EQUATOR Beverage Co 10-K

ITEM 9A. CONTROLS AND PROCEDURES Disclosure Controls and Procedures Evaluation of 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. Under the supervision and with the participation of the Company’s senior management, consisting of the Company’s principal executive and financial officer and the Company’s principal accounting officer, the Company conducted an evaluation of the effectiveness of the design and operation of its 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, the Company’s principal executive and financial officer concluded, as of the Evaluation Date, that the Company’s disclosure controls and procedures were effective. While management concluded that Internal Control over Financial Reporting was not effective due to the material weaknesses described below, disclosure controls and procedures were designed to provide reasonable assurance and were effective in ensuring that information required to be disclosed is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. Management’s Annual Report on Internal Control over Financial Reporting Management of the Company is responsible for establishing and maintaining adequate Internal Control over Financial Reporting (as defined in Rule 13a-15(f) under the Exchange Act). Internal control over Financial Reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, Internal Control over Financial Reporting may not prevent or detect misstatements. Based on management’s evaluation under the criteria set forth in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), management concluded that the Company’s Internal Control over Financial Reporting was not effective as of December 31, 2025, due to the following material weaknesses: Limited segregation of duties and governance structure, resulting from the Company’s size and limited number of personnel, including the concentration of financial reporting responsibilities and limited independent oversight of the financial reporting process; and Limited technical accounting oversight and review structure, as the Company’s current financial reporting structure does not incorporate an independent technical accounting oversight function or a formal secondary review layer to evaluate complex or non-routine transactions, including those involving significant estimates or specialized accounting guidance. These material weaknesses create a reasonable possibility that a material misstatement of the Company’s financial statements would not be prevented or detected on a timely basis. Management is implementing measures to enhance its Internal Control over Financial Reporting, including strengthening review controls and supplementing its financial reporting process with additional independent technical accounting support. Notwithstanding the material weaknesses described above, management believes that the financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, the Company’s financial position, results of operations, and cash flows for the periods presented. Management also evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2025. Based on that evaluation, management concluded that disclosure controls and procedures were effective in providing reasonable assurance that information required to be disclosed is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. Attestation Report This Annual Report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm regarding Internal Control over Financial Reporting, as such report is not required for non-accelerated filers. Changes in internal control over financial reporting There was no change in our Internal Control over Financial Reporting during the year ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our Internal Control over Financial Reporting. ITEM 9B. OTHER INFORMATION None ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable 13 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE Executive Officers and Directors Below is the name and certain information regarding our current executive officer and director: Name Age Title Appointed Glenn Simpson 73 Chairman and CEO October 27, 2011 Directors are elected to serve until the next annual meeting of stockholders and until their successors are elected and qualified. Biographical information of each current officer and director is set forth below. Glenn Simpson serves as Chairman of the Board of Directors and Chief Executive Officer of the Company. Mr. Simpson joined the Company in October 2011 and has extensive experience in the global beverage industry. From 1995 to 2000, Mr. Simpson served as Vice President and Chief Financial Officer of Coca-Cola Bottlers, Inc. in Uzbekistan. His primary responsibilities included corporate strategy, financial management, oversight of bottling and distribution operations, and supervision of major capital projects. Under his leadership, annual revenues increased from approximately $4 million to over $160 million. During this period, the company designed and constructed three large-scale bottling facilities totaling more than 1,000,000 square feet, significantly expanding production capacity and modernizing manufacturing infrastructure. These capital projects were funded entirely through internally generated cash flow and operating profits, and no debt financing or equity capital raises were required. Mr. Simpson’s bottling operations achieved the largest revenue increases in the history of The Coca-Cola Company at that time and were consistently ranked in the top 1% of all Coca-Cola bottlers worldwide for product and package quality. The company was recognized as “Bottler of the Year” by The Coca-Cola Company for two consecutive years based on product quality and revenue growth. From 2009 to 2011, Mr. Simpson was engaged on a consulting basis in beverage sector projects in Russia and Afghanistan. Mr. Simpson is a Certified Public Accountant and holds a Master of Business Administration from Columbia University School of Business. Board Committees The Board of Directors does not currently maintain separate standing committees, such as an audit committee, compensation committee or nominating committee. The full Board of Directors performs the functions typically performed by such committees. 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 a written request to our Company at 185 Hudson Street, Suite 2500, Jersey City, New Jersey 07302. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors, executive officers, and persons who beneficially own more than ten percent (10%) of the Company’s common stock to file reports of initial ownership and changes in ownership of the Company’s equity securities with the Securities and Exchange Commission. Based solely upon a review of Forms 3, 4 and 5, and amendments thereto furnished to the Company during the fiscal year ended December 31, 2025, and written representations from the reporting persons, the Company believes that all filing requirements applicable to its directors, executive officers and beneficial owners of more than ten percent (10%) of the Company’s common stock were complied with on a timely basis. The Company has one shareholder who beneficially owns more than ten percent (10%) of the Company’s outstanding common stock, which is the Company’s only class of equity securities authorized and outstanding. The Company’s Articles of Incorporation do not authorize stock options, stock appreciation rights, warrants, or other derivative equity securities. 14 Table of Contents ITEM 11. EXECUTIVE COMPENSATION The following table sets forth information concerning the total compensation paid or earned by each of our named executive officers (as defined under SEC rules). Name and Principal Position Year Salary Shares Share Price Stock Awards Glenn Simpson, Chairman and CEO 2025 $ 166,938 432,000 $ 0.81 $ 349,920 2024 $ 155,400 502,000 $ 1.36 $ 682,720 15 Table of Contents Director Compensation During the year ended December 31, 2025 and 2024 there were no non-employee directors. Board members are not reimbursed for expenses incurred in connection with attending meetings. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information regarding the beneficial ownership of the Company’s common stock as of December 31, 2025, by (i) each person known by the Company to beneficially own more than five percent (5%) of the outstanding shares of the Company’s common stock, and (ii) each director and executive officer of the Company. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to the securities. As of December 31, 2025, the Company had 9,380,260 shares of common stock outstanding. Name Position Shares % Glenn Simpson Chairman and CEO 5,056,946 53.9 Diane Cudia Corporate Controller 488,293 5.2 All Officers and Directors 5,545,239 59.1 16 Table of Contents ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Other than as disclosed below and in this Form 10-K, there have been no transactions, since January 1, 2025, 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. 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 composed 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. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The aggregate fees billed to the Company for services rendered in connection with the years ended December 31, 2025 and 2024 are set forth in the table below: Fee Category 2025 2024 Fee for quarterly reviews $ 15,000 $ 15,000 Fee for annual audit 30,000 25,000 Total $ 45,000 $ 40,000 Principal accountant fees and services consist of fees incurred for professional services rendered for the audit of financial statements, for reviews of our interim financial statements included in our quarterly reports on Form 10-Q and for services that are normally provided in connection with statutory or regulatory filings or engagements. For the years ended December 31, 2025 and December 31, 2024, total principal accountant fees represent fees billed by Victor Mokuolu, CPA PLLC , Registered Public Accounting Firm (PCAOB ID 6771). Audit Committee’s Pre-Approval Practice We do not have an audit committee. Our board of directors has approved the services described above. 17 Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES Financial Statement Schedules The financial statements of EQUATOR Beverage Company are listed on the Index to Financial Statements on this annual report on Form 10-K beginning on page 20. The following Exhibits are being filed with this annual report on Form 10-K: Exhibit No. SEC Report Reference Number Description 3.1 3.1 Certificate of Incorporation of MOJO Shopping, Inc. (1) 3.2 3.1 Amendment to Certificate of Incorporation of MOJO Ventures, Inc. (1) 3.3 3.1 Certificate of Amendment to Certificate of Incorporation of MOJO Ventures, Inc. (3) 3.5 3.1 Certificate of Amendment to Certificate of Incorporation of MOJO Organics, Inc. (5) 3.7 3.1 Amended and Restated Bylaws of MOJO Ventures, Inc. (4) 3.8 3.8 Amendment No. 1 to Amended and Restated Bylaws of MOJO Organics, Inc. (6) 3.9 3.9 Certificate of Amendment (7) 3.10 3.1 Certificate of Amendment to Certificate of Incorporation of MOJO Organics, Inc. (8) 3.11 3.1 Certificate of Amendment to the Certificate of Incorporation of EQUATOR Beverage Company (9) 31.1 31.1 Certification of Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) pursuant to Rule 13a-14(a) or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 32.1 Certification of Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) (1) Incorporated by reference to the Registrant’s Registration Statement on Form SB-2 as an exhibit, numbered as indicated above, filed with the SEC on December 19, 2007. (2) Incorporated by reference to the Registrant’s Current Report on Form 8-K as an exhibit, numbered as indicated above, filed with the SEC on May 4, 2011. (3) Incorporated by reference to the Registrant’s Current Report on Form 8-K as an exhibit, numbered as indicated above, filed with the SEC on January 4, 2012. (4) Incorporated by reference to the Registrant’s Current Report on Form 8-K as an exhibit, numbered as indicated above, filed with the SEC on October 31, 2011. (5) Incorporated by reference to the Registrant’s Current Report on Form 8-K as an exhibit, numbered as indicated above, filed with the SEC on April 2, 2013. (6) Incorporated by reference to the Registrant’s Current Report on Form 10-K as an exhibit, numbered as indicated above, filed with the SEC on September 24, 2013. (7) Incorporated by reference to the Registrant’s Current Report on Form 10-Q as an exhibit, numbered as indicated above, filed with the SEC on July 7, 2021. (8) Incorporated by reference to the Registrant’s Current Report on Form 8-K as an exhibit, numbered as indicated above, filed with the SEC on July 20, 2022. (9) Incorporated by reference to Registrant’s Current Report on Form 8-K as an exhibit, numbered as indicated above, filed with the SEC on October 24, 2025. 18 Table of Contents SIGNATURES In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EQUATOR BEVERAGE COMPANY Dated: March 23, 2026 By: /s/ Glenn Simpson Glenn Simpson, Chief Executive Officer and Chairman (Principal Executive and Principal Financial Officer) 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. SIGNATURE TITLE DATE /s/ Glenn Simpson Director, Chief Executive Officer and Chairman Dated: March 23, 2026 Glenn Simpson (Principal Executive and Principal Financial Officer) /s/ Diane Cudia Corporate Controller (Principal Accounting Officer) Dated: March 23, 2026 Diane Cudia 19 Table of Contents PART IV - FINANCIAL INFORMATION Page Report of Independent Registered Public Accounting Firm – Victor Mokuolu, CPA PLLC Registered Accounting Firm (PCAOB: 6771 ) 21 Balance Sheets as of December 31, 2025 and 2024 22 Statements of Operations for the years ended December 31, 2025 and 2024 23 Statements of Changes in Stockholders’ Equity for the years ended December 31, 2025 and 2024 24 Statements of Cash Flows for the years ended December 31, 2025 and 2024 25 Notes to Financial Statements 26 20 Table of Contents VICTOR MOKUOLU, CPA PLLC Accounting | Advisory | Assurance & Audit | Tax REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders EQUATOR Beverage Company Opinion on the Financial Statements We have audited the accompanying balance sheets of EQUATOR Beverage Company (“the Company”) as of December 31, 2025, and 2024, and the related statements of operations, changes in stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024, and the results of its operations and its cash flows for the two years ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its Internal Control over Financial Reporting. As part of our audits, we are required to obtain an understanding of Internal Control over Financial Reporting, 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. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. We have served as the Company’s auditor since 2023. Houston, Texas March 23, 2026 PCAOB ID: 6771 21 Table of Contents EQUATOR BEVERAGE COMPANY Balance Sheets As of December 31, 2025 and 2024 December 31, 2025 December 31, 2024 Assets Current Assets Cash and cash equivalents $ 219,457 $ 22,799 Accounts receivable, net 349,822 196,294 Inventory 508,301 219,388 Supplier deposits 52,329 93,930 Prepaid expenses 61,137 43,751 Total Current Assets 1,191,046 576,162 Total Assets $ 1,191,046 $ 576,162 Liabilities and Stockholders’ Equity Current Liabilities Accounts payable and accrued expenses $ 295,073 $ 124,861 Related party loans 340,000 115,000 Total Current Liabilities 635,073 239,861 Commitments and Contingencies – Refer to Note 4 Stockholders’ Equity Common Stock, 10,000,000 shares authorized at $ 0.001 par value, 9,380,260 and 9,109,317 shares issued and outstanding, at December 31, 2025 and December 31, 2024, respectively 9,381 9,110 Additional paid-in capital 25,107,762 24,937,573 Accumulated deficit ( 24,561,170 ) ( 24,610,382 ) Total Stockholders’ Equity 555,973 336,301 Total Liabilities and Stockholders’ Equity $ 1,191,046 $ 576,162 The accompanying notes are an integral part of these financial statements. 22 Table of Contents EQUATOR BEVERAGE COMPANY Statements of Operations For the Years Ended December 31, 2025 and 2024 2025 2024 Revenue $ 4,191,049 $ 3,246,913 Cost of Revenue 2,320,520 2,016,488 Gross Profit $ 1,870,529 $ 1,230,425 Operating Expenses Selling, General, and Administrative 1,786,803 2,011,834 Total Operating Expenses $ 1,786,803 $ 2,011,834 Income/(Loss) from Operations $ 83,726 $ ( 781,409 ) Interest Expense ( 30,178 ) ( 18,535 ) Income/(Loss) Before Provision for Income Taxes $ 53,548 $ ( 799,944 ) Provision for Income Taxes ( 141,800 ) ( 19,989 ) Benefit from Deferred Tax Asset 137,465 18,789 Net Income/(Loss) $ 49,213 $ ( 801,144 ) Net Income/(Loss) Per Common Share, Basic and Diluted $ 0.01 $ ( 0.09 ) Weighted Average Number of Common Shares Outstanding, Basic and Diluted 9,104,757 9,109,317 The accompanying notes are an integral part of these financial statements. 23 Table of Contents EQUATOR BEVERAGE COMPANY Statements of Changes in Stockholders’ Equity For the Years Ended December 31, 2025 and 2024 Common Stock Additional Paid-In Accumulated Stockholders’ Shares Amount Capital Deficit Equity Balance, January 1, 2024 8,466,673 $ 8,467 $ 24,071,643 $ ( 23,809,239 ) $ 270,871 Restricted Non-Trading Stock Issued to Directors and Employees 642,644 643 865,931 - 866,574 Net Loss - - - ( 801,144 ) ( 801,144 ) Balance, December 31, 2024 9,109,317 $ 9,110 $ 24,937,574 $ ( 24,610,383 ) $ 336,301 Restricted Non-Trading Stock Issued to Directors and Employees 495,943 496 409,963 - 410,459 Stock Retired to Treasury ( 225,000 ) ( 225 ) ( 239,775 ) ( 240,000 ) Net Income - - - 49,213 49,213 Balance, December 31, 2025 9,380,260 $ 9,381 $ 25,107,762 $ ( 24,561,170 ) $ 555,973 The accompanying notes are an integral part of these financial statements. 24 Table of Contents EQUATOR BEVERAGE COMPANY Statements of Cash Flows For the Years Ended December 31, 2025 and 2024 2025 2024 Cash Flows from Operating Activities: Net income/(loss) $ 49,213 $ ( 801,144 ) Adjustments to Reconcile Net Income/(Loss) to Net Cash Provided by Operating Activities: Restricted Non-Trading Common Stock issued to directors and employees 410,459 866,573 Changes in Assets and Liabilities: (Increase)/decrease in accounts receivable ( 153,528 ) ( 61,233 ) (Increase)/decrease in inventory ( 288,913 ) 51,400 (Increase)/decrease in supplier deposits 41,601 ( 41,275 ) (Increase)/decrease in prepaid expenses ( 17,386 ) ( 8,101 ) Increase/(decrease) in accounts payable and accrued expenses 170,212 44,240 Net Cash Provided by Operating Activities 211,658 50,460 Net Cash Used in Financing Activities: Net Proceeds from related party loan 427,000 463,000 Net Repayments to related party loan ( 202,000 ) ( 578,000 ) Shares repurchased for cancellation ( 240,000 ) - Net Cash Used in Financing Activities ( 15,000 ) ( 115,000 ) Net Increase/(Decrease) in Cash and Cash Equivalents 196,658 ( 64,540 ) Cash and Cash Equivalents at Beginning of Period 22,799 87,339 Cash and Cash Equivalents at End of Period $ 219,457 $ 22,799 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash Paid for Interest $ 30,178 $ 18,535 Summary of non-cash investing and financing activity: During the year ended December 31, 2025 the Company issued a total of 495,943 restricted and non-trading shares with an implied value of $410,459 to directors and officers as a result of contractual stock awards. During the year ended December 31, 2024 the Company issued a total of 642,644 restricted and non-trading shares with an implied value of $866,573 to directors and officers as a result of contractual stock awards and to settle obligations payable. The accompanying notes are an integral part of these financial statements. 25 Table of Contents EQUATOR BEVERAGE COMPANY Notes to Financial Statements December 31, 2025, and 2024 NOTE 1 – BUSINESS Overview EQUATOR Beverage Company is a Delaware corporation headquartered in Jersey City, New Jersey. The Company is engaged in the development, production, distribution, and marketing of a portfolio of beverage products. EQUATOR’s operations focus on identifying and responding to evolving consumer preferences through innovation, brand development, and disciplined execution. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Management is required 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 and time deposits purchased with a maturity of three months or less. As of December 31, 2025, and December 31, 2024, the Company did not have any cash equivalents. Accounts Receivable Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company provides for probable uncollectible amounts based upon its assessment of the current status of the individual receivables and after using reasonable collection efforts. The allowance for doubtful accounts as of December 31, 2025 and 2024 was zero. Inventory Inventory consists solely of finished goods and is stated at the lower of cost or net realizable value. Cost is determined using an average costing method that approximates first-in, first-out (“FIFO”). The Company evaluates inventory for excess or obsolescence and records valuation allowances when necessary. No such allowances were recorded during the years ended December 31, 2025 or 2024, as inventory turnover has been sufficient to support recoverability. Inventory in transit is included in inventory when title transfers to the Company at the shipping point, in accordance with the Company’s contractual shipping terms. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue from product sales is recognized when control of the promised goods is transferred to the customer, which generally occurs upon shipment or delivery in accordance with the applicable shipping terms. Each sale is based on a customer purchase order. Collectively, the purchase order and the Company’s standard terms and conditions constitute the contract with a customer. The Company’s contracts generally include a single performance obligation — the delivery of products. The transaction price is the stated amount in the purchase order and reflects the consideration the Company expects to receive. The Company does not have variable consideration, significant financing components, or multiple performance obligations. Payments are typically due within 30 days of delivery. For sales shipped FOB shipping point, control transfers upon shipment. For sales shipped FOB destination, control transfers upon delivery at the customer’s location. The Company has not historically experienced material returns; accordingly, no reserve for returns has been recorded. 26 Table of Contents Shipping and Handling Costs Shipping and Handling Costs incurred to move finished goods from our sales distribution centers to customer locations are included in the line Selling, General, and Administrative Expenses in our Statements of Operations. Net Income/(Loss) Per Common Share The Company computes per share amounts in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“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 accounts for income taxes using the asset-and-liability method in accordance with ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for temporary differences between the financial-statement and tax bases of assets and liabilities and are measured using enacted tax rates expected to apply when such differences reverse. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that such assets will not be realized. As of December 31, 2025, the Company had deferred tax assets of $ 918,141 . As of December 31, 2024, the Company had deferred tax assets of $ 1,064,381 . The Company did not have any deferred tax liabilities as of December 31, 2025, or December 31, 2024. The Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, during the year ended December 31, 2025. The adoption did not have a material impact on the Company’s financial statements or related disclosures. The Company recognizes interest and penalties related to income taxes, if any, as a component of income tax expense. As of December 31, 2025, and December 31, 2024, the Company had no accrued interest or penalties related to income taxes and is not currently under examination by any federal or state taxing authorities. Fair Value of Financial Instruments The carrying amounts of financial instruments, which include cash, accounts receivable, accounts payable and accrued expenses approximate their fair values due to their short-term nature. Recently Issued Accounting Pronouncements The Company evaluates new accounting pronouncements to determine their impact on the financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), which expands required segment disclosures. The guidance was adopted for the year ended December 31, 2025 and did not have a material impact on the Company’s financial statements, other than expanded disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), which enhances income tax disclosure requirements. The guidance was adopted for the year ended December 31, 2025 and did not have a material impact on the Company’s financial statements, other than expanded disclosures. The adoption of other recently issued accounting pronouncements is not expected to have a material impact on the Company’s financial statements. 27 Table of Contents NOTE 3 – SEGMENT REPORTING Adoption of ASU 2023-07 Effective January 1, 2025, the Company adopted Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments require enhanced disclosures regarding significant segment expenses, the title and role of the Chief Operating Decision Maker (“CODM”), and other segment items. The amendments were applied retrospectively to all periods presented. The adoption did not change the Company’s identification of its operating and reportable segment and did not have a material impact on the Company’s financial position, results of operations, or cash flows. Operating and Reportable Segment The Company has determined that it operates in one operating and reportable segment: the development, production, marketing, and distribution of beverage products. The Company’s operations are managed and evaluated on a consolidated basis. All significant operating decisions and resource allocations are made at the consolidated level. The Company does not have separate lines of business or discrete financial information that is regularly reviewed by the CODM for purposes of allocating resources. Chief Operating Decision Maker The Company’s Chief Executive Officer serves as the CODM. The CODM evaluates performance and allocates resources based on consolidated financial information. The CODM is regularly provided with consolidated revenue, gross profit, operating expenses, and consolidated net income (loss). The CODM does not review discrete asset information, capital expenditure information, or separate measures of segment profitability below consolidated net income (loss) for purposes of performance assessment or resource allocation. Measure of Segment Profit or Loss The measure of segment profit or loss used by the CODM is consolidated net income (loss), consistent with the amount reported in the Company’s Statements of Operations. This measure is used to assess performance and determine resource allocation. The Company does not present additional segment-level measures of profit or loss because no other measures are regularly reviewed by the CODM for decision-making purposes. Significant Segment Expenses In accordance with ASU 2023-07, the following expense categories are significant expenses that are regularly provided to the CODM and are included within operating expenses in the Statements of Operations: E-commerce fulfillment fees Freight and delivery expenses Compensation expenses These amounts are further described in Note 8, Selling, General, and Administrative Expenses. Other Segment Items Other segment items consist of the remaining operating expenses not separately disclosed above, together with interest expense and income tax expense (benefit), which are not individually reviewed by the CODM as separate components for purposes of evaluating segment performance. NOTE 4 – COMMITMENTS AND CONTINGENCIES Contingent Obligation Under Employment Agreement Pursuant to the Employment Agreement dated July 1, 2025, between the Company and Mr. Simpson, in the event Mr. Simpson’s employment is terminated by the Company without cause, he would be entitled to receive $ 649,980 in cash and 1,800,000 shares of the Company’s Common Stock. As of January 1, 2026, the full amounts would be payable upon a qualifying termination. Beginning January 1, 2026, the cash amount and the number of shares issuable would decrease ratably by one-sixtieth (1/60) of the stated amounts for each full month elapsed thereafter. NOTE 5 – STOCKHOLDERS’ EQUITY The Company has authorized 10,000,000 shares of Common Stock having a par value of $ 0.001 . On October 20, 2025, the State of Delaware approved a 1-for-2 reverse stock split and a decrease in authorized shares from 20,000,000 to 10,000,000 shares. The decrease in authorized shares and reverse stock split was approved by FINRA on October 27, 2025. All share and per share data has been retroactively adjusted to reflect the Reverse Stock Split. 28 Table of Contents Restricted Stock Issuances The table below summarizes the restricted non-trading Common Stock awards during the years 2025 and 2024: Restricted Non-trading Common Stock Awards Officers and Directors January 1 to December 31 2025 2024 Price Shares Amount Price Shares Amount Q1 Q1 Glenn Simpson $ - - $ - Glenn Simpson $ 1.40 100,500 $ 140,700 Diane Cudia $ - - $ - Diane Cudia $ 1.40 18,750 26,250 Total - $ - Total 119,250 $ 166,950 Q2 Q2 Glenn Simpson $ - - $ - Glenn Simpson $ 1.40 100,500 $ 140,700 Diane Cudia $ - - $ - Diane Cudia $ 1.40 18,750 $ 26,250 Total - $ - Total 119,250 $ 166,950 Q3 Q3 Glenn Simpson $ - - $ - Glenn Simpson $ 1.40 100,500 $ 140,700 $ - - $ - Glenn Simpson $ 1.20 100,000 $ 120,000 Diane Cudia $ - - $ - Diane Cudia $ 1.40 18,750 $ 26,250 $ - - $ - Diane Cudia $ 1.20 50,000 $ 60,000 Total - $ - Total 269,250 $ 346,950 Q4 Q4 Glenn Simpson $ 0.81 402,000 $ 325,620 Glenn Simpson $ 1.40 100,500 140,700 Diane Cudia $ 0.91 92,459 $ 84,000 Diane Cudia $ 1.40 18,750 26,250 Total 494,549 409,620 Total 119,250 $ 166,950 Grand Total 494,549 $ 409,620 Total 627,000 $ 847,800 Stock Transactions Performance stock awards based on revenue targets of 30,000 shares, and 150,000 shares valued at $ 24,300 , and $ 180,000 were recognized during the year ended December 31, 2025, and December 31, 2024, respectively. During the year ended December 31, 2025, the Company issued 841 shares of its restricted, non-trading Common Stock for marketing services and 494,549 shares of its restricted, non-trading Common Stock as a result of contractual stock awards. During the year ended December 31, 2024, the Company issued 627,000 shares of its restricted, non-trading Common Stock as a result of contractual stock awards. During the year ended December 31, 2025, the Company repurchased 225,000 shares of its Common Stock from shareholders compared to zero shares in 2024. Stock-Based Compensation The Company recognizes stock-based compensation expense for shares issued in exchange for services in accordance with ASC 718, Compensation—Stock Compensation, measured at the OTC closing market price on the grant date without discount. Service-based awards are expensed as earned. Performance-based awards are expensed when achievement of the performance condition is determined to be probable. No forfeitures were recorded during the periods presented. No stock awards were granted in the first, second, or third quarters of 2025. Share Repurchases The Company accounts for repurchased shares of Common Stock at cost using the cost method, with the repurchased shares recorded as treasury stock and presented as a reduction of stockholders' equity on the balance sheet. 29 Table of Contents NOTE 6 – CONCENTRATIONS Major Customers* During the year ended December 31, 2025, the Company had six customers that accounted for 94 % of revenue. Accounts receivable at December 31, 2025 from these six customers amounted to $ 329,194 . For the year ended December 31, 2024, there were six customers accounting for 91 % of total revenue. Accounts receivable at December 31, 2024 amounted to $ 192,185 . Major Suppliers* During the year ended December 31, 2025, the Company purchased its inventory from two suppliers. The Company has established relationships with other suppliers which management believes could meet its needs on similar terms. Accounts payable at December 31, 2025 to both suppliers were $ 122,725 . For the year ended December 31, 2024, Accounts payable to both suppliers were $ 28,143 . *Disclosure of the specific revenues generated by each customer and purchases from each supplier would have the effect of revealing sensitive financial and commercial risk information and would unfairly expose confidential aspects of the Company’s business strategies. The Company believes that its current disclosure satisfies the requirements of ASC 275-10-50-16 through 20 and provides ample information regarding the nature of these concentrations. NOTE 7 – RELATED PARTY TRANSACTIONS On October 1, 2025, EQUATOR Beverage Company (the “Company”) entered into a loan agreement with Glenn Simpson (the “Lender”), who is considered a related party. Pursuant to the agreement, the Lender provided the Company with a loan in the principal amount of $ 340,000 . The loan bears interest at a rate of 9.25 % per annum, calculated on the outstanding principal balance. The Company is required to make monthly payments consisting of (i) principal in the amount of $ 10,000 and (ii) accrued interest on the remaining unpaid balance. Payments commenced on October 1, 2025, and continue on a monthly basis until the loan is fully repaid. The Company may prepay all or a portion of the outstanding balance at any time without penalty. Prepayments are applied first to accrued interest and then to principal. In the event of default, defined as a failure to make a required payment within 15 days of its due date, the Lender has the right to declare the entire outstanding balance, together with accrued interest, immediately due and payable. The Company believes that the terms of this loan, including the interest rate and repayment structure, are comparable to those that could have been obtained from unaffiliated third parties. As of December 31, 2025, the loan payable to Mr. Simpson was $ 340,000 As of December 31, 2024, the loan payable to Mr. Simpson was $ 115,000 . NOTE 8 – SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES (SG&A) Selling, General, and Administrative ("SG&A") expenses consist of all costs related to the general operation of the Company, excluding direct production costs. SG&A expenses include costs such as sales and marketing expenses, including e-commerce fulfillment fees, salaries, office expenses, shipping and handling costs, and other overhead costs necessary to support the Company's core business activities. The table below presents the material components of SG&A expenses as a percentage of total expenses for the years ended December 31, 2025 and 2024: December 31, 2025 December 31, 2024 E-commerce Fulfillment Fees 32 % 21 % Freight and Delivery Expenses 8 % 6 % Compensation Expenses 19 % 16 % NOTE 9 – INCOME TAXES The Company provides for income taxes using the 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. Deferred tax assets are reduced 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. The Company did not have a deferred tax liability at December 31, 2025 and 2024. As of December 31, 2025, and December 31, 2024, the Company had no accrued interest or penalties. The Company has not been subject to any federal or state tax examinations, and is not currently under examination. The table below shows the details of the Net Operating Loss Carryforward and Deferred Tax Assets for 2025 and 2024: 2025 2024 Net Operating Loss Carryforward, January 1 $ 3,549,884 $ 3,616,513 Taxable Income, January 1 to December 31 ( 487,468 ) ( 66,629 ) Net Operating Loss Carryforward, December 31 $ 3,062,416 $ 3,549,884 Federal Deferred Tax Asset, January 1 745,476 759,468 Federal Tax Expense as of December 31 (21% Tax Rate) ( 102,368 ) ( 13,992 ) Federal Deferred Tax Asset, December 31 $ 643,108 $ 745,476 State of New Jersey Deferred Tax Asset, January 1 318,905 324,902 State of New Jersey Tax Expense as of December 31 (9% Tax Rate) ( 43,872 ) ( 5,997 ) State of New Jersey Deferred Tax Asset, December 31 $ 275,033 $ 318,905 Total Deferred Tax Asset, December 31 $ 918,141 $ 1,064,381 Total Tax Expense $ 146,240 $ 19,989 The table below shows the reconciliation of Net Income/(Loss) per Books to Taxable Income: 2025 2024 Net Income/(Loss) before Taxes $ 53,548 $ ( 799,944 ) Stock Awards 433,920 866,573 Taxable Net Income $ 487,468 $ 66,629 NOTE 10 – SUBSEQUENT EVENTS The Company has evaluated subsequent events through March 23, 2026, the date these financial statements were available to be issued. On January 6, 2026, the Company issued 60,000 shares of restricted Common Stock pursuant to contractual stock awards. On January 27, 2026, the Company issued 30,000 shares of restricted Common Stock pursuant to contractual stock awards related to the achievement of the 2025 revenue target. The Company repaid $ 110,000 of a loan made by Mr. Simpson. The remaining balance of the loan was $ 230,000 as of March 23, 2026. 30