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Item 1. Financial Statements

2026-05-13 compared with 2025-11-03 · 202 added, 195 removed, 79 unchanged (83% of the section changed)

FINANCIAL STATEMENTS (Unaudited)

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

EQUATOR BEVERAGE COMPANY

Condensed Balance Sheets (Unaudited)

As of September 30, 2025 and December 31, 2024

September 30,

As of March 31, 2026 and December 31, 2025

Current Assets

Cash and cash equivalents

Accounts receivable, net

Accounts and other receivables

Supplier deposits

8 unchanged sentences

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

Common stock, 10,000,000 shares authorized at $ 0.001 par value 9,449,655 and 9,380,260 shares issued and outstanding, at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

Accumulated deficit

( 24,434,295 )

( 24,610,382 )

Total Stockholders’ Equity

3 unchanged sentences

Condensed Statements of Operations (Unaudited)

For the Three Months Ended September 30, 2025 and 2024

Cost of Revenue

Operating Expenses

Selling, general and administrative

Total Operating Expenses

Income / (Loss) from Operations

Interest Expense

Income / (Loss) Before Provision for Income Taxes

$ ( 427,166 )

Provision for Income Taxes – Refer to Note 2

Benefit from Deferred Tax Assets

Net Income / (Loss)

$ ( 428,443 )

Net Income / (Loss) Per Common Share, Basic and Diluted

Weighted Average Number of Common Shares Outstanding, Basic and Diluted

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

EQUATOR BEVERAGE COMPANY

Condensed Statements of Operations (Unaudited)

For the Nine Months Ended September 30, 2025 and 2024

For the Three Months Ended March 31, 2026 and 2025

Cost of Revenue

Operating Expenses

Selling, general and administrative

Selling, general ,

and administrative

Total Operating Expenses

Income / (Loss) from Operations

Income from Operations

Interest Expense

Income / (Loss) Before Provision for Income Taxes

$ ( 588,968 )

Provision for Income Taxes – Refer to Note 2

Benefit from Deferred Tax Assets

Net Income / (Loss)

$ ( 591,601 )

Net Income / (Loss) Per Common Share, Basic and Diluted

Income Before Provision for Income Taxes

Provision for Income Taxes (net) – Refer to Note 8

Net Income Per Common Share, Basic and Diluted

Weighted Average Number of Common Shares Outstanding, Basic and Diluted

2 unchanged sentences

Condensed Statements of Cash Flows (Unaudited)

For the Nine Months Ended September 30, 2025 and 2024

For the Three Months Ended March 31, 2026 and 2025

Cash Flows from Operating Activities:

Net income / (loss)

$ ( 591,601 )

Adjustments to Reconcile Net Income / (Loss) to Net Cash Provided by / (Used In) Operating Activities:

Adjustments to Reconcile Net Income to Net Cash Provided by / (Used in) Operating Activities:

Restricted, non-trading common stock issued to directors and employees

Changes in Assets and Liabilities:

(Increase) / decrease in accounts receivable

(Increase) / decrease in inventory

(Increase) / decrease in supplier deposits

(Increase) / decrease in prepaid expenses

(Increase) / decrease in accounts payable and accrued expenses

ccounts receivable

upplier deposits

repaid expenses

ccounts payable and accrued expenses

Net Cash Provided by / (Used in) Operating Activities

6 unchanged sentences

Cash and Cash Equivalents at Beginning of Period

Cash and Cash Equivalents at End of Periods

Cash and Cash Equivalents at End of Period

Supplemental Disclosure of Cash Flow Information:

1 unchanged sentence

Summary of non-cash investing and financing activity:

During the nine-month period ended September 30, 2025 the Company issued a total of 201,841 restricted and non-trading shares with an implied value of $217,920.

The Company issued 841 restricted and non-trading shares to an unrelated party for marketing services and 201,000 shares of restricted, non-trading shares to directors and officers as a result of contractual stock awards.

During the nine-month period ended September 30, 2024 the Company issued a total of 507,750 restricted and non-trading shares with an implied value of $680,850 to directors and officers as a result of contractual stock awards.

During the quarter ended March 31, 2026, the Company issued 90,000 shares of restricted , non-trading

common stock to Glenn Simpson pursuant to the terms of his employment agreement.

The shares had an aggregate fair value of $ 72,900 , based on the quoted OTC market price of the Company’s common stock on the grant date.

The Company’s common stock price was $ 0.81 per share on November 17, 2025, the date the employment agreement was executed.

During the quarter ended March 31, 2025, the Company issued 841 shares of restricted common stock to third-party service providers pursuant to marketing service agreements.

The shares had an aggregate fair value of $ 840 .

In accordance with the terms of the agreements, the number of shares issued was determined based on the volume weighted average price (“VWAP”) of the Company’s common stock for the applicable month, as published by the OTC.

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

1 unchanged sentence

Condensed Statements of Changes in Stockholders’ Equity (Unaudited)

For the Nine Months Ended September 30, 2025 and 2024

For the Three Months Ended March 31, 2026 and 2025

Balance, December 31, 2025

$ ( 24,610,382 )

Restricted, Non-Trading Stock issued to Directors and employees

Net Income / (Loss)

Balance, March 31, 2025

$ ( 24,526,348 )

Restricted, Non-Trading Stock issued to Directors and employees

Stock repurchased and returned to Treasury

Net Income / (Loss)

Balance, June 30, 2025

$ ( 24,373,292 )

Restricted, Non-Trading Stock issued to Directors and employees

Restricted, Non-Trading Common Stock issued to Directors and employees

Stock repurchased and returned to Treasury

Net Income / (Loss)

Balance, September 30, 2025

$ ( 24,434,295 )

Balance, March 31, 2026

Balance, December 31, 2024

$ ( 23,809,238 )

Restricted, Non-Trading Stock issued to Directors and employees

Restricted, Non-Trading Common Stock issued to Directors, Employees and Unrelated Parties

Balance, March 31, 2025

$ ( 23,912,258 )

Restricted, Non-Trading Stock issued to Directors and employees

Balance, June 30, 2024

$ ( 23,972,396 )

Restricted, Non-Trading Stock issued to Directors and employees

Balance, September 30, 2024

$ ( 24,400,839 )

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

1 unchanged sentence

Notes to Condensed Financial Statements (Unaudited)

September 30, 2025

March 31, 2026

NOTE 1 – BUSINESS

EQUATOR Beverage Company, headquartered in Jersey City, NJ, is a Delaware corporation that specializes in developing, producing, distributing, and marketing new beverage products.

CURRENT OPERATIONS

Sales and Distribution

The Company’s main product is MOJO Coconut Water.

In addition to Coconut Water, the Company produces Coconut Water + Pineapple Juice, Coconut Water + Mango Juice, Organic Coconut Water, Sparkling Coconut Water Citrus, Energy Sparkling Blood Orange, Energy Sparkling Pink Grapefruit.

We seek to grow the market share of our products by expanding our hybrid distribution network through the relationships and efforts of our management and third-party partners and broker network, and new products and packaging.

The Company packages its beverages in 100% recyclable, Eco-Friendly packaging that can be recycled infinite times and is not made from carbon oil-based packaging.

The packaging has a very low impact on the environment, and does not contribute to landfills and the pollution of our bodies of water.

Also, our products are plant-based, Eco-friendly and renewable.

The Company has multiple sources for its production.

The fruit is part of the overall taste and quality of our products.

Currently, the Company has multiple production facilities that it could source products from, each of the facilities could supply our forecasted demand.

The beverage industry is competitive.

Competitors in our market compete for brand recognition, ingredient sourcing, product shelf space, and e-commerce page rankings.

Our competitors have similar distribution channels and retailers to deliver and sell their products.

Government Regulation

Within the United States, beverages are governed by the U.S.

Food and Drug Administration (the “FDA”).

As such, it is necessary for the Company to establish, maintain and make available for inspection records as well as to develop labels (including nutrition information) that meet FDA requirements.

The Company’s production facilities are subject to FDA regulation.

As of September 30, 2025, the Company had two employees.

The Company also uses the services of contractors, consultants and other third-parties.

The Company uses third party bottlers to produce its products which is standard industry practice for every beverage company.

We also use trucking and logistics companies to transport and store our products.

We use brokers to sell our product and other professionals for accounting, legal and marketing support, to do all these functions internally would take hundreds of employees and is not cost effective.

CORPORATE HISTORY AND DEVELOPMENT

The Company began producing MOJO branded products in 2015.

EQUATOR Beverage Company is headquartered in Jersey City, New Jersey and our internet site is www.EquatorBeverage.com.

EQUATOR’s stock is traded on the OTCQB under the symbol MOJO.

Interim Financial Statements

The accompanying unaudited interim condensed financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q and article 10 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (“SEC”).

Accordingly, certain information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements have been condensed or omitted pursuant to such rules and regulations.

However, the Company believes that the disclosures included in these financial statements are adequate to make the information presented not misleading.

The unaudited interim condensed financial statements included in this document have been prepared on the same basis as the annual audited financial statements, and in the Company’s opinion, reflect all adjustments necessary for a fair presentation in accordance with GAAP and SEC regulations for interim financial statements.

The results for the nine months ended September 30, 2025 are not necessarily indicative of the results that the Company will have for any subsequent period.

These unaudited condensed financial statements should be read in conjunction with the audited financial statements and the notes to those statements for the year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K.

EQUATOR Beverage Company is a Delaware corporation engaged in the development, production, and distribution of beverage products.

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 (“GAAP”).

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.

2 unchanged sentences

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

As of September 30, 2025, and December 31, 2024, the Company did not have any cash equivalents.

Accounts Receivable

The Company did not hold cash equivalents as of March 31, 2026 or December 31, 2025.

Accounts and Other Receivables

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 September 30, 2025 and December 31, 2024 was zero.

Inventory, consisting solely of finished goods, are stated at average cost (first-in, first-out method) or net realizable value (“NRV”).

If necessary, the Company provides allowances to adjust the carrying value of its inventories to NRV when NRV is below cost.

There were no such adjustments as of September 30, 2025 or 2024.

Inventory quantities were determined from inventory reports provided by the third-party warehouse provider.

Th Company reconciles this report with its records.

The allowance for doubtful accounts as of March 31, 2026 and December 31, 2025 was zero.

Other receivables consist of claims for recovery of tariffs previously paid on imported products.

During the quarter ended March 31, 2026, the Company recorded a receivable of $ 112,292 related to expected refunds of certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”), following a February 20, 2026 United States Supreme Court ruling concerning such tariffs.

The Company filed related claims with U.S.

Customs and Border Protection (“CBP”).

Management believes the receivable is recoverable;

however, recovery remains subject to CBP review and approval.

Inventory consists solely of finished goods and is stated at the lower of cost or net realizable value.

Cost is determined using an average cost method which 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 quarter ended March 31, 2026 or December 31, 2025, as inventory turnover has been sufficient to support recoverability.

Inventory in transit is included in inventory as of the last day of the reporting period when title transfers to the Company at the shipping point, in accordance with the Company’s contractual shipping terms.

Revenue Recognition

Revenue from sales of products is recognized when the related performance obligation is satisfied.

The Company’s performance obligation is satisfied upon the shipment or delivery of products to customers.

The Company’s products are sold on cash and credit terms which are established in accordance with standardized industry practices and typically require payment within 30 days of delivery.

Revenue Recognition — the Company recognizes revenue in accordance with ASC Topic 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 the customer.

The Company’s contracts generally include a single performance obligation, which is the delivery of products.

The transaction price is the amount stated in the purchase order and reflects the consideration the Company expects to receive.

The Company does not have material 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 and, accordingly, has not recorded a reserve for returns.

Shipping and Handling Costs

Shipping and Handling Costs incurred to move finished goods from our distribution center 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.

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 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 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.

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 September 30, 2025 and 2024.

As of September 30, 2025, and September 30, 2024, the Company had no accrued interest or penalties.

The Company had no Federal or State tax examinations in the past nor does it have any at the current time.

The table below shows the details of the Net Operating Loss Carryforward and Deferred Tax Assets as of September 30, 2025 and 2024:

Net Operating Loss Carryforward, January 1

Taxable Income, January 1 to September 30

Net Operating Loss Carryforward, September 30

Federal Deferred Tax Asset, January 1

Federal Tax Expense as of September 30 (21% Tax Rate)

Federal Deferred Tax Asset, September 30

State of New Jersey Deferred Tax Asset, January 1

State of New Jersey Tax Expense as of September 30 (9% Tax Rate)

State of New Jersey Deferred Tax Asset, September 30

Total Deferred Tax Asset, September 30

Total Tax Expense

Provision for Income Taxes

$ ( 120,112 )

Benefit from Deferred Tax Asset

Net Provision for Income Taxes -State of New Jersey*

*The State of New Jersey NOL deduction is limited to 80% of taxable income.

The table below shows the reconciliation of Net Income / (Loss) per Books to Taxable Income as of September 30:

Net Income/(Loss) before Taxes

$ ( 591,601 )

Taxable Net Income

Diluted earnings per share equals basic earnings per share because the Company has no potentially dilutive securities.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation

Compensation cost is measured at the grant-date fair value, based on the closing price of the Company’s common stock on the grant date, and is recognized over the requisite service period.

Stock-based compensation expense is included in selling, general, and administrative expenses in the consolidated statements of operations.

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 March 31, 2026, the Company had deferred tax assets of $ 849,491 .

As of March 31, 2025, the Company had deferred tax assets of $ 1,038,484 .

The Company did not have any deferred tax liabilities as of March 31, 2026, or

December 31, 2025.

The Company recognizes interest and penalties related to income taxes, if any, as a component of income tax expense.

As of March 31, 2026 and March 31, 2025 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 expense, approximate their fair values due to their short-term nature.

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

The Company adopted the guidance effective January 1, 2024.

The adoption 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 Company adopted the guidance effective January 1, 2024.

The adoption 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.

NOTE 3 – SEGMENT REPORTING

Adoption of ASU 2023-07

Effective January 1, 202 4

, 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 operates as a single reportable segment.

Chief Operating Decision Maker

The Chief Executive Officer, who serves as CODM, evaluates performance and allocates resources based on consolidated financial information.

Measure of Segment Profit

The measure of segment profit used by the CODM is consolidated net income, 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 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 fulfil l

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

Employment Agreement

Pursuant to Mr.

Simpson’s Employment Agreement (“the Agreement”) effective January 1, 2025 Mr.

Simpson is paid a salary of $ 9,500 per month until June 30, 2025.

Effective July 1, 2025 to December 31, 2025 Mr.

Simpson is paid a salary of $ 10,833 in cash and 67,000 shares of restricted, non-trading common stock per month.

Should the Company meet its revenue targets, the Company is obligated to grant Mr.

Simpson 100,000 shares of restricted, non-trading common stock and a cash bonus of $ 44,400 .

Pursuant to the Agreement, should Mr.

Simpson’s employment be terminated without cause, the Company is obligated to pay Mr.

Simpson all amounts from the contract immediately for the remaining term of 51 months.

As of September 30, 2025, the potential liability to EQUATOR Beverage Company was $ 552,483 .

At December 30, 2024, the potential liability to EQUATOR Beverage Company was $ 570,000 .

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 $ 712,500 in cash and 1,140,000 shares of the Company’s common stock.

NOTE 5 – STOCKHOLDERS’ EQUITY

On October 20, 2025, the State of Delaware approved the 1-for-2 reverse split and the decrease in Authorized shares from 20,000,000 to 10,000,000 shares.

On June 24, 2025, the Board of Directors of the Company approved the prospective amendment to the Fourth Article of the Company’s Articles of Incorporation to decrease the authorized common stock from 20,000,000 shares, par value $ 0.001 , to 10,000,000 shares, par value $ 0.001 .

On June 24, 2025, the Majority Stockholders approved the Decrease in Authorized Amendment by written consent, in lieu of a special meeting of the stockholders.

On June 24, 2025, the Board of Directors of the Company approved the prospective amendment to the Company’s Articles of Incorporation to effect a 1-for-2 reverse split of the Company’s Common Stock (the “Reverse Stock Split”).

On June 24, 2025, stockholders of the Company owning a majority of the Company’s outstanding voting stock (the “Majority Stockholders”) approved the Reverse Stock Split by written consent, in lieu of a special meeting of the stockholders.

The decrease in authorized shares and reverse stock split was approved by FINRA effective October 27, 2025.

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.

Restricted Stock Issuances

The table below summarizes the restricted, non-trading stock awards during the first nine months of 2025 and 2024:

Restricted, Non-trading Stock Awards

The table below summarizes the restricted non-trading common stock awards during the quarters ended March 31, 2026 and 2025:

Restricted Non-trading Common Stock Awards

Officers and Directors

January 1 to September 30

Glenn Simpson

January 1 to March 31

Glenn Simpson

The fair value of restricted , non-trading

stock awards issued during the quarter ended March 31, 2026 was determined based on the closing market price of the Company’s common stock on the grant date.

The restricted , non-trad ing

stock awards vested immediately upon grant, and accordingly, the full fair value of $ 72,900 was recognized as stock-based compensation expense during the period in accordance with ASC 718.

Such expense is included in selling, general ,

and administrative expenses in the accompanying statements of operations.

See Note 2 for further information regarding the Company’s stock-based compensation policy.

Stock Transactions

During the nine months ended September 30, 2025, the Company issued 841 shares of its restricted, non-trading common shares for marketing services and 200,500 shares of its restricted, non-trading common shares as a result of contractual stock awards.

During the nine months ended September 30, 2025, the Company purchased 225,000 shares of its common stock from shareholders at a cost of $ 240,000 .

During the period ended September 30, 2024, the Company did not purchase any shares of its common stock from shareholders.

During the quarter ended March 31, 2026, the Company issued 90,000 shares of restricted , non-trading

common stock to Glenn Simpson pursuant to the terms of his employment agreement.

The shares had an aggregate fair value of $ 72,900 , based on the quoted OTC market price of the Company’s common stock on the grant date.

The Company’s common stock price was $ 0.81 per share on November 17, 2025, the date the employment agreement was executed.

During the quarter ended March 31, 2025, the Company issued 841 shares of restricted common stock to third-party service providers pursuant to marketing service agreements.

The shares had an aggregate fair value of $ 840 .

During the quarter ended March 31, 2026, the Company repurchased 20,605 shares of its common stock from shareholders.

The Company did no t repurchase any shares during the quarter ended March 31, 2025.

NOTE 6 – RELATED PARTY TRANSACTIONS

Simpson lent funds to the Company for a revolving loan with a principal amount up to $ 300,000 .

The loan bears a 9.25 % simple interest per year.

The principal and any accrued interest are due and payable on demand, and the Company has the right to pay back the loan in full or make payments without penalty.

As of September 30, 2025, the loan payable to Mr.

Simpson was $ 399,000 .

As of December 31, 2024, the loan payable to Mr.

The Company engages in transactions with related parties in the ordinary course of business.

Related parties include the Company’s directors, executive officers, and entities in which such individuals have a financial interest.

During the quarter ended March 31, 2026, the Company issued 90,000 shares of restricted , non-trading

common stock to its Chief Executive Officer pursuant to a stock-based compensation arrangement.

The shares vested immediately upon grant and had an aggregate fair value of $ 72,900 , determined based on the quoted OTC market price of the Company’s common stock on the grant date.

The stock price was $ 0.81 on November 17, 2025 ,

when the employment agreement was signed.

The full amount was recognized as stock-based compensation expense during the period and is included in selling, general ,

and administrative expenses in the accompanying statements of operations.

The Company did not have comparable stock-based compensation transactions with related parties during the quarter ended March 31, 2025.

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 March 31, 2026, the loan payable to Mr.

Simpson was $ 230,000 ,

which was a decrease of $ 110,000 from the December 31, 2025 balance of $ 340,000 .

NOTE 7 – SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES (SG&A)

Selling, General, and Administrative expenses ("SG&A") consist of all costs related to the general operation of the company, excluding direct production costs.

SG&A includes 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 Selling, General and Administrative (SG&A) expenses as a percentage of total expenses for the quarters ended September 30, 2025 and 2024:

September 30,

E-commerce Fulfillment Fees

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 fulfi l

lment 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 quarters ended March 31, 2026 and 2025:

E-commerce Fulfi l

Freight and Delivery Expenses

Compensation Expenses

NOTE 8 – INCOME TAXES

The Company’s income tax provision consists of current and deferred components.

For the three months ended March 31, 2026, the Company recorded current tax expense of $ 68,650 , offset by a deferred tax benefit of $ 64,531 , resulting in a net income tax expense of $ 4,119 .

The table below shows the details of the Net Operating Loss Carryforward and Deferred Tax Assets as of March 31, 2026 and 2025:

Net Operating Loss Carryforward, January 1

Taxable Income, January 1 to March 31

Net Operating Loss Carryforward, March 31

Federal Deferred Tax Asset, January 1

Federal Tax Expense as of March 31 (21% Tax Rate)

Federal Deferred Tax Asset, March 31

State of New Jersey Deferred Tax Asset, January 1

State of New Jersey Tax Expense as of March 31 (9% Tax Rate)

State of New Jersey Deferred Tax Asset, March 31

Total Deferred Tax Asset, March 31

Total Tax Expense

The table below shows the reconciliation of Net Income per Books to Taxable Income:

Net Income before Taxes

Taxable Net Income

NOTE 9 – OTHER INCOME

Other income for the quarter ended March 31, 2026

and primarily reflects non-recurring tariff-related recoveries recognized during the period, including recoveries associated with favorable legal and regulatory developments.

In accordance with U.S.

GAAP, this amount is presented within other income

NOTE 10 – SUBSEQUENT EVENTS

On April 20, 2026, the Company adopted an Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws.

These documents are filed as Exhibits 3.1 and 3.2 to this report.

The Company has evaluated subsequent events through the date the financial statements were issued.

Subsequent to quarter end, the U.S.

government announced the repeal of the 10 % worldwide tariff previously imposed on imported goods.

During the period, the Company incurred tariff-related payments associated with this tariff.

Management believes these tariffs were improperly assessed and is evaluating potential reimbursement or recovery opportunities.

To the extent the Company receives repayment of these amounts, such recovery would result in an increase to net income in the period the reimbursement is recognized.

The Company repaid $ 10,000 of a loan made by Mr.

The remaining balance of the loan was $ 220,000 as of May 1 3

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements