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EQUATOR Beverage Co - Quarter Report: 2008 June (Form 10-Q)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

[X]
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
   
 
For the quarterly period ended June 30, 2008
   
[  ]
Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934
   
 
For the transition period __________  to __________
   
 
Commission File Number: 333-148190

Mojo Shopping, Inc.
(Exact name of small business issuer as specified in its charter)

Delaware
26-0884348
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)

1505 Dusty Canyon Street, Henderson, NV 89052
(Address of principal executive offices)

866-699-6656
(Issuer’s telephone number)
 
6620 Escondido Street, Suite E, Las Vegas, NV 89119
(Former name, former address and former fiscal year, if changed since last report)
 
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.

[ ] Large accelerated filer Accelerated filer
[ ] Non-accelerated filer
[X] Smaller reporting company
  

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 June 30, 2008
 



 PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements



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 June 30, 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
 
ASSETS
      
 
June 30, 2008
  
September 30, 2007
 
(Unaudited)
  
(Audited)
CURRENT ASSETS
      
       
Cash and cash equivalents
 $ 9,605   $ 26,436
           
Total Current Assets
   9,605     26,436
           
SOFTWARE, net
   248     248
           
OTHER ASSETS
          
           
Deposits
   348     348
           
TOTAL ASSETS
 $ 10,201   $ 27,032
           
           
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
          
           
CURRENT LIABILITIES
          
           
Accounts payable and accrued expenses
 $ 41,256   $ 10,415
Due to officer
   224     100
           
Total Current Liabilities
   41,480     10,515
           
STOCKHOLDERS' EQUITY (DEFICIT)
          
           
Preferred stock, $0.001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding
   -     -
Common stock, $0.001 par value, 90,000,000 shares  authorized, 4,520,000 shares issued and outstanding
   4,520     4,520
Additional paid-in capital
   27,080     27,080
Deficit accumulated during the development stage
   (62,879)     (15,083)
           
Total Stockholders' Equity (Deficit)
   (31,279)     16,517
           
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
 $ 10,201   $ 27,032
 
The accompanying notes are an integral part of these financial statements.
MOJO SHOPPING, INC.
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
 
 
For the Three
Months Ended
June 30, 2008
  
For the Nine
Months Ended
June 30, 2008
  
From Inception
on August 2,
2007 Through
June 30, 2008
           
REVENUES
          
Merchandise sales
 $ -   $ 1,785   $ 1,785
Sales discounts
   -     (60)     (60)
                 
Total Revenue
   -     1,725     1,725
                 
COST OF GOODS SOLD
                
Cost of goods sold
   -     3,425     3,425
Frieght
   -     135     135
                 
Total Cost of Goods Sold
   -     3,560     3,560
                 
GROSS PROFIT
   -     (1,835)     (1,835)
                 
OPERATING EXPENSES
                
Advertising and promotion
   -     3,117     3,117
General and administrative
   14,468     42,927     58,066
                 
Total Operating Expenses
   14,468     46,044     61,183
                 
LOSS FROM OPERATIONS
   (14,468)     (47,879)     (63,018)
                 
OTHER EXPENSES
                
Interest income
   7     82     88
Other income
   -     1     51
                 
Total Other Expenses
   7     83     139
                 
NET LOSS BEFORE TAXES
   (14,461)     (47,796)     (62,879)
                 
Income taxes
   -     -     -
                 
NET LOSS
 $ (14,461)   $ (47,796)   $ (62,879)
                 
BASIC LOSS PER COMMON SHARE
 $ (0.00)   $ (0.01)      
                 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
   4,520,000     4,520,000      
 
The accompanying notes are an integral part of these financial statements.
MOJO SHOPPING, INC.
(A Development Stage Company)
Consolidated Statement of Stockholders' Equity (Deficit)
 
 
 
 
Common Stock
  
 
Additional
Paid-In
  
Deficit
Accumulated
During
Development
  
 
Stockholders'
Equity
 
Shares
  
Amount
  
Capital
  
Stage
  
(Deficit)
                   
Balance, August 2, 2007
   -   $ -   $ -   $ -   $ -
                             
Shares issued at $0.02 per share pursuant to subscription on September 28, 2007
   1,000,000     1,000     19,000     -     20,000
                             
Shares issued at $0.005 per share pursuant to Share Purchase Agreement dated August 31, 2007
   320,000     320     1,280     -     1,600
                             
Shares issued at $0.003 per share pursuant to Share Purchase Agreement dated August 31, 2007
   3,200,000     3,200     6,800     -     10,000
                             
Net loss from inception through September 30, 2007
   -     -     -     (15,083)     (15,083)
                             
Balance, September 30, 2007
   4,520,000     4,520     27,080     (15,083)     16,517
                             
Net loss for the nine months June 30, 2008 (unaudited)
   -     -     -     (47,796)     (47,796)
                             
Balance, June 30, 2008 (unaudited)
   4,520,000   $ 4,520   $ 27,080   $ (62,879)   $ (31,279)
 
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)
 
 
 
For the Nine
Months Ended
June 30, 2008
  
From Inception
on August 2,
2007 Through
June 30, 2008
       
OPERATING ACTIVITIES
      
       
Net (loss)
 $ (47,796)   $ (62,879)
Adjustments to Reconcile Net Loss to Net
          
Cash Used by Operating Activities:
          
Changes in operating assets and liabilities:
          
Deposits
   -     (348)
Accounts payable and accrued expenses
   30,841     41,256
Due to officer
   124     224
           
Net Cash Used by Operating Activities
   (16,831)     (21,747)
           
INVESTING ACTIVITIES
          
           
Purchase of software
   -     (248)
           
Net Cash Used  by Investing Activities
   -     (248)
           
FINANCING ACTIVITIES
          
           
Issuance of common stock
   -     31,600
           
Net Cash Provided by Financing Activities
   -     31,600
           
NET INCREASE (DECREASE) IN CASH
   (16,831)     9,605
           
CASH AT BEGINNING OF PERIOD
   26,436     -
           
CASH AT END OF PERIOD
 $ 9,605   $ 9,605
           
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
          
           
CASH PAID FOR:
          
           
Interest
 $ -   $ -
Income Taxes
 $ -   $ -
 
The accompanying notes are an integral part of these financial statements.
MOJO SHOPPING, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
June 30, 2008 and September 30, 2007

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 June 30, 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, 2007 audited financial statements.  The results of operations for the periods ended June 30, 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 $62,879 as of June 30, 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.
 

Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 and are continuing to develop our website, www.mojoshopping.com (“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.

MojoShopping.com is propelled by a nucleus of design aficionados with collective backgrounds in furniture design, fashion design and manufacturing and innovative interior design.

Our initial repertoire of design products include core categories like modern furniture, lighting, design accessories, rugs & textiles, clothing, gifts, and pets, which contain products ranging from fashion staples to the latest unique gift items and cutting edge electronic gadgetry.

Influenced by pop culture, with a clear sense of the needs and demands of the hip, contemporary individual consumer that has a continual appetite for new and exciting design-oriented products, we present a new entertaining experience in online shopping. MojoShopping.com’s focus is to offer the most exciting lifestyle and design products in today’s modern world.

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 closely 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 the majority of our warehousing and shipping costs, we are able to offer competitive prices to our customers while realizing savings on our own costs.
 

We are designing 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 reduce our order processing time. Products will 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 a variety of 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 have verbal commitments from a variety of 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.


Results of Operations for the three and nine months ended June 30, 2008 and from August 2, 2007 (date of inception) until June 30, 2008.

For the three months ended June 30, 2008, we generated gross revenue from sales of $0. During the same period, we recorded cost of goods sold of $0, operating expenses of $14,468, and interest and other income of $7, resulting in a net loss of $14,461 for the three months ended June 30, 2008. For the nine months ended June 30, 2008, we generated gross revenue from sales of $1,725. During the same period, we recorded cost of goods sold of $3,560, operating expenses of $46,044, and interest and other income of $83, resulting in a net loss of $47,796 for the nine months ended June 30, 2008. For the period from August 2, 2007 (date of inception) through June 30, 2008, we generated gross revenue from sales of $1,725. Cost of goods sold of $3,560, operating expenses of $61,183, and interest and other income of $139 resulted in a net loss of $62,879 for the period from August 2, 2007 (date of inception) through June 30, 2008.

Liquidity and Capital Resources

As of June 30, 2008, we had total current assets of $9,605, consisting entirely of Cash. Our total current liabilities as of June 30, 2008 were $41,480.  Thus, we have working capital deficit of $31,875 as of June 30, 2008.
 

Operating activities used $16,831 in cash for the nine months ended June 30, 2008, and $21,747 for the period from August 2, 2007 (Date of Inception) until June 30, 2008. Our net losses of $47,796 and $62,879, respectively, were the primary components of our negative operating cash flow for the periods. Investing Activities neither used nor generated cash for the nine months ended June 30, 2008, and used $248 in cash during the period from August 2, 2007 (Date of Inception) until June 30, 2008.  We have incurred accrued expenses of $30,841 during the period from August 2, 2007 (Date of Inception) until June 30, 2008.  As of June 30, 2008, we had $9,605 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. We believe that it will be easier to raise the requisite financing once our stock is traded on a readily accessible exchange or national quotation system.

Off Balance Sheet Arrangements

As of June 30, 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 continuation of the Company as a going concern.  However, we have accumulated deficit of $62,879 as of June 30, 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.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

A smaller reporting company is not required to provide the information required by this Item.

Item 4T.     Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2008.  This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, Ms. Ivona Janieszewski.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2008, our disclosure controls and procedures are effective.  There have been no changes in our internal controls over financial reporting during the quarter ended June 30, 2008.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level.  Further, 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. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance 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 can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon 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. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.




PART II – OTHER INFORMATION

Item 1.     Legal Proceedings

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.

Item 1A:  Risk Factors

A smaller reporting company is not required to provide the information required by this Item.

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3.     Defaults upon Senior Securities

None

Item 4.     Submission of Matters to a Vote of Security Holders

No matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended June 30, 2008.

Item 5.     Other Information

None

Item 6.      Exhibits

Exhibit Number
Description of Exhibit


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.

 
Mojo Shopping, Inc.
   
Date:
August 13, 2008
   
 
By:       /s/ Ivona Janieszewski                                           
             Ivona Janieszewski
Title:    Chief Executive Officer and Director