Attached files
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
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[X]
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QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2011
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OR
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission File Number 000-53923
KOKO LTD.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
12901 South Buttercup Lane
Spokane, Washington 99224
(Address of principal executive offices, including zip code.)
(509) 991-5761
(Registrant’s, telephone number, including area code)
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 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 last 90 days. YES [X] 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 (SS 232.405 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. See the definitions of “large accelerated filer, “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large Accelerated Filer
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Accelerated Filer
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Non-accelerated Filer
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Smaller Reporting Company
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[X]
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(Do not check if smaller reporting company)
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [X] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicated the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
8,562,500 as of May 9, 2011.
KOKO, LTD.
For the Quarter Ended March 31, 2011
TABLE OF CONTENTS
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Page
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Financial Information.
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3
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Balance Sheets (Unaudited)
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4
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Statements of Expenses (Unaudited)
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5
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Statements of Cash Flows (Unaudited)
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6
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Notes to Financial Statements (Unaudited)
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7
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Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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9
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Quantitative and Qualitative Disclosures About Market Risk.
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9
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Controls and Procedures.
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9
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Risk Factors.
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10
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Exhibits.
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10
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11
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12
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-2-
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(A Development Stage Company)
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Balance Sheets (Unaudited)
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March 31,
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December 31,
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2011
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2010
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ASSETS
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CURRENT ASSETS:
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Cash
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$ | 95,664 | $ | 111,592 | ||||
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Inventory
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94,739 | 94,994 | ||||||
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Total Assets
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$ | 190,403 | $ | 206,586 | ||||
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LIABILITIES AND STOCKHOLDERS’ DEFICIT
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CURRENT LIABILITIES:
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Accounts payable
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$ | 1,208 | $ | 1,000 | ||||
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Total Current Liabilities
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1,208 | 1,000 | ||||||
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Stockholders' Equity
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Preferred stock, $.00001 par, 100,000,000 shares authorized, no
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shares issued or outstanding
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- | - | ||||||
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Common stock, $.00001 par, 100,000,000 shares authorized,
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8,562,500 and 8,545,000 shares issued and outstanding, respectively
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86 | 86 | ||||||
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Additional paid-in capital
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384,514 | 381,014 | ||||||
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Deficit accumulated during the development stage
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(195,405 | ) | (175,514 | ) | ||||
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Total Stockholders’ Deficit
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189,195 | 205,586 | ||||||
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Total Liabilities and Stockholders' Deficit
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$ | 190,403 | $ | 206,586 | ||||
The accompanying notes are an integral part of these financial statements.
F-1
-3-
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(A Development Stage Company)
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Statements of Expenses (Unaudited)
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From Inception
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(June 19, 2007)
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Three Month Period
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Through
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Ended March 31,
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March 31,
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2011
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2010
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2011
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GROSS REVENUES
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$ | 60 | $ | - | $ | 5,820 | ||||||
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Cost of goods sold
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38 | - | 4,588 | |||||||||
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GROSS PROFIT
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22 | - | 1,232 | |||||||||
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OPERATING EXPENSES:
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Legal fees
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$ | 12,956 | $ | 7,516 | $ | 69,616 | ||||||
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Promotional expense
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218 | - | 218 | |||||||||
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Accounting fees
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3,890 | 3,500 | 47,885 | |||||||||
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Office expense
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2,104 | 4,447 | 21,162 | |||||||||
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License and fees
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- | 315 | 11,124 | |||||||||
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Travel expense
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746 | - | 746 | |||||||||
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Product development costs
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- | 3,943 | 45,886 | |||||||||
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Total operating expenses
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19,914 | 19,721 | 196,637 | |||||||||
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Net Loss
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$ | (19,892 | ) | $ | (19,721 | ) | $ | (195,405 | ) | |||
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Weighted average number of shares issued
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8,560,167 | 8,324,800 | ||||||||||
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Basic and diluted net loss per share
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$ | (0.00 | ) | $ | (0.00 | ) | ||||||
The accompanying notes are an integral part of these financial statements.
F-2
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KOKO, LTD.
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(A Development Stage Company)
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Statements of Cash Flows (Unaudited)
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From Inception
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(June 19, 2007)
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Three Months Ended
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Through
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March 31,
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March 31,
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2011
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2010
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2011
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Cash Flows From Operating Activities
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Net Loss
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$ | (19,892 | ) | $ | (19,721 | ) | $ | (195,407 | ) | |||
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Adjustments to reconcile net loss to net cash
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used in operating activities:
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Common stock subscribed for services
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- | - | 10,000 | |||||||||
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Changes in assets and liabilities:
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Inventory
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256 | (48,000 | ) | (94,737 | ) | |||||||
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Accounts payable
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208 | 414 | 1,208 | |||||||||
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Total Cash (Used) by Operating Activities
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(19,428 | ) | (67,307 | ) | (278,936 | ) | ||||||
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Cash Flows From Financing Activities
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Payment on advances from shareholders
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- | (6,200 | ) | - | ||||||||
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Sale of common stock to founder
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- | - | 1,300 | |||||||||
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Sale of common stock
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3,500 | 87,000 | 373,300 | |||||||||
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Total Cash Provided by Financing Activities
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3,500 | 80,800 | 374,600 | |||||||||
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Net Increase in Cash
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(15,928 | ) | 13,493 | 95,664 | ||||||||
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Cash at Beginning of Period
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111,592 | 156,057 | - | |||||||||
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Cash at End of Period
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$ | 95,664 | $ | 169,550 | $ | 95,664 | ||||||
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Supplemental Disclosure of Cash Flow Information
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Interest paid
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$ | - | $ | - | $ | - | ||||||
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Income taxes paid
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$ | - | $ | - | $ | - | ||||||
The accompanying notes are an integral part of these financial statements.
F-3
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KOKO, LTD.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 – BASIS OF PRESENTATION
The unaudited financial statements of Koko, LTD. (Koko, “The Company”) included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Although certain information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted, the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the financial statements and notes thereto for the fiscal year ended December 31, 2010, included in The Company’s Form 10-K.
The financial statements included herein reflect all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation. The results for interim periods are not necessarily indicative of trends or of results to be expected for the full year ended December 31, 2011.
NOTE 2 – GOING CONCERN
During the three months ended March 31, 2011, Koko incurred a net loss and had negative cash flows from operations. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if Koko is unable to continue as a going concern.
For the immediate future the Company will raise operating capital via a private placement sale of restricted common stock to accredited investors. Koko is currently involved in its third offering of this type. Koko began its third stock offering on December 15, 2010, and it is still open. When this third stock offering is closed, the company plans to file a registration statement with the SEC in order to register all of the shares of common stock from the second and third stock offerings.
The Company is aware that in order to become profitable and competitive, they will have to be able to attract customers and generate significant revenues. Koko has no assurance that future equity or debt financing will be available to the Company. If this additional financing is not available, Koko may be unable to continue, develop or expand their operations. In addition, equity financing could result in additional dilution to existing shareholders.
F-4
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This section of the quarterly report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results of our predictions.
We are a development stage corporation and have not yet generated significant or continuing revenues from our business operations. Our auditors have issued a going concern opinion on the financial statements for the year ended December 31, 2010. The Company raised $3,500 from the sale of 17,500 shares of common stock during the quarter ended March 31, 2011. The Company does anticipate increased sales of its product during the next twelve months. There is no assurance that sales will materially increase during the next twelve months or that the current working capital position will be sufficient to meet unexpected obligations within that same time period.
Material Changes in Results of Operations
During the three months ended March 31, 2011, the Company had minimal revenues of $60 and incurred operating expenses of $19,913, which were primarily comprised of legal and accounting fees and office expenses. During the comparable three month period ended March 31, 2010, the Company had no revenues and incurred operating expenses of $19,721, which were primarily comprised of product development, office expenses, and legal and accounting fees.
Material Changes in Financial Condition
In order to meet our continuing need for cash, we raised $3,500 from the sale of common stock during the three months ended March 31, 2011. At this time, the Company has not decided if it will raise more cash through the sale of common stock during the second quarter of 2011.
As of March 31, 2011, the Company had total current assets of $190,403 and $1,208 in current liabilities for a working capital balance of $189,195. The Company believes that its cash balance of $95,664 as of March 31, 2011 is sufficient to pay all recurring expenses and current accounts payable during the next twelve month period. Since management of the Company likes to maintain a healthy cash balance, this does not mean that the Company will not pursue additional equity financing during the next twelve months if financing terms are acceptable. As of December 31, 2010, the Company had current assets of $206,586 and current liabilities of $1,000, for a working capital balance of $205,586. The decrease in current assets of $16,183 from December 31, 2010 to March 31, 2011 resulted primarily from a decrease in cash of $15,928 and an decrease in inventory of $255.
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ITEM 3.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
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We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
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Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective.
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
The following documents are included herein:
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Incorporated by reference
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Exhibit
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Document Description
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Form
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Date
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Number
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Filed herewith
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3.1
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Articles of Incorporation.
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S-1
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3/12/09
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3.1
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3.2
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Bylaws.
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S-1
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3/12/09
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3.2
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4.1
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Specimen Stock Certificate.
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S-1
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3/12/09
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4.1
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14.1
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Code of Ethics.
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10-K
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4/01/10
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14.1
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31.1
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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99.2
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Audit Committee Charter.
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10-K
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4/01/10
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99.2
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99.3
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Disclosure Committee Charter.
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10-K
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4/01/10
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99.3
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Pursuant to the requirements of Section 13 or 15(d) 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, on this 16th day of May, 2011.
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KOKO LTD.
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BY:
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GREGORY RUFF
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Gregory Ruff
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President, Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer, Secretary, Treasurer and sole member of the Board of Directors
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Incorporated by reference
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Exhibit
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Document Description
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Form
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Date
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Number
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Filed herewith
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3.1
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Articles of Incorporation.
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S-1
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3/12/09
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3.1
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3.2
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Bylaws.
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S-1
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3/12/09
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3.2
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4.1
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Specimen Stock Certificate.
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S-1
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3/12/09
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4.1
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14.1
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Code of Ethics.
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10-K
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4/01/10
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14.1
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31.1
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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32.1
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Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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99.2
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Audit Committee Charter.
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10-K
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4/01/10
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99.2
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99.3
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Disclosure Committee Charter.
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10-K
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4/01/10
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99.3
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