can maximize the potential response and sales by consumers.

DVD Continuity Programs

We plan to offer to our customers who purchase the initial Xflowsion DVD series (in response to the infomercial either via the call center or website) the opportunity to participate in an exclusive continuity program whereby the customer will receive one new DVD every 1-2 months. We anticipate producing multiple DVDs for our continuity program every quarter after we obtain approximately 10,000 customers. Since we shot and edited a total of 7 Xflowsion DVDs already and are selling 4 workout DVDs in our current Xflowsion DVD series, we currently have 3 Xflowsion DVDs available for our continuity program.

Web-based Sales

We believe that our websites, www.xflowsion.com and www.uKarma.com, will be an integral component of our direct response television marketing (DRTV) campaigns. Koeppel Direct estimates that between 15-50% of DRTV purchases are now occurring on the web due to the high percentage of people who surf the Internet and watch TV concurrently. Koeppel Direct also estimates that approximately 50% of U.S. homes now have a high-speed broadband connection, enabling prospective customers to easily view short clips of the infomercial or selected video and lead them to a purchase decision. The website may also serve as a tool to further educate the consumer about our products and its benefits. Current traffic to www.xflowsion.com has been generated as a result of receiving press coverage (www.xflowsion.com/press.html), in response to the airings of our infomercial, to online marketing we initiated, and from word of mouth. We expect to drive additional traffic to our websites via the airings of our infomercial, additional press coverage, and via online marketing including Social Media, SEO (search engine optimization), banner advertisements, and email marketing.

Paid Subscription Services

If we can reach a critical mass of customers (approximately 50,000 unique individuals) through our infomercial and begin to drive customers to our website through other marketing activities, we expect to offer an online subscription service to paying members. The service may offer customers updated content on health tips, yoga poses, healthy recipes, bulletins, live chats with instructors, among others.

Viral/Social Media Marketing

In order to expand our database, we expect to use viral marketing (marketing techniques that use pre-existing social networks to produce increases in brand awareness through self-replicating viral processes), such as by establishing Facebook, Twitter, YouTube, and other social media sites for our Xflowsion DVD series and providing free content and previews of our products. We also expect to offer daily inspirational messages to our prospective customers via opt-in email services, which are effective tools from which to then offer products and services and advertise third-party paid sponsors.

Affiliate Programs

The uKarma Affiliate Partner Program is intended to allow our partners to earn a commission by promoting uKarma products and/or brand links (text, images, banners, products) on our affiliates’ websites. We are expected to provide affiliates with a range of banners, coupons, and product links for each product. Using web-based technology, we will be able to track visitors from each affiliate site. Affiliate sites could include online yoga and fitness journals (i.e., www.yogajournal.com), as well as sites dedicated to selling products from infomercials (i.e., www.asseenontv.com).

Retail Sales

Our DRTV campaign will be designed to be integrated with a retail strategy such that the infomercial helps drive retail sales and build awareness for our product among consumers. We expect to take our Xflowsion DVD series to retail stores after it has gained success in the direct-to-consumer market but prior to the direct-to-consumer market being saturated.

Market and Industry Overview

The healthy lifestyles and personal development industry has grown in the last few years to become a multi-billion dollar industry representing products in many different segments. According to LOHAS (Lifestyles of Health and Sustainability -www.lohas.com/about.htm), the healthy lifestyle sector of the marketplace includes natural organics, nutritional products, food and beverage, dietary supplements, and personal care products. LOHAS defines the personal development segment of the marketplace to include mind, body, and spirit products such as CDs, books, tapes, seminars, and yoga, fitness, weight loss, and spiritual products and services.

Americans now spend up to $27 billion annually on yoga products (as reported by NAMASTA, the North American Studio Alliance, http://www.namasta.com/, http://www.bikramyoga.com/News/TheColoradoan071005.htm), with the average yoga consumer spending an estimated $1,500 per year (http://www.yogajournal.com/views/769.cfm).

Total U.S. sales for nutraceutical or dietary supplement products alone were estimated to be $86 billion (http://en.wikipedia.org/wiki/Nutraceutical). The term “nutraceutical” was coined in 1989 by the Foundation for Innovation in Medicine and is defined as any ingestible substance that may be considered a food or part of a food that provides health benefits.

The instructional fitness DVD industry is highly competitive. According to Nielsen media research, DVD fitness titles sales rated by Nielsen VideoScan reported in March 2004 that DVDs represented 51% of the sales for the top 30 fitness titles. Over the past few years, the most popular fitness DVD titles have related to pilates and yoga. USA Today reported that, according to Video Store Magazine Market Research, of the top 10 selling DVD fitness titles of 2003, No. 1 in the top ten is Leslie Sansone: Walk Away the Pounds: (168,000 Units) followed by #2 The Method Pilates Target Specific: (150,000 Units); #3 The Method Pilates: (120,000 Units); #4 Pilates Conditioning for Weight Loss: (117,000 Units); #5 Pilates for Dummies: (168,000 Units); #6 Crunch: Pick Your Spot Pilates: (105,000 Units); #7 Darrin's Dance Grooves: (91,000 Units); #8 Cheer: (80,000 Units); #9 The Firm: Total Body Super Cardio Mix: (73,000 Units); and #10 Yoga Conditioning for Weight Loss: (72,000 Units). In addition, sales of popular fitness DVDs sold via infomercial during the past year contained yoga related content such as in P90X and 10 Minute Trainer.

Competition

We believe that the “mind, body, and spirit” market is comprised of few large competitors and also comprised of small, local, and regional businesses. Some of our competitors have greater financial and marketing resources and greater brand recognition. Some smaller competitors may be able to more effectively personalize their relationships with customers, thereby gaining a competitive advantage. The largest and most similar competitor within this market is Gaiam, Inc. (NASDAQ: GAIA). Gaiam is a lifestyle media company that creates media, information, and products for individuals who seek to live healthier, more rewarding, and sustainable lifestyles. Other larger competitors who produce and market fitness related DVD products via infomercials and through other direct to consumer marketing are Beach Body and Guthy Renker, both of which are private companies.

There are numerous small, privately held companies in the lifestyle media space that offer yoga, spiritual, and personal development DVDs, among others. These companies include Acorn Media Group (owned by Acacia), Sounds True, Revolution, and Fitness Organica. These companies offer mind, body, and spirit products while being committed to being socially and environmentally responsible as corporate citizens.

Our fitness DVD sales business will face competition from the many companies that already sell fitness DVDs via infomercials, in chain stores, through smaller retailers, and on their own Internet sites or shopping websites such as ebay.com and Yahoo! Shopping. Many of our competitors who produce fitness DVDs have greater financial and other resources than we do and will be able to promote their products to a greater extent than we will and perhaps have celebrity endorsements or participation that will enable them to attract more buyers. In addition, competing production companies may be able to obtain more or better DVD content and have better promotional campaigns. Also, the extent to which consumers choose to exercise in fitness centers or in other manners without the aid of DVDs may reduce our sales, reduce our gross margins, increase our operating expenses, and decrease our profit margins.

Although we operate in a market that already contains many experienced companies with greater resources, we believe that we may still be able to compete in the market. We believe that there is room in the marketplace for original fitness DVDs that offer new information and types of exercise that are specifically targeted to groups of people or to people with specific interests. This belief is based on informal research that our management has done on the types of fitness DVDs available for purchase on the Internet and in other locations, compared to discussions with approximately 30 people from various backgrounds and of different demographics regarding the types of fitness DVDs that might appeal to them, along with a focus group comprised of approximately 60 individuals. We plan to produce and sell fitness DVDs to those mass market and niche markets.

Raw Materials and Principal Suppliers

We have no need for raw materials or suppliers at this time but may need such relationships if we sell nutraceutical and dietary supplement products. Our DVDs and CDs that are part of our Xflowsion product offering are replicated by a DVD/CD replication company, and the guidebooks and intro letters that are part of our Xflowsion products are printed at a printing company.

Customers

The marketing and sales of our Xflowsion DVD product has continued to be in the test-marketing and word of mouth stage until we are able to get the version of our infomercial that elicits the greatest response and makes sense to roll out nationally once our capital position warrants. As such, our customer base is limited in size. If we are able to establish a more substantial customer base in the future, we may become dependent on a few major customers or distributors.

Intellectual Properties and Licenses

We have applied and received for copyright protection for our seven Xflowsion DVDs and other related Xflowsion products such as CDs and guidebooks. We rely upon a combination of nondisclosure and other contractual arrangements and trade secret, and copyright and trademark laws to protect our proprietary rights. We enter into confidentiality agreements with our employees and limit distribution of proprietary information. However, we cannot assure you that the steps taken by us in this regard will be adequate to deter misappropriation of proprietary information or that we will be able to detect unauthorized use and take appropriate steps to enforce our intellectual property rights. We are subject to the risk of litigation alleging infringement of third-party intellectual property rights. Any such claims could require us to spend significant sums in litigation, pay damages, develop non-infringing intellectual property, or acquire licenses to the intellectual property that is the subject of the asserted infringement.

We have filed for patent protection for our proprietary yoga mat product concept. We do not, however, expect a patent to be issued, and, as a result, we do not plan to produce and market such a product.

We have filed and received a trademarks for “Xflowision” and “uKarma.” In addition, we have filed for Slogan Mark protection for “The most fun you’ll ever have working out”, “The most fun I’ve ever had working out”, “Mind Blowing fitness for every body”, “Mind Blowing workouts for every body”, “Triple Training”, “Look Great Outside, Feel Great Inside”, and “Ultimate Cross Training for mind body and spirit”. We have also filed trademarks for our DVD titles including “Calm Down Dog,” “The Lean,” “Amazing Abs,” “Body Blast,” and “Kick Butt Yoga.” We also filed for trademarks for “Dreams Realized”, “DreamsRealized.com”, and “The Karma Diet.” The following trademarks have been registered: uKarma, Xflowsion, Body Blast, Calm Down Dog, and The Most Fun You’ll Ever Have Working Out. The following trademarks have been published: All U Need, Amazing Abs, Dreams Realized, Look Great Outside Feel Great Inside, The Karma Diet, Triple Training, and The Most Fun I’ll Ever Have Working out. The others are currently pending. Our inability or failure to establish rights to these terms or protect our rights may have a material adverse effect on our business, results of operations, and financial condition. We also own the copyright in the websites www.ukarma.com and www.xflowsion.com.

Governmental Approval and Regulation

Laws and regulations directly applicable to Internet communications, commerce, and advertising are becoming more prevalent. Because we intend to sell our DVDs through the Internet as one of its methods of distribution, we will be subject to rules and regulations around the world that affect the business of the Internet. If and when we sell nutraceutical products, such products are subject to a variety of FTC and FDA regulations which we would be subject to as related to ingredients and advertising claims.

Research and Development

Over the past two fiscal years, we have conducted formal and informal research related to the marketing of our Xflowsion products. Included in that research was a focus group that we conducted during the 3rd quarter of 2008. We recruited 4 test groups comprised of approximately 12-15 people per group who watched our infomercial for our Xflowsion DVD products and provided their feedback via a questionnaire and group discussion. We also conducted more informal research on our product and marketing messaging in our infomercial via listening to recorded customer calls at our telemarketing company and via customer service emails sent via xflowsion.com.

Employees

We currently have 1 employee, who is a full-time employee.

ITEM 2. PROPERTIES

Our principal executive offices were located at 499 North Canon Drive, Suite 308, Beverly Hills, California 90210. Subsequent to the lease expiration date on April 15, 2009, we physically moved from our office but maintain an identity plan that includes phone answering and mail service at this location on a quarterly basis for approximately $450 per quarter. As such, our mailing address has not changed. We plan to continue the identity plan until we are able to afford office space. In the meantime, our CEO works from his home.

ITEM 3. LEGAL PROCEEDINGS

On June 17, 2009, Jeffrey Fischer (the “Landlord”) filed a compliant against uKarma Corporation and Bill Glaser, our Chief Executive Officer, in the Los Angeles Superior Court in Los Angeles, California. The Landlord claimed that we owe back rent on the lease of our yoga and fitness studio in Sherman Oaks, California and sought to recover $222,859.97 and evict us from the subject property. We denied liability and contend that the Landlord never reimbursed us for a tenant improvement allowance of $165,000 pursuant to the lease along with other breaches by the Landlord. The judge in the cased denied a writ of attachment motion that was submitted by the Landlord. A settlement could not be reached between the parties, and as such the Company vacated the property on September 30, 2009. On December 2, 2009, the Landlord filed a First Amended complaint naming the Company, Mr. Glaser, and Fred Tannous, a director of the Company, and a number of unrelated parties and added additional causes of actions and damages totaling $1,066,660.00. The Company filed a demurer that was heard and sustained by the court on March 2, 2010. As a result of the judge’s ruling, there is currently no pending complaint on file against the Company, Mr. Glaser, and Mr. Tannous. The judge did provide the Landlord with the right to amend the complaint within 45 days from March 2, 2010. If and when he does so, we plan to defend such claims that we believe are false and frivolous along with initiating legal action against the Landlord for full recovery of all tenant improvements it incurred to date along with other damages.

Other than the proceeding discussed above, we know of no material, existing or pending legal proceeding against us, nor are we involved as a plaintiff in any material proceeding or pending litigation, and there are no proceedings in which any of our directors, officers, or affiliates, or any registered or beneficial holder of more than 5% of our voting securities, or any associate of such persons, is an adverse party or has a material interest adverse to the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is quoted on the Over-the-Counter Bulletin Board ("OTCBB") under the symbol “UKMA.” The following table sets forth, for the periods indicated, the reported high and low closing bid quotations for our common stock as reported on the OTCBB. The bid prices reflect inter-dealer quotations, do not include retail markups, markdowns, or commissions, and do not necessarily reflect actual transactions.

Quarter Ended	High Bid		Low Bid

December 31, 2009	$	0.015	$	0.005
September 30, 2009	$	0.03	$	0.0101
June 30, 2009	$	0.031	$	0.01
March 31, 2009	$	0.12	$	0.02

December 31, 2008	$	0.22	$	0.08
September 30, 2008	$	0.35	$	0.14
June 30, 2008	$	0.54	$	0.30
March 31, 2008	$	*	$	*

* Our common stock had no active trading market until June 17, 2008.

As of April 14, 2010, the closing sales price for shares of our common stock was $.004 per share on the OTCBB.

Holders

As of April 14, 2010, we had approximately 102 stockholders of record of our issued and outstanding common stock based upon a shareholder list provided by our transfer agent.

Dividend Policy

We do not currently intend to pay any cash dividends in the foreseeable future on our common stock and, instead, intend to retain earnings, if any, for operations. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions, and other factors that our board of directors may deem relevant.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth, as of December 31, 2009, certain information related to our compensation plans under which shares of our common stock are authorized for issuance.

Equity Compensation Plan Information
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	—			—	—
Equity compensation plans not approved by security holders	5,250,000	(1)	$	0.20	2,250,000	(2)
Total	5,250,000		$	0.20	2,250,000

(1)	Includes outstanding options granted pursuant to our 2006 Stock Option, Deferred Stock and Restricted Stock Plan.
(2)	Includes shares remaining available for future issuance under our 2006 Stock Option, Deferred Stock and Restricted Stock Plan.

On January 1, 2006, our board of directors approved the 2006 Stock Option, Deferred Stock and Restricted Stock Plan (the “Plan”) to provide the issuance of non-qualified and/or incentive stock options to employees, officers, directors, and consultants and other service providers. Generally, all options granted expire ten years from the date of grant. All options have an exercise price equal to or higher than the fair market value of our stock on the date the options were granted. It is our policy to issue new shares for stock option exercised and restricted stock, rather than issued treasury shares. Options generally vest over ten years. There are 7,500,000 shares of common stock reserved for issuance under the Plan, and the Plan is effective through December 31, 2015.

Recent Sales of Unregistered Securities

During the year ended December 31, 2009, we sold the following equity securities of the Company that were not registered under the Securities Act of 1933, as amended, and that were not previously disclosed in a quarterly report on Form 10-Q or on a current report on Form 8-K:

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the results of operations and financial condition of uKarma Corporation for the fiscal years ending December 31, 2009 and 2008 should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Forward-Looking Information and Business sections in this report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Overview

We are an early stage company that develops and markets proprietary branded personal health and wellness products, including yoga and fitness DVDs, printed materials and CDs, nutraceuticals, and other products targeting the mass market and MBS (Mind/Body/Spirit) consumers. We generated no revenues since inception through the first quarter of 2007. We began to generate revenue in the second quarter of 2007. Accordingly, we are no longer a development stage since April 1, 2007.

We incurred net losses of approximately $122,488 in 2005, $1,397,922 in 2006, $1,849,636 in 2007, 2,677,092 in 2008 and $1,743,449 in 2009. As of December 31, 2009, we had an accumulated deficit of $7,832,650. As a company in the early stage of development, our limited history of operations makes prediction of future operating results difficult. We believe that period-to-period comparisons of our operating results should not be relied on as predictive of our future results.

In May 2007, we began to market and sell our initial Xflowsion yoga/fitness DVD products. We believe that our success depends upon our ability to successfully produce, market, and distribute such products along with having the necessary capital to operate and grow our business. After test-marketing the initial version of our infomercial, we recognized the need to shoot additional footage and to reedit it before airing it again. Due to capital constraints, we had to wait until our registration statement was declared effective by the Securities and Exchange Commission in order to raise capital. Our registration statement was declared effective on August 9, 2007, and we focused the remainder of 2007 raising capital and preparing to update our infomercial and implement our marketing strategy in 2008.

We began airing the reedited version of our Xflowsion infomercial nationally on June 27, 2008. Infomercials typically go through a period of on-air testing and other means such as focus groups to obtain feedback that can be used to make edits designed to elicit the greatest consumer response. We went through such a process and conducted a focus group during the 3rd quarter of 2008. We had a very high percentage (approximately 80%) of participants who were interested in buying our Xflowsion DVD series. Overall, the focus group feedback revealed a strong interest in the Xflowsion workout and instructor Eric Paskel and confirmed our potential for Xflowsion to be a big seller. We also previously received strong media coverage regarding our Xflowsion brand. Xflowsion has been profiled in People Magazine, People.com, Fitness Magazine, TMZ, The National Enquirer, and many other publications. We have been encouraged by the response to our Xflowsion DVD series in the media and with consumers and via our past marketing efforts, and, when in a better capital position, we plan to reinstitute our marketing initiatives. It has also been indicated to us by executives of our competitors and other industry contacts that most successful fitness DVD infomercials take many incarnations before they become successful.

During 2008, we entered into a lease to develop and operate a yoga and fitness studio in Sherman Oaks, CA that we expected to be open in late 2008 or early 2009. Due to a number of construction delays that we believe were in large part caused by the breaches and interference of the landlord, and after spending approximately $500,000 in tenant improvements, we were unable to open and operate that component of our business. During that time period, the U.S. and global economic recession and related turmoil and volatility in the equity markets along with our financial results made if very difficult to raise additional capital. As such, our marketing efforts for our Xflowsion DVD series and, in particular, the editing and re-airing of our infomercial has been delayed until such time that we are sufficiently capitalized. The ongoing economic uncertainty in general and current economic condition of the Company may continue to impact our ability to raise capital and successfully market and sell our Xflowsion products along with creating and marketing other products. This could negatively impact our future operating performance and cash flow.

The personality of our Xflowsion DVD series, Eric Paskel, appeared on the CBS reality show, The Amazing Race, which started airing in September 2009. Prior to the airing of the first episode of that season, we engaged an online marketing firm to market our Xflowsion DVD series on a CPA (Cost per Acquisition) basis. We also explored and planned many other marketing initiatives in order to leverage the large audience that was going to be exposed to Eric Paskel. While it was possible that Mr. Paskel could have been eliminated on the first show, the audience of millions was a big opportunity to leverage into potential Xflowsion DVD sales. Unfortunately, Mr. Paskel was eliminated at the beginning of the first episode and, as such, our marketing initiatives relating to that exposure were put on hold, which affected our sales.

Further to the Letter of Intent (LOI) to that we entered into with Galen Capital Corporation (“Galen”), we and our wholly owned subsidiary GCC Merger Corporation (“Merger Sub”) subsequently executed a merger agreement with Galen. Under the agreement, Merger Sub would merge with Galen such that following the merger (“Merger” or “Transaction”), and Galen would be a wholly owned subsidiary of the Company. As consideration for the transaction, the Company will issue to the holders of Galen securities equaling that number of shares of common stock on a fully diluted basis (“Common Shares”) such that following such issuance, Merger Sub security holders would hold 95% of the outstanding Company Common Shares on a fully diluted basis. Galen common stock would be exchanged for Company Common Shares. Galen convertible preferred stock, options, and warrants would be exchanged for equivalent Company preferred stock, options, and warrants.

In addition, we entered into an amendment to the merger agreement in which Galen has agreed to pay the Company an amount equal to $475,000 (“Cash Payment”). As of the date of this report, $375,000 of the Cash Payment has already been paid to the Company as a non-refundable deposit along with $23,500 worth of expenses.

Our obligations to close the Transaction will be subject to certain conditions of the other party that must be satisfied or waived, including, among other things, Galen shall pay the remaining portion of the Cash Payment and Galen shareholders shall vote to approve the merger transaction. Galen’s obligations to close the Transaction will be subject to certain conditions of the other party that must be satisfied or waived, including, among other things, Galen shall have certain persons appointed as Company officers and directors. The Agreement may be terminated by any party if the Closing does not occur by May 15, 2010 provided such terminating party is not in breach of this Agreement. The Company has been informed by Galen’s management that the timing to close the Transaction is based on when their audit will be completed, which they expect to be completed in order to close by May 15, 2010.

Concurrent with the merger of Galen, our operating business will be spun-off into a new entity that will be held by our then-current shareholders on a pro-rata basis. As such, we believe that this transaction is beneficial for our shareholders as we will be able to receive capital without selling shares and without taking on debt. Our then-current shareholders are also expected to own the same pro-rata ownership in the spun-off operating business while also retaining some ownership of the Company.

Along with converting his loans to the Company and $144, 231 of deferred compensation into common stock, our CEO, Bill Glaser, continues to have his salary deferred until the Company can better afford to pay it.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

The following accounting policies, which are also described in Note 2 to our financial statements, are critical to aid the reader in fully understanding and evaluating this discussion and analysis:

Use of estimates: The preparation of the accompanying financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that directly affect the results of reported assets, liabilities, revenue, and expenses. Actual results may differ from these estimates.

Revenue recognition: The Company generally recognizes product revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. In instances where the final acceptance of the product is specified by the customer, revenue is deferred until all acceptance criteria have been met. Customers’ prepayments are deferred until products are shipped and accepted by the customers. No provisions were established for estimated product returns and allowances based on the Company’s historical experience.

Cash Equivalents: For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

Concentration of Cash: The Company places its cash and cash equivalents with high quality financial institutions. At times, cash balances may be in excess of the FDIC’s insurance limits. Management considers the risk to be minimal.

Inventories: Inventories consist of finished goods and are stated at the lower of cost or market, using the first-in, first-out method.

Property and Equipment: Property and equipment are valued at cost. Maintenance and repair costs are charged to expenses as incurred. Depreciation is computed on the straight-line method based on the estimated useful lives of the assets, generally 5 to 7 years.

Patents: The Company capitalizes patent costs as incurred, excluding costs associated with Company personnel, relating to patenting its technology. The majority of capitalized costs represent legal fees related to a patent application. As of the balance sheet date, the Company determines that a patent application is not likely to be awarded or elects to discontinue payment of required maintenance fees for a particular patent, the Company, at that time, records as expense the capitalized amount of such patent application or patent.

Fair value of financial instruments: All financial instruments are carried at amounts that approximate estimated fair value.

Income Taxes: Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts.

Advertising Costs: All costs associated with advertising and promoting the Company’s products and services are expensed as incurred.

Net Loss per Share: Basic net loss per share includes no dilution and is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding for the period. Diluted net loss per share does not differ from basic net loss per share since potential shares of common stock are anti-dilutive for all periods presented. Potential shares consist of restricted common stock, stock warrants, and stock options.

Stock Based Compensation: Effective January 1, 2006, the Company adopted the fair value recognition provisions of FASB Statement No. 123(R), “Shares-Based Payment” (SFAS 123R), using the modified-prospective-transition method. Under that transition method, compensation cost recognized in 2006 includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006 based of the grant date fair value calculated in accordance with the original provisions of SFAS 123, and (b) compensation cost for all share-based payments granted subsequent to December 31, 2005, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123(R). The Company accounts for stock issued to non-employees in accordance with the provisions of SFAS No. 123R and the EITF Issue No. 00-18, “Accounting For Equity Instruments That Are Issued To Other Than Employees for Acquiring, Or In Conjunction With Selling, Goods Or Services.” SFAS No. 123R states that equity instruments that are issued in exchange for the receipt of goods or services should be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Under the guidance in Issue 00-18, the measurement date occurs as of the earlier of (a) the date at which a performance commitment is reached or (b) absent a performance commitment, the date at which the performance necessary to earn the equity instruments is complete (that is, the vesting date).

New Accounting Pronouncements:

In April 2009, the FASB issued three Staff Positions (FSPs): (i) FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly”, (ii) FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Statements,” and (iii) FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments.” The pronouncements intended to provide additional application guidance and enhance disclosures regarding fair value measurements and impairments of securities, but they will not be applicable to the current operations of the Company. Therefore a description and the impact on the Company’s operations and financial position for each of the pronouncements above have not been disclosed.

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards Codification TM and the Hierarchy of Generally Accepted Accounting Principles – a replacement of FASB Statements No. 162”. The statement establishes the Accounting Standards Codification TM (Codification) as the source of authoritative U.S. GAAP recognized by the FASB to be applied by nongovernmental entities. Under the Codification, all of its content will carry the same level of authority. This statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The adoption of this statement did not have a material impact on the Company’s financial position or results of operations.

In June 2009, the FASB issued SFAS No.167, “Amendments to FASB Interpretation No. 46(R).” The statement changes the approach to determining the primary beneficiary of a variable interest entity (VIE) and requires companies to more frequently assess whether they must consolidate VIEs. This new standard is effective for fiscal years beginning after November 15, 2009. The Company is currently assessing the potential impacts, if any, on its financial statements.

In June 2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial Assets, an amendment of FASB Statement No. 140.” The statement improves the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. This new standard is effective for fiscal years beginning after November 15, 2009. The Company is currently assessing the potential impacts, if any, on its financial statements.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events.” The statement establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This new standard is effective for fiscal years or interim periods after June 15, 2009. The adoption of this statement did not have a material impact on the Company’s financial position or results of operations.

Results of Operations

The following table sets forth the results of our operations for the years ended December 31, 2009 and 2008:

	Fiscal Year Ended December 31,
	2009			2008
Net Sales	$	20,528		$	86,339

Cost of Sales		1,226			4,048

Gross Profit		19,302			82,291

Operating Expenses		(1,738,427	)		(2,741,075	)

Operating Loss		(1,719,125	)		(2,658,784	)

Interest Expense		(23,524	)		(16,758	)

Net Loss Before Income Tax		(1,742,649	)		(2,675,542	)

Provision for Income Taxes		800			800

Net Loss		(1,743,449	)		(2,676,342	)

Net Sales. Net sales were $20,528 in 2009, a decrease of approximately 76.2% from $86,339 in 2008. We attribute the decrease to not airing our infomercial and less publicity coverage.

Cost of Sales. Cost of sales was $1,226 in 2009, a decrease of approximately 69.7% from $4,048 in 2008. The decrease is attributable to lower sales as we were unable to take advantage of volume discounts that are associated with our larger sales.

Gross Profit. Gross profit was $19,302 in 2009, a decrease of approximately 76.5% from $82,291 in 2008. The decrease is attributable to lower sales and a lower selling price of our DVDs.

Operating Expenses. Operating expenses in 2009 were $1,738,427, a decrease of approximately 36.6% from $2,741,825 in 2008. The decrease was due to lower production expenses along with other reduced expenses and fewer stock for services expenses.

Operating Loss. Operating loss was $1,719,125 in 2009, a decrease of approximately 35.3% from an operating loss of $2,658,784 in 2008. The decrease in operating loss is attributable to lower operating costs due to not producing and airing our infomercial and other reduced expenditures.

Net Loss. Net loss was $1,743,449 in 2009, a decrease of approximately 34.9% from a net loss of $2,676,342 in 2008. The decrease in net loss is mainly attributable to lower operating costs due to not producing and airing our infomercial and other reduced expenditures.

Liquidity

Cash Flows

Net cash used in operating activities was $165,511 in 2009 while net cash flow used in operating activities was $1,335,715 in 2008. The increase in net cash flow from operating activities was due primarily to a lack of infomercial productions costs and less stock for services issued.

Net cash used in investing activities was $150,540 in 2009 while net cash flow used in investing activities was $383,563 in 2008. The decrease in net cash flow from investing activities was due to less capital raised.

Net cash provided by financing activities was $314,355 in 2009 while net cash flow provided by financing activities was $1,237,495 in 2008. The decrease in net cash flow from financing activities was due to less capital raised.

Material Impact of Known Events on Liquidity

Our obligation to perform tenant improvements of our yoga and fitness studio and then begin operations is a cause of a decrease in our liquidity. We estimate that the completed construction costs for our studio will be approximately $500,000 and then require approximately $55,000 per month to operate once we open for business. Due to our current liquidity, we must raise additional capital in order to meet the aforementioned obligations.

Capital Resources

As of December 31, 2009, we had working capital of $(273,648). To satisfy current working capital needs, our CEO, Bill Glaser, loaned funds to the Company along with raising capital via the sale of common stock as well as receiving capital from its planned merger with Galen Capital. Until we raise sufficient capital via the sale of our common stock, there is no guarantee that we will be able to meet current working capital needs if we do not receive additional infusions of cash via loans, stock sales, revenues, or other sources. We have fully incurred the production cost of our Xflowsion DVD series and last version of our infomercial, and plan to make financial investments in marketing of our Xflowsion DVD series for the next six months. We expect to incur substantial losses over the next two years.

We estimate that our expenses over the next 12 months beginning on January 1, 2010 will be approximately $860,000 as follows:

General and Administrative	$	300,000
Infomercial Production		150,000
Inventory		50,000
Media (Airtime)		50,000
Marketing/Publicity		150,000
Legal		75,000
DVD/CD Production		50,000
Accounting		35,000

As of December 31, 2009, we had cash equivalents of $85. We believe that we need approximately an additional $860,000 to meet our capital requirements over the next 12 months. Our intention is to obtain this money through debt and/or equity financings.

We plan to engage outside contractors and consultants who are willing to be paid in stock rather than cash or a combination of stock and cash. Expenses incurred that cannot be paid in stock, such as auditors' fees, will be paid in cash. There are no assurances that we will be able to meet our capital requirements or that our capital requirements will not increase. If we are unable to raise necessary capital to meet our capital requirements, we may not be able to successfully market and sell our Xflowsion DVDs and other products.

Our independent certified public accountants have stated in their report dated April 9, 2010 included herein that we have incurred operating losses from our inception and that we are dependent upon our ability to meet our future financing requirements and the success of future operations. These factors raise substantial doubts about our ability to continue as a going concern.

Off-Balance Sheet Arrangements

We have not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as stockholders’ equity or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements for the years ended December 31, 2009 and 2008 begin on the following page.

UKARMA CORPORATION

INDEX TO FINANCIAL STATEMENTS

	Pages

Report of Independent Registered Public Accounting Firm		F-2

Balance Sheets as of December 31, 2009 and 2008		F-3

Statements of Operations for the Year Ended December 31, 2009 and 2008		F-4

Statements of Changes in Stockholders’ Equity		F-5

Statements of Cash Flows for the Year Ended December 31, 2009 and 2008		F-6

Notes to Financial Statements		F-7

F-1

HAROLD Y. SPECTOR, CPA	SPECTOR & ASSOCIATES, LLP	70 SOUTH LAKE AVENUE
STEVEN M. SPECTOR, CPA	Certified Public Accountants	SUITE 630
	(888) 584-5577 FAX (626) 584-6447 admin@swdcpa.com	PASADENA, CA 91101

To the Board of Directors and

Stockholders of uKarma Corporation

We have audited the accompanying balance sheets of uKarma Corporation as of December 31, 2009 and 2008, and the related statements of operations, changes in stockholders’ equity (deficit), and cash flows for the years then ended. These financial statements are the responsibility of the company’s management. 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 uKarma Corporation as of December 31, 2009 and 2008, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3, the Company’s ability to continue in the normal course of business is dependent upon the success of future operations. The Company has recurring losses, substantial working capital deficiency, stockholders’ deficit and negative cash flows from operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 3. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/Spector & Associates, LLP
Pasadena, CA
April 9, 2010

F-2

UKARMA CORPORATION

BALANCE SHEETS

	As of
	December 31,			December 31,
	2009			2008
ASSETS
Current Assets
Cash	$	85		$	1,781
Accounts receivable		-			309
Due from stockholder		46,172			-
Merger and acquisition receivable		100,000			-
Other receivable		-			26,691
Prepaid expenses		67,380			70,863
Inventory		18,476			22,327
Total Current Assets		232,113			121,971

Property and equipment, net of accumulated depreciation of $9,742 for 2009, and $4,689 for 2008		18,242			391,514

Other Assets
Production costs, net of accumulated amortization of $335,864 for 2009, and $212,047 for 2008		283,221			407,038
Deposit		-			28,380
Patent		-			10,358
Total Other Assets		283,221			445,776

TOTAL ASSETS	$	533,576		$	959,261

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable	$	318,396			196,161
Accrued expenses		176,546			66,677
Notes payable to unrelated parties, including accrued interest of $319 for 2009		10,819			-
Notes payable to related party, including accrued interest of $22,637 for 2008		-			207,768
Total Current Liabilities		505,761			470,606

Stockholders' Equity
Common stock, $0.001 par value; 100,000,000 shares authorized; 52,794,482 and 29,768,292 shares issued and outstanding in 2009 and 2008, respectively		52,795			29,768
Preferred stock, $0.001 par value; 20,000,000 shares authorized, none issued		-			-
Paid-in capital		7,807,670			6,548,088
Accumulated deficit		(7,832,650	)		(6,089,201	)
Total Stockholders' Equity		27,815			488,655

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	533,576		$	959,261

See notes to financial statements

F-3

UKARMA CORPORATION

STATEMENTS OF OPERATIONS

For the years ended December 31, 2009 and 2008

	For the years
	ended December 31,
	2009			2008
Sales	$	20,528		$	86,339

Cost of Sale		1,226			4,048

Gross Profit		19,302			82,291

Selling, General and Administrative Expenses		1,738,427			2,741,825

Operating Loss		(1,719,125	)		(2,659,534	)

Other Income (Expenses)
Interest Expense		(23,524	)		(16,758	)
Total Other Income (Expense)		(23,524	)		(16,758	)

Net Loss before Income Taxes		(1,742,649	)		(2,676,292	)

Provision for Income Taxes		800			800

Net Loss	$	(1,743,449	)	$	(2,677,092	)

Loss Per Share-Basic and Diluted	$	(0.04	)	$	(0.11	)

Weighted Average Number of Shares		43,608,671			23,886,934

See notes to financial statements

F-4

UKARMA CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the years ended December 31, 2009 and 2008

	Common Stock				Paid-in		Stock			Accumulated
	Shares		Amount		Capital		Subscriptions			Deficit			Total
Balance at December 31, 2007		20,611,406	$	20,611	$	4,152,161	$	147,200		$	(3,412,109	)	$	907,863
Stock subscriptions issued		420,571		421		146,779		(147,200	)					-
Sales of common stock		5,349,575		5,349		1,230,646								1,235,995
Issuance of common stock for services		3,386,740		3,387		771,947								775,334
Issuance of stock options						232,115								232,115
Issuance of stock warrants						14,440								14,440
Net Loss for the year ended
December 31, 2008											(2,677,092	)		(2,677,092	)
Balance at December 31, 2008		29,768,292	$	29,768	$	6,548,088	$	-		$	(6,089,201	)	$	488,655
Sales of common stock		1,288,266		1,288		137,712								139,000
Issuance of common stock for services		3,639,653		3,640		301,151								304,791
Issuance of stock options						195,352								195,352
Insurance of common stock for loan fees		750,000		750		20,750								21,500
Conversion loans and compensation to Common stock		17,348,271		17,349		329,617								346,966
Pending merger cash proceeds						275,000								275,000
Net Loss for the year ended
December 31, 2009											(1,743,449	)		(1,743,449	)
Balance at December 31, 2009		52,794,482	$	52,795	$	7,532,670	$	-		$	(7,832,650	)	$	27,815

See notes to financial statements

F-5

UKARMA CORPORATION

STATEMENTS OF CASH FLOWS

For the years ended December 31, 2009 and 2008

	For the years ended
	December 31,
	2009			2008
Cash Flow from Operating Activities:
Net loss	$	(1,743,449	)	$	(2,677,092	)
Adjustment to reconcile net loss to net cash used by operating activities:
Depreciation		5,053			2,760
Amortization of production costs		123,817			112,654
Loss on abandonment of leasehold improvements		492,119			-
Impairment of intangible assets		10,358			-
Issuance of stock for services		304,791			775,334
Issuance of stock for loan fee		21,500			-
Stock option expenses		195,352			232,115
Stock warrant expenses		-			14,440
(Increase) Decrease in:
Trade accounts receivable		309			(309	)
Other receivable		-			(26,691	)
Payroll tax refund receivable		7,159			-
Prepaid expenses		3,483			(15,717	)
Inventory		3,851			1,220
Capitalized production costs		-			75,017
Deposit		28,380			(24,646	)
Increase (Decrease) in:
Accounts payable		122,235			139,174
Accrued expenses		259,531			56,026
Net Cash Provided (Used) by Operating Activities		(165,511	)		(1,335,715	)

Cash Flow from Investing Activities:
Due from stockholder		(26,640	)		-
Purchase of property and equipment		(123,900	)		(383,563	)
Net Cash Provided (Used) by Investing Activities		(150,540	)		(383,563	)

Cash Flow from Financing Activities:
Proceeds from notes payable		30,854			36,500
Repayments to notes payable		(30,499	)		(35,000	)
Proceeds from pending mergers		175,000			-
Proceeds from sale of stock		139,000			1,235,995
Net Cash Provided (Used) by Financing Activities		314,355			1,237,495

Net Increase (Decrease) in Cash		(1,696	)		(481,783	)

Cash Balance at Beginning of Year		1,781			483,564

Cash Balance at End of Year	$	85		$	1,781

Supplemental Disclosures:
Interest Paid	$	48,666		$	-
Taxes Paid	$	800		$	1,600
Noncash Investment and Financing Activities:
Conversion of notes payable and accrued interest into common stock	$	202,735		$	-
Conversion of accrued compensation into common stock	$	144,231		$	-
Receivable incurred for pending merger proceeds	$	100,000		$	-

See notes to financial statements

F-6

UKARMA CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 1 – NATURE OF OPERATIONS

uKarma Corporation (“the Company”) was incorporated under the name of OM Capital Corporation in the State of Nevada on June 26, 2001. On April 30, 2004, the Company changed its name to uKarma Corporation. In 2006, the Company relocated its headquarter to the State of California and became a California foreign corporation.

The Company develops and markets proprietary branded personal health and wellness products, including fitness DVDs, nutraceuticals, and mind, body, and spirit goods and services, for fitness and health-conscious consumers. The Company’s product lines target the rapidly growing tens of millions that are seeking to enrich their physical, spiritual, and mental wellness.

Through infomercials and other marketing initiatives, the Company launched its initial products. The goal of the infomercials is to generate initial working capital, and build a community of loyal customers. From there, the Company will expand its product offerings into proprietary branded products primarily within the fitness and wellbeing multimedia and nutraceutical markets. As the brand image builds, the Company intends to extend its brand systematically to other complementary consumer products that meet its stringent product guidelines and are consistent with its message of “total health and happiness for oneself and others.”

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

Cash Equivalents: For purposes of the statements of cash flows, the Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

Inventories: Inventories consist of finished goods and are stated at the lower of cost or market, using the first-in, first-out method.

F-7

UKARMA CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value of financial instruments: All financial instruments are carried at amounts that approximate estimated fair value.

Advertising Costs: All costs associated with advertising and promoting the Company’s products and services are expensed as incurred. Advertising expense for the year then ended December 31, 2009 and 2008 was $15,987 and $319,761, respectively.

Net Loss Per Share: Basic net loss per share includes no dilution and is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding for the period. Diluted net loss per share does not differ from basic net loss per share since potential shares of common stock are anti-dilutive for all periods presented. Potential shares consist of restricted common stock, stock warrants, and stock options.

F-8

UKARMA CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

The Company accounts for stock issued to non-employees in accordance with the provisions of SFAS No. 123R and the EITF Issue No. 00-18, “Accounting For Equity Instruments That Are Issued To Other Than Employees for Acquiring, Or In Conjunction With Selling, Goods Or Services.” SFAS No. 123R states that equity instruments that are issued in exchange for the receipt of goods or services should be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. Under the guidance in Issue 00-18, the measurement date occurs as of the earlier of (a) the date at which a performance commitment is reached or (b) absent a performance commitment, the date at which the performance necessary to earn the equity instruments is complete (that is, the vesting date).

New Accounting Pronouncements: In April 2009, the FASB issued three Staff Positions (FSPs): (i) FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly”, (ii) FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Statements,” and (iii) FSP FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments.” The pronouncements intended to provide additional application guidance and enhance disclosures regarding fair value measurements and impairments of securities, but they will not be applicable to the current operations of the Company. Therefore a description and the impact on the Company’s operations and financial position for each of the pronouncements above have not been disclosed.

F-9

UKARMA CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 3 – GOING CONCERN

The Company's financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. In the near term, the Company expects operating costs to continue to exceed funds generated from operations. As a result, the Company expects to continue to incur operating losses, and the operations in the near future are expected to continue to use working capital.

Management of the Company is actively increasing marketing efforts to increase revenues. The ability of the Company to continue as a going concern is dependent on its ability to meet its financing arrangement and the success of its future operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 – PREPAID EXPENSES

Prepaid expenses consisted of the following:

	December 31,		December 31,
	2009		2008
	(Audited)		(Audited)
Prepaid Royalty	$	67,380	$	68,581
Prepaid Legal		-		2,282
Total Prepaid Expenses	$	67,380	$	70,863

On April 25, 2008, the Company entered into an agreement with a coauthor for its diet and nutrition book that it is self publishing and plans to market direct to customers. Pursuant to this agreement, the Company paid the coauthor a $10,000 advance against future royalties. The Company will pay the coauthor a 5% royalty if uKarma acts as the publisher or a 2 ½% royalty if uKarma engages a third party publisher after the $10,000 advance is recouped.

On March 26, 2008, the Company entered into an agreement with an author to write a book related to diet and nutrition that the Company plans to self publish and market directly to consumers. Pursuant to the agreement, the author will be paid a $40,000 advance on royalties with the following arrangement: $15,000 payable upon execution of the agreement; $15,000 payable on or before the completion and delivery of the first 50% of the book; and $10,000 on full completion, delivery, and acceptance of the book. The $40,000 advance on royalties is based on the first 50,000 books sold. The author will receive a 5% royalty on sales above 50,000 books sold where the Company acts as the publisher and 2 1/2% royalty on sales above 50,0000 books sold if the Company engages a third party publisher. As of December 31, 2009, no advance payment has been paid.

On April 19, 2006, the Company entered into an agreement with a consultant to provide consulting and advisory services for the Company, to appear in the Company’s yoga, health, and wellness film productions, to assist in scriptwriting for the projects such as classes, interviews and introductions, to participate in the projects rehearsals, and to assist in marketing and promoting the projects. Accordingly, the Company shall pay a royalty of 8% on the first $300,000 and 10% on above $300,000 on all gross revenue, net of returns, refunds, chargebacks, taxes, and shipping and handling charges. As of December 31, 2009, there is a balance of $57,380 after advancing $70,000 and deducting royalties to the 2009 sales. Future royalty obligations will be deducted from the current balance.

F-10

UKARMA CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

	December 31,			December 31,
	2009			2008
	(Audited)			(Audited)
Furniture & Fixtures	$	15,459		$	13,721
Machinery & Equipment		12,525			12,525
Studio Leasehold Improvements		-			369,957
		27,984			396,203
Accumulated Depreciation		(9,742	)		(4,689	)

Property and Equipment, net	$	18,242		$	391,514

NOTE 6 – PRODUCTION COSTS

The Company capitalized costs incurred for recording seven fitness videos’ master copies. As of December 31, 2009, total costs of $619,085 were capitalized. All costs consisted of in-production costs only.

Beginning in the second quarter of 2007, the costs were amortized on a straight-line method over the estimated life of the recorded performances, which is five years. The Company recorded an amortization expense of $123,817 and $112,654 for the year ended December 31, 2009 and 2008, respectively.

NOTE 7 – PATENT

The Company filed for a patent for three proprietary yoga mats, which it believes provide unique functions and benefits compared to yoga mats currently in the market. As of the balance sheet date, the Company determined that the patent application is not likely to be awarded, accordingly, recognized an impairment loss of $10,358. The impairment loss was included in legal expense for 2009.

NOTE 8 – MERGER AND ACQUISITION

On October 19, 2009, the Company and its wholly owned subsidiary, GCC Merger Sub Corporation (“Merger Sub”), entered into a Merger Agreement with Galen Capital Corporation (“GCC”) dated as of October 15, 2009 (“Agreement”). This followed a previously executed Letter of Intent between the Company and GCC dated June 11, 2009.

Under the Agreement, Merger Sub would merge with GCC such that following the merger (“Merger” or “Transaction”), GCC would be a wholly owned subsidiary of the Company. As consideration for the transaction, the Company would issue to GCC security holders that number of shares of common stock on a fully diluted basis (“Common Shares”) such that following such issuance, GCC security holders would hold 95% of the outstanding Company Common Shares on a fully diluted basis. GCC common stock would be exchanged for the Company Common Shares. GCC’s convertible preferred stock, options, and warrants would be exchanged for equivalent the Company’s preferred stock, options, and warrants. In addition, GCC agreed to pay the Company an amount equal to $275,000.

F-11

UKARMA CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 8 – MERGER AND ACQUISITION (continued)

On December 22, 2009, the Company amended the Merger Agreement with GCC. Under the amended agreement, the closing date has changed to May 15, 2010. GCC has also agreed to pay the Company an amount equal to $475,000 (“Cash Payment”) and replaced the previous agreement amount of $275,000. As of December 31, 2009, $175,000 of the Cash Payment has already been paid to uKarma as a non-refundable deposit along with $11,000 of expenses. The remaining balance of the Cash Payment shall be paid in three equal installments of $100,000 on or before December 31, 2009, January 30, 2010 and March 31, 2010. The Company recorded a receivable of $100,000 for the installment that was due on December 31, 2009.

NOTE 9 – ACCRUED EXPENSES

Accrued expenses consisted of the following:

	December 31,		December 31,
	2009		2008
Accrued Professional Fees	$	28,700	$	15,000
Accrued Salaries		146,246		41,404
Employee Reimbursable		-		6,955
Accrued Sales Tax		-		18
Accrued Income Tax		1,600		800
Others		-		2,500
Total Accrued Expenses	$	176,546	$	66,677

NOTE 10 – NOTES PAYABLE

The notes payable to unrelated parties bear interest at 6% per annum and are due on one year anniversary of May 2009 and September 2009. As of December 31, 2009, the balance was $10,819 including accrued interest of $319.

During the year ended December 31, 2009, a notes payable to a related party of $202,735, including accrued interest of $27,749, was converted into shares of the Company’s common stock. As of December 31, 2008, the balance was $207,768, including accrued interest of $22,637.

NOTE 11 – STOCKHOLDERS’ EQUITY

During the year ended December 31, 2009, the Board of Directors of the Company approved the issuance of an aggregate 3,639,653 shares of Company’s common stock to various providers in consideration of their services to the Company. The shares were valued and charged to operations based on the opening trading price on the grant date, or $304,791 in the aggregate.

F-12

UKARMA CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 11 – STOCKHOLDERS’ EQUITY (continued)

During the year ended December 31, 2009, the Board of Directors of the Company approved the issuance of an aggregate 17,348,271 restricted shares of common stock to its Chief Executive Officer in consideration for cancellation of debt and deferred and accrued compensation owed by the Company to the CEO pursuant to a Conversion Agreement entered into between the Company and the CEO on June 11, 2009. The shares were valued based on the opening bid price on the grant date, or $346,966 in the aggregate.

Through December 31, 2009, the Company received $139,000 and sold 1,288,266 shares of the Company’s common stock at a price of $0.06 to $0.15 per share in a self-private placement offering.

On September 17, 2009, the Board of Directors of the Company approved the issuance of an aggregate 250,000 restricted shares of common stock to an individual in connection with a loan made by him to the Company. The shares were valued based on the opening bid price on the grant date, or $7,500 in the aggregate.

On August 17, 2009, the Board of Directors of the Company approved the issuance of an aggregate 200,000 restricted shares of common stock to an individual in connection with a loan made by him to the Company. The shares were valued based on the opening bid price on the grant date, or $8,000 in the aggregate.

On June 11, 2009, the Board of Directors of the Company approved the issuance of an aggregate 300,000 restricted shares of common stock to an individual in connection with a loan made by him to the Company. The shares were valued based on the opening bid price on the grant date, or $6,000 in the aggregate.

During the year ended December 31, 2008, the Board of Directors of the Company approved the issuance of an aggregate 3,386,740 shares of the Company’s common stock to various providers as consideration for their services to the Company. The shares were valued and charged to operations at a price of $0.12 to $0.35 per share, or $775,334 in the aggregate. The valuation was based on the closing trading price and/or the public offering prior to June 2008 of $0.35 per share, with discounts, if applicable as per the service agreements.

During the year ended December 31, 2008, the Company received $859,750 and sold 2,456,428 shares of the Company’s common stock pursuant to the August 6, 2007 offering at a price of $0.35 per share. The Company also sold 2,893,147 shares of its common stock and received $376,245 in a self-private placement offering.

NOTE 12 - PROVISION FOR INCOME TAXES

Provision of income tax consists of a minimum state franchise tax of $800 for the year ended December 31, 2009 and 2008, respectively.

The Company has net operating loss carryforwards, approximately of $7,513,900 and $6,058,451, which is suspended until 2010, to reduce future federal and state taxable income as of December 31, 2009 and 2008, respectively. To the extent not utilized, the carryforwards will begin to expire through 2028 for federal tax purposes and through 2020 for state tax purposes. The Company’s ability to utilize its federal net operating loss carryforwards is uncertain and thus a valuation reserve has been provided against the Company’s net deferred tax assets.

F-13

UKARMA CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 12 - PROVISION FOR INCOME TAXES (continued)

The deferred tax asset as of December 31, 2009 and 2008 consists of the following:

	2009			2008
Tax Benefit on Net Operating Loss Carryforward	$	2,629,865		$	2,120,458
Less: Valuation Allowance		(2,629,865	)		(2,120,458	)
Net Deferred Tax Asset	$	-		$	-

NOTE 13 – NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per share:

	For years ended
	December 31,
Numerator:	2009			2008
Net Loss	$	(1,743,449	)	$	(2,677,092	)
Denominator:
Weighted Average of Common Shares		43,608,671			23,886,934

Basic and Diluted Net Loss per Share	$	(0.04	)	$	(0.11	)

There were no dilutive securities for the year ended December 31, 2009.

As the Company incurred a net loss for the year ended December 31, 2009, the effect of dilutive securities totaling 250,000 equivalent shares has been excluded from the calculation of diluted loss per share because their effect was anti-dilutive.

There were also 11,777,000 and 6,527,000 shares out-of-money stock options and warrants excluded from the calculation of diluted net loss per share for the year ended December 31, 2009 and 2008, respectively, because their exercise prices were greater than the average fair market price of the common stock.

NOTE 14 – 2006 STOCK OPTION PLAN

On January 1, 2006, the Board of Directors approved and adopted the 2006 Stock Option, Deferred Stock and Restricted Stock Plan (the “Plan”) to provide the issuance of non-qualified and/or incentive stock options to employees, officers, directors and consultants and other service providers. Generally, all options granted expire ten years from the date of grant. All options have an exercise price equal to or higher than the fair market value of the Company’s stock on the date the options were granted. It is the policy of the Company to issue new shares for stock option exercised and restricted stock, rather than issued treasury shares. Options generally vest over ten years. The Plan reserves 7,500,000 shares of common stock under the Plan and shall be effective through December 31, 2015.

F-14

UKARMA CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 14 – 2006 STOCK OPTION PLAN (continued)

A summary of the status of stock options issued by the Company as of December 31, 2009 and 2008 is presented in the following table:

	2009				2008
			Weighted				Weighted
	Number		Average		Number		Average
	of		Exercise		of		Exercise
	Shares		Price		Shares		Price
Outstanding at beginning of year		5,295,000	$	0.20		5,250,000	$	0.20
Granted		-		-		45,000	$	0.35
Exercised/Expired/Cancelled		-		-		-		-
Outstanding at end of period		5,295,000	$	0.20		5,295,000	$	0.20

Exercisable at end of period		4,265,000	$	0.20		3,208,344	$	0.20

The fair value of the stock option granted is estimated on the date of grant using the Black-Scholes option valuation model. This model uses the assumptions listed in the table below. Expected volatilities are based on the estimated volatility of the Company’s stock. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

	2009		2008
Weighted average fair value per option granted		N/A	$	0.11
Risk-free interest rate		N/A		3.23	%
Expected dividend yield		N/A		0	%
Expected lives		N/A		5
Expected volatility		N/A		29.49	%

The following table sets forth additional information about stock options outstanding at December 31, 2009:

			Weighted
			Average		Weighted
Range of			Remaining		Average
Exercise	Options		Contractual		Exercise		Options
Prices	Outstanding		Life		Price		Exercisable
$0.20-$0.35		5,295,000		5.76	$	0.20		4,265,000
		5,295,000		5.76	$	0.20		4,265,000

F-15

UKARMA CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 14 – 2006 STOCK OPTION PLAN (continued)

As of December 31, 2009, there was $97,574 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted average period of 0.52 years.

As of December 31, 2008, there was $292,926 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted average period of 1.49 years.

NOTE 15 – STOCK WARRANTS

As of December 31, 2009, the Company had warrants to purchase 6,482,000 shares of the Company’s common stocks. The warrants are exercisable from $0.25 to $1.00 and will expire through October 2012.

The Company recognized $14,440 stock warrant expense for the year ended December 31, 2008. No stock warrant expense was recognized for the year ended December 31, 2009.

NOTE 16 – RELATED PARTY TRANSACTIONS

During the year ended December 31, 2008, the Company paid $23,500 to a director for his consulting services to the Company. During the year ended December 31, 2009, the Company paid $14,285 in 714,250 shares of the Company’s common stock for his services to the Company.

As of December 31, 2008, the Company had an employee advance of $19,532 due from the Company’s CEO. The Company also had accrued salary of $38,462 payable to the CEO. The advance will be netted against the accrued salary payable when it is reported to the Internal Revenue Service. In addition, the Company had an employee reimbursable of $6,955 due to the Company’s CEO. The reimbursable did not carry interest and payable on demand.

As of December 31, 2009, the Company had an employee advance of $46,173 due from the Company’s CEO. The Company also had accrued salary of $134,615 payable to the CEO. The advance will be netted against the accrued salary payable when it is reported to the Internal Revenue Service.

NOTE 17 – LEGAL DISPUTE

On June 17, 2009, Jeffrey Fischer (the “Landlord”) filed a compliant against uKarma Corporation and Bill Glaser, our Chief Executive Officer, in the Los Angeles Superior Court in Los Angeles, California. The Landlord claimed that we owe back rent on the lease of our yoga and fitness studio in Sherman Oaks, California and sought to recover $222,859.97 and evict us from the subject property. We denied liability and contend that the Landlord never reimbursed us for a tenant improvement allowance of $165,000 pursuant to the lease along with other breaches by the Landlord. The judge in the cased denied a writ of attachment motion that was submitted by the Landlord. A settlement could not be reached between the parties, and as such the Company vacated the property on September 30, 2009. On December 2, 2009, the Landlord filed a First Amended complaint naming the Company, Mr. Glaser, and Fred Tannous, a director of the Company, and a number of unrelated parties and adding additional causes of actions and damages totaling $1,066,660.00. The Company filed a demurer that was heard and sustained by the court on March 2, 2010. As a result of the judge’s ruling, there is currently no pending complaint on file against the Company, Mr. Glaser and Mr. Tannous. The judge did provide the Landlord with the right to amend the complaint within 45 days from March 2, 2010. If and when he does so, we plan to defend such claims that we believe are false and frivolous along with initiating legal action against the Landlord for full recovery of all tenant improvements it incurred to date along with other damages.

F-16

UKARMA CORPORATION

NOTES TO FINANCIAL STATEMENTS

NOTE 18 – SUBSEQUENT EVENTS

On March 9, 2010 and pursuant to the terms of the Merger Agreement between the Company and GCC, the Company received a payment in the amount of $100,000 towards the Cash Payment that is due under the agreement and $12,500 worth of expenses.

F-17

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There were no changes in or disagreements with our accountants on accounting and financial disclosures during our last two fiscal years.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Regulations under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), require public companies to maintain “disclosure controls and procedures,” which are defined to mean a company’s controls and other procedures that are designed to ensure that information required to be disclosed 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 SEC’s rules and forms. Our Chief Executive Officer and Interim Chief Financial Officer carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on those evaluations, as of December 31, 2009, our CEO and CFO believes that:

(i)

our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure; and

(ii)

our disclosure controls and procedures are effective.

Internal Control over Financial Reporting

(a) Management’s annual report on internal control over financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive officer and principal financial officer and effected by the Company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, the Company’s internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2009. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework.

Based on our assessment, management believes that, as of December 31, 2009, our internal control over financial reporting is effective based on those criteria.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only the management’s report in this annual report.

(b) Changes in internal control over financial reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) or Rule15d-15(d) promulgated under the Exchange Act that occurred during our fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The names, ages and biographical information of each of our directors and executive officers as of December 31, 2009 are set forth below.

Name	Age	Position Held	Initial Election or Appointment Date

Bill Glaser	43	Chairman, Chief Executive Officer and Interim Chief Financial Officer	June 2001

Fred Tannous	43	Director	June 2001

Business Experience Descriptions

Set forth below is a summary of our executive officers’ and directors’ business experience for the past 5 years. The experience and background of each of the directors, as summarized below, were significant factors in their previously being nominated as directors of the Company.

Bill Glaser. Mr. Glaser is currently our Chairman, Chief Executive Officer and Interim Chief Financial Officer. Mr. Glaser began to devote his full time to the Company beginning in July 2005. From December 2000 to July 2005 Bill served as President of Health Sciences Group, Inc., a manufacturer, marketer, and distributor of pharmaceuticals and nutrition based products. He was also a director of Health Sciences from December 2000 to May 2007, during which time the company was publicly traded. He worked closely with the CEO of Health Sciences to provide oversight in all aspects of operations ranging from crafting and executing Health Sciences’ overall growth strategy to structuring debt and equity financings and seeking and evaluating qualified acquisition candidates. Prior to that, Mr. Glaser was founder and Chief Executive Officer of Zenterprise, Inc., a corporate consulting firm, which provided strategy, finance, and marketing services for both public and private companies. Prior, Mr. Glaser was a registered principal of a regional stock brokerage firm where he gained diverse experience in finance, management, marketing, sales, and public company relations. Previously, he was a registered representative at Drexel Burnham Lambert and Smith Barney. Mr. Glaser holds a Bachelor’s degree in finance and economics from the Ithaca College - School of Business.

Fred Tannous. Mr. Tannous is currently our director. He had been the co-Chairman, Chief Executive Officer, and Treasurer of Health Sciences Group from October 2000 to May 2007. He was also a director of Health Sciences from December 2000 to May 2007 during which time the company was publicly traded. Previously, Mr. Tannous was employed at DIRECTV, Inc. where he was involved in various capacities including valuing, structuring, and executing strategic investments. Prior to joining DIRECTV, a wholly owned subsidiary of Hughes Electronics Corporation, Mr. Tannous was with the corporate treasury organization of Hughes where he assisted in conducting valuations and effectuating financing transactions for the company’s satellite and network communication units. From February 1996 to May 1999, Mr. Tannous served as Treasurer and Chief Financial Officer of Colorado Casino Resorts, Inc., a gaming and lodging concern with operations in Colorado. In addition to overseeing the company’s finance and accounting operations, he was accountable for all corporate finance and treasury activities. Previously, as principal of his own consulting firm, Mr. Tannous consulted to several start-up ventures in various industries where he was instrumental in developing business plans, advising on business strategy and capital structure, and arranging venture financings. Mr. Tannous received an MBA in finance and accounting from the University of Chicago, Graduate School of Business. He also holds a Masters and Bachelors degree in Electrical Engineering from the University of Southern California.

Family Relationships

There are no family relationships among our directors and executive officers.

Involvement in Certain Legal Proceedings

None of our directors or executive officers has, during the past ten years:

Had any petition under the federal bankruptcy laws or any state insolvency law filed by or against, or had a receiver, fiscal agent, or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;

Been convicted in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);

Been the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:

(i)

Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;

(ii)

Engaging in any type of business practice; or

(iii)

Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;

Been the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any federal or state authority barring, suspending, or otherwise limiting for more than 60 days the right of such person to engage in any activity described in (i) above, or to be associated with persons engaged in any such activity;

Been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, where the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated; or

Been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, where the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended, or vacated.

·	Been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:

	(i)	Any federal or state securities or commodities law or regulation; or

	(ii)	Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or

	(iii)	Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

Been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Securities Exchange Act of 1934), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Our executive officers, directors, and persons who beneficially own more than 10% of a registered class of our equity securities are not currently subject to Section 16(a) of the Exchange Act.

Code of Ethics

We have adopted a code of ethics that applies to our directors, executive officers, including our Chief Executive Officer and Interim Chief Financial Officer, and employees. A copy of our code of ethics is filed as Exhibit 14.1 with our annual report on Form 10-KSB filed with the SEC on April 15, 2008.

Recommendation of Nominees to the Board

There were no changes to the procedures by which our stockholders may recommend nominees to our board of directors.

Diversity

The Company does not currently have a policy regarding diversity of its board members.

Audit Committee; Audit Committee Financial Expert

We do not have a separately designated standing audit committee or a committee performing similar functions. We do, however, consider Mr. Glaser, our Interim Chief Financial Officer, a financial expert regarding generally accepted accounting principals and general application of such principles in connection with the accounting for estimates and accruals, including an understanding of internal control procedures and policies over financial reporting, and maintains sufficient experience preparing, auditing, analyzing, and evaluating financial statements in such depth and breadth as may be required of an audit committee financial expert.

ITEM 11. EXECUTIVE COMPENSATION

The following summary compensation table indicates the cash and non-cash compensation earned during the years ended December 31, 2009, 2008, and 2007 by (i) our Chief Executive Officer (principal executive officer), (ii) our Interim Chief Financial Officer (principal financial officer), (iii) the three most highly compensated executive officers other than our CEO and CFO who were serving as executive officers at the end of our last completed fiscal year, whose total compensation exceeded $100,000 during such fiscal year ends, and (iv) up to two additional individuals for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer at the end of our last completed fiscal year, whose total compensation exceeded $100,000 during such fiscal year ends.

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary ($)			Bonus ($)	Stock Awards ($)	Option Awards ($)(1)		Non- Equity Incentive Plan Compen- sation ($)	Non- qualified Deferred Compen- sation Earnings ($)	All Other Comp- ensation ($)			Total ($)

Bill Glaser,	2009	$	144,231	(2)	—	—	$	190,108	—	—	$	9,000	(3)	$	343,339
CEO and Interim CFO	2008	$	211,538		—	—	$	190,110	—	—	$	9,000	(3)	$	410,648
	2007	$	250,000		—	—	$	178,171	—	—	$	9,000	(3)	$	437,171

(1)	The assumptions made in the valuation of these options can be found in Note 2 to our financial statements for the period ended December 31, 2009.

(2)	This amount was paid in the form of 7,211,535 shares of our common stock.

(3)	This compensation consists of a car allowance of $750 per month pursuant to Mr. Glaser’s employment agreement.

Grants of Plan-Based Awards

We made no grants of an award to a named executive officer during the year ended December 31, 2008 under any plan.

Employment Agreements

On January 1, 2006, we entered into a five-year employment agreement with our Chief Executive Officer, Bill Glaser. This employment agreement provides him with a salary of $180,000 per year. The salary increases to $250,000, $360,000 and $500,000 per year if we either (i) raise $1.0 million, $2.5 million or $5 million in debt or equity financing in the aggregate, respectively, or (ii) recognize $1.0 million, $2.5 million or $5 million in cumulative gross revenues (i.e., the sum of all revenues recognized since commencement of operations), respectively. During 2007, pursuant to the milestones met, Mr. Glaser’s salary was increased to $250,000 per year. He is also eligible for a performance bonus in an amount equal to 5% of “Adjusted EBITDA” for each fiscal year. “Adjusted EBITDA” is earnings before interest, taxes, depreciation and amortization, but adjusted to account for non-cash expenses and calculated from financial statements in accordance with generally accepted accounting principles. He also received options to purchase 5,000,000 shares of our common stock at $0.20 per share. These options are exercisable at the rate of 500,000 on July 1, 2006, 1,000,000 on January 1, 2007, and 500,000 every six months thereafter. These options were granted to Mr. Glaser based on the Board’s view that they provided an appropriate incentive and compensation. He is entitled to participate in all medical, pension, dental, and life insurance benefits that are in effect from time to time. He also receives a car allowance of $750 per month.

We are required to pay Mr. Glaser the greater of the remainder of his salary or $250,000 if we enter into a change of control transaction within a month after his termination. All of his options will accelerate their vesting upon such an event.

Upon termination without cause, we are required to pay Mr. Glaser the lesser of his salary for the remainder of the term of the agreement and one-year’s salary. In addition, all five million options would automatically vest. Mr. Glaser has agreed not to solicit any employee to terminate his employment relationship with us during the term of Mr. Glaser’s employment agreement or a 12-month period thereafter. Pursuant to the terms of his employment agreement, all proprietary information will be kept confidential by Mr. Glaser, and inventions developed during the course of his employment will belong to the Company.

Outstanding Equity Awards at December 31, 2009

	OPTION AWARDS							STOCK AWARDS
Name	Number of securities underlying unexercised options (#) Exercisable	Number of securities underlying unexercised options (#) Unexercis- able		Equity Incentive Plan Awards: Number of Securities underlying unexercised unearned options (#)	Option exercise price ($)		Option expiration date	Number of shares or units of stock that have not vested (#)		Market value of shares or units of stock that have not vested ($)	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 (#)

Bill Glaser	4,000,000		1,000,000	—	$	0.20	01/01/2016		—	—		—	—

Fred Tannous	—		—	—		—	—		—	—		—	—

Option Exercises and Stock Vested

There were no exercises of stock options, SARs, and similar instruments, or vesting of stock, during our fiscal year ended December 31, 2009 for any of our named executive officers.

Director Compensation

Directors do not currently receive compensation for their services as directors, but we plan to reimburse them for expenses incurred in attending board meetings.

Compensation Committee Interlocks and Insider Participation

We do not currently have a compensation committee. During our fiscal year ended December 31, 2009, our entire Board of Directors participated in deliberations concerning executive officer compensation.

During the fiscal year ended December 31, 2009:

(i) none of our executive officers served as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served on our compensation committee;

(ii) none of our executive officers served as a director of another entity, one of whose executive officers served on our compensation committee; and

(iii) none of our executive officers served as a member of the compensation committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served as a member of our board of directors.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance under Equity Compensation Plans

Please see the section titled “Securities Authorized for Issuance under Equity Compensation Plans” under Item 5 above.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding the beneficial ownership of our common stock as of April 14, 2010 for each of our directors and officers; all directors and officers as a group; and each person known by us to beneficially own five percent or more of our common stock. Beneficial ownership is determined in accordance with SEC rules. Unless otherwise indicated in the table, the persons and entities named in the table have sole voting and sole investment power with respect to the shares set forth opposite the shareholder’s name.

Name and Address of Beneficial Owner (1)	Number of Shares of Common Stock Beneficially Owned (2)			Percentage of Outstanding Shares of Common Stock (2)(3)
Named Executive Officers and Directors:
Bill Glaser		29,781,979	(4)	56.4	%
Fred Tannous		1,714,250		3.2	%
All Officers and Directors as a Group (2 persons)		31,496,229		59.6	%

(1)

Unless otherwise indicated, the address of each beneficial owner listed below is 499 North Canon Drive, Suite 308, Beverly Hills, CA 90210.

(2)

Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person's actual ownership or voting power with respect to the number of shares of common stock actually outstanding.

(3)

The percentage of class beneficially owned is based on 52,794,482 shares of common stock outstanding on April 14, 2010.

(4)

4,000,000 of these shares represent the number of shares of common stock that Mr. Glaser has the right to purchase upon exercise of options, and 575,000 of these shares represent the number of shares of common stock issuable upon exercise of warrants held by Mr. Glaser.

Change of Control

On December 22, 2009, the Company amended the Merger Agreement with GCC. Pursuant to the terms of the amended agreement, the closing date was changed to on or before May 15, 2010. GCC has also agreed to pay Company an amount equal to $475,000 (“Cash Payment”) and replaced the previous agreement amount of $275,000. Through the date of this report, $375,000 of the Cash Payment has already been paid to the Company as a non-refundable deposit along with $23,500 of expenses. In addition, GCC must pay Company a final payment of $100,000 along with other expenses related to the filing of the Form 10-K on or before the latest of March 31, 2010 or the date the Company files its Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Transactions with Related Persons

There are no reportable transactions since the beginning of our last fiscal year in which we were or are to be a participant and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest.

Director Independence

Our board of directors has determined that it currently has 1 member who qualifies as "independent" as the term is used in the listing standards of the NASDAQ Stock Market. The independent director is Fred Tannous.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table sets forth fees billed to us by our auditors during the fiscal years ended December 31, 2009 and 2008 for: (i) services rendered for the audit of our annual financial statements and the review of our quarterly financial statements, (ii) services by our auditor that are reasonably related to the performance of the audit or review of our financial statements and that are not reported as Audit Fees, (iii) services rendered in connection with tax compliance, tax advice and tax planning, and (iv) all other fees for services rendered.

		December 31, 2009		December 31, 2008
(i)	Audit Fees	$	27,000	$	33,000
(ii)	Audit Related Fees		0		0
(iii)	Tax Fees		1,200		1,000
(iv)	All Other Fees		0		0

	Total fees	$	28,200	$	34,000

Pre-Approval Policies and Procedures of the Audit Committee

We do not currently have an audit committee of our board of directors.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Financial Statements; Schedules

Our financial statements for the years ended December 31, 2009 and 2008 begin on page F-1 of this annual report on Form 10-K. We are not required to file any financial statement schedules.

Exhibits

The Exhibit Table below lists those documents that we are required to file with this annual report on Form 10-K.

Exhibit No.		Description
3.1		Amended and Restated Certificate of Incorporation, as currently in effect (1)

3.2		Bylaws, as currently in effect (1)

4.1		Form of Warrant (1)


10.1		Employment Agreement between the Company and Bill Glaser, dated January 1, 2006 (1)

10.2		Consulting Agreement between the Company and Eric Paskel, dated April 19, 2006 (1)

10.3		Warrant issued to Bill Glaser, dated January 26, 2007 (1)

10.4		Common Stock Warrant issued to Bill Glaser, dated March 13, 2007 (2)

10.5		Common Stock Warrant issued to Bill Glaser, dated March 29, 2007 (2)

10.6		Paskel Book Agreement, dated April 25, 2008 (5)

10.7		Glaser Book Agreement, dated April 25, 2008 (5)

10.8		Aronson Book Agreement, dated March 26, 2008 (5)

10.9		Lease, dated April 25, 2008 (4)

10.10		First Amendment to Lease, dated October 31, 2008 (6)

10.11		Conversion Agreement between the Registrant and Bill Glaser, dated June 8, 2009 (7)

10.12		Letter of Intent between Galen Capital Corporation and uKarma Corporation, dated June 11, 2009 (8)

10.13		Amendment to Letter of Intent between Galen Capital Corporation and uKarma Corporation, dated August 18, 2009 (8)

10.14		Merger Agreement between Galen Capital Corporation, GCC Merger Sub Corporation, and uKarma Corporation, dated October 15, 2009 (9)

10.15		First Amendment to Merger Agreement between Galen Capital Corporation, GCC Merger Sub Corporation, and uKarma Corporation, dated December 18, 2009 *

14.1		Code of Ethics (3)

31.1		Rule 13a-14(a) / 15d-14(a)(4) Certification by the Chief Executive Officer *

31.2		Rule 13a-14(a) / 15d-14(a)(4) Certification by the Chief Financial Officer *

32.1		Section 1350 Certification by the Chief Executive Officer and Chief Financial Officer *

*	Filed herewith.

(1)	Incorporated herein by reference to our Form SB-2 filed with the SEC on February 12, 2007.

(2)	Incorporated herein by reference to our Form SB-2 Amendment No. 1 filed with the SEC on June 28, 2007.

(3)	Incorporated herein by reference to our Form 10-KSB filed with the SEC on April 15, 2008.

(4)	Incorporated herein by reference to our Form 8-K filed with the SEC on May 1, 2008

(5)	Incorporated herein by reference to our Form 10-Q filed with the SEC on August 19, 2008.

(6)	Incorporated herein by reference to our Form 10-K filed with the SEC on May 14, 2009.

(7)	Incorporated herein by reference to our Form 10-Q filed with the SEC on June 12, 2009.

(8)	Incorporated herein by reference to our Form 10-Q filed with the SEC on August 19, 2009.

(9)	Incorporated herein by reference to our Form 10-Q filed with the SEC on November 23, 2009.

SIGNATURES

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

	UKARMA CORPORATION

	/s/ Bill Glaser
	Bill Glaser Chief Executive Officer

	Date: April 14, 2010

In accordance with the Securities Exchange of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

NAME	TITLE	DATE

/s/ Bill Glaser	Chairman of the Board, Chief Executive Officer (Principal Executive	April 14, 2010
Bill Glaser	Officer), and Interim Chief Financial Officer (Principal Financial and Accounting Officer)


/s/ Fred Tannous	Director	April 14, 2010
Fred Tannous

Innolog Holdings Corp. - FORM 10-K - April 15, 2010

Attached files

Innolog Holdings Corp. Reports