EQUATOR Beverage Co - Annual Report: 2008 (Form 10-K)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
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[X]
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ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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For
the fiscal year ended September 30,
2008
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[ ]
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT
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| For the transition period from _________ to ________ | ||
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Commission
file number: 333-148190
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Mojo Shopping,
Inc.
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(Exact
name of registrant as specified in its
charter)
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Nevada
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26-0884348
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(State or other
jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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PO Box 778176
Henderson, NV
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89077
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant’s
telephone number: 702
349 5750
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Securities
registered under Section 12(b) of the Exchange Act:
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Title
of each class
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Name
of each exchange on which registered
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none
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not
applicable
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Securities
registered under Section 12(g) of the Exchange Act:
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Title
of each class
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Name
of each exchange on which registered
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Common Stock, par
value $0.001
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not
applicable
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Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes
[ ] No
[X]
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes
[ ] No
[X]
Check
whether the Issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90
days. Yes
[X] No
[ ]
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, 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. Yes
[ ] No [X]
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.
Large
accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes [X] No
[ ]
State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average bid and asked price of such common equity, as of the
last business day of the registrant’s most recently completed second fiscal
quarter. Not
available
Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date. 4,520,000 as of September 30,
2008.
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Page
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PART
I
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PART
II
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PART
III
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PART
IV
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PART I
Company
Overview
We are in
the business of online retailing. Specifically, we have created and are
continuing to develop our website, www.mojoshopping.com (our “Site” or
“mojoshopping.com”). Through our site, we sell products, such as furniture,
design accessories, art, clothing, music, and a variety of environmentally
friendly products, all of which are designed to appeal to the tastes of young,
socially conscious professionals.
Our plan
is to target young professionals who are conscious of and attempting to keep
pace with ever-changing trends. We will draw these individuals to our site by
providing content that not only educates customers on the latest trends, but
provides a place to make purchases consistent with those trends. Our target
clientele may best be described as “hip” or “trendy”.
We plan
to seek alliances with other online entities that cater to our target market,
whereby they will help drive traffic to our site in exchange for a percentage of
sales revenue generated by any resulting traffic.
Ivona
Janieszewski is our President, Secretary, Chief Executive Officer, Chief
Financial Officer, and sole director.
Website
Our
mojoshopping.com website is currently active and fully
functioning. The shopping cart options are live and capable of
processing orders.
Our
initial repertoire of design products includes core categories such as modern
furniture, lighting, design accessories, rugs & textiles, clothing, gifts,
and pet accessories.
We have
designed our Site in an effort to reach the hip, contemporary individual
consumer that has a continual appetite for new and exciting design-oriented
products. We have sought to draw and keep that customer by presenting a new,
entertaining experience in online shopping and by offering the most exciting
lifestyle and design products available in today’s modern world.
However,
today’s online retail marketplace is extremely competitive and current economic
conditions have curtailed many of the free spending habits of our target market,
resulting in lower than expected revenues from sales. In spite of gross sales of
only $2,507 for the year ended September 30, 2008, continuing operating
expenses, and the resulting lack of liquidity and capital, we intend to continue
to pursue our business plan of developing and marketing our Site. We
will require additional financing to do so, however. At present, we
lack sufficient financing to fully implement our business plan and have no
immediate prospects to obtain that financing.
Competition
We face
significant competition in the online retail industry. E-commerce is a dynamic,
high-growth market. Our competition for online customers comes from a variety of
sources, including existing traditional retailers that are using the Internet to
expand their channels of distribution, established Internet companies, and new
Internet companies such as ourselves. In addition, our competition for customers
comes from traditional direct marketers, brands that may attempt to sell their
products directly to consumers through the Internet, and outlet
stores.
Many of
our competitors have longer operating histories, significantly greater
resources, greater brand recognition and more firmly established supply
relationships. Moreover, we expect additional competitors to emerge in the
future. We believe that the principal competitive factors in our market include:
brand recognition, merchandise selection, price, convenience, customer service,
order delivery performance, and site features. Although we plan to compete
effectively in this market, we recognize that this market is relatively new and
is evolving rapidly, and, accordingly, there can be no assurance that we will be
able to compete effectively in this marketplace.
We
believe that our success will depend upon our ability to remain competitive in
this field. We compete with others in efforts to obtain financing and explore
and develop our online forum. The failure to compete successfully in the online
market for commercial opportunities and for resources could have a material
adverse effect on our business.
Intellectual
Property
We have
not filed a trademark application to register the name or the URL for our Site,
“MojoShopping.com.” To date, we do not yet own any other patent,
trademark, or legally enforceable claim to proprietary intellectual
property.
Employees
We have
no significant employees other than our sole officer and director, Ivona
Janieszewski.
Research
and Development Expenditures
We have
not incurred any research or development expenditures since our
incorporation.
Government
Regulation
Government
regulation and compliance with environmental laws do not have a material effect
on our business. We are subject to the laws and regulations of those
jurisdictions in which we plan to operate and sell our products, which are
generally applicable to business operations, such as business licensing
requirements, income taxes and payroll taxes. In general, the publishing of our
Site and the sale of our products are not subject to special regulatory and/or
supervisory requirements.
Subsidiaries
We
conduct our operations through our wholly owned subsidiary, Mojo Shopping,
LLC.
We do not
presently lease or own any real property. We receive mail at PO Box
778176, Henderson, NV 89077. In order to minimize expenses, we
conduct our limited operations out of the home of our sole officer and director
and intend to do so until such time as our operations necessitate dedicated
office space. We further expect that our business model of relying primarily on
the manufacturers of the products we sell to ship products directly to our
customers will allow us to avoid the expense of dedicated warehouse space for
the foreseeable future. Should we need warehouse space, we anticipate
being able to lease such space on a short term basis at competitive rates in
light of current economic conditions.
We are
not a party to any pending legal proceeding. We are not aware of any pending
legal proceeding to which any of our officers, directors, or any beneficial
holders of 5% or more of our voting securities are adverse to us or have a
material interest adverse to us.
No
matters were submitted to a vote of the Company's shareholders during the fiscal
year ended September 30, 2008.
PART II
Market
Information
Our
common stock is currently quoted on the OTC Bulletin Board (“OTCBB”), which is
sponsored by FINRA. The OTCBB is a network of security dealers who buy and sell
stock. The dealers are connected by a computer network that provides information
on current "bids" and "asks", as well as volume information. Our shares are
quoted on the OTCBB under the symbol “MOJO”
The
following table sets forth the range of high and low bid quotations for our
common stock for each of the periods indicated as reported by the OTCBB. These
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not necessarily represent actual transactions.
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Fiscal
Year Ending September 30, 2008
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Quarter
Ended
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High
$
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Low
$
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September
30, 2008
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0.25
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0.25
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June
30, 2008
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N/A
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N/A
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March
31, 2008
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N/A
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N/A
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December
31, 2007
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N/A
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N/A
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Fiscal
Year Ending September 30, 2007
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Quarter
Ended
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High
$
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Low
$
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September
30, 2007
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N/A
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N/A
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June
30, 2007
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N/A
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N/A
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March
31, 2007
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N/A
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N/A
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December
31, 2006
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N/A
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N/A
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On
September 30, 2008, the last sales price per share of our common stock was
$0.25.
Penny
Stock
The SEC
has adopted rules that regulate broker-dealer practices in connection with
transactions in penny stocks. Penny stocks are generally equity securities with
a market price of less than $5.00, other than securities registered on certain
national securities exchanges or quoted on the NASDAQ system, provided that
current price and volume information with respect to transactions in such
securities is provided by the exchange or system. The penny stock rules require
a broker-dealer, prior to a transaction in a penny stock, to deliver a
standardized risk disclosure document prepared by the SEC, that: (a) contains a
description of the nature and level of risk in the market for penny stocks in
both public offerings and secondary trading; (b) contains a description of the
broker's or dealer's duties to the customer and of the rights and remedies
available
to the customer with respect to a violation of such duties or other requirements
of the securities laws; (c) contains a brief, clear, narrative description of a
dealer market, including bid and ask prices for penny stocks and the
significance of the spread between the bid and ask price; (d) contains a
toll-free telephone number for inquiries on disciplinary actions; (e) defines
significant terms in the disclosure document or in the conduct of trading in
penny stocks; and (f) contains such other information and is in such form,
including language, type size and format, as the SEC shall require by rule or
regulation.
The
broker-dealer also must provide, prior to effecting any transaction in a penny
stock, the customer with (a) bid and offer quotations for the penny stock; (b)
the compensation of the broker-dealer and its salesperson in the transaction;
(c) the number of shares to which such bid and ask prices apply, or other
comparable information relating to the depth and liquidity of the market for
such stock; and (d) a monthly account statement showing the market value of each
penny stock held in the customer's account.
In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser's written acknowledgment of the receipt
of a risk disclosure statement, a written agreement as to transactions involving
penny stocks, and a signed and dated copy of a written suitability
statement.
These
disclosure requirements may have the effect of reducing the trading activity for
our common stock. Therefore, stockholders may have difficulty selling our
securities.
Holders
of Our Common Stock
As of
September 30, 2008, we had 4,520,000 shares of our common stock issued and
outstanding, held by 31 shareholders of record.
Dividends
We
currently intend to retain future earnings, if any, to finance the expansion of
our business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
In the
event that a dividend is declared, common stockholders on the record date are
entitled to share ratably in any dividends that may be declared from time to
time on the common stock by our board of directors from funds legally
available.
There are
no restrictions in our Certificate of Incorporation or bylaws that restrict us
from declaring dividends. The Delaware General Corporation Law provides that a
corporation may pay dividends out of surplus, out the corporation's net profits
for the preceding fiscal year, or both provided that there remains in the stated
capital account an amount equal to the par value represented by all shares of
the corporation's stock raving a distribution preference.
Securities
Authorized for Issuance under Equity Compensation Plans
We do not
have any equity compensation plans.
A smaller
reporting company is not required to provide the information required by this
Item.
Forward-Looking
Statements
Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These forward-looking
statements generally are identified by the words “believes,” “project,”
“expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,”
“will,” “would,” “will be,” “will continue,” “will likely result,” and similar
expressions. We intend such forward-looking statements to be covered by the
safe-harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and are including this statement for
purposes of complying with those safe-harbor provisions. Forward-looking
statements are based on current expectations and assumptions that are subject to
risks and uncertainties which may cause actual results to differ materially from
the forward-looking statements. Our ability to predict results or the actual
effect of future plans or strategies is inherently uncertain. Factors which
could have a material adverse affect on our operations and future prospects on a
consolidated basis include, but are not limited to: changes in economic
conditions, legislative/regulatory changes, availability of capital, interest
rates, competition, and generally accepted accounting principles. These risks
and uncertainties should also be considered in evaluating forward-looking
statements and undue reliance should not be placed on such statements. We
undertake no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or otherwise.
Further information concerning our business, including additional factors that
could materially affect our financial results, is included herein and in our
other filings with the SEC.
Plan
of Operation in the Next Twelve Months
We are in
the business of online retailing. Specifically, we have created and are
continuing to develop our website, www.mojoshopping.com. Through the site, we
sell products, such as furniture, design accessories, art, clothing, music, and
a variety of environmentally friendly products, all of which are designed to
appeal to the tastes of young, socially conscious professionals.
We intend
to work with our web designer over the next twelve months to further develop our
website and our shopping cart functionalities. In addition, we intend
to solidify relationships with our existing suppliers and manufacturers as well
as expand our supplier base. Our intent is to develop relationships whereby our
suppliers and manufacturers will be willing to ship products offered on our
website directly to our customers.
We do not
currently and do not plan on maintaining a significant product inventory. We
anticipate that the majority of our product suppliers will drop ship products
from their respective warehousing facilities directly to our customers. We have
already received verbal commitments from several suppliers to that effect. By
eliminating warehousing and shipping costs, we are able to offer competitive
prices to our customers while realizing savings on our own costs.
We intend
to upgrade our site to automatically place orders with suppliers when customers
place their order on our site. By automating this process and arranging for
suppliers to ship directly to our customers, we expect to reduce our order
processing time. Ideally, products would then ship immediately from the
manufacturer or supplier when customers place their order, rather than waiting
for individuals at our business to process or fill the order. Currently,
however, our site does not have this functionality, and we resubmit incoming
orders to our suppliers for shipping.
Notwithstanding
the foregoing, we do currently and plan to continue to hold in inventory a small
number of customizable gift items, such as t-shirts. We anticipate that most
such items will retail between $10 and $40. While these items will not represent
a significant profit center, they will serve to draw visitors to our site and
build brand loyalty.
Products
We have
entered into negotiations and have verbal commitments from several
manufacturers and suppliers to sell their products on our site. Most of the
manufacturers/suppliers have also committed to drop ship products from their
warehouses directly to our customers. Notwithstanding the foregoing, there can
be no assurance that any of the manufacturers/suppliers we have verbal
commitments from will follow through on their verbal commitments or continue to
allow us to sell their products and ship to our customers in the
future.
Over the
next twelve months, we intend to solidify negotiations and commitments from
manufacturers and suppliers to sell their products on our site and to drop ship
products from their warehouses directly to our customers.
Intellectual
Property Protection
Our
business depends, in part, on the protection of our intellectual property,
including our business name, logo, and distinctive branding. We have not taken
any measures to protect our intellectual property to this point, so there are no
legal barriers to prevent others from using what we regard as our intellectual
property. We currently own the URL www.mojoshopping.com and we will be further
developing our corporate logo and branding strategy over the next twelve
months.
Significant
Equipment
We do not
intend to purchase any significant equipment for the next twelve
months.
Employees
We do not
have plans to change the number of our employees during the next twelve
months.
Results
of Operations for the year ended September 30, 2008 and for the period from
February 22, 2007 (Date of Inception) until September 30, 2008
We
generated revenue from sales of $2,507 for the year ended September 30, 2008, as
well as for the period from Inception (August 2, 2007) through September 30,
2008. Our Operating Expenses equaled $66,690, Cost of Goods Sold was $4,628, and
Sales Discounts was $60 during the year ended September 30, 2008. The primary
components of our Operating Expenses were General and Administrative Expenses,
and Advertising and Promotion Expenses. After considering interest and other
income of $83, our Net Loss for the year ended September 30, 2008, was $69,088.
Our Operating Expenses equaled $82,129, Cost of Goods Sold was $4,628, and Sales
Discounts was $60 during the period from Inception (August 2, 2007) through
September 30, 2008. The primary components of our Operating Expenses were
General and Administrative Expenses, and Advertising and Promotion Expenses.
After considering interest and other income of $139, our Net Loss for the year
ended September 30, 2008, was $84,171.
Our
General and Administrative Expenses are primarily attributable to professional
fees associated with the initial development of our business, legal expenses,
and consulting fees.
We
anticipate our operating expenses will increase as we more fully implement our
business plan. The increase will be attributable to expenses to operating our
business, and the professional fees to be incurred in connection with our
reporting obligations as a public company as our business activity
increases.
Liquidity
and Capital Resources
As of
September 30, 2008, we had total current assets of $248. We had $53,340 in
current liabilities as of September 30, 2008. Thus, we had a working capital
deficit of $53,092 as of September 30, 2008.
For the
year ended September 30, 2008, and for the period from Inception (August 2,
2007) through September 30, 2008, operating activities have used $26,188 and
$31,104, respectively. The primary factors in this negative operational cash
flow were our net losses of $69,088 and $84,171, respectively, offset primarily
by prepaid and accrued expenses. We generated no cash from financing activities
during the year ended September 30, 2008, but we generated $31,600 in cash from
financing activities during the period from Inception (August 2, 2007) through
September 30, 2008, all of which was due to an equity offering. There was no
positive or negative cash flow due to investing activities during the year ended
September 30, 2008. Investing Activities used $248 in cash for the period from
Inception (August 2, 2007) through September 30, 2008.
We expect
to spend approximately $20,000 to further develop and market our Site over the
coming year. Our accounting, legal and administrative expenses for the next
twelve months are anticipated to be $30,000. As of September 30, 2008, we have
insufficient cash to operate our business at the current level for the next
twelve months and insufficient cash to achieve our business goals. The success
of our business plan during the next 12 months and beyond is contingent upon us
obtaining additional financing. We intend to obtain business capital through the
use of private equity fundraising or shareholders loans. We do not have any
formal commitments or arrangements for the sales of stock or the advancement or
loan of funds at this time. There can be no assurance that such additional
financing will be available to us on acceptable terms, or at all. Although our
sales volume has been limited thus far, we anticipate that, in time, the primary
source of revenues for our business model will be the sales of our
products.
Going
Concern
We have
experienced losses since our inception of the development stage amounting to
$84,171 as of September 30, 2008 and have had minimal operating
revenues. As of September 30 2008, we had a total of $248 in cash,
and this amount may be insufficient to sustain operations over the course of the
next year. These factors raise substantial doubt about our ability to
continue as a going concern. Our ability to meet our commitments as
they become payable is dependent on our ability to execute our plan to establish
a customer base, obtain customers that make purchases, and to obtain necessary
financing or achieve a profitable level of operations. There are no
assurances that we will be successful in achieving these goals.
Off
Balance Sheet Arrangements
As of
September 30, 2008, there were no off balance sheet arrangements.
Critical
Accounting Policies
In
December 2001, the SEC requested that all registrants list their most “critical
accounting polices” in the Management Discussion and Analysis. The SEC indicated
that a “critical accounting policy” is one which is both important to the
portrayal of a company’s financial condition and results, and requires
management’s most difficult, subjective or complex judgments, often as a result
of the need to make estimates about the effect of matters that are inherently
uncertain.
Cash and Cash
Equivalents
Cash
equivalents comprise certain highly liquid instruments with a maturity of three
months or less when purchased. As of September 30, 2008, we did not
have any cash equivalents other than our bank accounts.
Basic Income (Loss) Per
Share
Basic
income (loss) per share is calculated by dividing the Company’s net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company’s net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity. There are no such
common stock equivalents outstanding as of September 30, 2008.
Dividends
We have
not adopted any policy regarding payment of dividends. No dividends have been
paid during any of the periods shown.
Income
Taxes
We
provide for income taxes under Statement of Financial Accounting Standards No.
109, Accounting for Income Taxes. SFAS No. 109 requires the use of an asset and
liability approach in accounting for income taxes. Deferred tax assets and
liabilities are recorded based on the differences between the financial
statement and tax bases of assets and liabilities and the tax rates in effect
when these differences are expected to reverse. Our predecessor operated as
entity exempt from Federal and State income taxes.
SFAS No.
109 requires the reduction of deferred tax assets by a valuation allowance if,
based on the weight of available evidence, it is more likely than not that some
or all of the deferred tax assets will not be realized.
The
provision for income taxes differs from the amounts which would be provided by
applying the statutory federal income tax rate of 39% to net loss before
provision for income taxes for the following reasons:
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September
30,
2008
|
September
30,
2007
|
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Income
tax expense at statutory rate
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$ | (23,490) | $ | (5,128) | |
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Valuation
allowance
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23,490 | 5,128 | |||
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Income
tax expense per books
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$ | - | $ | - | |
Net deferred tax assets consist of the
following components as of:
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September
30,
2008
|
September
30,
2007
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||||
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NOL
carryover
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$ | 28,618 | $ | 5,128 | |
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Valuation
allowance
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(28,618) | (5,128) | |||
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Net
deferred tax asset
|
$ | - | $ | - | |
Due to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss carry forwards of $84,171 for federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur net operating
loss carry forwards may be limited as to use in future years.
Impairment of Long-Lived
Assets
We
continually monitor events and changes in circumstances that could indicate
carrying amounts of long-lived assets may not be recoverable. When such events
or changes in circumstances are present, we assess the recoverability of
long-lived assets by determining whether the carrying value of such assets will
be recovered through undiscounted expected future cash flows. If the total of
the future cash flows is less than the carrying amount of those assets, we
recognize an impairment loss based on the excess of the carrying amount over the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or the fair value less costs to sell.
Accounting
Basis
The basis
is accounting principles generally accepted in the United States of
America. We have adopted a September 30 fiscal year end.
Advertising
Costs
Our
policy regarding advertising is to expense advertising when incurred. We
incurred advertising expense $11,617 during the year ended September 30,
2008.
Recently Issued Accounting
Pronouncements
In
September 2006, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 157, “Fair Value Measurements” which defines
fair value, establishes a framework for measuring fair value in generally
accepted accounting principles (GAAP), and expands disclosures about fair value
measurements. Where applicable, SFAS No. 157 simplifies and codifies
related guidance within GAAP and does not require any new fair value
measurements. SFAS No. 157 is effective for financial statements issued for
fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier adoption is encouraged. The Company does
not expect the adoption of SFAS No. 157 to have a significant effect on its
financial position or results of operation.
In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,
“Accounting for Financial Guarantee Insurance Contracts-and interpretation of
FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60
applies to financial guarantee insurance
contracts,
including the recognition and measurement of premium revenue and
claims liabilities. This statement also requires expanded disclosures about
financial guarantee insurance contracts. SFAS No. 163 is effective for fiscal
years beginning on or after December 15, 2008, and interim periods within those
years. SFAS No. 163 has no effect on the Company’s financial position,
statements of operations, or cash flows at this time.
In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162,
“The Hierarchy of Generally Accepted Accounting Principles”. SFAS No.
162 sets forth the level of authority to a given accounting pronouncement or
document by category. Where there might be conflicting guidance between two
categories, the more authoritative category will prevail. SFAS No. 162 will
become effective 60 days after the SEC approves the PCAOB’s amendments to AU
Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on
the Company’s financial position, statements of operations, or cash flows at
this time.
In March
2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities—an amendment of
FASB Statement No. 133. This standard requires companies to provide
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. The Company has not yet
adopted the provisions of SFAS No. 161, but does not expect it to have a
material impact on its consolidated financial position, results of operations or
cash flows.
In
December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding
the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in
developing an estimate of expected term of "plain vanilla" share options in
accordance with SFAS No. 123 (R), Share-Based Payment. In particular,
the staff indicated in SAB 107 that it will accept a company's election to use
the simplified method, regardless of whether the company has sufficient
information to make more refined estimates of expected term. At the time SAB 107
was issued, the staff believed that more detailed external information about
employee exercise behavior (e.g., employee exercise patterns by industry and/or
other categories of companies) would, over time, become readily available to
companies. Therefore, the staff stated in SAB 107 that it would not expect a
company to use the simplified method for share option grants after December 31,
2007. The staff understands that such detailed information about employee
exercise behavior may not be widely available by December 31, 2007. Accordingly,
the staff will continue to accept, under certain circumstances, the use of the
simplified method beyond December 31, 2007. The Company currently uses the
simplified method for “plain vanilla” share options and warrants, and will
assess the impact of SAB 110 for fiscal year 2009. It is not believed that this
will have an impact on the Company’s consolidated financial position, results of
operations or cash flows.
In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51. This
statement amends ARB 51 to establish accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a noncontrolling interest in a subsidiary is
an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this statement was issued,
limited guidance existed for reporting noncontrolling interests. As a result,
considerable diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as liabilities or
in the mezzanine section between liabilities and equity. This statement improves
comparability by eliminating that diversity. This statement is effective for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2008 (that is, January 1, 2009, for entities with calendar
year-ends). Earlier adoption is prohibited. The effective date of this statement
is the same as that of the related Statement 141 (revised 2007). The Company
will adopt this Statement beginning March 1, 2009. It is not believed that this
will have an impact on the Company’s consolidated financial position, results of
operations or cash flows.
In
December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations.’This Statement replaces FASB Statement No. 141, Business
Combinations, but retains the fundamental requirements in
Statement 141. This Statement establishes principles and
requirements for how the acquirer: (a) recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interest in the acquiree; (b) recognizes and measures the
goodwill acquired in the business combination or a gain from a bargain purchase;
and (c) determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. This statement applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. An entity may not
apply it before that date. The effective date of this statement is the same as
that of the related FASB Statement No. 160, Noncontrolling Interests in
Consolidated Financial Statements. The Company will adopt this
statement beginning March 1, 2009. It is not believed that this will have an
impact on the Company’s consolidated financial position, results of operations
or cash flows.
In
February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for
Financial Assets and Liabilities—Including an Amendment of FASB Statement No.
115. This standard permits an entity to choose to measure many
financial instruments and certain other items at fair value. This option is
available to all entities. Most of the provisions in FAS 159 are elective;
however, an amendment to FAS 115 Accounting for Certain Investments in Debt and
Equity Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not report
net income. SFAS No. 159 is effective as of the beginning of an entity’s first
fiscal year that begins after November 15, 2007. Early adoption is permitted as
of the beginning of the previous fiscal year provided that the entity makes that
choice in the first 120 days of that fiscal year and also elects to apply the
provisions of SFAS No. 157 Fair Value Measurements. The Company will
adopt SFAS No. 159 beginning March 1, 2008 and is currently evaluating the
potential impact the adoption of this pronouncement will have on its
consolidated financial statements.
In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. This
statement
applies under other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value measurements.
However, for some entities, the application of this statement will change
current practice. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier application is encouraged, provided that the
reporting entity has not yet issued financial statements for that fiscal year,
including financial statements for an interim period within that fiscal year.
The Company will adopt this statement March 1, 2008, and it is not believed that
this will have an impact on the Company’s consolidated financial position,
results of operations or cash flows.
A smaller
reporting company is not required to provide the information required by this
Item.
See the
financial statements annexed to this annual report.
No events
occurred requiring disclosure under Item 307 and 308 of Regulation S-K during
the fiscal year ending September 30, 2008.
Management
is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rule 13a-15(f) under the Exchange Act.
This rule defines internal control over financial reporting as a process
designed by, or under the supervision of, the Company’s Chief Executive Officer
and Chief Financial Officer, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with U.S. GAAP. Our internal control over
financial reporting includes those policies and procedures that:
|
•
|
Pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect our transactions and
dispositions;
|
|
•
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with U.S. GAAP, and that
our receipts and expenditures 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 our assets that could
have a material effect on the financial
statements.
|
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. In addition, 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.
With the
participation of the Chief Executive Officer and the Chief Financial Officer,
our management conducted an evaluation of the effectiveness of our internal
control over financial reporting. Based on this evaluation, our
management has concluded that our internal control over financial reporting was
not effective as of September 30, 2008, as the result of a material
weakness. The material weakness results from significant
deficiencies in internal control that collectively constitute a material
weakness.
A
significant deficiency is a deficiency, or combination of deficiencies, in
internal control over financial reporting that is less severe than a material
weakness, yet important enough to merit attention by those responsible for
oversight of the registrant’s financial reporting. We had the following
significant deficiencies at September 30, 2008:
|
·
|
We
have only one employee to oversee bank reconciliations, posting payables,
and so forth, so there are no checks and balances on internal
controls.
|
Remediation
of Material Weakness
We are
unable to remedy the material weakness in our internal controls until we are
able to hire additional employees, so that we may then introduce checks and
balances on internal controls.
Limitations
on the Effectiveness of Internal Controls
Our
management, including our Chief Executive Officer and our Chief Financial
Officer, does not expect that our disclosure controls and procedures or our
internal control over financial reporting are or will be capable of preventing
or detecting all errors or all fraud. Any control system, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance that
the control system’s objectives will be met. The design of a control system must
reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Further, because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that misstatements, due to error or fraud will not
occur or that all control issues and instances of fraud, if any, within the
company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns may occur
because of simple error or mistake. Controls can also be circumvented by the
individual acts of some persons, by collusion of two or more people, or by
management override of controls. The design of any system of controls is based
in part on certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions. Projections of any evaluation of controls
effectiveness to future periods are subject to risk.
This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management’s report in this annual
report.
During
the most recently completed fiscal quarter, there has been no change in our
internal control over financial reporting that has materially affected or is
reasonably likely to materially affect, our internal control over financial
reporting.
None
PART III
The
following information sets forth the name of our sole executive officer and
directors, her age as of September 30, 2008 and her present
position.
|
Name
|
Age
|
Position
Held with the Company
|
|
Ivona
Janieszewski
|
42
|
President,
Secretary, CEO, CFO,
Director
|
Set forth
below is a brief description of the background and business experience of our
sole executive officer and director.
Ivona
Janieszewski, President and CEO.
Ivona
Janieszewski is President and CEO of Mojo Shopping, Inc., which she founded.
Pursuing a career as a makeup artist and fashion stylist for musicians, models,
and television personalities, Ivona apprenticed under award-winning stylist
Maciej Radzyminski in her native Poland. In 1993, she was an assistant under
interior designer Christian St. Clair in Cleveland, Ohio. In early 2000, she
served as Fashion Stylist and Assistant Set Director for Bob Eubanks and The Live Auction Game Show,
which was directed and produced by Emmy Award-winning TV producer Tony Verna in
Las Vegas, Nevada. Ms. Janieszewski has also worked on videos and television
commercials for TKO Multi-Media Entertainment and organized fashion showcases
and runway shows for modeling agencies since 2000. In 2002, Ivona co-founded
Innovation Flooring + Furniture Design (“IF+D”), a Las Vegas design firm selling
both modern flooring and modern furniture. Working with developers, architects,
and interior designers, Ms. Janieszewski has also worked as a designer through
IF+D, designing artistic living and working environments for clients such as
Tommy Hilfiger, John Daly, and Caesar’s Entertainment.
Directors
Our
bylaws authorize no less than one (1) and more than ten (10)
directors. We currently have one Director.
Term
of Office
Our
Directors are appointed for a one-year term to hold office until the next annual
general meeting of our shareholders or until removed from office in accordance
with our bylaws. Our officers are appointed by our board of directors
and hold office until removed by the board.
Family
Relationships
There are
no family relationships between or among the directors, executive officers or
persons nominated or chosen by us to become directors or executive
officers.
Involvement
in Certain Legal Proceedings
To the
best of our knowledge, during the past five years, none of the
following occurred with respect to a
present or former director, executive officer, or employee: (1) any
bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either
at the time of the bankruptcy or within two
years prior to that time; (2) any conviction in a
criminal proceeding or being subject to a
pending criminal
proceeding (excluding traffic violations and
other minor offenses); (3) being subject to any order,
judgment or decree, not subsequently reversed, suspended
or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his or her
involvement in any type of business, securities or banking
activities; and (4) being found
by a court of competent jurisdiction (in a civil
action), the SEC or the
Commodities Futures Trading Commission to have violated
a federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.
Audit
Committee
We do not
have a separately-designated standing audit committee. The entire Board of
Directors performs the functions of an audit committee, but no written charter
governs the actions of the Board when performing the functions of what would
generally be performed by an audit committee. The Board approves the selection
of our independent accountants and meets and
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires our directors and executive officers and
persons who beneficially own more than ten percent of a registered class of the
Company’s equity securities to file with the SEC initial reports of ownership
and reports of changes in ownership of common stock and other equity securities
of the Company. Officers, directors and greater than ten percent
beneficial shareholders are required by SEC regulations to furnish us with
copies of all Section 16(a) forms they file. To the best of our
knowledge based solely on a review of Forms 3, 4, and 5 (and any amendments
thereof) received by us during or with respect to the year ended September
30, 2006,
the following persons have failed to file, on a timely basis, the identified
reports required by Section 16(a) of the Exchange Act during fiscal year ended
September 30, 2008:
|
Name
and principal position
|
Number
of
late
reports
|
Transactions
not
timely
reported
|
Known
failures to
file
a required form
|
|
Ivona
Janieszewski
|
0
|
0
|
0
|
Code
of Ethics
As of
September 30, 2008, we had not adopted a Code of Ethics for Financial
Executives, which would include our principal executive officer, principal
financial officer, principal accounting officer or controller, or persons
performing similar functions.
Summary
Compensation Table
The table
below summarizes all compensation awarded to, earned by, or paid to both to our
officers and to our directors for all services rendered in all capacities to us
for our fiscal years ended September 30, 2008 and 2007.
|
SUMMARY
COMPENSATION TABLE
|
|||||||||
|
Name
and
principal
position
|
Year
|
Salary ($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|
Ivona Janieszewski,President,
Chief Executive Officer, Principal Executive Officer,
Chief
Financial Officer, Principal Financial Officer, Principal Accounting
Officer and Director
|
2008
2007
|
0
0
|
0
0
|
0
0
|
0
0
|
0
0
|
0
0
|
0
0
|
0
0
|
Narrative
Disclosure to the Summary Compensation Table
We have
not entered into any employment agreement or consulting agreement with our
executive officer. There are no arrangements or plans in which we
provide pension, retirement or similar benefits for executive
officers.
Although
we do not currently compensate our officer, we reserve the right to provide
compensation at some time in the future. Our decision to compensate
officers depends on the availability of our cash resources with respect to the
need for cash to further our business purposes.
Outstanding
Equity Awards at Fiscal Year-End
The table
below summarizes all unexercised options, stock that has not vested, and equity
incentive plan awards for each named executive officer as of September 30,
2008.
|
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
|
|||||||||
|
OPTION
AWARDS
|
STOCK
AWARDS
|
||||||||
|
Name
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number
of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
(#)
|
Equity
Incentive
Plan
Awards:
Market
or
Payout
Value
of
Unearned
Shares,
Units
or
Other
Rights
That
Have
Not
Vested
(#)
|
|
Ivona
Janieszewski
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Stock
Option Grants
We have
not granted any stock options to the executive officers or directors since our
inception.
Director
Compensation
The table
below summarizes all compensation awarded to, earned by, or paid to our director
for all services rendered in all capacities to us for the period from inception
(August 2, 2007) through September 30, 2008.
|
DIRECTOR
COMPENSATION
|
|||||||
|
Name
|
Fees
Earned or
Paid
in
Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Non-Qualified
Deferred
Compensation
Earnings
($)
|
All
Other
Compensation
($)
|
Total
($)
|
|
Ivona
Janieszewski
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
Narrative
Disclosure to the Director Compensation Table
We do not
pay any compensation to our directors at this time. However, we reserve the
right to compensate our directors in the future with cash, stock, options, or
some combination of the above.
We have
not reimbursed our directors for expenses incurred in connection with attending
board meetings nor have we paid any directors fees or other cash compensation
for services rendered as a director in the year ended September 30,
2008.
We have
no formal plan for compensating our directors for their services in their
capacity as directors. In the future we may grant options to our
directors to purchase shares of common stock as determined by our Board of
Directors or a compensation committee that may be established. We do
have a stock option plan in place at this time although we have not yet issued
any options. Directors are entitled to reimbursement for reasonable
travel and other out-of-pocket expenses incurred in connection with attendance
at meetings of our board of directors. The board of directors may
award special remuneration to any director undertaking any special services on
behalf of Mojo Shopping other than services ordinarily required of a
director. No director received and/or accrued any compensation for
his or her services as a director, including committee participation and/or
special assignments
Stock
Option Plans
We did
not have a stock option plan as of September 30, 2008
The
following table sets forth certain information known to us with respect to the
beneficial ownership of our Common Stock as of September 30, 2008, by (1) all
persons who are beneficial owners of 5% or more of our voting securities, (2)
each director, (3) each executive officer, and (4) all directors and executive
officers as a group. The information regarding beneficial ownership of our
common stock has been presented in accordance with the rules of the Securities
and Exchange Commission. Under these rules, a person may be deemed to
beneficially own any shares of capital stock as to which such person, directly
or indirectly, has or shares voting power or investment power, and to
beneficially own any shares of our capital stock as to which such person has the
right to acquire voting or investment power within 60 days through the exercise
of any stock option or other right. The percentage of beneficial ownership as to
any person as of a particular date is calculated by dividing (a) (i) the number
of shares beneficially owned by such person plus (ii) the number of shares as to
which such person has the right to acquire voting or investment power within 60
days by (b) the total number of shares outstanding as of such date, plus any
shares that such person has the right to acquire from us within 60 days.
Including those shares in the tables does not, however, constitute an admission
that the named stockholder is a direct or indirect beneficial owner of those
shares. Unless otherwise indicated, each person or entity named in the table has
sole voting power and investment power (or shares that power with that person’s
spouse) with respect to all shares of capital stock listed as owned by that
person or entity.
Except as
otherwise indicated, all Shares are owned directly and the percentage shown is
based on 4,520,000 Shares of Common Stock issued and outstanding as of September
30, 2008.
|
Name
and Address of Beneficial Owners of Common Stock1
|
Title
of Class
|
Amount
and Nature of Beneficial Ownership
|
%
of Common Stock2
|
|
Ivona
Janieszewski
1505
Dusty Canyon St.
Henderson,
NV 89052
|
Common
Stock
|
3,200,000
|
70.80%
|
|
DIRECTORS
AND OFFICERS – TOTAL
|
3,200,000
|
70.80%
|
|
|
5%
SHAREHOLDERS
|
|||
|
Kent
Morgan
2479
Antrim Irish
Henderson,
NV 89044
|
Common
Stock
|
NONE
|
NONE
|
|
Total
of 5% shareholders
|
400,000
|
8.85%
|
Other than the shareholders listed above, we know of no other person who is the beneficial owner of more than five percent (5%) of our common stock.
None of
our directors or executive officers, nor any proposed nominee for election as a
director, nor any person who beneficially owns, directly or indirectly, shares
carrying more than 5% of the voting rights attached to all of our outstanding
shares, nor any members of the immediate family (including spouse, parents,
children, siblings, and in-laws) of any of the foregoing persons has any
material interest, direct or indirect, in any transaction over the last two
years or in any presently proposed transaction which, in either case, has or
will materially affect us.
Below is
the table of Audit Fees (amounts in US$) billed by our auditor in connection
with the audit of the Company’s annual financial statements for the years
ended:
|
Financial
Statements for the Year Ended September 30
|
Audit
Services
|
Audit
Related Fees
|
Tax
Fees
|
Other
Fees
|
|
2008
|
$4,750
|
$0
|
$0
|
$0
|
|
2007
|
$5,000
|
$0
|
$0
|
$0
|
PART IV
Index to
Financial Statements Required by Article 8 of Regulation S-X:
|
Audited
Financial Statements:
|
|
|
Exhibit
Number
|
Description
|
|
3.1
|
Articles
of Incorporation, as amended (1)
|
|
3.2
|
Bylaws,
as amended (1)
|
|
1
|
Incorporated
by reference to the Registration Statement on Form SB-2 filed on December
19, 2007.
|
SIGNATURES
In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Mojo
Shopping, Inc.
|
By:
|
/s/Ivona
Janieszewski
|
|
Ivona
Janieszewski
President,
Chief Executive Officer, Principal Executive Officer, Chief
Financial Officer, Principal Financial Officer, Principal Accounting
Officer and Director
|
|
|
December
29, 2008
|
In accordance with Section 13 or 15(d)
of the Exchange Act, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the dates
indicated:
|
By:
|
/s/Ivona
Janieszewski
|
|
Ivona
Janieszewski
President,
Chief Executive Officer, Principal Executive Officer, Chief
Financial Officer, Principal Financial Officer, Principal Accounting
Officer and Director
|
|
|
December
29, 2008
|
Maddox
Ungar Silberstein, PLLC CPAs and Business
Advisors
Phone
(248) 203-0080
Fax (248)
281-0940
30600
Telegraph Road, Suite 2175
Bingham
Farms, MI 48025-4586
www.maddoxungar.com
Board of
Directors
MoJo
Shopping, Inc.
Henderson,
Nevada
We have
audited the accompanying consolidated balance sheets of MoJo Shopping, Inc. (a
development stage company) as of September 30, 2008 and 2007 and the related
consolidated statements of operations, stockholders’ equity and cash flows for
the periods 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 audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The Company has determined
that it is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits 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 includes examining on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes 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 MoJo Shopping, Inc. as of September
30, 2008 and 2007, and the results of its operations and cash flows for the
periods then ended, in conformity with accounting principles general 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 2 to the
financial statements, the Company has negative working capital, has received
limited revenue from sales of products or services, and has incurred losses from
operations. These factors raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans with
regard to these matters are described in Note 2. The accompanying financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
/s/ Maddox Ungar
Silberstein, PLLC
Maddox
Ungar Silberstein, PLLC
Bingham
Farms, Michigan
December
24, 2008
MOJO
SHOPPING, INC.
(A DEVELOPMENT STAGE COMPANY)
As
of September 30, 2008 and 2007
|
2008
|
2007
|
||||
|
ASSETS
|
|||||
|
Current
Assets
|
|||||
|
Cash
and equivalents
|
$ | 248 | $ | 26,436 | |
|
Property
and equipment, net
|
173 | 248 | |||
|
Other
Asset
|
|||||
|
Refundable
deposit
|
348 | 348 | |||
|
TOTAL
ASSETS
|
$ | 769 | $ | 27,032 | |
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||
|
Current
Liabilities
|
|||||
|
Accrued
expenses
|
$ | 57,866 | $ | 10,415 | |
|
Due
to officer
|
224 | 100 | |||
|
Total
liabilities
|
58,090 | 10,515 | |||
|
Stockholders’
Equity
|
|||||
|
Common
stock, $.001 par value, 90,000,000 shares authorized, 4,520,000
shares issued and outstanding
|
4,520 | 4,520 | |||
|
Preferred
Stock, $.001 par value, 10,000,000 shares authorized, -0- shares
issued and outstanding
|
-0- | -0- | |||
|
Additional
paid-in capital
|
27,080 | 27,080 | |||
|
Deficit
accumulated during the development stage
|
(88,921) | (15,083) | |||
|
Total
stockholders’ equity
|
(57,321) | 16,517 | |||
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 769 | $ | 27,032 | |
The
accompanying notes are an integral part of these financial
statements.
MOJO
SHOPPING, INC.
(A
DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
Years
Ended September 30, 2008 and 2007
Period
from August 2, 2007(Inception) to September 30,
2008
|
Year
Ended September
30, |
Period
from August 2,
2007 |
Period
from August 2,
2007 |
||||||
|
Revenues,
net of discounts
|
$ | 2,447 | $ | -0- | $ | 2,447 | ||
|
Cost
of sales
|
4,628 | -0- | 4,628 | |||||
|
Gross
(loss)
|
(2,181) | -0- | (2,181) | |||||
|
Expenses
:
|
||||||||
|
Advertising
and promotion
|
11,617 | -0- | 11,617 | |||||
|
General
and administrative
|
51,910 | 2,312 | 54,222 | |||||
|
Professional
fees
|
8,213 | 4,000 | 12,213 | |||||
|
Start-up
costs
|
-0- | 8,827 | 8,827 | |||||
|
Total
expenses
|
(71,740) | (15,139) | (86,879) | |||||
|
Net
loss from operations
|
(73,921) | (15,183) | (89,060) | |||||
|
Other
income
|
83 | 56 | 139 | |||||
|
Net
loss before taxes
|
(73,838) | (15,083) | (88,921) | |||||
|
Income
taxes
|
-0- | -0- | -0- | |||||
|
Net
loss
|
$ | (73,838) | $ | (15,083) | $ | (88,921) | ||
|
Net
loss per share:
|
||||||||
|
Basic
and diluted
|
$ | (0.02) | $ | (0.01) | ||||
|
Weighted
average shares outstanding:
|
||||||||
|
Basic
and diluted
|
4,520,000 | 1,664,998 | ||||||
The
accompanying notes are an integral part of these financial
statements.
MOJO
SHOPPING, INC.
(A
DEVELOPMENT STAGE COMPANY)
Period
from August 2, 2007 (Inception) to September 30, 2007
|
Common
stock
|
Additional
paid-in
|
Deficit
accumulated
during
the
development
|
|||||||||||
|
Shares
|
Amount
|
capital
|
stage
|
Total
|
|||||||||
|
Issuance
of common stock for
cash @$.005
|
320,000 | $ | 320 | $ | 1,280 | - | $ | 1,600 | |||||
|
Issuance
of common stock for
cash @$.003125
|
3,200,000 | 3,200 | 6,800 | - | 10,000 | ||||||||
|
Issuance
of common stock for
cash @$.02
|
1,000,000 | 1,000 | 19,000 | - | 20,000 | ||||||||
|
Net
loss for the period
|
- | - | - | (15,083) | (15,083) | ||||||||
|
Balance,
September 30, 2007
|
4,520,000 | 4,520 | 27,080 | (15,083) | 16,517 | ||||||||
|
Net
loss for the period
|
- | - | - | (73,838) | (73,838) | ||||||||
|
Balance,
September 30, 2008
|
4,520,000 | $ | 4,520 | $ | 27,080 | $ | (88,921) | $ | (57,321) | ||||
The
accompanying notes are an integral part of these financial
statements.
F-4
MOJO
SHOPPING, INC.
(A
DEVELOPMENT STAGE COMPANY)
Period
from August 2, 2007 (Inception) to September 30, 2007
|
Year
Ended September
30, |
Period
from August 2,
2007 |
Period
from August 2,
2007 |
||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||
|
Net
loss
|
$ | (73,838) | $ | (15,083) | $ | (88,921) | ||
|
Amortization
expense
|
75 | 0 | 75 | |||||
|
Change
in non-cash working capital items
|
(348) | (348) | ||||||
| Increase in refundable deposits | 0 | |||||||
|
Increase
in accrued expenses
|
47,451 | 10,415 | 57,866 | |||||
|
Increase
in due to officer
|
124 | 100 | 224 | |||||
|
CASH
FLOWS USED BY OPERATING ACTIVITIES
|
(26,188) | (4,916) | (31,104) | |||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||
|
Purchase
of software
|
0 | (248) | (248) | |||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||
|
Proceeds
from sales of common stock
|
0 | 31,600 | 31,600 | |||||
|
NET
INCREASE (DECREASE) IN CASH
|
(26,188) | 26,436 | 248 | |||||
|
Cash,
beginning of period
|
26,436 | 0 | 0 | |||||
|
Cash,
end of period
|
$ | 248 | $ | 26,436 | $ | 248 | ||
|
SUPPLEMENTAL
CASH FLOW
INFORMATION
|
||||||||
|
Interest
paid
|
$ | 0 | $ | 0 | $ | 0 | ||
|
Income
taxes paid
|
$ | 0 | $ | 0 | $ | 0 | ||
The
accompanying notes are an integral part of these financial
statements.
MOJO
SHOPPING, INC.
(A
DEVELOPMENT STAGE COMPANY)
September
30, 2008
1. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Description
of Business
Mojo
Shopping, Inc. (the “Company”) was incorporated in the State of Delaware on
August 2, 2007. The Company plans to operate as a holding company for
its wholly owned subsidiary, Mojo Shopping LLC, which was incorporated in the
state of Nevada on April 2, 2007 and sells goods via its online store. The
Company intends to provide credit in the normal course of business to its
customers and perform ongoing credit evaluations of those
customers. It will maintain allowances for doubtful accounts based on
factors surrounding the credit risk of specific customers, historical trends,
and/or other information.
Cash and Cash
Equivalents
Cash
equivalents comprise certain highly liquid instruments with a maturity of three
months or less when purchased. As of September 30, 2008, the Company
did not have any cash equivalents other than its bank accounts.
Basic Income (Loss) Per
Share
Basic
income (loss) per share is calculated by dividing the Company’s net loss
applicable to common shareholders by the weighted average number of common
shares during the period. Diluted earnings per share is calculated by dividing
the Company’s net income available to common shareholders by the diluted
weighted average number of shares outstanding during the year. The diluted
weighted average number of shares outstanding is the basic weighted number of
shares adjusted for any potentially dilutive debt or equity. There are no such
common stock equivalents outstanding as of September 30, 2008.
|
For
the
Year
Ended
September
30,
2008
|
||
|
Loss
(numerator)
|
$ | (73,838) |
|
Shares
(denominator)
|
4,520,000 | |
|
Per
share amount
|
$ | (0.02) |
Dividends
The
Company has not adopted any policy regarding payment of dividends. No dividends
have been paid during any of the periods shown.
Income
Taxes
The
Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes. Deferred tax
assets and liabilities are recorded based on the differences between the
financial statement and tax bases of assets and liabilities and the tax rates in
effect when these differences are expected to reverse. The Company’s predecessor
operated as entity exempt from Federal and State income
taxes.
MOJO
SHOPPING, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2008
1. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income Taxes
(Continued)
SFAS No.
109 requires the reduction of deferred tax assets by a valuation allowance if,
based on the weight of available evidence, it is more likely than not that some
or all of the deferred tax assets will not be realized.
The
provision for income taxes differs from the amounts which would be provided by
applying the statutory federal income tax rate of 34% to net loss before
provision for income taxes for the following reasons:
|
September
30,
2008
|
September
30,
2007
|
||||
|
Income
tax expense at statutory rate
|
$ | (25,100) | $ | (5,128) | |
|
Valuation
allowance
|
25,100) | 5,128 | |||
|
Income
tax expense per books
|
$ | - | $ | - | |
Net deferred tax assets consist of the
following components as of:
|
September
30,
2008
|
September
30,
2007
|
||||
|
NOL
carryover
|
$ | 28,618 | $ | 5,100 | |
|
Valuation
allowance
|
(28,618) | (5,100) | |||
|
Net
deferred tax asset
|
$ | - | $ | - | |
Due to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss carry forwards of $88,921 for federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur net operating
loss carry forwards may be limited as to use in future years.
Impairment of Long-Lived
Assets
The
Company continually monitors events and changes in circumstances that could
indicate carrying amounts of long-lived assets may not be recoverable. When such
events or changes in circumstances are present, the Company assesses the
recoverability of long-lived assets by determining whether the carrying value of
such assets will be recovered through undiscounted expected future cash flows.
If the total of the future cash flows is less than the carrying amount of those
assets, the Company recognizes an impairment loss based on the excess of the
carrying amount over the fair value of the assets. Assets to be disposed of are
reported at the lower of the carrying amount or the fair value less costs to
sell.
Accounting
Basis
The basis
is accounting principles generally accepted in the United States of
America. The Company has adopted a September 30 fiscal year
end.
Advertising
Costs
The
Company’s policy regarding advertising is to expense advertising when incurred.
The Company incurred advertising expense $11,617 during the year ended September
30, 2008.
MOJO
SHOPPING, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2008
1. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting
Pronouncements
In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163,
“Accounting for Financial Guarantee Insurance Contracts-and interpretation of
FASB Statement No. 60”. SFAS No. 163 clarifies how Statement 60
applies to financial guarantee insurance contracts, including the recognition
and measurement of premium revenue and claims liabilities. This
statement also requires expanded disclosures about financial guarantee insurance
contracts. SFAS No. 163 is effective for fiscal years beginning on or after
December 15, 2008, and interim periods within those years. SFAS No. 163 has no
effect on the Company’s financial position, statements of operations, or cash
flows at this time.
In May
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162,
“The Hierarchy of Generally Accepted Accounting Principles”. SFAS No.
162 sets forth the level of authority to a given accounting pronouncement or
document by category. Where there might be conflicting guidance between two
categories, the more authoritative category will prevail. SFAS No. 162 will
become effective 60 days after the SEC approves the PCAOB’s amendments to AU
Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on
the Company’s financial position, statements of operations, or cash flows at
this time.
In March
2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities—an amendment of
FASB Statement No. 133. This standard requires companies to provide
enhanced disclosures about (a) how and why an entity uses derivative
instruments, (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows. This Statement is effective for
financial statements issued for fiscal years and interim periods beginning after
November 15, 2008, with early application encouraged. The Company has not yet
adopted the provisions of SFAS No. 161, but does not expect it to have a
material impact on its consolidated financial position, results of operations or
cash flows.
In
December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding
the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in
developing an estimate of expected term of "plain vanilla" share options in
accordance with SFAS No. 123 (R), Share-Based Payment. In particular,
the staff indicated in SAB 107 that it will accept a company's election to use
the simplified method, regardless of whether the company has sufficient
information to make more refined estimates of expected term. At the time SAB 107
was issued, the staff believed that more detailed external information about
employee exercise behavior (e.g., employee exercise patterns by industry and/or
other categories of companies) would, over time, become readily available to
companies. Therefore, the staff stated in SAB 107 that it would not expect a
company to use the simplified method for share option grants after December 31,
2007. The staff understands that such detailed information about employee
exercise behavior may not be widely available by December 31, 2007. Accordingly,
the staff will continue to accept, under certain circumstances, the use of the
simplified method beyond December 31, 2007. The Company currently uses the
simplified method for “plain vanilla” share options and warrants, and will
assess the impact of SAB 110 for fiscal year 2009. It is not believed that this
will have an impact on the Company’s consolidated financial position, results of
operations or cash flows.
In
December 2007, the FASB issued SFAS No. 160, Non-controlling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51. This
statement amends ARB 51 to establish accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. It clarifies that a non-controlling interest in a subsidiary is an
ownership interest in the consolidated entity that should be reported as equity
in the consolidated financial statements. Before this statement was issued,
limited guidance existed for reporting non-controlling interests. As a result,
considerable diversity in practice existed. So-called minority interests were
reported in the consolidated statement of financial position as liabilities or
in the mezzanine section between liabilities and equity. This statement improves
comparability by eliminating that diversity. This statement is effective for
fiscal years, and interim periods within those fiscal years, beginning on or
after December 15, 2008 (that is, January 1, 2009, for entities with calendar
year-ends). Earlier adoption is prohibited. The effective date of this statement
is the same as that of the related Statement 141 (revised 2007). The Company
will adopt this Statement beginning March 1, 2009. It is not believed that this
will have an impact on the Company’s consolidated financial position, results of
operations or cash flows.
MOJO
SHOPPING, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2008
1. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting
Pronouncements (Continued)
In
December 2007, the FASB, issued FAS No. 141 (revised 2007), Business
Combinations. This Statement replaces FASB Statement No. 141, Business
Combinations, but retains the fundamental requirements in
Statement 141. This Statement establishes principles and
requirements for how the acquirer: (a) recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any
non-controlling interest in the acquiree; (b) recognizes and measures the
goodwill acquired in the business combination or a gain from a bargain purchase;
and (c) determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. This statement applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. An entity may not
apply it before that date. The effective date of this statement is the same as
that of the related FASB Statement No. 160, Non-controlling Interests in
Consolidated Financial Statements. The Company will adopt this
statement beginning March 1, 2009. It is not believed that this will have an
impact on the Company’s consolidated financial position, results of operations
or cash flows.
In
February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for
Financial Assets and Liabilities—Including an Amendment of FASB Statement No.
115. This standard permits an entity to choose to measure many
financial instruments and certain other items at fair value. This option is
available to all entities. Most of the provisions in FAS 159 are elective;
however, an amendment to FAS 115 Accounting for Certain Investments in Debt and
Equity Securities applies to all entities with available for sale or trading
securities. Some requirements apply differently to entities that do not report
net income. SFAS No. 159 is effective as of the beginning of an entities first
fiscal year that begins after November 15, 2007. Early adoption is permitted as
of the beginning of the previous fiscal year provided that the entity makes that
choice in the first 120 days of that fiscal year and also elects to apply the
provisions of SFAS No. 157 Fair Value Measurements. The Company will
adopt SFAS No. 159 beginning March 1, 2008 and is currently evaluating the
potential impact the adoption of this pronouncement will have on its
consolidated financial statements.
In
September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements This statement defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
(GAAP), and expands disclosures about fair value measurements. This statement
applies under other accounting pronouncements that require or permit fair value
measurements, the Board having previously concluded in those accounting
pronouncements that fair value is the relevant measurement attribute.
Accordingly, this statement does not require any new fair value measurements.
However, for some entities, the application of this statement will change
current practice. This statement is effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier application is encouraged, provided that the
reporting entity has not yet issued financial statements for that fiscal year,
including financial statements for an interim period within that fiscal year.
The Company will adopt this statement March 1, 2008, and it is not believed that
this will have an impact on the Company’s consolidated financial position,
results of operations or cash flows.
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date the financial statements and the
reported amount of revenues and expenses during the reporting
period. Actual results could differ from those
estimates.
MOJO
SHOPPING, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
September
30, 2008
1. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Stock-based
compensation.
As of
September 30, 2008, the Company has not issued any share-based payments to its
employees.
The
Company adopted SFAS No. 123-R effective January 1, 2006 using the
modified prospective method. Under this transition method, stock compensation
expense includes compensation expense for all stock-based compensation awards
granted on or after January 1, 2006, based on the grant-date fair
value estimated in accordance with the provisions of SFAS
No. 123-R.
Revenue
Recognition
The
Company recognizes revenue when products are fully delivered or services have
been provided and collection is reasonably assured.
2. GOING
CONCERN
These
consolidated financial statements have been prepared on a going-concern basis
which assumes that the Company will be able to realize assets and discharge
liabilities in the normal course of business for the foreseeable
future.
The
Company has negative working capital, has experienced losses since its inception
of the development stage amounting to $88,921 as of September 30, 2008 and has
had minimal operating revenues. As of September 30 2008, the Company
had a total of $248 in cash, and this amount is insufficient to sustain
operations over the course of the next year. These factors raise
substantial doubt about the Company’s ability to continue as a going
concern. The ability of the Company to meet its commitments as they
become payable is dependent on the ability of the Company to execute its plan to
establish a customer base, obtain customers that make purchases, and to obtain
necessary financing or achieve a profitable level of
operations. There are no assurances that the Company will be
successful in achieving these goals.
These
financial statements do not give effect to adjustments to the amounts and
classifications to assets and liabilities that would be necessary should the
Company be unable to continue as a going concern.
3. COMMON
AND PREFERRED STOCK
On August
31, 2007, the Company issued 3,200,000 shares of its common stock at $0.003125
per share and 320,000 shares at $0.005 per shares in exchange for a 100%
interest in its wholly owned subsidiary Mojo Shopping LLC.
On
September 28, 2007, the Company closed a private placement and issued 1,000,000
shares of its common stock to 30 individuals pursuant to subscriptions for $0.02
per share in return for total proceeds of $20,000.
The
Company has not issued any preferred shares as of September 30,
2008.
4. PROPERTY
AND EQUIPMENT
Property
and equipment is comprised of software and is stated at
cost. Amortization expense for the periods ended September 30, 2008
and 2007 amounted to $75 and $-0-, respectively. Gains and losses on
sales and disposals of software are included in the statements of
operations. Maintenance and repairs are charged to expense as
incurred. As of September 30, 2008 and 2007 software consisted of the
following:
|
September
30,
2008
|
September
30,
2007
|
||||
|
Software
|
$ | 248 | $ | 248 | |
|
Accumulated
amortization
|
(75 | - | |||
|
Total
|
$ | 173 | $ | 248 | |