EQUATOR Beverage Co - Quarter Report: 2008 December (Form 10-Q)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
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[X]
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Quarterly
Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
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For
the quarterly period ended December 31,
2008
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[ ]
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Transition
Report pursuant to 13 or 15(d) of the Securities Exchange Act of
1934
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For
the transition period to __________
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Commission
File Number: 333-148190
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Mojo Shopping,
Inc.
(Exact
name of small business issuer as specified in its charter)
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Delaware
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26-0884348
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(State
or other jurisdiction of incorporation or organization)
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(IRS
Employer Identification No.)
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PO Box 778176,
Henderson, NV 89077
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(Address
of principal executive offices)
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866-699-6656
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(Issuer’s
telephone number)
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1505 Dusty Canyon
Street, Henderson, NV 89052
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(Former
name, former address and former fiscal year, if changed since last
report)
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Check
whether the issuer (1) 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 issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days [X]
Yes [ ] No
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.
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[ ]
Large accelerated filer Accelerated filer
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[ ]
Non-accelerated filer
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[X]
Smaller reporting company
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). [X] Yes [ ] No
State the
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date: 4,520,000 common shares as of
December 31, 2008.
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Page
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PART I – FINANCIAL
INFORMATION
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PART II – OTHER
INFORMATION
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| Item 1A: | Risk Factors | |
PART
I - FINANCIAL INFORMATION
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Our
unaudited financial statements included in this Form 10-Q are as
follows:
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These
unaudited financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America for interim
financial information and the SEC instructions to Form 10-Q. In the
opinion of management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the interim
period ended December 31, 2008 are not necessarily indicative of the results
that can be expected for the full year.
MOJO SHOPPING, INC.
(A
Development Stage Company)
Consolidated
Balance Sheets
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ASSETS
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December
31, 2008 |
September
30, 2008 |
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(unaudited)
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(audited)
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CURRENT
ASSETS
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Cash
and cash equivalents
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$ | 102 | $ | 248 | |
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Total
Current Assets
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102 | 248 | |||
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SOFTWARE,
net
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161 | 173 | |||
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OTHER
ASSETS
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Deposits
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348 | 348 | |||
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TOTAL
ASSETS
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$ | 611 | $ | 769 | |
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LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
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CURRENT
LIABILITIES
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Accounts
payable and accrued expenses
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$ | 64,286 | $ | 53,116 | |
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Due
to officer
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274 | 224 | |||
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Total
Current Liabilities
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64,560 | 53,340 | |||
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STOCKHOLDERS'
EQUITY (DEFICIT)
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Preferred
stock, $0.001 par value, 10,000,000 shares authorized, no
shares issued and outstanding
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- | - | |||
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Common
stock, $0.001 par value, 90,000,000 shares authorized,
4,520,000 shares issued and outstanding
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4,520 | 4,520 | |||
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Additional
paid-in capital
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27,080 | 27,080 | |||
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Deficit
accumulated during the development stage
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(95,549) | (84,171) | |||
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Total
Stockholders' Equity (Deficit)
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(63,949) | (52,571) | |||
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TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
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$ | 611 | $ | 769 | |
The
accompanying notes are an integral part of these financial
statements.
F-1
MOJO SHOPPING, INC.
(A
Development Stage Company)
Consolidated
Statements of Operations (unaudited)
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For
the Three Months Ended December
31, |
From
Inception on August
2, |
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2008
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2007
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2008
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REVENUES
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Merchandise
sales
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$ | - | $ | 1,693 | $ | 2,507 | ||
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Sales
discounts
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- | (60) | (60) | |||||
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Net
Revenues
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- | 1,633 | 2,447 | |||||
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COST
OF GOODS SOLD
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Cost
of goods sold
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36 | 1,295 | 4,392 | |||||
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Frieght
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- | 135 | 272 | |||||
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Total
Cost of Goods Sold
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36 | 1,430 | 4,664 | |||||
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GROSS
PROFIT (LOSS)
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(36) | 203 | (2,217) | |||||
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OPERATING
EXPENSES
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Advertising
and promotion
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- | 3,009 | 11,617 | |||||
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Depreciation
and amortization
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12 | - | 87 | |||||
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General
and administrative
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11,330 | 16,054 | 81,767 | |||||
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Total
Operating Expenses
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11,342 | 19,063 | 93,471 | |||||
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LOSS
FROM OPERATIONS
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(11,378) | (18,860) | (95,688) | |||||
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OTHER
EXPENSES
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Interest
income
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- | 46 | 88 | |||||
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Other
income
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- | 1 | 51 | |||||
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Total
Other Expenses
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- | 47 | 139 | |||||
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NET
LOSS BEFORE TAXES
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(11,378) | (18,813) | (95,549) | |||||
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Income
taxes
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- | - | - | |||||
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NET
LOSS
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$ | (11,378) | $ | (18,813) | $ | (95,549) | ||
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BASIC
LOSS PER COMMON SHARE
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$ | (0.00) | $ | (0.01) | ||||
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WEIGHTED
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
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4,520,000 | 2,260,000 | ||||||
The
accompanying notes are an integral part of these financial
statements.
F-2
MOJO SHOPPING, INC.
(A
Development Stage Company)
Consolidated
Statements of Stockholders' Equity (Deficit) (unaudited)
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Common
Stock
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Additional Paid-In |
Deficit Accumulated |
Total Stockholders' |
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Shares
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Amount
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Capital
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Stage
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(Deficit)
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Balance,
August 2, 2007
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- | $ | - | $ | - | $ | - | $ | - | |||||
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Shares
issued at $0.02 per share pursuant to subscription
on September 28, 2007
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1,000,000 | 1,000 | 19,000 | - | 20,000 | |||||||||
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Shares
issued at $0.005 per share pursuant to Share
Purchase Agreement dated August 31, 2007
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320,000 | 320 | 1,280 | - | 1,600 | |||||||||
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Shares
issued at $0.003 per share pursuant to Share
Purchase Agreement dated August 31, 2007
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3,200,000 | 3,200 | 6,800 | - | 10,000 | |||||||||
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Net
loss from inception through September 30, 2007
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- | - | - | (15,083) | (15,083) | |||||||||
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Balance,
September 30, 2007
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4,520,000 | 4,520 | 27,080 | (15,083) | 16,517 | |||||||||
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Net
loss for year ended September 30, 2008
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- | - | - | (69,088) | (69,088) | |||||||||
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Balance,
September 30, 2008
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4,520,000 | 4,520 | 27,080 | (84,171) | (52,571) | |||||||||
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Net
loss for three months ended December 31, 2008
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- | - | - | (11,378) | (11,378) | |||||||||
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Balance,
December 31, 2008
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4,520,000 | $ | 4,520 | $ | 27,080 | $ | (95,549) | $ | (63,949) | |||||
The
accompanying notes are an integral part of these financial
statements.
F-3
MOJO SHOPPING, INC.
(A
Development Stage Company)
Consolidated
Statements of Cash Flows (unaudited)
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For
the Three Months Ended December
31, |
From
Inception on August
2, |
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2008
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2007
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2008
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OPERATING
ACTIVITIES
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Net
income (loss)
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$ | (11,378) | $ | (18,813) | $ | (95,549) | ||
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Adjustments
to Reconcile Net Loss to Net
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Cash
Used by Operating Activities:
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Depreciation
and amortization
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12 | - | 87 | |||||
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Changes
in operating assets and liabilities:
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Deposits
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- | (1,000) | (348) | |||||
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Accounts
payable and accrued expenses
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11,170 | 11,386 | 64,286 | |||||
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Due
to officer
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50 | 224 | 274 | |||||
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Net
Cash Used in Operating Activities
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(146) | (8,203) | (31,250) | |||||
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INVESTING
ACTIVITIES
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Purchase
of software
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- | - | (248) | |||||
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Net
Cash Used in Investing Activities
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- | - | (248) | |||||
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FINANCING
ACTIVITIES
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Issuance
of common stock
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- | - | 31,600 | |||||
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Net
Cash Provided by Financing Activities
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- | - | 31,600 | |||||
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NET
INCREASE (DECREASE) IN CASH
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(146) | (8,203) | 102 | |||||
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CASH
AT BEGINNING OF PERIOD
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248 | 26,436 | - | |||||
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CASH
AT END OF PERIOD
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$ | 102 | $ | 18,233 | $ | 102 | ||
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SUPPLEMENTAL
DISCLOSURES OF CASH
FLOW INFORMATION
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CASH
PAID FOR:
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Interest
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$ | - | $ | - | $ | - | ||
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Income
Taxes
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$ | - | $ | - | $ | - | ||
The
accompanying notes are an integral part of these financial
statements.
MOJO SHOPPING, INC.
(A
Development Stage Company)
Notes to
Consolidated Financial Statements
December
31, 2008 and September 30, 2008
1. CONDENSED
FINANCIAL STATEMENTS
The
accompanying financial statements have been prepared by the Company without
audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations and cash flows at December 31, 2008 and for all
periods presented have been made.
Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted. It is suggested that
these condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's September 30, 2008
audited financial statements. The results of operations for the
periods ended December 31, 2008 and 2007 are not necessarily indicative of the
operating results for the full years.
2. GOING
CONCERN
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate continuation of the
Company as a going concern. However, the Company has accumulated
deficit of $95,549 as of December 31, 2008. The Company currently has
limited liquidity, and has not completed its efforts to establish a stabilized
source of revenues sufficient to cover operating costs over an extended period
of time.
Management
anticipates that the Company will be dependent, for the near future, on
additional investment capital to fund operating expenses The Company intends to
position itself so that it may be able to raise additional funds through the
capital markets. In light of management’s efforts, there are no assurances that
the Company will be successful in this or any of its endeavors or become
financially viable and continue as a going concern.
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.
Company
Overview
We were
incorporated on August 2, 2007, in the state of Delaware for the purpose of
developing, promoting, and expanding our online retail business.
We are in
the business of online retailing. Specifically, we have created our website,
www.mojoshopping.com (“mojoshopping.com”). Through our site, we have sold
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.
Ivona
Janieszewski is our President, Secretary, Chief Executive Officer, Chief
Financial Officer, and sole director.
Results
of Operations for the three months ended December 31, 2008 and 2007 and for the
Period from August 2, 2007 (Date of Inception) until December 31,
2008
We
generated $0 of Gross Revenue for the three months ended December 31, 2008,
compared with $1,693 of Gross Revenue for the three months ended December 31,
2007. We generated $2,507 of Gross Revenue for the period from August
2, 2007 (Date of Inception) until December 31, 2008.
For the
three months ended December 31, 2008, we had $0 in sales discounts, Cost of
Goods Sold of $36, and Operating Expenses of $11,342, resulting in a Net Loss of
$11,378 for the period. Our Operating Expenses for the three months ended
December 31, 2008 were primarily due to General and Administrative Expenses of
$11,330.
For the
three months ended December 31, 2007, we had $60 in Sales Discounts, Cost of
Goods Sold of $1,430, and Operating Expenses of $19,063. Our Operating Expenses
for the period included General and Administrative expenses of $16,054 and
Advertising and Promotion Expenses of $3,009. Our Interest and Other Income was
$27 for the three months ended December 31, 2007. Thus, our Net Loss for the
period was $18,813.
For the
period from August 2, 2007 (Date of Inception) until December 31, 2008, our
Sales Discounts were $60, Cost of Goods Sold was $4,664, and Operating Expenses
were $93,471. Our Operating Expenses were primarily composed of General and
Administrative Expenses of $81,767 and Advertising and Promotion Expenses of
$11,617. Our Interest and Other Income was $139 for the period from August 2,
2007 (Date of Inception) until December 31, 2008. Thus, our Net Loss for the
period was $95,549.
Liquidity
and Capital Resources
As of
December 31, 2008, we had total current assets of $102, consisting entirely of
cash. Our total current liabilities as of the three months ended December 31,
2008 were $64,560. Thus, we have a working capital deficit of
$64,458, as of December 31, 2008.
Operating
Activities used $146 in cash for the three months ended December 31, 2008,
$8,203 for the three months ended December 31, 2007, and $31,250 for the period
from August 2, 2007 (Date of Inception) until December 31, 2008. Our
net losses of $11,378, $18,813 and $95,549 for those respective periods were the
primary components of our negative operating cash flow for the periods, offset
by Accounts Payable and Accrued Expenses.
Investing
Activities neither used nor generated cash for the three month periods ended
December 31, 2008, and December 31, 2007. Investing Activities used $248 in cash
during the period from August 2, 2007 (Date of Inception) until December 31,
2008.
Financing
Activities neither used nor generated cash for the three month periods ended
December 31, 2008, and December 31, 2007. Investing Activities generated $31,600
in cash during the period from August 2, 2007 (Date of Inception) until December
31, 2008, as a result of a private offering of equity securities.
As of
December 31, 2008, we had $102 in cash. Therefore, we will need to
raise additional funds during the next twelve months in order to execute on our
business plan.
Although
our principal has no legal obligation to infuse additional capital, it is
anticipated that our principal will do so as reasonably necessary by providing
short-term demand loans carrying a market interest rate should it become
necessary. We anticipate that we may have to raise additional capital
to meet our financial requirements over the next twelve months.
Off
Balance Sheet Arrangements
As of
December 31, 2008, there were no off balance sheet arrangements.
Going
Concern
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate our continuation as a
going concern. However, we have accumulated deficit of $95,549 as of
December 31, 2008. We currently have limited liquidity, and have not completed
our efforts to establish a stabilized source of revenues sufficient to cover
operating costs over an extended period of time.
Management
anticipates that we will be dependent, for the near future, on additional
investment capital to fund operating expenses. We intend to position ourselves
so that we may be able to raise additional funds through the capital markets. In
light of our efforts, there are no assurances that we will be successful in this
or any of our endeavours or become financially viable and continue as a going
concern.
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:
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•
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Pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the
Company;
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•
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Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with U.S. GAAP, and that
receipts and expenditures of the Company are being made only in accordance
with authorizations of management and directors of the
Company; and
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•
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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.
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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.
Ms. Ivona
Janieszewski, our Chief Executive Officer and the Chief Financial Officer,
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 December 31, 2007 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. The Company
had the following significant deficiencies at December 31, 2007:
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The
company is effectively insolvent, and only has one employee to oversee
bank reconciliations, posting payables, and so forth, so there are no
checks and balances on internal
controls.
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Remediation
of Material Weakness
We are
unable to remedy our internal controls until we are able to locate another
business opportunity, or receive financing to hire additional
employees. At this time, we are effectively not a going
concern.
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.
PART
II – OTHER INFORMATION
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.
A smaller
reporting company is not required to provide the information required by this
Item.
None
None
No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the quarterly period ended December
31, 2008.
None
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Exhibit
Number
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Description
of Exhibit
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SIGNATURES
In
accordance with the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
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Mojo
Shopping, Inc.
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Date:
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February
13, 2009
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By: /s/Ivona
Janieszewski
Ivona
Janieszewski
Title: Chief
Executive Officer and
Director
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