x
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ANNUAL REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSTION PERIOD FROM ________TO ________
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Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to section 12(g) of the Act:
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NONE
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NONE
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Large Accelerated Filer
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o
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Accelerated Filer
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o
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Non-accelerated Filer
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o
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Smaller Reporting Company
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x
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(Do not check if a smaller reporting company)
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Page
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||
PART I
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||
Item 1.
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Business.
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3
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Item 1A.
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Risk Factors.
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8
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Item 1B.
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Unresolved Staff Comments.
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8
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Item 2.
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Properties.
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8
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Item 3.
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Legal Proceedings.
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8
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Item 4.
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Submission of Matters to a Vote of Security Holders.
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8
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PART II
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||
Item 5.
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Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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9
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Item 6.
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Selected Financial Data.
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10
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operation.
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10
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk.
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13
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Item 8.
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Financial Statements and Supplementary Data.
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13
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
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21
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Item 9A.
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Controls and Procedures.
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21
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Item 9B.
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Other Information.
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23
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PART III
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||
Item 10.
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Directors, Executive Officers and Corporate Governance.
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23
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Item 11.
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Executive Compensation.
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26
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
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28
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence.
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29
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Item 14.
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Principal Accountant Fees and Services.
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30
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PART IV
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||
Item 15.
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Exhibits and Financial Statement Schedules.
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31
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ITEM 1A.
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RISK FACTORS.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS.
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ITEM 2.
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PROPERTIES.
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ITEM 3.
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LEGAL PROCEEDINGS.
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ITEM 4.
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SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
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ITEM 5.
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MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
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Fiscal Year
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|||
2009
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High Bid
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Low Bid
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Fourth Quarter: 10/1/09 to 12/31/09
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$0
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$0
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Third Quarter: 7/1/09 to 9/30/09
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$0
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$0
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Second Quarter: 4/1/09 to 6/30/09
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$0
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$0
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First Quarter: 1/1/09 to 3/31/09
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$0
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$0
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Fiscal Year
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|||
2008
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High Bid
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Low Bid
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Fourth Quarter: 10/1/08 to 12/31/08
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$0
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$0
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Third Quarter: 7/1/08 to 9/30/08
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$0
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$0
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Second Quarter: 4/1/08 to 6/30/08
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$0
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$0
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First Quarter: 1/1/08 to 3/31/08
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$0
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$0
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ITEM 6.
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SELECTED FINANCIAL DATA.
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ITEM 7.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
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1.
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Complete the software programming to run the computer chip of the steak timer. Infinetix in Spokane, Washington completed the software program late in 2008. Design the electrical circuit board for the patent and prototype. Infinetix completed this drawing in January 2009. This drawing will also be used by our patent attorney for our patent application. Burn an LCD screen with characters for the display screen completed in July 2009. Select all the internal components such as the speaker, buttons, color design of timer, art work on timer completed in December 2009. Make are necessary adjustments to make timer smaller and sleeker and sexier and completed in Dec. 2010. Finalize design casing completed in Jan 2010. Completed the art work for the cardboard box packaging in March 2010. Completed the instruction manual in March 2010.
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2.
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Our marketing program will include our website promotion and personal selling. Our president, Gregory Ruff, will do personal selling initially. He will be responsible for all phases of our operations. We have budgeted between $500 and $5,000 for marketing. Initial marketing efforts began in March 2010.
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3.
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Within 6 months from the initiation of our marketing program, we believe that we will begin generating fees from the sale of our steak timer.
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ITEM 7A.
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
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ITEM 8.
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FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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F-1
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Balance Sheets
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F-2
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Statements of Expenses
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F-3
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Statements of Cash Flows
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F-4
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Statement of Stockholders’ Deficiency
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F-5
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Notes to Financial Statements
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F-6
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KOKO, LTD.
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||||||||||||
(A Development Stage Company)
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||||||||||||
Statements of Cash Flows
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||||||||||||
From Inception
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||||||||||||
(June 19, 2007)
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||||||||||||
Twelve Months Ended
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Through
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|||||||||||
December 31,
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December 31,
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|||||||||||
2009
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2008
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2009
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||||||||||
Cash Flows From Operating Activities
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||||||||||||
Net Loss
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$ | (75,530 | ) | $ | (18,800 | ) | $ | (119,350 | ) | |||
Adjustments to reconcile net loss to net cash
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||||||||||||
used in operating activities:
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||||||||||||
Common stock subscribed for services
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- | - | 10,000 | |||||||||
Changes in assets and liabilities:
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||||||||||||
Accounts payable
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(10,153 | ) | (690 | ) | 407 | |||||||
Total Cash (Used) by Operating Activities
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(85,683 | ) | (19,490 | ) | (108,943 | ) | ||||||
Cash Flows From Financing Activities
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||||||||||||
Advances from shareholders
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(1,100 | ) | 9,300 | 10,400 | ||||||||
Sale of common stock to founder
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- | - | 1,300 | |||||||||
Sale of common stock
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158,500 | 92,000 | 253,300 | |||||||||
Total Cash Provided by Financing Activities
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157,400 | 101,300 | 265,000 | |||||||||
Net Increase in Cash
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71,717 | 81,810 | 156,057 | |||||||||
Cash at Beginning of Period
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84,340 | 2,530 | - | |||||||||
Cash at End of Period
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$ | 156,057 | $ | 84,340 | $ | 156,057 | ||||||
Supplemental Disclosure of Cash Flow Information
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||||||||||||
Interest paid
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$ | - | $ | - | $ | - | ||||||
Income taxes paid
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$ | - | $ | - | $ | - |
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KOKO, LTD.
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(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
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2009 | 2008 | ||||
Deferred income tax asset
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$
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37,000
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$
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5,000
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Valuation allowance
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(37,000)
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(5,000)
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|||
Net deferred tax assets
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$
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-
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$
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-
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ITEM 9.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
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ITEM 9A.
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CONTROLS AND PROCEDURES.
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ITEM 9B.
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OTHER INFORMATION.
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ITEM 10.
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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
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Name and Address
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Age
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Position(s)
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Gregory Ruff
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52
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president, principal accounting officer, principal
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12901 South Buttercup Lane
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executive officer, principal financial officer, secretary,
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Spokane, Washington 99224
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treasurer, and sole member of the board of directors
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Craig Littler
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68
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vice president
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1025 Ocean Avenue
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||
Santa Monica, California 90403
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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(i)
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(j)
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Change in
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|||||||||
Pension
|
|||||||||
Value &
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|||||||||
Non-
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Nonqual-
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||||||||
Equity
|
ified
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||||||||
Incentive
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Deferred
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All
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|||||||
Plan
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Compen-
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Other
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|||||||
Stock
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Option
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Compen-
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sation
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Compen-
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|||||
Name and Principal
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Salary
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Bonus
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Awards
|
Awards
|
sation
|
Earnings
|
sation
|
Totals
|
|
Position [1]
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Year
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
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Gregory Ruff
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2009
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0
|
0
|
0
|
0
|
0
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0
|
0
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0
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President & Treasurer
|
2008
|
0
|
0
|
0
|
0
|
0
|
0
|
0
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0
|
2007
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0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
|
Craig Littler
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2009
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0
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0
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0
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0
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0
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0
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0
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0
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Vice President
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2008
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0
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0
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0
|
0
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0
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0
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0
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0
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2007
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0
|
0
|
0
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0
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0
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0
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0
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0
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(a)
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(b)
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(c)
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(d)
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(e)
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(f)
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(g)
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(h)
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Change in
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|||||||
Pension
|
|||||||
Fees
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Value and
|
||||||
Earned
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Non-Equity
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Nonqualified
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All
|
||||
or
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Incentive
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Deferred
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Other
|
||||
Paid in
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Stock
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Option
|
Plan
|
Compensation
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Compen-
|
||
Cash
|
Awards
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Awards
|
Compensation
|
Earnings
|
sation
|
Total
|
|
Name
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
|
($)
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Gregory Ruff
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0
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0
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0
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0
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0
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0
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0
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ITEM 12.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
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Name and Address
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Number of
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Percentage of
|
Beneficial Owner
|
Shares
|
Ownership
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Gregory Ruff
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5,000,000
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62.79%
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12901 South Buttercup Lane
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||
Spokane, WA 99224
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||
Craig Littler
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1,250,000
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15.70%
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1025 Ocean Avenue
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||
Santa Monica, CA 90403
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||
All officers and directors as a group
|
||
(2 individuals)
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6,250,000
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78.49%
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ITEM 13.
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CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE.
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2009
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$
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$11,500
|
MaloneBailey LLP
|
2008
|
$
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11,500
|
MaloneBailey LLP
|
2009
|
$
|
$0.00
|
MaloneBailey LLP
|
2008
|
$
|
$0.00
|
MaloneBailey LLP
|
2009
|
$
|
$0.00
|
MaloneBailey LLP
|
2008
|
$
|
$0.00
|
MaloneBailey LLP
|
2009
|
$
|
$0.00
|
MaloneBailey LLP
|
2008
|
$
|
$4,057
|
MaloneBailey LLP
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ITEM 15.
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EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
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Incorporated by reference
|
|||||
Exhibit
|
Document Description
|
Form
|
Date
|
Number
|
Filed
herewith
|
3.1
|
Articles of Incorporation.
|
S-1
|
3/12/09
|
3.1
|
|
3.2
|
Bylaws.
|
S-1
|
3/12/09
|
3.2
|
|
4.1
|
Specimen Stock Certificate.
|
S-1
|
3/12/09
|
4.1
|
|
14.1
|
Code of Ethics.
|
X
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|||
31.1
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
99.2
|
Audit Committee Charter.
|
X
|
|||
99.3
|
Disclosure Committee Charter.
|
X
|
KOKO LTD.
|
||
BY:
|
GREGORY RUFF
|
|
Gregory Ruff
|
||
President, Principal Executive Officer,
Principal Financial Officer, Principal
Accounting Officer, Secretary, Treasurer and
sole member of the Board of Directors
|
Signature
|
Title
|
Date
|
GREGORY RUFF
|
President, Principal Executive Officer,
|
March 31, 2010
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Gregory Ruff
|
Principal Accounting Officer, Principal
Financial Officer, Secretary, Treasurer and
sole member of the Board of Directors
|
|
Incorporated by reference
|
|||||
Exhibit
|
Document Description
|
Form
|
Date
|
Number
|
Filed
herewith
|
3.1
|
Articles of Incorporation.
|
S-1
|
3/12/09
|
3.1
|
|
3.2
|
Bylaws.
|
S-1
|
3/12/09
|
3.2
|
|
4.1
|
Specimen Stock Certificate.
|
S-1
|
3/12/09
|
4.1
|
|
14.1
|
Code of Ethics.
|
X
|
|||
31.1
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
32.1
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||
99.2
|
Audit Committee Charter.
|
X
|
|||
99.3
|
Disclosure Committee Charter.
|
X
|
1.
|
Statement
of Policy
|
||
2.
|
Implementation
and Enforcement
|
||
3.
|
Relations
with Competitors and Other Third Parties
|
||
4.
|
Insider
Trading, Securities Compliance and Public Statements
|
||
5.
|
Financial
Reporting
|
||
6.
|
Human
Resources
|
||
7.
|
Environmental,
Health and Safety
|
||
8.
|
Conflicts
of Interest
|
||
9.
|
International
Trade
|
||
10.
|
Government
Relations
|
||
11.
|
Contractors,
Consultants, and Temporary Workers
|
||
12.
|
Conclusion
|
1.
|
STATEMENT
OF POLICY
|
The Company has adopted eight
Corporate Values (Focus, Respect, Excellence, Accountability, Teamwork,
Integrity, Very Open Communications and Enjoying Our Work) to provide a
framework for all employees in conducting ourselves in our jobs. These
policies are not intended to substitute for those Values, but will serve
as guidelines in helping you to conduct the Company's business in
accordance with our Values. Compliance requires meeting the spirit, as
well as the literal meaning, of the law, the policies and the Values. It
is expected that you will use common sense, good judgment, high ethical
standards and integrity in all your business dealings.
|
|
If you encounter a situation you
are not able to resolve by reference to these policies, ask for
help. Contact Gregory Ruff, Chairman and Chief Executive
Officer, who has been identified as responsible for overseeing compliance
with these policies.
|
|
Violations of the law or the
Company's policies will subject employees to disciplinary action, up to
and including termination of employment. In addition, individuals involved
may subject themselves and the Company to severe penalties including fines
and possible imprisonment. Compliance with the law and high ethical
standards in the conduct of Company business should be a top priority for
each employee, officer and director.
|
|
2.
|
IMPLEMENTATION
AND ENFORCEMENT.
|
Gregory Ruff, our Chairman and
Chief Executive Officer, has been appointed as Compliance Officer of the
Company, responsible for overseeing compliance with, and enforcement of,
all Company policies.
|
Employees are expected to be
familiar with these policies as they apply to their duties. They should
consult with their managers if they need assistance in understanding or
interpreting these policies. Each employee is required to follow these
policies and to comply with their terms. A refusal by any employee to
agree to be bound by these policies shall be grounds for discipline up to
and including dismissal.
|
|
Any employee who, in good faith,
has reason to believe a Company operation or activity is in violation of
the law or of these policies must call the matter to the attention of
Gregory Ruff, our Chairman and Chief Executive Officer. All
reports will be reviewed and investigated and as necessary under the
circumstances, and the reporting employee should provide sufficient
information to enable a complete investigation to be
undertaken.
|
|
Any employee who makes an
allegation in good faith reasonably believing that a person has violated
these policies or the law, will be protected against
retaliation.
|
|
3.
|
RELATIONS
WITH COMPETITORS AND OTHER THIRD PARTIES.
|
The Company's policy is to comply
fully with competition and antitrust laws throughout the world. These laws
generally prohibit companies from using illegal means to maintain, obtain
or attempt to obtain a monopoly in a market. They also prohibit companies
from engaging in unfair trade practices.
"Unfair trade
practices" include fixing prices, dividing markets, agreeing with
competitors not to compete, or agreeing to boycott certain
customers. It is advised that you consult with Gregory Ruff
before attending a meeting with a party who may be viewed as a
competitor.
|
|
4.
|
INSIDER
TRADING, SECURITIES COMPLIANCE AND PUBLIC STATEMENTS.
|
Securities laws prohibit anyone
who is in possession of material, non-public information ("Insider
Information") about a company from purchasing or selling stock of that
company, or communicating the information to others. Information is
considered "material" if a reasonable investor would consider it to be
important in making a decision to buy or sell that stock. Some examples
include financial results and projections, new products, acquisitions,
major new contracts or alliances prior to the time that they are publicly
announced. Employees who become aware of such Inside Information about the
Company must refrain from trading in the shares of the Company until the
Inside Information is publicly announced.
|
|
Employees must also refrain from
disclosing that information to persons who do not have a Company need to
know, whether they are inside the Company or outside, such as spouses,
relatives or friends.
|
|
The Company makes regular formal
disclosures of its financial performance and results of operations to the
investment community. We also regularly issue press releases. Other than
those public statements, which go through official Company channels,
employees are prohibited from communicating outside the Company about the
Company's business, financial performance or future prospects. Such
communications include questions from securities analysts, reporters or
other news media, but also include seemingly innocent discussions with
family, friends, neighbors or
acquaintances.
|
5.
|
FINANCIAL
REPORTING.
|
The Company is required to
maintain a variety of records for purposes of reporting to the government.
The Company requires all employees to maintain full compliance with
applicable laws and regulations requiring that its books of account and
records be accurately maintained. Specifics of these requirements are
available from Gregory Ruff.
|
|
6.
|
HUMAN
RESOURCES.
|
The Company is committed to
providing a work environment that is free from unlawful harassment and
discrimination, and respects the dignity of its employees. The Company has
policies covering various aspects of its relationship with its employees,
as well as employees
=
relationships with each other. For more detailed information, you should
consult Gregory Ruff. Each employee is expected to be familiar
with these policies and to abide by them.
|
|
7.
|
ENVIRONMENTAL,
HEALTH AND SAFETY.
|
The Company is committed to
protecting the health and safety of our employees, as well as the
environment in general. The Company expects employees to obey all laws and
regulations designed to protect the environment, and the health and safety
of our employees, and to obtain and fully observe all permits necessary to
do business.
|
|
At the very least, all employees
should be familiar with and comply with safety regulations applicable to
their work areas. The Company will make, to the extent possible,
reasonable accommodations for the known physical or mental limitations of
our employees. Employees who require an accommodation should contact
Gregory Ruff. The Company will then engage in an interactive
process to determine what reasonable accommodations may
exist.
|
|
8.
|
CONFLICTS
OF INTEREST.
|
Each employee is expected to
avoid any activity, investment or association that interferes with the
independent exercise of his or her judgment in the Company's best
interests ("Conflicts of Interest"). Conflicts of Interest can arise in
many situations. They occur most often in cases where the employee or the
employee's family obtains some personal benefit at the expense of the
Company's best interests.
|
|
No employee, or any member of
employee's immediate family, shall accept money, gifts of other than
nominal value, unusual entertainment, loans, or any other preferential
treatment from any customer or supplier of the Company where any
obligation may be incurred or implied on the giver or the receiver or
where the intent is to prejudice the recipient in favor of the provider.
Likewise, no employee shall give money, gifts of other than nominal value,
unusual entertainment or preferential treatment to any customer or
supplier of the Company, or any employee or family members thereof, where
any obligation might be incurred or implied, or where the intent is to
prejudice the recipient in favor of the Company. No such persons shall
solicit or accept kickbacks, whether in the form of money, goods, services
or otherwise, as a means of influencing or rewarding any decision or
action taken by a foreign or domestic vendor, customer, business partner,
government employee or other person whose position may affect the
Company's business.
|
No employee shall use Company
property, services, equipment or business for personal gain or
benefit.
|
|
Employees may not: (1) act on
behalf of, or own a substantial interest in, any company or firm that does
business, or competes, with the Company; (2) conduct business on behalf of
the Company with any company or firm in which the employee or a family
member has a substantial interest or affiliation. Exceptions require
advance written approval from the Legal Department.
|
|
Employees should not create the
appearance that they are personally benefitting in any outside endeavor as
a result of their employment by the Company, or that the Company is
benefitting by reason of their outside interests. Any employee who is not
sure whether a proposed action would present a conflict of interest or
appear unethical should consult with Gregory Ruff.
|
|
9.
|
INTERNATIONAL
TRADE.
|
The Company must comply with a
variety of laws around the world regarding its activities. In
some cases, the law prohibits the disclosure of information, whether the
disclosure occurs within the U.S. or elsewhere, and whether or not the
disclosure is in writing.
|
|
Payments or gifts to non-U.S.
government officials are prohibited by law and by Company policy. The
Foreign Corrupt Practices Act precludes payments to non-U.S. government
officials for the purpose of obtaining or retaining business, even if the
payment is customary in that country. This law applies anywhere in the
world to U.S. citizens, nationals, residents, businesses or employees of
U.S. businesses. Because Koko Ltd. is a U.S. company, this law applies to
the Company and all of its subsidiaries. Any questions on this policy
should be directed to Gregory Ruff.
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|
10.
|
GOVERNMENT
RELATIONS.
|
The Company is prohibited by law
from making any contributions or expenditures in connection with any U.S.
national election. This includes virtually any activity that furnishes
something of value to an election campaign for a federal office. Use of
the Company's name in supporting any political position or ballot measure,
or in seeking the assistance of any elected representative, requires the
specific approval of the Chairman and Chief Executive Officer of the
Company. Political contributions or expenditures are not to be made out of
Company funds in any foreign country, even if permitted by local law,
without the consent of the Company's Chairman and Chief Executive
Officer.
|
|
U.S. law also prohibits giving,
offering, or promising anything of value to any public official in the
U.S. or any foreign country to influence any official act, or to cause an
official to commit or omit any act in violation of his or her lawful duty.
Company employees are expected to comply with these
laws.
|
|
11.
|
VENDORS,
CONTRACTORS, CONSULTANTS AND TEMPORARY WORKERS.
|
Vendors, contractors, consultants
or temporary workers who are acting on the Company's behalf, or on Company
property, are expected to follow the law, Company policies and honor
Company Values. Violations will subject the person or firm to sanctions up
to and including loss of the contract, contracting or consulting
agreement, or discharge from temporary
assignment.
|
12.
|
CONCLUSION.
|
This Code of Ethics is not
intended to cover every possible situation in which you may find yourself.
It is meant to give you the boundaries within which the Company expects
you to conduct yourself while representing Koko Ltd. You may
find yourself in a situation where there is no clear guidance given by
this Code of Ethics. If that occurs, return to the foundations
stated earlier: common sense, good judgment, high ethical standards and
integrity. And refer to the Company's Values. In addition, there are many
resources upon which you may rely: your management chain, Human Resources,
Legal or other Koko Ltd. departments, and the CEO. Together we can
continue to make Koko Ltd. a company that sets a standard for designing,
manufacturing, and marketing of a steak
timer.
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|
|
Employee
|
1.
|
I
have reviewed this 10-K for the year ending December 31, 2009 of Koko
Ltd.;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
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4.
|
I
am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
|
|
a.
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
|
b.
|
Designed
such internal controls over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principals;
|
c.
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
|
d.
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
5.
|
I
have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing
the equivalent functions):
|
|
a.
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
|
b.
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
Date: March
31, 2010
|
GREGORY RUFF
|
Gregory
Ruff
Principal
Executive Officer and Principal Financial
Officer
|
|
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
|
(2)
|
The
information contained in this Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
GREGORY RUFF
|
|
Gregory
Ruff
|
|
Chief
Executive Officer and Chief Financial
Officer
|
(1)
|
Communications
- The chairperson and others on the committee shall, to the extent
appropriate, have contact throughout the year with senior management,
other committee chairpersons, and other key committee advisors, external
and internal auditors, etc., as applicable, to strengthen the committee's
knowledge of relevant current and prospective business
issues.
|
(2)
|
Committee
Education/Orientation - The committee, with management, shall develop and
participate in a process for review of important financial and operating
topics that present potential significant risk to the company.
Additionally, individual committee members are encouraged to participate
in relevant and appropriate self-study education to assure understanding
of the business and environment in which the company
operates.
|
(3)
|
Annual
Plan - The committee, with input from management and other key committee
advisors, shall develop an annual plan responsive to the "primary
committee responsibilities" detailed herein. The annual plan shall be
reviewed and approved by the full board.
|
(4)
|
Meeting
Agenda - Committee meeting agendas shall be the responsibility of the
committee chairperson, with input from committee members. It is expected
that the chairperson would also ask for management and key committee
advisors, and perhaps others, to participate in this
process.
|
(5)
|
Committee
Expectations and Information Needs - The committee shall communicate
committee expectations and the nature, timing, and extent of committee
information needs to management, internal audit, and external parties,
including external auditors. Written materials. including key performance
indicators and measures related to key business and financial risks, shall
be received from management, auditors, and others at least one week in
advance of meeting dates. Meeting conduct will assume board members have
reviewed written materials in sufficient depth to participate in
committee/board dialogue.
|
(6)
|
External
Resources -The committee shall be authorized to access internal and
external resources, as the committee requires, to carry out its
responsibilities.
|
(7)
|
Committee
Meeting Attendees - The committee shall request members of management,
counsel, internal audit, and external auditors, as applicable, to
participate in committee meetings, as necessary, to carry out the
committee responsibilities. Periodically and at least annually, the
committee shall meet in private session with only the committee members.
It shall be understood that either internal or external auditors, or
counsel, may, at any time, request a meeting with the audit committee or
committee chairperson with or without management attendance. In any case,
the committee shall meet in executive session separately with internal and
external auditors, at least annually.
|
(8)
|
Reporting
to the Board of Directors - The committee, through the committee
chairperson, shall report periodically, as deemed necessary, but at least
semi-annually, to the full board. In addition, summarized minutes from
committee meetings, separately identifying monitoring activities from
approvals, shall be available to each board member at least one week prior
to the subsequent board of directors
meeting.
|
(9)
|
Committee
Self Assessment - The committee shall review, discuss, and assess its own
performance as well as the committee role and responsibilities, seeking
input from senior management, the full board, and others. Changes in role
and/or responsibilities, if any, shall be recommended to the full board
for approval.
|
(1)
|
The
external auditors, in their capacity as independent public accountants,
shall be responsible to the board of directors and the audit committee as
representatives of the shareholders.
|
(2)
|
As
the external auditors review financial reports, they will be reporting to
the audit committee. They shall report all relevant issues to the
committee responsive to agreed-on committee expectations. In executing its
oversight role, the board or committee should review the work of external
auditors.
|
(3)
|
The
committee shall annually review the performance (effectiveness,
objectivity, and independence) of the external and internal auditors. The
committee shall ensure receipt of a formal written statement from the
external auditors consistent with standards set by the Independent
Standards Board and the Securities and Exchange Commission. Additionally,
the committee shall discuss with the auditor relationships or services
that may affect auditor objectivity or independence. If the committee is
not satisfied with the auditors' assurances of independence, it shall take
or recommend to the full board appropriate action to ensure the
independence of the external auditor.
|
(4)
|
The
internal audit function shall be responsible to the board of directors
through the committee.
|
(5)
|
If
either the internal or the external auditors identify significant issues
relative to the overall board responsibility that have been communicated
to management but, in their judgment, have not been adequately addressed,
they should communicate these issues to the committee
chairperson.
|
(6)
|
Changes
in the directors of internal audit or corporate compliance shall be
subject to committee approval.
|
(1)
|
Risk
Management - The company's business risk management process, including the
adequacy of the company's overall control environment and controls in
selected areas representing significant financial and business
risk.
|
(2)
|
Annual
Reports and Other Major Regulatory Filings - All major financial reports
in advance of filings or distribution.
|
(3)
|
Internal
Controls and Regulatory Compliance - The company's system of internal
controls for detecting accounting and reporting financial errors, fraud
and defalcations, legal violations, and noncompliance with the corporate
code of conduct.
|
(4)
|
Internal
Audit Responsibilities - The annual audit plan and the process used to
develop the plan. Status of activities, significant findings,
recommendations, and management's response.
|
(5)
|
Regulatory
Examinations - SEC inquiries and the results of examinations by other
regulatory authorities in terms of important findings, recommendations,
and management's response.
|
(6)
|
External
Audit Responsibilities - Auditor independence and the overall scope and
focus of the annual/interim audit, including the scope and level of
involvement with unaudited quarterly or other interim-period
information.
|
(7)
|
Financial
Reporting and Controls - Key financial statement issues and risks, their
impact or potential effect on reported financial information, the
processes used by management to address such matters, related auditor
views, and the basis for audit conclusions. Important conclusions on
interim and/or year-end audit work in advance of the public release of
financials.
|
(8)
|
Auditor
Recommendations - Important internal and external auditor recommendations
on financial reporting, controls, other matters, and management's
response. The views of management and auditors on the overall quality of
annual and interim financial reporting.
|
The
committee should review, assess, and approve:
|
|
(1)
|
The
code of ethical conduct.
|
(2)
|
Changes
in important accounting principles and the application thereof in both
interim in and annual financial
reports.
|
(3)
|
Significant
conflicts of interest and related-party transactions.
|
(4)
|
External
auditor performance and changes in external audit firm (subject to
ratification by the full board).
|
(5)
|
Internal
auditor performance and changes in internal audit leadership and/or key
financial management.
|
(6)
|
Procedures
for whistle blowers.
|
(7)
|
Pre-approve
allowable services to be provided by the auditor.
|
(8)
|
Retention
of complaints.
|
Subject
to the supervision and oversight of Senior Officers, the Committee shall
be responsible for the following tasks:
|
||||
|
-
|
Review
and, as necessary, help revise the Corporation's controls and other
procedures ("Disclosure Controls and Procedures") to ensure that (i)
information required by the Corporation to be disclosed to the Securities
and Exchange Commission (the "SEC"), and other written information that
the Corporation will disclose to the public is recorded, processed,
summarized and reported accurately and on a timely basis, and (ii) such
information is accumulated and communicated to management, including the
Senior Officers, as appropriate to allow timely decisions regarding
required disclosure.
|
||
|
-
|
Assist
in documenting, and monitoring the integrity and evaluating the
effectiveness of, the Disclosure Controls and
Procedures.
|
||
|
-
|
Review
the Corporation's (i) Annual Report on Form 10-K, Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K, proxy statement, material
registration statements, and any other information filed with the SEC
(collectively, the "Reports"), (ii) press releases containing financial
information, earnings guidance, forward-looking statements, information
about material transactions, or other information material to the
Corporation's security holders, (iii) correspondence broadly disseminated
to shareholders, and (iv) other relevant communications or presentations
(collectively, the "Disclosure
Statements").
|
-
|
Discuss
information relative to the Committee's responsibilities and proceedings,
including (i) the preparation of the Disclosure Statements and (ii) the
evaluation of the effectiveness of the Disclosure Controls and
Procedures.
|
-
|
Control Environment:
The directives of the Board and Audit Committee; the integrity and ethical
values of the Corporation's officers and employees, including the "tone at
the top"; the Corporation's Code of Conduct; and the philosophy and
operating style of management, including how employees are organized and
how authority is delegated.
|
|
|
-
|
Risk Assessment:
The
identification and analysis of relevant risks to achieving the goal of
accurate and timely disclosure, forming a basis for determining how the
risks should be managed.
|
|
-
|
Control Activities:
The
procedures to ensure that necessary actions are taken to address and
handle risks to achievement of objectives.
|
|
-
|
Information and Communication:
The accumulation, delivery and communication of financial
information throughout (i.e., up, down and across) the
organization.
|
|
-
|
Monitoring:
The
assessment of the quality of the financial reporting systems over time
through ongoing monitoring and separate evaluations, including through
regular management supervision and reporting of deficiencies
upstream.
|