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EQUATOR Beverage Co - Quarter Report: 2009 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, 2009
   
[  ]
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.)

PO Box 778176, Henderson, NV 89077
(Address of principal executive offices)

866-699-6656
(Issuer’s telephone number)
 
1505 Dusty Canyon Street, Henderson, NV 89052
(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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 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.

[ ] 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 August 7, 2009.
 

 
TABLE OF CONTENTS
 
 
Page
 
PART I – FINANCIAL INFORMATION
 
 
PART II – OTHER INFORMATION
 
 
 
 PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements

Our financial statements included in this Form 10-Q are as follows:
 


These 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 period ended June 30, 2009 are not necessarily indicative of the results that can be expected for the full year.
 
 
3

MOJO SHOPPING, INC.
(A Development Stage Company)
Consolidated Balance Sheets
 
ASSETS
     
 
June 30,
2009
 
September 30,
2008
 
(Unaudited)
   
CURRENT ASSETS
     
       
Cash and cash equivalents
$ 119   $ 248
           
Total Current Assets
  119     248
           
SOFTWARE, net
  136     173
           
OTHER ASSETS
         
           
Deposits
  348     348
           
TOTAL ASSETS
$ 603   $ 769
           
LIABILITIES AND STOCKHOLDERS' DEFICIT
         
           
CURRENT LIABILITIES
         
           
Accounts payable and accrued expenses
$ 73,551   $ 53,116
Due to officer
  2,259     224
           
Total Current Liabilities
  75,810     53,340
           
STOCKHOLDERS' DEFICIT
         
           
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no 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
  (106,807)     (84,171)
           
Total Stockholders' Deficit
  (75,207)     (52,571)
           
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
$ 603   $ 769
 
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,
 
For the Nine Months Ended June 30,
 
From Inception
on August 2, 2007 Through June 30,
 
2009
 
2008
 
2009
 
2008
 
2009
                   
REVENUES
                 
Merchandise sales
$ -   $ 92   $ -   $ 1,785   $ 2,507
Sales discounts
  -     -     -     (60)     (60)
                             
Net Revenues
  -     92     -     1,725     2,447
                             
COST OF GOODS SOLD
                           
Cost of goods sold
  -     2,130     36     3,425     4,392
Frieght
  -     -     -     135     272
                             
Total Cost of Goods Sold
  -     2,130     36     3,560     4,664
                             
GROSS PROFIT (LOSS)
  -     (2,038)     (36)     (1,835)     (2,217)
                             
OPERATING EXPENSES
                           
Advertising and promotion
  -     108     -     3,117     11,617
Depreciation and amortization
  12     -     36     -     111
General and administrative
  9,447     12,405     22,594     28,459     93,031
                             
Total Operating Expenses
  9,459     12,513     22,630     31,576     104,759
                             
LOSS FROM OPERATIONS
  (9,459)     (14,551)     (22,666)     (33,411)     (106,976)
                             
OTHER EXPENSES
                           
Interest income
  -     29     30     75     88
Other income
  -     -     -     1     81
                             
Total Other Expenses
  -     29     30     76     169
                             
NET LOSS BEFORE TAXES
  (9,459)     (14,522)     (22,636)     (33,335)     (106,807)
                             
Income taxes
  -     -     -     -     -
                             
NET LOSS
$ (9,459)   $ (14,522)   $ (22,636)   $ (33,335)   $ (106,807)
                             
BASIC LOSS PER COMMON SHARE
$ (0.00)   $ (0.00)   $ (0.01)   $ (0.01)      
                             
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
  4,520,000     4,520,000     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 Statements of Stockholders' Deficit

 
Common Stock
 
Additional
Paid-In
 
Deficit
Accumulated
During
Development
 
Total
 
Shares
 
Amount
 
Capital
 
Stockholders'
 
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 year ended September 30, 2008
  -     -     -     (69,088)     (69,088)
                             
Balance, September 30, 2008
  4,520,000     4,520     27,080     (84,171)     (52,571)
                             
Net loss for nine months ended June 30, 2009 (unaudited)
  -     -     -     (22,636)     (22,636)
                             
Balance, June 30, 2009 (unaudited)
  4,520,000   $ 4,520   $ 27,080   $ (106,807)   $ (75,207)
 
The accompanying notes are an integral part of these financial statements.
MOJO SHOPPING, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
 
 
For the Nine Months Ended
June 30,
 
From Inception
on August 2,
2007 Through
June 30,
 
2009
 
2008
 
2009
           
OPERATING ACTIVITIES
         
 
 
 
 
 
 
Net loss
$ (22,636)   $ (33,335)   $ (106,807)
Adjustments to Reconcile Net Loss to Net
               
Cash Used by Operating Activities:
               
Depreciation and amortization
  37     -     112
Changes in operating assets and liabilities:
               
Deposits
  -     -     (348)
Accounts payable and accrued expenses
  20,435     17,533     73,551
Due to officer
  2,035     124     2,259
                 
Net Cash Used in Operating Activities
  (129)     (15,678)     (31,233)
                 
INVESTING ACTIVITIES
               
                 
Purchase of software
  -     -     (248)
                 
Net Cash Used in Investing Activities
  -     -     (248)
                 
FINANCING ACTIVITIES
               
                 
Issuance of common stock
  -     -     31,600
                 
Net Cash Provided by Financing Activities
  -     -     31,600
                 
NET DECREASE IN CASH
  (129)     (15,678)     119
                 
CASH AT BEGINNING OF PERIOD
  248     26,436     -
                 
CASH AT END OF PERIOD
$ 119   $ 10,758   $ 119
                 
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, 2009
 
NOTE 1 - FINANCIAL STATEMENTS
 
The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments necessary in order for the financial statements to be not misleading have been reflected herein.
 
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 June 30, 2009 and June 30, 2008 are not necessarily indicative of the operating results for the full year.

NOTE 2 - GOING CONCERN
 
The Company’s financial statements are prepared using generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has had no revenues and has generated losses from operations.
 
In order to continue as a going concern and achieve a profitable level of operations, the Company will need, among other things, additional capital resources and to develop a consistent source of revenues.  The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's planned business.
 
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plan described in the preceding paragraph and eventually attain profitable operations.  The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
 
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
 
         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 of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

 
F-5

MOJO SHOPPING, INC.
(A Development Stage Company)
Notes to Consolidated Financial Statements
June 30, 2009
 
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
         Recent Accounting Pronouncements
 
In May 2009, the FASB issued FAS 165, “Subsequent Events”.  This pronouncement establishes standards for accounting for and disclosing subsequent events (events which occur after the balance sheet date but before financial statements are issued or are available to be issued). FAS 165 requires and entity to disclose the date subsequent events were evaluated and whether that evaluation took place on the date financial statements were issued or were available to be issued. It is effective for interim and annual periods ending after June 15, 2009. The adoption of FAS 165 did not have a material impact on the Company’s financial condition or results of operation.
 
In June 2009, the FASB issued FAS 166, “Accounting for Transfers of Financial Assets” an amendment of FAS 140. FAS 140 is intended to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets: the effects of a transfer on its financial position, financial performance , and cash flows: and a transferor’s continuing involvement, if any, in transferred financial assets. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 166 to have an impact on the Company’s results of operations, financial condition or cash flows.
 
In June 2009, the FASB issued FAS 167, “Amendments to FASB Interpretation No. 46(R) ”. FAS 167 is intended to (1) address the effects on certain provisions of FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, as a result of the elimination of the qualifying special-purpose entity concept in FAS 166, and (2) constituent concerns about the application of certain key provisions of Interpretation 46(R), including those in which the accounting and disclosures under the Interpretation do not always provided timely and useful information about an enterprise’s involvement in a variable interest entity. This statement must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of FAS 167 to have an impact on the Company’s results of operations, financial condition or cash flows.
 
In June 2009, the FASB issued FAS 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles”. FAS 168 will become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of this Statement, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification will become nonauthoritative. This statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009.The Company does not expect the adoption of FAS 168 to have an impact on the Company’s results of operations, financial condition or cash flows.
 
 
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.

Ivona Janieszewski is our President, Secretary, Chief Executive Officer, Chief Financial Officer, and sole director.

At present, we lack the financial resources to operate and have therefore suspended operations indefinitely.  We will need to raise additional funds during the next twelve months in order to resume operations or otherwise execute on our business plan.  In addition, our management will consider other business opportunities should they arise.
 
 
Results of Operations for the three and nine months ended June 30, 2009 and 2008 and for the Period from August 2, 2007 (Date of Inception) until June 30, 2009

We generated $0 and $0 of Net Revenue for the three and nine months ended June 30, 2009, compared with $92 and $1,725 of Net Revenue for the three and nine months ended June 30, 2008, respectively.  We realized net losses of $9,459 and $22,666 for the three and nine months ended June 30, 2009 and $14,551 and $33,411 for the three and nine months ended June 30, 2008, respectively.  We generated a loss of $106,807 for the period from August 2, 2007 (Date of Inception) until June 30, 2009.

For the three months ended June 30, 2009, we had $0 in sales discounts, Cost of Goods Sold of $0, and Operating Expenses of $9,459. Our net loss for the three months ended June 30, 2009 was substantially less than the net loss for the three months ended June 30, 2008 due to a reduction in our general and administrative expenses.

For the nine months ended June 30, 2009, we had $0 in Sales Discounts, Cost of Goods Sold of $36, and Operating Expenses of $22,630.   Our net loss for the nine months ended June 30, 2009 was substantially less than the net loss for the nine months ended June 30, 2008 due to a reduction in our general and administrative expenses.

For the period from August 2, 2007 (Date of Inception) until June 30, 2009, we realized a loss in Sales Discounts of $60, Cost of Goods Sold was $4,664, and Operating Expenses were $104,759. Our Operating Expenses were primarily composed of General and Administrative Expenses of $93,031 and Advertising and Promotion Expenses of $11,617. Our Interest and Other Income was $169 for the period from August 2, 2007 (Date of Inception) until June 30, 2009. Thus, our Net Loss for the period was $106,807.

Liquidity and Capital Resources

As of June 30, 2009, we had total current assets of $119, consisting entirely of cash. Our total current liabilities as of June 30, 2009 were $75,810.  Thus, we have a working capital deficit of $75,207, as of June 30, 2009.

Operating Activities used $129 in cash for the nine months ended June 30, 2009, $15,678 for the nine months ended June 30, 2008, and $31,233 for the period from August 2, 2007 (Date of Inception) until June 30, 2009.  Our net losses of $22,636, $33,335 and $106,807 for those respective periods were the primary components of our negative operating cash flow for the periods, offset by increases in Accounts Payable and Accrued Expenses.

Investing Activities neither used nor generated cash for the three month periods ended June 30, 2009, and June 30, 2008. Investing Activities used $248 for the purchase of software in cash during the period from August 2, 2007 (Date of Inception) until June 30, 2009.

Financing Activities neither used nor generated cash for the nine month periods ended June 30, 2009 and June 30, 2008. Financing Activities generated $31,600 in cash during the period from August 2, 2007 (Date of Inception) until June 30, 2009, as a result of a private offering of equity securities.
 

As of June 30, 2009, we had $119 in cash.  At present, we lack the financial resources to operate and have therefore suspended operations indefinitely.  We will need to raise additional funds during the next twelve months in order to resume operations or otherwise execute on our business plan.  In addition, our management will consider other business opportunities should they arise.

Off Balance Sheet Arrangements

As of June 30, 2009, 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 an accumulated deficit of $106,807 as of June 30, 2009. We also currently have a working capital deficit, and have not completed our efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.
 
Item 4T.     Controls and Procedures

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 the transactions and dispositions of the assets of the Company;
 
 
 
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with 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
 
 
 
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, 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 June 30, 2009 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 June 30, 2009:
 
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.

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

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 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, 2009.

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 12, 2009
   
 
By:       /s/ Ivona Janieszewski                                                                  
             Ivona Janieszewski
Title:    Chief Executive Officer and Director