EQUATOR Beverage Co - Quarter Report: 2009 March (Form 10-Q)

mainbody.htm

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 March 31, 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 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 May 12, 2009.

Table of Contents

	TABLE OF CONTENTS	Page
PART I – FINANCIAL INFORMATION
Item 1:	Financial Statements	3
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 4T:	Controls and Procedures	6
PART II – OTHER INFORMATION
Item 1:	Legal Proceedings	8
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	8
Item 3:	Defaults Upon Senior Securities	8
Item 4:	Submission of Matters to a Vote of Security Holders	8
Item 5:	Other Information	8
Item 6:	Exhibits	9

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our financial statements included in this Form 10-Q are as follows:
F-1	Consolidated Balance Sheet as of March 31, 2009 (unaudited) and September 30, 2008 (audited);
F-2	Statements of Operations for the six months ended March 31, 2009 and 2008 and for the period from August 2, 2007 (Inception) to March 31, 2009 (unaudited);
F-3	Statements of Stockholders’ Equity (Deficit) for period from August 2, 2007 (Inception) to March 31, 2009 (unaudited);
F-4	Consolidated Statements of Cash Flows for the six months ended March 31, 2009 and 2008, and for the period from August 2, 2007 (Inception) to March 31, 2009 (unaudited)
F-5	Notes to Consolidated Financial Statements;

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 interim period ended March 31, 2009 are not necessarily indicative of the results that can be expected for the full year.

Table of Contents

MOJO SHOPPING, INC.

(A Development Stage Company)

Consolidated Balance Sheets

	March 31, 2009		September 30, 2008
ASSETS	(Unaudited)

CURRENT ASSETS

Cash and cash equivalents	$	237	$	248

Total Current Assets		237		248

SOFTWARE, net		149		173

OTHER ASSETS

Deposits		348		348

TOTAL ASSETS	$	734	$	769

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES

Accounts payable and accrued expenses	$	64,258	$	53,116
Due to officer		2,224		224

Total Current Liabilities		66,482		53,340

STOCKHOLDERS' EQUITY (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		(97,348)		(84,171)

Total Stockholders' Equity (Deficit)		(65,748)		(52,571)

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	734	$	769

The accompanying notes are an integral part of these financial statements.

F-1

Table of Contents

MOJO SHOPPING, INC.

(A Development Stage Company)

Consolidated Statements of Operations

(Unaudited)

	For the Three Months Ended March 31,				For the Six Months Ended March 31,				From Inception on August 2, 2007 Through March 31,
	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		-		24		-		99
General and administrative		1,817		12,405		13,147		28,459		83,584

Total Operating Expenses		1,829		12,513		13,171		31,576		95,300

LOSS FROM OPERATIONS		(1,829)		(14,551)		(13,207)		(33,411)		(97,517)

OTHER EXPENSES
Interest income		-		29		-		75		88
Other income		30		-		30		1		81

Total Other Expenses		30		29		30		76		169

NET LOSS BEFORE TAXES		(1,799)		(14,522)		(13,177)		(33,335)		(97,348)

Income taxes		-		-		-		-		-

NET LOSS	$	(1,799)	$	(14,522)	$	(13,177)	$	(33,335)	$	(97,348)

BASIC LOSS PER COMMON SHARE	$	(0.00)	$	(0.00)	$	(0.00)	$	(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.

F-2

Table of Contents

MOJO SHOPPING, INC.

(A Development Stage Company)

Consolidated Statements of Stockholders' Equity (Deficit)

(Unaudited)

	Common Stock			Additional Paid-In		Deficit Accumulated During Development		Total 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 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 six months ended March 31, 2009	-		-		-		(13,177)		(13,177)

Balance, March 31, 2009	4,520,000	$	4,520	$	27,080	$	(97,348)	$	(65,748)

The accompanying notes are an integral part of these financial statements.

F-3

Table of Contents

MOJO SHOPPING, INC.

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)

	For the Six Months Ended March 31,				From Inception on August 2, 2007 Through March 31,
	2009		2008		2009

OPERATING ACTIVITIES

Net loss	$	(13,177)	$	(33,335)	$	(97,348)
Adjustments to Reconcile Net Loss to Net
Cash Used by Operating Activities:
Depreciation and amortization		24		-		99
Changes in operating assets and liabilities:
Deposits		-		-		(348)
Accounts payable and accrued expenses		11,142		17,533		64,258
Due to officer		2,000		124		2,224

Net Cash Used in Operating Activities		(11)		(15,678)		(31,115)

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		(11)		(15,678)		237

CASH AT BEGINNING OF PERIOD		248		26,436		-

CASH AT END OF PERIOD	$	237	$	10,758	$	237

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

CASH PAID FOR:
Interest	$	-	$	-	$	-
Income Taxes	$	-	$	-	$	-

The accompanying notes are an integral part of these financial statements.

F-4

Table of Contents

MOJO SHOPPING, INC.

(A Development Stage Company)

Notes to Consolidated Financial Statements

March 31, 2009 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

March 31, 2009 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 March 31, 2009 and 2008 are not necessarily indicative of the operating results for the full years.

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.

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 $97,348 as of March 31, 2009. 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.

F-5

Table of Contents

MOJO SHOPPING, INC.

(A Development Stage Company)

Notes to Consolidated Financial Statements

March 31, 2009 and September 30, 2008

3. RECENT ACCOUNTING PRONOUNCEMENTS

In June 2008, the FASB issued FASB Staff Position EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, (“FSP EITF 03-6-1”). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the computation of earnings per share under the two-class method as described in FASB Statement of Financial Accounting Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. We are not required to adopt FSP EITF 03-6-1; neither do we believe that FSP EITF 03-6-1 would have material effect on our consolidated financial position and results of operations if adopted.

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.

F-6

Table of Contents

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.

Table of Contents

Results of Operations for the three and six months ended March 31, 2009 and 2008 and for the Period from August 2, 2007 (Date of Inception) until March 31, 2009

We generated $0 and $0 of Gross Revenue for the three and six months ended March 31, 2009, compared with $92 and $1,785 of Gross Revenue for the three and six months ended March 31, 2008. We realized net losses of $1,799 and $13,177 for the three and six months ended March 31, 2009 and $14,522 and $33,335 for the three and six motnhs ended March 31, 2008. We generated a loss of $93,348 for the period from August 2, 2007 (Date of Inception) until March 31, 2009.

For the three months ended March 31, 2009, we had $0 in sales discounts, Cost of Goods Sold of $0, and Operating Expenses of $1,829. Our net loss for the three months ended March 31, 2009 was substantially less than the net loss for the three months ended March 31, 2008 due to a reduction in our general and administrative expenses.

For the six months ended March 31, 2009, we had $0 in Sales Discounts, Cost of Goods Sold of $36, and Operating Expenses of $13,171. Our net loss for the six months ended March 31, 2009 was substantially less than the net loss for the six months ended March 31, 2008 due to a reduction in our general and administrative expenses.

For the period from August 2, 2007 (Date of Inception) until March 31, 2009, our Sales Discounts were $60, Cost of Goods Sold was $4,664, and Operating Expenses were $95,300. Our Operating Expenses were primarily composed of General and Administrative Expenses of $83,584 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 March 31, 2009. Thus, our Net Loss for the period was $97,348.

Liquidity and Capital Resources

As of March 31, 2009, we had total current assets of $237, consisting entirely of cash. Our total current liabilities as of March 31, 2009 were $66,482. Thus, we have a working capital deficit of $66,245, as of March 31, 2009.

Operating Activities used $11 in cash for the six months ended March 31, 2009, $15,678 for the six months ended March 31, 2008, and $31,115 for the period from August 2, 2007 (Date of Inception) until March 31, 2009. Our net losses of $13,177, $33,335 and $97,348 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 March 31, 2009, and March 31, 2008. Investing Activities used $248 in cash during the period from August 2, 2007 (Date of Inception) until March 31, 2009.

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

Table of Contents

As of March 31, 2009, we had $237 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 March 31, 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 $97,348 as of March 31, 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.

Table of Contents

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 March 31, 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 March 31, 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.

Table of Contents

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 March 31, 2009.

Item 5. Other Information

None

Item 6. Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Table of Contents

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:	May 12, 2009

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