MOJO Swings to Profit YTD, Boosted by Revenue Growth & Cost Cuts

TL;DR

**MOJO's Q3 loss is a red flag, but YTD profit and revenue growth show potential, making it a speculative buy for risk-tolerant investors.**

AI Summary

EQUATOR Beverage Co (MOJO) reported a significant turnaround for the nine months ended September 30, 2025, achieving a net income of $176,087, a substantial improvement from a net loss of $591,601 in the prior year. Revenue increased by 21.88% to $3,104,914 from $2,547,620, driven by expanded distribution and new products. Gross profit surged by 41.29% to $1,371,029 from $970,342, while operating expenses decreased by 24.50% to $1,166,003. However, the company experienced a net loss of $61,003 for the three months ended September 30, 2025, compared to a net loss of $428,443 in the same period last year. Cash and cash equivalents decreased to $11,248 as of September 30, 2025, from $22,799 at December 31, 2024, primarily due to increased inventory and accounts receivable. Related party loans increased significantly to $399,000 from $115,000, indicating reliance on insider financing. The company also executed a 1-for-2 reverse stock split and decreased authorized shares from 20,000,000 to 10,000,000, effective October 27, 2025.

Why It Matters

MOJO's shift to year-to-date profitability and revenue growth signals potential operational improvements, which could attract new investors looking for growth in the competitive beverage sector. However, the significant increase in related party loans and declining cash reserves raise concerns about financial stability and reliance on internal funding, potentially impacting future expansion and market competitiveness against larger players like Coca-Cola or PepsiCo. Employees might see this as a positive sign for job security, but the reverse stock split could be perceived negatively by existing shareholders due to potential dilution or a signal of underlying financial weakness. The broader market will watch if MOJO can sustain this profitability and reduce its dependence on related party financing.

Risk Assessment

Risk Level: medium — The company reported a net loss of $61,003 for the three months ended September 30, 2025, despite a year-to-date net income. Cash and cash equivalents declined by 50.7% from $22,799 at December 31, 2024, to $11,248 at September 30, 2025. Furthermore, related party loans increased by 247% to $399,000 from $115,000, indicating a growing reliance on insider financing, which poses a risk to independent governance and financial flexibility.

Analyst Insight

Investors should monitor MOJO's next quarterly report closely for sustained profitability and a reduction in related party debt. Consider a small, speculative position if the company demonstrates continued revenue growth and improved cash flow from operations, but be aware of the high risk associated with its current financial structure and limited cash reserves.

Financial Highlights

debt To Equity

N/A

revenue

$3,104,914

operating Margin

N/A

total Assets

$1,034,100

total Debt

$399,000

net Income

$176,087

eps

$0.01

gross Margin

44.15%

cash Position

$11,248

revenue Growth

+21.88%

Key Numbers

• $176,087 — Net Income (for the nine months ended September 30, 2025, a significant improvement from a $591,601 net loss in 2024)
• $3,104,914 — Revenue (for the nine months ended September 30, 2025, up 21.88% from $2,547,620 in 2024)
• $1,371,029 — Gross Profit (for the nine months ended September 30, 2025, up 41.29% from $970,342 in 2024)
• $11,248 — Cash and Cash Equivalents (as of September 30, 2025, a decrease from $22,799 at December 31, 2024)
• $399,000 — Related Party Loans (as of September 30, 2025, a significant increase from $115,000 at December 31, 2024)
• $0.01 — Net Income Per Common Share (for the nine months ended September 30, 2025, compared to $(0.03) in 2024)
• 9,287,180 — Common Shares Outstanding (as of November 3, 2025, after a 1-for-2 reverse stock split)
• $61,003 — Net Loss (for the three months ended September 30, 2025)

Key Players & Entities

• EQUATOR Beverage Company (company) — registrant
• MOJO Coconut Water (company) — main product
• U.S. Food and Drug Administration (regulator) — governs beverages in the United States
• Glenn Simpson (person) — employee with employment agreement
• State of Delaware (regulator) — approved reverse stock split and decrease in authorized shares
• FINRA (regulator) — approved reverse stock split
• Jersey City, New Jersey (location) — company headquarters
• Diane Cudia (person) — officer/director receiving restricted stock awards

FAQ

Risk Factors

• Deteriorating Cash Position and Reliance on Insider Financing [high — financial]: Cash and cash equivalents have decreased significantly to $11,248 as of September 30, 2025, down from $22,799 at December 31, 2024. Concurrently, related party loans have surged from $115,000 to $399,000. This indicates a growing dependence on financing from insiders, which could pose risks if these loans are not repaid or if insider confidence wanes.
• Increased Inventory and Accounts Receivable [medium — operational]: The decrease in cash is attributed to increased inventory ($650,957 from $219,388) and accounts receivable ($283,153 from $196,294). While increased inventory can support sales growth, a significant rise in accounts receivable may signal potential collection issues or an overstocking of goods that are not selling quickly.
• Recent Quarterly Net Loss Despite Annual Improvement [medium — financial]: While the nine months ended September 30, 2025, showed a net income of $176,087, the third quarter (three months ended September 30, 2025) resulted in a net loss of $61,003. This contrasts with a net loss of $428,443 in the prior year's third quarter, indicating a positive trend but also highlighting recent operational challenges or increased expenses impacting profitability in the latest period.
• Reverse Stock Split and Share Reduction [medium — financial]: The company executed a 1-for-2 reverse stock split and reduced authorized shares from 20,000,000 to 10,000,000, effective October 27, 2025. Reverse stock splits are often implemented to boost a low stock price, which can be a signal of underlying financial distress or a lack of investor confidence.

Industry Context

The beverage industry is highly competitive, with established players and emerging brands vying for market share. Trends include a growing demand for healthier options, functional beverages, and sustainable packaging. Companies like EQUATOR Beverage Co. must innovate and expand distribution to capture consumer interest and navigate supply chain complexities.

Regulatory Implications

As a beverage company, EQUATOR Beverage Co. is subject to various regulations concerning food safety, labeling, and alcohol content (if applicable). Compliance with these regulations is crucial to avoid penalties and maintain consumer trust. Changes in tax laws or environmental regulations could also impact operational costs and profitability.

What Investors Should Do

1. Monitor cash flow and working capital management closely.
2. Evaluate the sustainability of revenue growth and profitability.
3. Assess the implications of increased related party debt.
4. Analyze the impact of the reverse stock split.

Key Dates

• 2025-09-30: End of Nine Months Reporting Period — Reported a net income of $176,087 on revenue of $3,104,914, a significant turnaround from the prior year's loss. However, the third quarter ended with a net loss of $61,003.
• 2025-10-27: Reverse Stock Split and Authorized Share Reduction — Executed a 1-for-2 reverse stock split and reduced authorized shares to 10,000,000. This action may be intended to improve share price but can also signal underlying financial challenges.

Glossary

Accumulated deficit

The cumulative net losses of a company that have not been offset by net income. It represents a deficit in the company's equity. (EQUATOR Beverage Co. has a significant accumulated deficit of ($24,434,295) as of September 30, 2025, indicating a history of net losses despite recent improvements.)

Related party loans

Loans made between entities that are related to each other, such as between a company and its officers, directors, or major shareholders. (The company's reliance on related party loans, which increased to $399,000 from $115,000, highlights a dependence on insider financing.)

Reverse stock split

A corporate action in which a company reduces the total number of its outstanding shares by consolidating existing shares into fewer, proportionally more valuable shares. (EQUATOR Beverage Co. executed a 1-for-2 reverse stock split, which can be a strategy to increase the per-share price, often used by companies facing low stock valuations.)

Year-Over-Year Comparison

EQUATOR Beverage Co. has shown a significant improvement in its year-to-date performance, with revenue increasing by 21.88% to $3,104,914 and a net income of $176,087 compared to a net loss in the prior year. Gross profit also surged by 41.29%, and operating expenses decreased by 24.50%. However, the company's cash position has weakened, and reliance on related party loans has substantially increased, alongside a recent quarterly net loss, indicating a mixed financial picture.

Key Financial Figures

• $0 — he registrant's common stock, par value $0.001, issued and outstanding. DOCUMENTS
• $217,920 — trading shares with an implied value of $217,920. The Company issued 841 restricted and
• $680,850 — trading shares with an implied value of $680,850 to directors and officers as a result o

Filing Documents

• mojo_10q.htm (10-Q) — 571KB
• mojo_ex311.htm (EX-31.1) — 13KB
• mojo_ex321.htm (EX-32.1) — 5KB
• 0001477932-25-007863.txt ( ) — 2430KB
• mojo-20250930.xsd (EX-101.SCH) — 22KB
• mojo-20250930_lab.xml (EX-101.LAB) — 134KB
• mojo-20250930_cal.xml (EX-101.CAL) — 25KB
• mojo-20250930_pre.xml (EX-101.PRE) — 103KB
• mojo-20250930_def.xml (EX-101.DEF) — 39KB
• mojo_10q_htm.xml (XML) — 355KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION ITEM 1.

FINANCIAL STATEMENTS (Unaudited)

FINANCIAL STATEMENTS (Unaudited) F-1 Condensed Balance Sheets as of September 30, 2025 and December 31, 2024 F-1 Condensed Statements of Operations for the three months ended September 30, 2025 and September 30, 2024 F-2 Condensed Statements of Operations for the nine months ended September 30, 2025 and September 30, 2024 F-3 Condensed Statements of Cash Flows for the nine months ended September 30, 2025 and September 30, 2024 F-4 Condensed Statements of Changes in Stockholders' Equity for the nine months ended September 30, 2025 and September 30, 2024 F-5 Notes to the Condensed Financial Statements F-6 ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 3 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 5 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 5 PART II ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 7 ITEM 1a.

RISK FACTORS

RISK FACTORS 7 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 14 ITEM 3. UNRESOLVED STAFF COMMENTS 14 ITEM 4. MINE SAFETY DISCLOSURE 14 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 15 ITEM 6.

SELECTED FINANCIAL DATA

SELECTED FINANCIAL DATA 15 PART III ITEM 7. Directors, Executive Officer and Corporate Governance 16 ITEM 8.

Executive Compensation

Executive Compensation 17 ITEM 9.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 18 PART IV ITEM 10. Exhibits, Financial Statement Schedules 19

SIGNATURES

SIGNATURES 20 2 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS (Unaudited)

ITEM 1. FINANCIAL STATEMENTS (Unaudited) EQUATOR BEVERAGE COMPANY Condensed Balance Sheets (Unaudited) As of September 30, 2025 and December 31, 2024 September 30, 2025 December 31, 2024 Assets Current Assets Cash and cash equivalents $ 11,248 $ 22,799 Accounts receivable, net 283,153 196,294 Inventory 650,957 219,388 Supplier deposits 24,946 93,930 Prepaid expenses 63,796 43,751 Total Current Assets $ 1,034,100 $ 576,162 Total Assets $ 1,034,100 $ 576,162 Liabilities and Stockholders' Equity Current Liabilities Accounts payable and accrued expenses $ 144,792 $ 124,861 Related party loans 399,000 115,000 Total Current Liabilities 543,792 239,861 Commitments and Contingencies – Refer to Note 3 Stockholders' Equity Common stock, 10,000,000 shares authorized at $ 0.001 par value, 9,086,158 and 9,109,317 shares issued and outstanding, at September 30, 2025 and December 31, 2024, respectively 9,086 9,109 Additional paid-in capital 24,915,517 24,937,574 Accumulated deficit ( 24,434,295 ) ( 24,610,382 ) Total Stockholders' Equity 490,308 336,301 Total Liabilities and Stockholders' Equity $ 1,034,100 $ 576,162 The accompanying notes are an integral part of these condensed financial statements. F-1 Table of Contents EQUATOR BEVERAGE COMPANY Condensed Statements of Operations (Unaudited) For the Three Months Ended September 30, 2025 and 2024 2025 2024 Revenue $ 1,184,589 $ 1,061,645 Cost of Revenue 607,191 704,370 Gross Profit 577,398 357,275 Operating Expenses Selling, general and administrative 625,780 778,786 Total Operating Expenses 625,780 778,786 Income / (Loss) from Operations ( 48,382 ) ( 421,511 ) Interest Expense ( 9,760 ) ( 5,655 ) Income / (Loss) Before Provision for Income Taxes $ ( 58,142 ) $ ( 427,166 ) Provision for Income Taxes – Refer to Note 2 ( 47,681 ) ( 1,277 ) Benefit from Deferred Tax Assets 4

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is provided in addition to the accompanying financial statements and notes to assist readers in understanding our results of operations, financial condition and cash flows. MD&A is organized as follows: Significant Accounting Policies — Accounting policies that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts. Results of Operations — Analysis of our financial results comparing the quarter ended September 30, 2025 to September 30, 2024. Liquidity and Capital Resources — Analysis of changes in our cash flows, and discussion of our financial condition and potential sources of liquidity. This 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 annual report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. Significant Accounting Policies We have prepared our financial statements in conformity with accounting principles generally accepted in the United States, which requires management to make significant judgments and estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. We base these significant

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