EQUATOR Beverage Co - Annual Report: 2011 (Form 10-K)

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

For Fiscal Year Ended: December 31, 2011

OR

For the transition period from _______________ to _______________

Commission file number: 333-140148

Registrant’s telephone number: (201) 633-2300

Securities registered under Section 12(b) of the Act: None           

Securities registered under Section 12(g) of the Act: None           

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ¨   No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes x   No ¨

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x   No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company. See the definitions of the “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨   No x

On June 30, 2011, there were 58,885,244 shares of the registrant's common stock, par value $0.001, issued and outstanding. Of these, 38,153,241 shares were held by non-affiliates of the registrant. The market value on June 30, 2011 of those shares held by non-affiliates was $30,141,060, based on the closing price of $0.79 per share for the registrant’s common stock. Shares of common stock held by each officer and director have been excluded from this calculation because such persons may be deemed to be affiliates. This determination of officer or affiliate status is not necessarily a conclusive determination for other purposes

DOCUMENTS INCORPORATED BY REFERENCE

Not Applicable.

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

Except for historical information, this report contains forward-looking statements. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in the sections “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You should carefully review the risks described in this Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

All references in this Form 10-K to “Mojo,” “Mojo Organics,” the “Company,” “we,” “us” or “our” are to Mojo Organics, Inc. and its wholly owned subsidiary.

PART I

Company Overview

We were incorporated in the State of Delaware on August 2, 2007 under the name Mojo Shopping, Inc. for the purpose of developing an online retail business focused on merchandise for young professionals. We generated only nominal revenues and because we lacked the financial resources to maintain operations, we decided to seek a business opportunity for our shareholders.

Merger with Specialty Beverage and Supplement, Inc.

On May 13, 2011, we closed a merger (the “Merger”) with Specialty Beverage and Supplement, Inc., a privately held Nevada corporation (“Specialty Beverage”), pursuant to which Specialty Beverage merged with and into SBSI Acquisition Corp., a Nevada corporation and our wholly-owned subsidiary (“SBSI”). Specialty Beverage, incorporated in the State of Nevada on April 3, 2008, was engaged in the development of beverage products and vitamin supplements, such as energy drinks, sports drinks, wellness beverages, ready to drink iced teas and vitamin enhanced kids drinks.

Upon the closing of the Merger, Ms. Janieszewski resigned as our President, Secretary, Chief Executive Officer and Chief Financial Officer and sole director. Peter Scalise III was appointed as Chief Executive Officer and Chairman, Scott Ferrari was appointed President and Chief Operating Officer and Neil Rosenberg was appointed Secretary and Treasurer. Simultaneous with the closing, Peter Scalise, Scott Ferrari, Neil Rosenberg, Duncan Weir and Rich Hall were appointed as directors.

As a result of the Merger, the offices of Specialty Beverage at 836 Grundy Avenue, Holbrook, New York 11741 became our corporate headquarters. We intended to carry on Specialty Beverage’s business as our sole line of business.

Split-Off of SBSI

In October 2011, we determined to restructure our business to focus our activities on the continued development of our Dispensing Cap Technology and our Pinch zero-calorie natural and organic sweetener, as well as other marketing and branding opportunities.  To this end, we split off (the “Split-Off”) our other products in development to certain of our stockholders (the “Buyers”).

To accomplish this restructuring, we entered into a split-off agreement dated October 27, 2011 by and among us, our newly organized wholly owned subsidiary Mojo Organics Operating Company, Inc., a Delaware corporation formerly known as Mojo Organics, Inc. (“Mojo Organics”), SBSI and the Buyers. We closed the Split-Off on October 27, 2011.

In the Split-Off, we assigned and transferred to the Buyers all of the issued and outstanding shares of capital stock of the SBSI in exchange for the surrender by the Buyers to us for cancellation an aggregate to 23,307,748 shares (the “Shares”) of our common stock, which constituted approximately 38% of the issued and outstanding shares of our common stock prior to the Split-Off.

In the Split-Off, SBSI assigned the Dispensing Cap and Pinch assets (including all related intellectual property (patent pending and trademarks)) to the Company and retained all of its other assets and all liabilities, including its (and the Company’s former) principal office and distribution facilities in Holbrook, New York, as well as our other former subsidiary, Graphic Gorilla LLC.

Prior to the closing of the Split-Off, our Board of Directors appointed Glenn Simpson as a director and our Chief Executive Officer, effective as of the closing of the Split-Off. At the closing of the Split-Off, Peter Scalise III, Scott Ferrari, Neil Rosenberg, Duncan Weir and Richard Hall, all of whom were among the Buyers that repurchased SBSI, resigned as members of our Board of Directors, and Mr. Scalise resigned as our Chief Executive Officer, Mr. Ferrari resigned as our President and Mr. Rosenberg resigned as our Secretary and Treasurer.

Recent Developments

On December 15, 2011, our Board of Directors dismissed ZS Consulting Group, LLP as our independent registered public accountant, and approved the engagement of Friedman LLP to serve as our independent registered public accountant for our fiscal year ending December 31, 2011. Friedman LLP was engaged on December 15, 2011.

On December 28, 2011, we changed our name to Mojo Organics, Inc. from Mojo Ventures, Inc. We also changed the name of our wholly owned operating subsidiary to Mojo Organics Operating Company, Inc. We effected these name changes to better reflect our focus on the organic beverage market.

On January 27, 2012, we appointed Jeffrey A. Devlin and J. Robert LeShufy to serve as members of our Board of Directors.

Current Status of Business

We are currently evaluating our plans with respect to the further development of our Dispensing Cap Technology and our Pinch zero-calorie natural and organic sweetener. At the same time, we are evaluating other marketing and branding opportunities.

We had filed a U.S. patent application entitled Tamper-Evident Bottle Cap Having A Pre-Sealed Insertable Storage Chamber (serial no. 61/381,580) with the U.S. Patent and Trade Mark Office (the “PTO”) on September 10, 2010. This patent application was supposed to have been converted to a non-provisional application and patent cooperation treaty/international application by September 10, 2011. We have not converted this application.

Our Dispensing Cap Technology trade mark application was published on Feb. 14, 2012 in the PTO's Official Gazette and we expect to be issued a Notice of Allowance on this trademark in the near future. The PTO recently issued Notices of Allowance for our other 3 trademarks: “Pinch Organically Sweet,” “Pinch Organically Sweet (stylized)” and “All You Need is Pinch.”

Employees

As of April 30, 2012, we had one full time employee.

Because we are a “smaller reporting company” as that term is defined by the SEC, we are not required to present risk factors at this time.

None.

None.

No legal or governmental proceedings are presently pending or, to our knowledge, threatened, to which we are a party.

Not Applicable.

PART II

Our common stock is currently dually quoted on the OTC Bulletin Board under the symbol “MOJO.OB” and on the OTCQB under the symbol “MOJO.”

For the period from January 2, 2009 to December 31, 2011, the table sets forth the best high and low closing bid prices based upon information obtained from inter-dealer quotations on the OTC Bulletin Board and the OTCQB without retail markup, markdown, or commission and may not necessarily represent actual transactions:

Because our common stock is thinly traded, bid information on our common stock does not necessarily represent its fair market value.

Holders

As of April 30, 2012, we had 40,620,353¹ shares of our common stock issued and outstanding held by 69 shareholders of record.

Securities Authorized For Issuance Under Equity Compensation Plans

On May 24, 2011, our Board of Directors adopted our 2011 Equity Incentive Plan (the “2011 Plan”), which provides for various types of equity awards with respect to an aggregate of up to 8,000,000 shares of our common stock. On the same date, our Board of Directors issued nonqualified stock options to officers, directors and employees to purchase an aggregate of 7,770,264 shares of our common stock, all of which options were exercised at a price of $0.001 per share. As part of the Split-Off, 6,074,830 shares of our common stock issued under the 2011 Plan were returned to our treasury for cancellation and are now available for reissuance under the 2011 Plan. As of the date of this report, we have 6,304,566 shares of our common stock available for issuance under the 2011 Plan.

Dividends

We have never declared any cash dividends with respect to our common stock. Future payment of dividends is within the discretion of our board of directors and will depend on our earnings, capital requirements, financial condition and other relevant factors. Although there are no material restrictions limiting, or that are likely to limit, our ability to pay dividends on our common stock, we presently intend to retain future earnings, if any, for use in our business and have no present intention to pay cash dividends on our common stock.

Recent Sales of Unregistered Securities

Not applicable.

Not applicable.

ITEM 7.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described. This discussion contains forward-looking statements. Please see “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements.

The following discussion and analysis of the Company’s financial condition and results of operations are based on the preparation of our financial statements in accordance with U.S. generally accepted accounting principles.  You should read the discussion and analysis together with such financial statements and the related notes thereto.

Results of Operations

Fiscal year Ended December 31, 2011 and 2010

Revenues

We did not generate any revenues from for the years ended December 31, 2011 and 2010.

Total operating expenses

For the years ended December 31, 2011 and 2010, total operating expenses were $165,994 and $0, respectively. Administrative expenses increased $165,994 during the year ended December 31, 2011 to $165,994 compared to $0 for the year ended December 31, 2010. This increase was due primarily to an increase in professional fees and merger and acquisition costs. As a result of the Merger and subsequent Split-Off, administrative expenses for the year ended December 31, 2010 are included in the loss for discontinued operations.

Discontinued operations

As more fully described in Note (4) to our consolidated financial statements, in October 2011, we determined to restructure our business to focus our activities on the continued development of our Dispensing Cap Technology and our Pinch zero-calorie natural and organic sweetener, as well as other marketing and branding opportunities.  To this end, we split off (the “Split-Off”) our other products in development to certain of our stockholders (the “Buyers”). To accomplish this restructuring, we entered into a split-off agreement dated October 27, 2011 by and among us, our newly organized wholly owned subsidiary Mojo Organics Operating Company, Inc., a Delaware corporation formerly known as Mojo Organics, Inc. (“Mojo Organics”), SBSI and the Buyers. We closed the Split-Off on October 27, 2011. In the Split-Off, we assigned and transferred to the Buyers all of the issued and outstanding shares of capital stock of the SBSI in exchange for the surrender by the Buyers to us for cancellation an aggregate to 23,307,748 shares (the “Shares”) of our common stock, which constituted approximately 38% of the issued and outstanding shares of our common stock prior to the Split-Off. In the Split-Off, SBSI assigned the Dispensing Cap and Pinch assets (including all related intellectual property (patent pending and trademarks)) to the Company and retained all of its other assets and all liabilities, including its (and the Company’s former) principal office and distribution facilities in Holbrook, New York, as well as our other former subsidiary, Graphic Gorilla LLC. We assigned no value to these assets.

Accounting Standards Codification Topic 205-20, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“ASC 205-20”) provides accounting guidance for accounting for operations to be disposed by sale and, in our circumstances, requires us to report SBSI as a discontinued operation. In accordance with ASC 205-20, we classified all assets and liabilities of SBSI as “Current assets from discontinued operations”, “Non-current assets from discontinued operations”, “Current liabilities of discontinued operations” and “Non-current liabilities of discontinued operations” in the accompanying Consolidated Balance Sheets as of December 31, 2011 and 2010. ASC 205-20 also requires us to report SBSI’s operating results as a separate summarized component after net loss from continuing operations for each year presented. For the year ended December 31, 2011 and 2010, we incurred a loss from discontinued operations of $5,656,954 and $1,178,126, respectively. The accompanying Consolidated Statements of Operations and Consolidated Statements of Cash Flows contain all appropriate reclassifications for each year presented.

Net Loss

Our net losses for years ended December 31, 2011 and 2010 were $5,822,948 and $1,178,126 respectively, which consisted primarily of losses from discontinued operations.

We have generated no revenues and our accumulated deficit as of December 31, 2011 was $8,742,088.

Liquidity and Capital Resources

As of December 31, 2011, our cash and cash equivalents was $0 and our negative working capital was $165,994.

Prior to the Split-Off, we financed our operations through the issuance of equity and debt to private investors. On May 13, 2011, SBSI issued twelve-month 9% convertible subordinated debentures (the “Debentures”) to accredited investors in a private placement for aggregate gross proceeds of $2,612,000. Interest on the Debentures accrued at the rate of 9% per annum and was payable in shares of SBSI common stock. The Debentures were convertible into shares of common stock of SBSI at a conversion price of $0.35 per share and were mandatorily converted in accordance with their terms, into an aggregate of 7,462,848 shares of our common stock upon the effectiveness of the Merger on May 13, 2011. In the Split-Off, SBSI retained all of its liabilities and the Company retained its accounts payable to its various vendors and service providers.

Working Capital Needs

We presently do not have any available credit, bank financing or other external sources of liquidity. Due to our historical operating losses, our operations have not been a source of liquidity. At our current level of operation, we do not have sufficient cash to meet our expenses for the next twelve months. We expect that we will need to obtain additional capital in order to meet our current working capital needs, execute our business plan, build our operations and become profitable. In order to obtain capital, we may need to sell additional shares of our common stock or debt securities, or borrow funds from private lenders or banking institutions. We have not made any decisions with respect to any such financing. There can be no assurance that we will be successful in obtaining additional funding in amounts or on terms acceptable to us, if at all. If we are unable to raise additional funding as necessary, we may have to suspend our operations temporarily or cease operations entirely.

Our auditors have included an explanatory paragraph in their report on our consolidated financial statements relating to the uncertainty of our business as a going concern, due to our limited operating history, our lack of historical profitability, and our limited funds. We believe that we will be able to raise the required funds for operations and to achieve our business plan.

ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable.

Our audited financial statements are included beginning immediately following the signature page to this report. See Item 15 for a list of the financial statements included herein.

Item 9.   Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act of 1934 (the “Exchange Act”) is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. It should be noted that the design of any system of controls 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, regardless of how remote.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Under the supervision and with the participation of our senior management, consisting of Glenn Simpson, our Chief Executive and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our Chief Executive and Chief Financial Officer concluded, as of the Evaluation Date, that our disclosure controls and procedures were not effective because of the identification of what might be deemed a material weakness in our internal control over financial reporting which is identified below.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on this evaluation, our sole officer concluded that, during the period covered by this annual report, our internal controls over financial reporting were not operating effectively. Management did not identify any material weaknesses in our internal control over financial reporting as of December 31, 2011; however, it has identified the following deficiencies that, when aggregated, may possibly be viewed as a material weakness in our internal control over financial reporting as of that date:

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the year ended December 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Officers’ Certifications

Appearing as exhibits to this Annual Report are “Certifications” of our Chief Executive and Chief Financial Officer. The Certifications are required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (the “Section 302 Certifications”). This section of the Annual Report contains information concerning the Controls Evaluation referred to in the Section 302 Certification. This information should be read in conjunction with the Section 302 Certifications for a more complete understanding of the topics presented.

ITEM 9B. OTHER INFORMATION

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

Executive Officers and Directors

Below are the names and certain information regarding the Company’s current executive officers and directors:

Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified.

Currently, directors are not compensated for their services, although their expenses in attending meetings may be reimbursed. Officers are elected by the Board of Directors and serve until their successors are appointed by the Board of Directors. Biographical resumes of each officer and director are set forth below.

Certain biographical information of our directors and officers:

Glenn Simpson: Glenn Simpson, a beverage industry veteran, was Vice President and Chief Financial Officer of Coca-Cola Bottlers, Inc. in Tashkent, Uzbekistan from 1995 to 2000.  His primary responsibilities included corporate strategy and supervision of bottling and distribution operations.  His accomplishments included growing revenues from a base at $5 million to over $160 million annually.  The company was awarded “Bottler of the Year” by The Coca-Cola Company for two consecutive years in 1996 and 1997 based on product quality and revenue growth.  From 2005 to 2009, Mr. Simpson served as chief operating officer, chief financial officer and director of Even Technologies Inc. and IVIDEO Corporation, technology companies with patented technology for the delivery of HD video to wireless devices.  Most recently, from 2009 to 2011, Mr. Simpson was engaged in beverage projects on a consulting basis in Russia and Afghanistan.  Mr. Simpson is a Certified Public Accountant and holds an MBA from Columbia University School of Business.

Jeffrey A. Devlin: Jeffrey Devlin has over 25 years of advertising and business development experience. He held various executive and creative positions over the course of his advertising career, including serving as Vice President of New Business Development for Doner Advertising. He also previously served as a Senior Vice President at Lintas Worldwide Advertising, as the head of television accounts. His honors include 17 CLIO Awards; 16 Andy Awards for advertising excellence; 21 Telly Awards for outstanding commercials; four Effie Media Awards; and a Gold Camera from the U.S. International Film Festival.

J. Robert Lehufy: J. Robert LeShufy has been involved in a wide range of ventures as entrepreneur for over 40 years. In the 1970s he created The Collectors' Guild Ltd. and Consolidated Fine Arts. In the late 1980's, he joined the board of IMT Inc. in Washington D.C, a company which evaluated aspects of naval research. In the 1990s, he formed a joint-venture with certain Russian companies in the Siberian oil fields. Subsequently, J. R. LeShufy formed a joint venture Panax Pharmaceuticals with the Komarov Institute. He took the company public under the new name Inkine Pharmaceutical. In 2004, LeShufy was one of the founders of Glyconix Corp., a company specializing in sugar chemistry to improve the efficacy of small molecule drugs. In 2010, he became a Senior Advisor to The Broadsmoore Group, a merchant bank involved in financing innovative start-up enterprises.

Employment Agreements with Our Executives

None.

Board Committees

The Company currently has not established any committees of the Board of Directors. Our Board of Directors may designate from among its members an executive committee and one or more other committees in the future. We do not have a nominating committee or a nominating committee charter. Further, we do not have a policy with regard to the consideration of any director candidates recommended by security holders. To date, no security holders have made any such recommendations. Our two directors perform all functions that would otherwise be performed by committees. Given the present size of our board it is not practical for us to have committees. If we are able to grow our business and increase our operations, we intend to expand the size of our board and allocate responsibilities accordingly.

Shareholder Communications

Currently, we do not have a policy with regard to the consideration of any director candidates recommended by security holders. To date, no security holders have made any such recommendations.

Code of Ethics

We have adopted a written code of ethics (the “Code of Ethics”) that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, and persons performing similar functions. We believe that the Code of Ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. To request a copy of the Code of Ethics, please make written request to our President at 560 Lexington Avenue, 16^th Floor, New York, NY 10022.

Compliance with Section 16(a) of the Exchange Act

Our common stock is not registered pursuant to Section 12 of the Exchange Act. Accordingly, our officers, directors and principal shareholders are not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth information concerning the total compensation paid or accrued by us during the last two fiscal years ended December 31, 2011 to (i) all individuals that served as our principal executive officer or acted in a similar capacity for us at any time during the fiscal year ended December 31, 2011; (ii) all individuals that served as our principal financial officer or acted in a similar capacity for us at any time during the fiscal year ended December 31, 2011; and (iii) all individuals that served as executive officers of ours at any time during the fiscal year ended December 31, 2011 that received annual compensation during the fiscal year ended December 31, 2011 in excess of $100,000.

Summary Compensation Table

We have not issued Equity Incentive stock options or maintained any stock option or other incentive plans other than our 2011 Plan. (See “Item 5. Market for Common Equity and Related Stockholder Matters – Securities Authorized for Issuance Under Equity Compensation Plans” above.) We have no other plans in place and have never maintained any plans that provide for the payment of retirement benefits or benefits that will be paid primarily following retirement including, but not limited to, tax qualified deferred benefit plans, supplemental executive retirement plans, tax-qualified deferred contribution plans and nonqualified deferred contribution plans.

Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information regarding stock options held by the Company’s Named Executive Officers at December 31, 2011.

During the year ended December 31, 2011, options exercisable for an aggregate of 4,886,669 shares of our common stock were granted to a number of our former executive officers and directors. These options were all exercised, but on October 27, 2011, all 4,886,669 of these shares were returned to our treasury and cancelled as part of the Split-Off. There are no stock awards outstanding as of December 31, 2011.

Equity Compensation Plan Information

The following table sets forth information about the Company’s equity compensation plans as of December 31, 2011:

Compensation of Directors

None of our current directors receives any compensation for serving as such, for serving on committees (if any) of the Board of Directors or for special assignments. During the fiscal year ended December 31, 2011, except as set forth below, there were no arrangements between us and our directors that resulted in our making payments to any of our directors for any services provided to us by them as directors.

Prior to the Split-Off of SBSI, we issued 800,000 shares of our common stock valued at $760,000 to Duncan Weir, a non-employee director, and 233,334 shares of our common stock valued at $221,667 to Richard Hall, a non-employee director. All of these shares were contributed to us as consideration in connection with the Split-Off of SBSI and have been cancelled and returned to our authorized but unissued common stock.

Each of Messrs. Devlin and LeShufy received a grant of 1,000,000 restricted shares of our common stock upon being appointed to our Board of Directors in January 2012.

The following table sets forth information with respect to the beneficial ownership of our common stock known by us as of April 30, 2012 by:

Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent such power may be shared with a spouse.

Securities Authorized for Issuance Under Equity Compensation Plans

On May 24, 2011, our Board of Directors adopted the 2011 Plan which reserves a total of 8,000,000 shares of common stock for issuance under the 2011 Plan.  If an incentive award granted under the 2011 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the 2011 Plan.

Our Board of Directors issued nonqualified stock options to officers, directors and employees to purchase an aggregate of 6,870,264 shares of our common stock, all of which options were exercised at a price of $0.001 per share. As part of the Split-Off, 6,074,830 shares of our common stock issued under the 2011 Plan were returned to our treasury for cancellation and are now available for reissuance under the 2011 Plan. As of the date of this report, we have 6,304,566 shares of our common stock available for issuance under the 2011 Plan and no options or other awards are currently outstanding under the 2011 Plan.

Other than as disclosed below and in this Annual Report, there have been no transactions, since January 1, 2011, or any currently proposed transaction, in which we were or are to be a participant and the amount involved exceeds the lesser of $120,000 or 1% of the average of our total assets at year end for the last two completed fiscal years and in which any of our directors, executive officers or beneficial holders of more than 5% of our outstanding common stock, or any of their respective immediate family members, has had or will have any direct or material indirect interest.

On June 22, 2011, we issued 3,000,000 restricted shares of our common stock valued at $1,050,000 to Peter Scalise III as compensation for services rendered to us as our Chief Executive Officer. On June 22, 2011, we issued 820,001 restricted shares of our common stock valued at $287,000 to Scott Ferrari as compensation for services rendered to us as our President. On that date we also issued 800,000 shares of our common stock valued at $280,000 to Duncan Weir, a director, 233,334 shares of our common stock valued at $81,667 to Richard Hall, a director, and 33,334 shares of our common stock valued at $11,667 to Neil Rosenberg, our Secretary, Treasurer and director. All of these shares were contributed to us as consideration in connection with the Split-Off of SBSI and have been cancelled and returned to our authorized but unissued common stock.

Director Independence

We are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has requirements that a majority of the board of directors be “independent” and, as a result, we are not at this time required to (and we do not) have our Board of Directors comprised of a majority of “Independent Directors.”

Our Board of Directors has considered the independence of its directors in reference to the definition of “independent director” established by the Nasdaq Marketplace Rule 5605(a)(2). In doing so, the Board of Directors has reviewed all commercial and other relationships of each director in making its determination as to the independence of its directors. After such review, the Board of Directors has determined that Messrs. LeShufy and Devlin qualify as independent under the requirements of the Nasdaq listing standards.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees.

The aggregate fees billed to us by our principal accountant for services rendered during the fiscal years ended December 31, 2011 and 2010 are set forth in the table below:

Audit Committee’s Pre-Approval Practice.

We currently do not have an audit committee. However, our board of directors has approved the services described above.

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statement Schedules

The consolidated financial statements of Mojo Organics, Inc. are listed on the Index to Financial Statements on this annual report on Form 10-K beginning on page F-1.

Exhibits

The following Exhibits are being filed with this Annual Report on Form 10-K:

 ____________________

* Filed herewith.

** This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

PART IV – FINANCIAL INFORMATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Mojo Organics, Inc.

We have audited the accompanying consolidated balance sheet of Mojo Organics, Inc. and its subsidiaries (the “Company”) as of December 31, 2011, and the related consolidated statements of operations, stockholders' deficit, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with standards established by the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2011, and the results of its operations and its cash flows for the year ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 3, the Company has incurred substantial accumulated deficits and operating losses and will require additional financing in 2012 to meet its obligations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also discussed in Note 3. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

/s/Friedman LLP

Marlton, New Jersey

April 30, 2012

ZS CONSULTING GROUP, LLP

Certified Public Accountants and Advisors

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Specialty Beverage & Supplement, Inc.

We have audited the accompanying balance sheets of Specialty Beverage & Supplement, Inc. as of December 31, 2010 and 2009, and the related statements of operations, stockholders' equity (deficit) and cash flows for the 'years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Specialty Beverage & Supplement, Inc. as of December 31,2010 and 2009, and the related statements of operations, stockholders' equity (deficit) and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has not yet established an ongoing source of revenue sufficient to cover its operating costs which raises substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

MOJO ORGANICS, INC.

(Formerly Mojo Ventures, Inc. and Mojo Shopping, Inc.)

Consolidated Balance Sheets

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

MOJO ORGANICS, INC.

(Formerly Mojo Ventures, Inc. and Mojo Shopping, Inc.)

Consolidated Statements of Operations

For the Years Ended December 31, 2011 and 2010

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

 MOJO ORGANICS, INC.

(Formerly Mojo Ventures, Inc. and Mojo Shopping, Inc.)

Consolidated Statements of Stockholders’ Equity (Deficit)

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

MOJO ORGANICS, INC.

(Formerly Mojo Ventures, Inc. and Mojo Shopping, Inc.)

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2011 and 2010

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

MOJO ORGANICS, INC.

(Formerly Mojo Ventures, Inc. and Mojo Shopping, Inc.)

Notes to Consolidated Financial Statements

December 31, 2011 and 2010

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

Corporate Changes and History of Company

Mojo Organics, Inc. (the “Company”) was incorporated in the State of Delaware on August 2, 2007.

On May 13, 2011, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Specialty Beverage and Supplement, Inc., a privately held Nevada corporation (“SBSI”) and SBSI Acquisition Corp., a Nevada corporation and wholly-owned subsidiary of the Company (“Acquisition Sub”), pursuant to which SBSI merged with and into Acquisition Sub (the “Merger”) with the filing of the Articles of Merger with the Nevada Secretary of State on May 13, 2011. The Merger was accounted for as a reverse acquisition and recapitalization in which SBSI became the acquirer for accounting purposes and the Company became the issuer. The value of Mojo’s common stock that was issued was the historical cost of Mojo’s net tangible assets, which did not differ materially from their fair value. As a result of the acquisition of SBSI through the reverse merger transaction, the board of directors approved a change in the Company’s fiscal year end from September 30 to December 31.

In accordance with the terms of the Merger Agreement, at the closing, an aggregate of 19,552,128 shares of the Company’s common stock were issued to the holders of SBSI’s common stock in exchange for their shares of SBSI.

On May 13, 2011, simultaneously with the consummation of the Merger, the Company issued 7,462,848 shares of common stock to retire certain debt in SBSI held by the holders of 9% subordinated convertible debentures.

On May 13, 2011, simultaneously with the consummation of the Merger, in a separate transaction, the Company entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) with its former Chief Executive Officer and sole director. Pursuant to the Purchase Agreement, the Company transferred all of its membership interests in Mojo Shopping, LLC, a wholly owned subsidiary of the Company (the “LLC”), to the former Chief Executive Officer in exchange for the assumption of Company account payables in the amount of approximately $200,000, the cancellation of 80,000,000 of the former Chief Executive Officer’s shares of the Company’s common stock, and the cancellation of indebtedness owed by the Company to the former Chief Executive Officer in the amount of $2,759.  Also, simultaneously with the consummation of the Merger, the Company cancelled an aggregate of 8,000,000 shares of the Company’s common stock held by two shareholders.

On October 27, 2011 the board of directors approved a Split-Off agreement with Acquisition Sub. In the Split-Off, the Company assigned and transferred to Acquisition Sub all of the issued and outstanding shares of capital stock of SBSI in exchange for the surrender by certain stockholders to the Company for cancellation an aggregate to 23,307,748 shares (the “Shares”) of the Company’s common stock.

In the Split-Off, SBSI assigned the Dispensing Cap and Pinch assets (including all related intellectual property (patent pending and trademarks)) to Mojo Organics, Inc., the Company’s wholly owned subsidiary newly organized to receive these assets, and retained all of its other assets and all liabilities, including its (and the Company’s former) principal office and distribution facilities in Holbrook, New York, as well as the Company’s other subsidiary, Graphic Gorilla LLC.

The financial position and activity of the Company prior to Split-Off were accounted for as a discontinued operations (See Note 4).

Corporate Name Changes

On April 28, 2011, the Company filed an amendment to its Certificate of Incorporation in Delaware to change its name from Mojo Shopping, Inc. to Mojo Ventures, Inc.

On December 21, 2011, the board of directors adopted resolutions authorizing an amendment to the Company’s Certificate of Incorporation to change its name from Mojo Ventures, Inc. to Mojo Organics, Inc.   On December 28, 2011, the Company filed the amendment with the Secretary of State of the State of Delaware effecting the name change. Additionally, the name change was submitted to The Financial Industry Regulatory Authority (“FINRA”).

MOJO ORGANICS, INC.

(Formerly Mojo Ventures, Inc. and Mojo Shopping, Inc.)

Notes to Consolidated Financial Statements

December 31, 2011 and 2010

The Company has not asked FINRA to authorize a new trading symbol and thus, its trading symbol will remain “MOJO”.

On December 27, 2011, the Company’s wholly owned operating subsidiary, Mojo Organics, Inc. changed its name to Mojo Organics Operating Company, Inc.

Line of Business

The Company is currently evaluating its plans with respect to the further development of its Dispensing Cap Technology and Pinch zero-calorie natural and organic sweetener. In addition, the Company is evaluating other marketing and branding opportunities.

Basis of Presentation

For 2011, the accompanying consolidated financial statements include the accounts of the Company and its formerly wholly-owned subsidiaries, SBSI Acquisition Corp, Specialty Beverage and Supplement Inc., and Graphic Gorilla LLC. All significant inter-company accounts and transactions were eliminated in consolidation.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash equivalents include investment instruments, CD’s and time deposits purchased with a maturity of three months or less.

Property and Equipment

Property and equipment is recorded at cost less accumulated depreciation. Depreciation and amortization is calculated using the straight-line method over the expected useful life of the asset, after the asset is placed in service.

Impairment of Long-Lived Assets

The Company has adopted ASC 360, “Accounting for Impairment or Disposal of Long-Lived Assets.”   In complying with these standards, the company reviews its long-lived assets to determine if any events or changes in circumstances have transpired which indicate that the carrying value of its assets may not be recoverable.  The company determines impairment by comparing the undiscounted future value cash flows estimated to be generated by its assets to their respective carrying amounts whenever events or changes in circumstances indicate that an asset may not be recoverable.

Net Loss Per Common Share

The Company computes per share amounts in accordance with Statement of Financial Accounting Standards ASC Topic 260, “Earnings per Share”.  ASC Topic 260 requires presentation of basic and diluted EPS.  Basic EPS is computed by dividing the income (loss) available to Common Stockholders by the weighted-average number of common shares outstanding for the period.  Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods.

Income Taxes

The Company provides for income taxes under ASC 740 which requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company’s predecessor operated as entity exempt from Federal and State income taxes.

MOJO ORGANICS, INC.

(Formerly Mojo Ventures, Inc. and Mojo Shopping, Inc.)

Notes to Consolidated Financial Statements

December 31, 2011 and 2010

ASC 740 also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Tax returns for the years from 2009 to 2011 are subject to examination by tax authorities.

Stock-Based Compensation

ASC Topic 718, “Accounting for Stock-Based Compensation” prescribes accounting and reporting standards for all stock-based compensation plans, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights.

ASC Topic 718 requires employee compensation expense to be recorded using the fair value method.  This standard was effective as of the first interim or annual fiscal period that began after December 15, 2005. The Company accounts for employee stock based compensation in accordance with the provisions of ASC Topic 718. For non-employee options and warrants, the company uses the fair value method as prescribed in ASC Topic 718.

NOTE 3 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. As shown in the accompanying consolidated financial statements for the year ended December 31, 2011, the Company incurred net losses from continuing operations of $165,994. At December 31, 2011, the Company had a working capital deficit of $165,994 and accumulated losses of $8,742,088 which includes accumulated losses from discontinued operations of $8,576,094. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and 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 4 – DISCONTINUED OPERATIONS

In connection with the Split-Off discussed in Note 1, the following table summarizes the loss from discontinued operations for the years ended December 31, 2011 and 2010.

MOJO ORGANICS, INC.

(Formerly Mojo Ventures, Inc. and Mojo Shopping, Inc.)

Notes to Consolidated Financial Statements

December 31, 2011 and 2010

The assets and liabilities from discontinued operations are presented in the balance sheet under the caption “assets and liabilities from discontinued operations" and relate to the discontinued operations of SBSI Acquisition Corp. The carrying amounts of these assets and liabilities as of December 31, 2010 are summarized as follows:

NOTE 5 – INCOME TAX

The Company accounts for income taxes under the assets and liability method.  Deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.  Deferred tax assets are  reduced by a  valuation  allowance  when,  in the opinion  of  management,  it is more  likely  than not  that  some portion or all of the deferred  tax assets will be realized.

The reported provision for income taxes differs from the amount computed by applying the statutory U.S. federal income tax rate of 34% to the loss before income taxes as follows:

Net deferred tax assets consist of the following components:

MOJO ORGANICS, INC.

(Formerly Mojo Ventures, Inc. and Mojo Shopping, Inc.)

Notes to Consolidated Financial Statements

December 31, 2011 and 2010

The Tax Reform Act of 1986 contains provisions that limit the utilization of net operating loss and tax credit carryforwards if there has been a change of ownership as described in Section 382 of the Internal Revenue Code. A limitation under these provisions would reduce the amount of losses available to offset future taxable income of the Company. Management believes that at December 31, 2011, the Company has available for federal income tax purposes a net operating loss carry forward of approximately $166,000 expiring through the year 2031 that may be used to offset future taxable income.

NOTE 6 –RELATED PARTY TRANSACTIONS

Pursuant to the Purchase Agreement, the Company transferred all of its membership interests in Mojo Shopping, LLC, a wholly owned subsidiary of the Company (the “LLC”), to its former chief executive officer in exchange for her assuming the liability for the Company’s account payable in the amount of approximately $200,000, the cancellation of 80,000,000 of  shares of the Company’s common stock held by the former chief executive officer, and the cancellation of indebtedness owed by the Company to former chief executive officer in the amount of $2,759.  

During the year, various expenses of the Company, including loans for operating purposes, have been paid for or made by the officers of the Company. At December 31, 2011, there were no loans due to or from related parties.

The Company uses office space from a shareholder at no charge.

NOTE 7 – COMMITMENTS AND CONTINGENCIES

Under the terms of the Split-Off agreement, Acquisition Sub assumed liability for $72,500 in professional fees for which the Company may be liable in the event that Acquisition Sub does not satisfy its obligation.

NOTE 8 – SHAREHOLDERS EQUITY

Preferred stock

The Company has authorized 10,000,000 shares of Preferred Stock with a par value $0.001.

Common stock

On April 28, 2011, the Company filed an amendment to its Certificate of Incorporation in Delaware to increase the number of its authorized shares from 100,000,000 shares to 200,000,000, consisting of 190,000,000 shares of common stock and 10,000,000 shares of preferred stock, each having a par value of $0.001.

During the year ended December 31, 2011, the Company converted debt and accrued interest of $2,612,000 into 7,462,848 shares of common stock.

During the year ended December 31, 2011, the Company granted options to purchase 7,770,264 shares of common stock under the 2011 Stock Incentive Plan (the “2011 Plan”). All options granted were excercised during 2011.

During the year ended December 31, 2011, the Company sold 46,233 shares of common stock at an average price of $0.98 per share.

During the year ended December 31, 2011, the Company issued 1,000,000 shares of common stock, valued at $420,000, in exchange for services rendered.

During the year ended December 31, 2011, the Company entered into a subscription agreement to sell 1,142,857 shares of common stock at a price of $0.35 per share.

MOJO ORGANICS, INC.

(Formerly Mojo Ventures, Inc. and Mojo Shopping, Inc.)

Notes to Consolidated Financial Statements

December 31, 2011 and 2010

Stock incentive plans

In May 2011, the Company adopted the 2011 Stock Incentive Plan. The 2011 Plan is a shareholder approved plan that provides for broad-based equity grants to employees, officers, directors, consultants, agents, advisors and independent contractors of the Company.  The 2011 Plan allows for the granting of awards including options, stock appreciation rights, stock awards, restricted stock, performance based awards, cash-based awards or other incentive payable in cash or in shares of common stock.

The 2011 Plan provides for the granting of options to purchase up to 8,000,000 shares of common stock.  There were 7,770,264 options granted and exercised to date.  Options granted under the 2011 Plan have a 1-year term and may be incentive stock options or non-qualified stock options. The awards that have been granted to date are at an exercise price equal to $.001 vest immediately. The Company recognized $2,711,822 in compensation expense.  At December 31, 2011, there were no options outstanding under the 2011 Plan.

Stock option plan activity for the year ended December 31, 2011 was as follows:

The fair value of options granted is estimated on the date of grant based on the Black-Scholes valuation model. The significant assumptions considered by the model were the per share stock price, the risk free rate and the expected volatility. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected life at the grant date.  The calculated value method using the historical volatility of the Food and Beverages industry is used as the basis for the volatility assumption.

NOTE 9 – SUBSEQUENT EVENTS

On February 17, 2012, the Company issued 1,000,000 shares of common stock to each of its new directors who were appointed on January 27, 2012.

In March 2012, the board of directors authorized the issuance of 1,142,857 shares of common stock in satisfaction of a subscription agreement.