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 SEPTEMBER 30, 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, WA 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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[ ]
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Accelerated Filer
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[ ]
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Non-accelerated Filer
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[ ]
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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.
8,587,500 as of November 10, 2011.
KOKO, LTD.
For the Quarter Ended September 30, 2011
TABLE OF CONTENTS
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Page
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Financial Information.
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3
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3
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4
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5
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6
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Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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7
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Quantitative and Qualitative Disclosures About Market Risk.
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7
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Controls and Procedures.
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7
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Risk Factors.
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8
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Unregistered Sales of Equity Securities and Use of Proceeds.
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8
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Exhibits.
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8
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10
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11
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-2-
KOKO, LTD.
(A Development Stage Company)
(Unaudited)
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September 30,
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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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$
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60,638
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$
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111,592
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Inventory
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94,549
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94,994
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Total Assets
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$
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155,187
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$
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206,586
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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CURRENT LIABILITIES:
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Accounts payable
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$
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321
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$
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1,000
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Total Current Liabilities
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321
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1,000
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Stockholders' Equity
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Preferred stock, $.00001 par, 100,000,000 shares authorized,
no shares issued or outstanding
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-
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-
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Common stock, $.00001 par, 100,000,000 shares authorized,
8,587,500 and 8,545,000 shares issued and outstanding,
respectively
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87
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86
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Additional paid-in capital
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389,513
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381,014
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Deficit accumulated during the development stage
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(234,734)
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(175,514)
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Total Stockholders’ Equity
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154,866
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205,586
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Total Liabilities and Stockholders' Equity
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$
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155,187
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$
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206,586
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The accompanying notes are an integral part of these financial statements.
-3-
KOKO, LTD.
(A Development Stage Company)
(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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Nine Months Ended
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Through
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September 30,
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September 30,
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September 30,
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2011
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2010
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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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-
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5,760
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465
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5,760
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6,225
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Cost of goods sold
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-
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4,550
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228
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4,550
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4,778
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GROSS PROFIT
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-
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1,210
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237
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1,210
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1,447
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OPERATING EXPENSES:
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Legal fees
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$
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3,799
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$
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2,028
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$
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28,680
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$
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16,629
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$
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85,340
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Accounting fees
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5,745
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3,990
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20,043
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15,026
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64,039
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Office expense
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4,398
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3,760
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10,634
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10,060
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29,692
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License and fees
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-
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637
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1,100
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11,124
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Professional fees
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-
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651
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100
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5,168
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100
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Product development costs
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-
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-
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-
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45,886
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Total operating expenses
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13,942
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11,066
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59,457
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47,983
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236,181
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Net Loss
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$
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(13,942)
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$
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(9,856)
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$
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(59,220)
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$
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(46,773)
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$
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(234,734)
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Weighted average number of shares
outstanding
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8,587,500
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8,420,000
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8,575,171
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8,385,467
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Basic and diluted net loss per share
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$
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(0.00)
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$
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(0.00)
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$
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(0.01)
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$
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(0.00)
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The accompanying notes are an integral part of these financial statements.
-4-
KOKO, LTD.
(A Development Stage Company)
(Unaudited)
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From Inception
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(June 19, 2007)
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Nine Months Ended
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Through
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September 30,
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September 30,
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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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$
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(59,220)
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$
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(46,773)
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$
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(234,734)
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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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Accounts receivable
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-
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(5,760)
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-
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Inventory
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445
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(94,994)
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(94,549)
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Accounts payable
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(679)
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(393)
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321
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Total Cash Used by Operating Activities
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(59,454)
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(147,920)
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(318,962)
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Cash Flows From Financing Activities
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Payment on advances from shareholders
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-
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(10,400)
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-
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Sale of common stock to founder
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-
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1,300
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Sale of common stock
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8,500
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91,500
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378,300
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Total Cash Provided by Financing Activities
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8,500
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81,100
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379,600
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Net Increase in Cash
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(50,954)
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(66,820)
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60,638
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Cash at Beginning of Period
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111,592
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156,057
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-
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Cash at End of Period
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$
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60,638
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$
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89,237
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$
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60,638
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Supplemental Disclosure of Cash Flow Information
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Interest paid
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$
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-
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$
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-
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$
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-
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Income taxes paid
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$
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-
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$
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-
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$
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-
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The accompanying notes are an integral part of these financial statements.
-5-
KOKO, LTD.
(A Development Stage Company)
(Unaudited)
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 nine months ended September 30, 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.
The Company is aware that in order to become profitable and competitive, it 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 its operations. In addition, equity financing could result in additional dilution to existing shareholders.
-6-
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 $8,500 from the sale of 37,500 shares of common stock during the quarter ended September 30, 2011. The Company hopes to increase 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 September 30, 2011, the Company had no revenues of and incurred operating expenses of $13,942, which were primarily comprised of legal and accounting fees and office expenses. During the comparable three month period ended September 30, 2010, the Company had minimal revenues of $5,760 and incurred operating expenses of $11,066, which were primarily comprised of office expenses, and legal and accounting fees.
Material Changes in Financial Condition
As of September 30, 2011, the Company had total current assets of $155,187 and $321 in current liabilities for a working capital balance of $154,866. The Company believes that its cash balance of $60,638 as of September 30, 2011, is sufficient to pay all recurring expenses and current accounts payable during the next nine month period. If sales do not accelerate, the Company may be required to pursue additional equity financing within the next nine to twelve months. 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 $51,399 from December 31, 2010 to September 30, 2011, resulted primarily in a decrease in cash of $50,954.
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.
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.
-7-
There were no changes in our internal control over financial reporting during the quarter ended September 30, 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.
During the nine months ended September 30, 2011, the company sold 25,000 shares of common stock at $0.20 per share for a total cash raise of $5,000. The company plans to use this cash for normal recurring expenses. These shares were sold pursuant to the following exemption from registration: A Registration D 506 which was filed with the Securities and Exchange Commission on December 1, 2010.
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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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10.1
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License Agreement with Gregory Ruff.
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S-1
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6/13/11
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10.1
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10.2
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Manufacturing Agreement with Meri LLC.
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S-1
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6/13/11
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10.2
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10.3
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License Agreement with Sharper Image.
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S-1
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6/13/11
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10.3
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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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X
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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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X
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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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-8-
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101.INS
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XBRL Instance Document.
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X
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101.SCH
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XBRL Taxonomy Extension – Schema.
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X
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101.CAL
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XBRL Taxonomy Extension – Calculations.
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X
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101.DEF
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XBRL Taxonomy Extension – Definitions.
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X
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101.LAB
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XBRL Taxonomy Extension – Labels.
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X
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101.PRE
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XBRL Taxonomy Extension – Presentation.
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X
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-9-
Pursuant to the requirements of the Securities Exchange Act of 1934, this registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on this 10th day of November, 2011.
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KOKO LTD.
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(the “Registrant”)
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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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-10-
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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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10.1
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License Agreement with Gregory Ruff.
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S-1
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6/13/11
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10.1
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10.2
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Manufacturing Agreement with Meri LLC.
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S-1
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6/13/11
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10.2
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10.3
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License Agreement with Sharper Image.
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S-1
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6/13/11
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10.3
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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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X
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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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X
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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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101.INS
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XBRL Instance Document.
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X
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101.SCH
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XBRL Taxonomy Extension – Schema.
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X
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101.CAL
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XBRL Taxonomy Extension – Calculations.
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X
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101.DEF
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XBRL Taxonomy Extension – Definitions.
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X
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101.LAB
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XBRL Taxonomy Extension – Labels.
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X
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101.PRE
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XBRL Taxonomy Extension – Presentation.
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X
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-11-