TABLE OF CONTENTS

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PART I – FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

Condensed Financial Statements

Shaka Shoes, Inc.  

As of September 30, 2010 (unaudited) and December 31, 2009

And for the Three and Nine Months Ended September 30, 2010 (unaudited) and 2009 (unaudited)

Contents

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Shaka Shoes, Inc.

(Previously Technology Resources, Inc.)

Notes to Condensed Financial Statements

(Unaudited)

NOTE A – BACKGROUND INFORMATION

Shaka Shoes, Inc., formerly Technology Resources, Inc. was incorporated in Florida on March 1, 1996, as Integrated Marketing Technology, Inc. Its name was changed to Technology Resources, Inc., on January 1, 1997.   

In January 2008, the Company received an unsolicited offer to do a business combination with Shaka Shoes, Inc. (SHAKA), a shoe and apparel design and manufacturing company located in Hawaii. The Hawaii-based company was formed in 2005 and has experienced growth throughout the United States and internationally. The business combination was completed in January 2009 with the transfer of 20,000,0000 shares of the Company’s common stock in exchange for the stock of the Hawaii-based company, at which time a corporate action was approved by the shareholders to change the name of the Company to “Shaka Shoes, Inc.”.

On May 5, 2009, several of the Company’s majority shareholders entered into certain separate Stock Purchase Agreements with certain purchasers. Pursuant to the terms of the Stock Purchase Agreements, the Purchasers have transferred to the Shareholders total consideration of $5,040.68 to purchase an aggregate of 21,916,000 shares. A change of control of the Company occurred, and it was determined that the Company would continue its shoe manufacturing and marketing business.

NOTE B – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for a fair statement of (a) the result of operations for the three and nine month periods ended September 30, 2010 and 2009; (b) the financial position at September 30, 2010, and (c) cash flows for the nine month periods ended September 30, 2010 and 2009, have been made.  

The unaudited condensed financial statements and notes are presented as permitted by Form 10-Q. Accordingly, certain information and note disclosures normally included in the condensed financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. The accompanying unaudited condensed financial statements should be read in conjunction with the financial statements for the years ended December 31, 2009 and notes thereto in the Company’s annual report on Form 10-K for the year ended December 31, 2009, filed with the Securities and Exchange Commission. Operating results for the three months and nine months ended September 30, 2010 are not necessarily indicative of the results that may be expected for the entire year.

Certain reclassifications may have been made to prior reported amounts. These reclassifications were made for the purpose of comparability to the current information presented and any reclassifications are considered immaterial.

Use of Estimates

The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.

Financial Instruments

Effective January 1, 2008, the Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing generally accepted accounting principles that require the use of fair value measurements; establishes a framework for measuring fair value and expands disclosure about such fair value measurements. The adoption of ASC 820 did not have an impact on the Company’s financial position or operating results, but did expand certain disclosures.

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ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Cash and Cash Equivalents

The majority of cash is maintained with a major financial institution in the United States. Deposits with this bank may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed on demand and, therefore, bear minimal risk. The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Revenue Recognition

The Company will be generating revenue by shipping merchandise to its customers. Upon shipment of orders, revenue will be recognized, according to the terms of the shipping agreement, normally FOB shipping point, at which time title and risk of loss passes to the purchaser. At that point in time the price had been determined and collectability reasonably assured and revenue is recognized.

Related Party Transactions and Loans

Shareholder loans consist of amounts advanced to the Company for the purpose of financing the cash requirements of the Company. Related party receivables and payables have occurred for the specific purposes of transactions (target acquisition). Advances are considered demand loans and is interest bearing at a reasonably determined interest rate. Advances are intended to be temporary; however payment is dependent on the lenders demand.

NOTE C – GOING CONCERN

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  As reflected in the accompanying financial statements, the Company has a history of material net losses, negative cash flows from operations and an accumulated deficit. These factors raise substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the company’s ability to raise additional funds and implement its new business plan. Based on management’s viable plan, the financial statements do not include any adjustments that might be necessary if the company is unable to continue as a going concern.

NOTE D – DEBT

Note Payable

The Company entered into a promissory note payable with an unrelated party on February 26, 2006 in the amount of $100,000 United States dollars and on September 17, 2007 in the amount of $242,554 United States dollars. Each note was payable in Canadian dollars one year from issuance, with interest accrued at 4%. The Company has not made payment on the note or the accrued interest. The note is payable on demand. The Company has recognized the change in the revaluation of the note at the exchange rate at the balance sheet date and included the change, in the amount of $5,919 as an expense. The amount due in United States dollars, as of September 30, 2010 is $354,594. Accrued expenses include the accrued interest in the amount of $47,901 and amounts accrued are charged to interest expense.

On March 31, 2010 the Company entered into a promissory note payable, non-interest bearing and payable upon demand, for prior services rendered and recorded in accounts payable.  The Note was in the amount of $350,000.   On June 30, 2010 and September 30, 2010 the Company converted an additional $30,000, for each quarterly period, under the same conditions of the original note.  Total promissory notes payable on demand for this series of notes were $410,000 as of September 30, 2010.

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NOTE E - INCOME TAXES    

Income taxes are provided for the tax effects of transactions reported in the condensed financial statements and consist of taxes currently due plus deferred taxes, if and when applicable, related primarily to differences between the bases of certain assets and liabilities for financial and tax reporting. Any deferred taxes would represent the future tax return consequences of those differences, which will either be taxable when the assets and liabilities are recovered or settled. The company fully allowed for any deferred tax assets available based on the net operating losses at December 31, 2009.

NOTE F – EARNINGS PER COMMON SHARE

The Company follows SFAS No. 128, “Earnings Per Share.” Basic earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares outstanding during the year. Diluted earnings (loss) per share calculations are determined by dividing net income (loss) by the weighted average number of shares. There are no share equivalents and, thus, anti-dilution issues are not applicable.   

NOTE G – RECENT ACCOUNTING PRONOUNCEMENTS  

Except for rules and interpretive releases of the SEC under authority of federal securities laws and a limited number of grandfathered standards, the FASB Accounting Standards Codification™ (“ASC”) is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.  Management has reviewed the aforementioned rules and releases and believes any effect will not have a material impact on the Company's present or future consolidated financial statements.

NOTE H – RELATED PARTY TRANSACTIONS

During the transition period, the Company has minimal needs for office space. The current shareholders have provided, as necessary, any minimal use of office and office equipment at no charge.  

The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion should be read in conjunction with our unaudited condensed financial statements and the notes thereto.

Cautionary Notice Regarding Forward-Looking Statements

The information contained in Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. This filing contains a number of forward-looking statements which reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.

Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors which could cause or contribute to such differences include, but are not limited to, the risks to be discussed in our Annual Report on form 10-K and in the press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors which may affect our business. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Use of Generally Accepted Accounting Principles (“GAAP”) Financial Measures

We use GAAP financial measures in the section of this quarterly report captioned "Management’s Discussion and Analysis or Plan of Operation" (“MD&A”).  All of the GAAP financial measures used by us in this report relate to the inclusion of financial information.

Overview

This subsection of MD&A provides an overview of the important factors that management focuses on in evaluating our businesses, financial condition and operating performance, our overall business strategy and our earnings for the periods covered.

General

We were incorporated in Florida on March 1, 1996, as Integrated Marketing Technology, Inc. Our name was changed to Technology Resources, Inc., on January 1, 1997 and changed again on January 28, 2009 to Shaka Shoes, Inc..

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Business Sources of Revenue

Shaka Shoes, Inc. is currently developing strategic sourcing options for the production and manufacturing of our product line. We are currently marketing our product samples to large distributor operations and retailers.

We anticipate that when we secure orders we will be able to drop ship our product from our production source.

Economic and Industry Wide Factors Relevant to our Company

During economic slow-down it was anticipated that there would be a slow-down in securing orders and market penetration, as well as attaining proper financing to develop our product sales.

Opportunity for Growth

Our objective was to be a leading provider of low cost, fashionable casual footwear. The casual footwear market is a multi-billion dollar market and we believe our product line will attain a substantial market share.

Business Strategy

Since our Registration Statement has been declared effective, the Company has actively been seeking capital from Investment Banks and Private and Venture Capitalists. As of the date of the filing of this report, the Company has not been able to secure additional capital on terms favorable to the Company and its stockholders. The Officers and Directors have determined that it must consider alternative methods of maintaining and increasing company revenues as well as shareholder value.  

Material Risks, Trends and Uncertainties Affecting our Business 

The revenue growth and profitability of our business depended on the overall market demand for casual footwear. However, if we failed to quickly expand our market share in the public sector, our financial status would be adversely affected.

Operating Results for Three and Nine Months Ended September 30, 2010 (unaudited) Compared to September 30, 2009 (Unaudited)

Revenues.  For the three and nine months ended September 30, 2010 and 2009, revenues were $0 for all periods.  There has been no revenue generated during the periods presented, since the business is in process of securing production of our product line in the Orient. The Company, under new control, is in process of implementing a new business plan of production and generating revenue.

Operating Expenses.  Operating expenses were $90,000, $609,170, $0, and $26,350 for the three and nine months ending September 30, 2010 and 2009, respectively. These expenses are primarily professional and consulting fees for management consultation on business plan and development and legal and accounting services associated with the public entity filings.

Net Income.  Income before taxes for the three and nine months ended September 30, 2010 and 2009 was a loss of $94,464, $625,338, $0, and $26,350, respectively. No revenue was generated for the periods presented. The losses presented were primarily due to costs incurred for public filing requirements, as management is seeking to implement new business operating plan.

Liquidity and Capital Resources

As of September 30, 2010, we had cash and cash equivalents of $0.  Liabilities at September 30, 2010 totaled $1,406,650 and consisted of $958,602 in Accounts Payable and Accrued Expenses and $350,130 in loans and advances, primarily from related parties.

Cash flows have been minimally affected through the business, as the current expense payments are being deferred, increasing payables. Net cash used in operations was $0 and $0 for the nine months ending September 30, 2010 and 2009, respectively. There have been no investing activities during the nine month period ended September 30, 2010 and 2009, respectively.

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The Company is actively seeking new investors to help new management implement their plan as a manufacturer of footwear. Current costs incurred are anticipated to be paid through any capital raised or through loans from shareholders.

Inflation

Inflation does not materially affect our business or the results of our operations.

Subsequent Events

None

Recent Accounting Pronouncements

The Financial Accounting Standards Board and other entities issued new or modifications to, or interpretations of, existing accounting guidance during the year. The corporation has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. These recent pronouncements have been addressed in the footnotes to the unaudited condensed financial statements.

Critical Accounting Policies

The Company prepares its condensed financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.

Off-Balance Sheet Arrangements

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in market risk since the filing of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009.

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of September 30, 2010. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures as of the end of such periods are not effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that our disclosure and controls are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure

The company has limited resources and as a result, a material weakness in financial reporting currently exists.

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A material weakness is a deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) auditing standard 5) or combination of deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim condensed financial statements will not be prevented or detected on a timely basis.  Management has determined that a material weakness exists due to a lack of segregation of duties, resulting from the Company's limited resources.

The Company’s management confirm that there was no change in the Company’s internal control over financial reporting during the quarter ended September 30, 2010 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

There is no pending litigation by or against us.

ITEM 2.  UNREGISTERED SHARES OF EQUITY SECURITIES AND USE OF PROCEEDS
 

None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.  [REMOVED AND RESERVED]
 

ITEM 5.  OTHER INFORMATION

Committees

We currently do not have standing audit, nominating or compensation committees.  Currently, our entire Board of Directors is responsible for the functions that would otherwise be handled by these committees.  We intend, however, to establish an audit committee, a nominating committee and a compensation committee of the Board of Directors.  We envision that the audit committee will be primarily responsible for reviewing the services performed by our independent auditors, evaluating our accounting policies and our system of internal controls.  The nominating committee would be responsible for nomination of new director candidates and will be responsible for implementing our corporate governance policies and procedures.  The compensation committee will be primarily responsible for reviewing and approving our salary and benefits policies (including stock options) and other compensation of our executive officers.

Our Board of Directors has not made a determination as to whether any member of our board is an audit committee financial expert. Upon the establishment of an audit committee, the board will determine whether any of the directors qualify as an audit committee financial expert.

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ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

Reports on Form 8-K

Exhibits