10QSB 1 rocketinfo10qsb.txt FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2005. [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from _________________ to _________________ Commission File Number 0-26373 ROCKETINFO INC. (Name of small business issuer in its charter) DELAWARE 98-0196717 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 27 Oakmont Drive, Rancho Mirage, Ca ---------------------------------------- (address of principal executive offices) 92270 ---------- (Zip Code) Issuer's telephone number (760)328-8988 Check whether the issuer (1) filed all reports required to be filed by Section13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] As of June 30, 2005 23,558,942 shares of the issuer's common stock, par value $0.001 per share, were outstanding. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ X ] TABLE OF CONTENTS Page PART I - FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS (UNAUDITED).................................... 3 ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............4 ITEM 3: CONTROLS AND PROCEDURES..............................................9 PART II - OTHER INFORMATION ITEM 1: LEGAL PROCEEDINGS...................................................10 ITEM 2: CHANGES IN SECURITIES AND USES OF PROCEEDS..........................10 ITEM 3: DEFAULTS UPON SENIOR SECURITIES.....................................10 ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................10 ITEM 5: OTHER INFORMATION...................................................11 ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K...................................11 SIGNATURE PAGE.........................................................................12 2 PART 1. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) ROCKETINFO, INC. AND SUBSIDIARY (FORMERLY ZEPPELIN ENERGY INC.) (A Development Stage Company) Consolidated Financial Statements June 30, 2005 Table of Contents ----------------- Financial Statements: Consolidated Balance Sheet as of June 30, 2005 (Unaudited) and December 31, 2004.....................................F-1 Consolidated Statement of Operations for the three months and six months ended June 30, 2005 and 2004 (Unaudited).................F-2 Consolidated Statements of Cash Flows for the three months and six months ended June 30, 2005 and 2004 (Unaudited)..................F-3 Consolidated Statement of Stockholders' Equity as of June 30, 2005 (Unaudited)............................................F-4 Notes to the Consolidated Statements as of June 30, 2005.............F-5-7 ROCKETINFO, INC. AND SUBSIDIARY (FORMERLY ZEPPELIN ENERGY INC.) (A Development Stage Company) Consolidated Balance Sheet (Unaudited)
June 30, December 31, 2005 2004 ---------- ----------- Assets ------ Current assets: Cash $ 57,616 $ 146,982 Accounts receivable 131,951 38,068 Prepaid expenses 2,930 - ---------- ----------- Total current assets 192,497 185,050 -------------------- Equipment, net 23,227 29,327 Goodwill 3,975,003 3,975,003 ----------- ----------- Total assets $ 4,190,727 $ 4,189,380 =========== =========== Liabilities and Stockholders' Equity ------------------------------------ Current liabilities: Accounts payable and accrued liabilities 15,986 17,084 Due to related parties - 50,000 Deferred revenues - Note 3 34,316 - ---------- ----------- Total current liabilities 50,302 67,084 Stockholders' equity: Preferred stock, $.001 par value, 5,000,000 shares authorized, none issued - - Common stock, $.001 par value, 95,000,000 shares authorized, 23,558,942 shares and 22,303,276 shares issued and outstanding respectively 23,559 22,303 Additional paid-in capital 7,681,355 6,537,853 Contributed capital 164,875 157,099 Common stock subscriptions 15,000 136,000 Deficit accumulated during the development stage (3,744,364) (2,730,959) ----------- ----------- Total stockholders' equity 4,140,425 4,122,296 ----------- ----------- Total liabilities and stockholders' equity $ 4,190,727 $ 4,189,380 =========== ===========
See accompanying notes to the financial statements F-1 ROCKETINFO, INC. AND SUBSIDIARY (FORMERLY ZEPPELIN ENERGY INC.) (A Development Stage Company) Consolidated Statements of Operations (Unaudited) June 30, 2005 and 2004
Three-month period ended Six-month period ended June 30, June 30, ----------------------------- --------------------------- 2005 2004 2005 2004 Revenues: Sales 40,444 - 112,444 - Miscellaneous income 797 - 797 - ----------- --------- --------- --------- 41,241 - 113,241 - Expenses: General and administrative 660,172 122,047 1,126,645 136,533 ----------- ---------- ---------- --------- Net loss (618,931) (122,047) (1,013,404) (136,533) =========== ========== ========== ========== Basic net loss per share (0.03) (0.01) (0.04) (0.02) =========== ========== =========== ========== Weighted average common shares outstanding 23,306,744 8,982,678 22,897,021 8,982,678 =========== ========== =========== ==========
See accompanying notes to the financial statements F-2 ROCKETINFO, INC. AND SUBSIDIARY (FORMERLY ZEPPELIN ENERGY INC.) (A Development Stage Company) Consolidated Statements of Cash Flows (Unaudited) June 30, 2005 and 2004
Six-month Six-month period ended period ended June 30, June 30, 2005 2004 ------------- -------------- Cash flows from operating activities: Net income (loss) $(1,013,404) $ (136,533) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 6,100 443 Foreign currency translation - (1,852) Changes in operating assets and liabilities: Accounts receivable (93,883) - Prepaid expenses (2,930) (199,375) Accounts payable and accrued liabilities (1,099) 15,148 Deferred revenues 34,316 - ------------- ----------- Net cash provided (used) in operating activities (1,070,900) (322,169) Cash flows from investing activities: Purchase of equipment - (3,787) ------------- ----------- Cash flows from financing activities: Advances from related parties - 6,626 Payments to related parties (50,000) (258) Proceeds from issuance of common stock, net 1,144,758 319,738 Common stock subscriptions (121,000) - Contributed capital 7,776 - ------------- ----------- Net cash provided (used) by financing activities 981,534 326,106 ------------- ----------- Net increase (decrease) in cash (89,366) 150 Cash at beginning of period 146,982 - ------------- ----------- Cash at end of period $ 57,616 $ 150 ============= ===========
See accompanying notes to the financial statements F-3 ROCKETINFO, INC. AND SUBSIDIARY (FORMERLY ZEPPELIN ENERGY INC.) (A Development Stage Company) Consolidated Statement of Stockholders' Equity (Unaudited)
Issued Subscribed Common Common Common Common Additional Accumulated Subscriptions Total Stock Stock Stock Stock Paid-In Contributed (Deficit) Receivable Shares Amount$ Shares Amt$ Capital$ Capital$ $ $ $ ============= =========== =========== ========== ============ ========== ============= ============ ====== Inception (Octber 2, 1998) - - - - - - - - - Issuance of common stock 2,000,000 2,000 2,000 Common stock subscriptions 6,000,000 6,000 (5,488) 512 Net Loss (426) (426) ------------ ---------- ---------- -------- --------- ---------- ---------- ---------- --------- Balance December 31,1998 2,000,000 2,000 6,000,000 6,000 - - (426) (5,488) 2,086 Issuance of stock to subscribers 6,000,000 6,000 (6,000,000) (6,000) 5,488 5,488 Issuance of common stock through Regulation D offering 500,000 500 102,144 - 102,644 Net loss (259,663) (259,663) ------------ ---------- ---------- -------- --------- ---------- ---------- ---------- --------- Balances December 31,1999 8,500,000 8,500 102,144 - (260,089) (149,445) Net loss (80,401) (80,401) ------------ ---------- ---------- -------- --------- ---------- ---------- ---------- --------- Balances December 31, 2000 8,500,000 8,500 102,144 - (340,490) (229,846) Net Loss (36,509) (36,509) ------------ ---------- ---------- -------- --------- ---------- ---------- ---------- --------- Balances December 31, 2001 8,500,000 8,500 102,144 - (376,999) (266,355) Net loss (65,167) (65,167) ------------ ---------- ---------- -------- --------- ---------- ---------- ---------- --------- Balances December 31, 2002 8,500,000 8,500 102,144 - (442,166) (331,522) - Issuance of common stock 20,000 20 19,980 20,000 - Net loss for year (58,935) (58,935) ------------ ---------- ---------- -------- --------- ---------- ---------- ---------- --------- Balances December 31, 2003 8,520,000 8,520 122,124 - (501,101) (370,457) Stock issued for Debt 274,375 274 548,201 548,475 Stock Issued for services 1,722,785 1,723 496,377 498,100 Stock Issued for purchae of Rocket Technologies, Inc. 8,000,000 8,000 3,582,800 3,590,800 Common stock issued for cash 2,786,116 2,786 1,114,351 1,117,137 for Cash 1,000,000 1,000 674,000 675,000 Capital contributed 157,099 157,099 Common Stock Subscribed 90,666 136,000 136,000 Net (Loss) for year (2,229,858) (2,229,858) ------------ ---------- ---------- -------- --------- ---------- ---------- ---------- --------- Balances December 31, 2004 22,303,276 22,303 90,666 136,000 6,537,853 157,099 (2,730,959) 4,122,296 Subscription shares issued 90,666 91 (90,666) (136,000) 135,909 - Stock issued for services 500,000 500 499,507 499,507 Stock issued for cash 615,000 615 508,136 508,751 Stock issued pursuant to private placement 50,000 50 74,950 75,000 Stock issue cost (75,000) (75,000) Capital contributed 7,776 7,776 Common stock subscribed 50,000 15,000 15,000 Net (loss) for the period (1,013,405) (1,013,405) ------------ ---------- ---------- -------- ---------- ---------- ----------- -------- --------- Balances June 30, 2005 23,558,942 23,559 50,000 15,000 7,681,355 164,875 (3,744,364) 4,140,425 ============ ========== ========== ======== ========== ========== =========== ======== ==========
See accompanying notes to the financial statements F-4 ROCKETINFO, INC. AND SUBSIDIARY (FORMERLY ZEPPELIN ENERGY INC.) (A Development Stage Company) Notes to Consolidated Financial Statements (Unaudited) June 30, 2005 (1) Basis of Presentation The accompanying financial statements for the six-month period ended June 30, 2005 have been prepared by Rocketinfo, Inc. (formerly Zeppelin Energy Inc.) (the "Company"). In the opinion of management, the accompanying unaudited financial statements contain all adjustments, consisting only of normal recurring accruals, considered necessary for a fair presentation of the Company's financial position and results of operations for the period presented. The results of operations for the period ended June 30, 2005 is not necessarily indicative of the results to be expected for the full year. All references to dollar amounts are in US$ unless otherwise identified. These financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $3,744,364 and further losses are anticipated in the development of its business raising substantial doubt about the Company's ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. (2) Basic Loss Per Share Basic loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during each period. (3) Accounts receivable, net Accounts Receivable summary is listed below. 6/30/05 12/31/04 ------- -------- Gross Amount $131,951 $ 38,845 Allowance for Doubtful Accounts - (777) -------- --------- Accounts receivable, net $131,951 $ 38,068 ======== ========= (4) Deferred revenues Amounts for the services billed in advance are deferred and recognized on a monthly basis corresponding with the reporting period. F-5 ROCKETINFO, INC. AND SUBSIDIARY (FORMERLY ZEPPELIN ENERGY INC.) (A Development Stage Company) Notes to Consolidated Financial Statements (Unaudited) June 30, 2005 (5) Stock Option Plan The Company has a nonqualified stock option plan (the "Plan") pursuant to which up to 1,000,000 shares of its common stock can be set aside to provide certain executives, directors, and other employees or consultants the option to purchase shares of the Company's common stock. The stock options vest at various increments as specified in the respective option agreements. As provided by the Plan, the Board of Directors may waive the vesting provision in whole or in part at any time based on such factors as the Board of Directors determines at its sole discretion. The stock options expire 2, 5, and 10 years from the date of grant or upon termination of employment, retirement, or death. As of December 31, 2004, 1,025,000 stock options were outstanding with a weighted-average exercise price of $2.07 and weighted-average remaining contractual lives of 2.68 years. As of December 31, 2004, 875,000 stock options were exercisable at a weighted average exercise price of $2.09. During the six-month period ended June 30, 2005 no stock options were granted, exercised, forfeited, or expired. All of the Company's stock options issued were valued at fair value using an option-pricing model. The fair value of each option issued was estimated at the date of the grant using the Black-Scholes option pricing model with the following assumptions: risk free interest rates of 2.8% in 2004 dividend yield of 0% in 2004; volatility factors of the expected market price of the Company's stock of 0% in 2004; and the expected life of an option of five years in 2004. The weighted fair value at the date of grant for options granted was $0.00 per share. No stock-based compensation costs were charged to operations during the six-month period ended June 30, 2005. (6) Employment Agreement Effective January 1, 2004, the Company entered into a one-year employment agreement with a former chief executive officer. The employment agreement provided for i) a base salary of CDN $2,000 per month, ii) the issuance of 400,000 nonqualified stock options (as discussed in Note 3 above), and iii) a 5% net operating royalty ("NOR") on any and all operations acquired by the Company during the term of the employment agreement. The 5% NOR is calculated based on wellhead revenue less applicable royalties, costs, and fees of operations acquired as described in the employment agreement. The agreement was terminated during the second quarter of 2004. F-6 ROCKETINFO, INC. AND SUBSIDIARY (FORMERLY ZEPPELIN ENERGY INC.) (A Development Stage Company) Notes to Consolidated Financial Statements (Unaudited) June 30, 2005 (7) Contingency In June 2004, the Company was made aware of a purported claim related to non-payment for services. In the opinion of management, the ultimate disposition of this matter will not have a material adverse effect on the Company's financial position, results of operations or liquidity and, as such, no accrual has been made in the accompanying financial statements. (8) Purchase of subsidiary During the last quarter of 2004 the Company purchased 100% of its current subsidiary, Rocket Technologies, Inc. The subsidiary was purchased to acquire software technology and client contracts. This value has been reflected in the goodwill on the balance sheet as of June 30, 2005 and December 31, 2004. The terms of the purchase were $400,000 cash and 8,000,000 shares of restricted common stock. The stock was valued at the current market prices discounted for restriction and control, ($1.488 less 1.030 = .45 per share value) for a total stock value of $3,600,000. The total purchase price was $4,000,000. Below is a condensed balance sheet of Rocket Technologies, Inc. at the time of purchase, October 1, 2004. Cash $ 1,510 Other Current Assets 1,265 Fixed Assets 31,422 Goodwill 3,975,003 Current Liabilities (9,200) ------------ Net Equity $ 4,000,000 ============ During the six-month period ended June 30, 2005, the Company paid the balance of $50,000 due on acquisition of the subsidiary. F-7 Item 2. Management's Discussion and Analysis or Plan of Operation. This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results and events could differ materially from those projected, anticipated, or implicit, in the forward-looking statements as a result of the risk factors set forth below and elsewhere in this report. With the exception of historical matters, the matters discussed herein are forward looking statements that involve risks and uncertainties. Forward looking statements include, but are not limited to, statements concerning anticipated trends in revenues and net income, the date of introduction or completion of our products, projections concerning operations and available cash flow. Our actual results could differ materially from the results discussed in such forward-looking statements. The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes thereto appearing elsewhere herein. Business Strategy ----------------- Rocketinfo is a "News Infomediary" focusing on delivering a vast range of business and financial news, utilizing proprietary search-related products and services as the delivery mechanism. By "news infomediary" we mean a third-party content syndicator or aggregator who identifies and coordinates the flow of new information about specific and timely events created at many sources and distributes it to many outlets through the use of the web.' Rocketinfo's corporate mission is to deliver more news to any user's device, application or website more quickly, more efficiently and more cost effectively than anyone else. Rocketinfo has three lines of business: Firstly we provide individuals and businesses with access to real time news utilizing our search systems. The company's corporate clients use Rocketinfo's products for intelligence gathering, research, as well as for real-time news and media monitoring. Our clients can be assured they are getting the news first Secondly we deliver embedded news search capability to third party applications, portals and websites. Vendors looking to embed targeted, relevant current news results into their product offerings or to embed current news search functionality into those offerings can find all they are looking for from Rocketinfo. Through our popular Embedded RocketNews search system, the Rocket Comprehensive Desktop Research tool and the soon-to-be-launched Rocket Desktop Alert (provisional name) we give businesses, web sites and people real-time access to news on any topic. 4 Finally, we provide all types of current news directly to individual consumers. Through our popular RocketNews current news search engine, the Rocket RSS Reader, the recently launched Rocket Desktop, and the soon to be available Comprehensive Desktop, we give people great tools for searching for news on any topic from our up-to-the-minute database of over 16,000 news sources, along with thousands of weblogs. We derive revenue from these consumer services by embedding targeted contextual advertising in our search results. Since the Internet was commercialized in the mid-90s, it has achieved more rapid adoption than any other new medium, and Rocketinfo's news portal Rocketnews.com is now among the most trusted news sites in the world. Rocketinfo's founders originally started out to make Rocketinfo the premier source of current business news on the Internet. Rocketinfo's products and services are rapidly expanding as our aggressive marketing programs are being initiated, but our original goal remains at the core of our mission today, which is "to deliver current business news faster, better, and cheaper." Our Q1 and 2 2005 and 2004 results show the new business of the Company in its most embryonic stage. The Company had very limited revenue in 2004 and Q1 2005 as that number is a reflection of the acquisition of Rocket Technologies in the last quarter of 2004 and shows only the revenue that the private Company was producing with little or no marketing budget. And while revenues have increased during this quarter (Q2 2005) we do not expect to see significant increases in revenue until our new products and advertising initiatives are further along in their marketing and sales cycle. What is important to note, however, is that while Rocket is a relatively unknown ompany and technology, it has over the years developed a small but dedicated list of marquee clients who continue to be dedicated users of the Company's products (i.e. Sun Microsystems, Nascar, and the Canadian Department of Foreign Affairs and Trade). The Company is focused upon continuing these relationships and expanding the client base as well as the number of users on Rocketinfo and its news infomediary tools. We did not expect to see any major improvement in gross revenue results as a result of these activities in Q2 of 2005. However, what we did expect and are currently seeing is a increase in interest in the Company's products and the signing of several new contracts culminating in the signing of the major embedded contract with Canada NewsWire (the CNW Group) in December 2004 and the launching of their major sales program incorporating the Rocket's news product in the middle of Q2 2005 The goals we set for the Company when we launched the marketing program in terms of new contracts and estimated increase of interest for Rocketinfo products and tools have already been met and exceeded. And as our sales and marketing team continues to expand we are reaching and responding to an ever expanding group of interested potential clients. 5 During the past year advertisers addressed the continued shift in users' changing media habits by investing more of their advertising dollars online. With a dedicated and engaged audience utilizing Rocketnews.com and our new Rocket Desktop download we believe Rocketinfo is well positioned to take advantage of this shift. Innovation and Product Development ---------------------------------- As an integral part of the Company's business strategy we have begun to relentlessly focus on our technology and increasing the rate of innovation and product development. The list of detailed accomplishments has been impressive and there are now numerous products, and systems and enhancements that defines our Company including: Rocket Search Technology We have made many improvements to our core search product including, significantly improving our content scraping and indexing technology to provide more news, more quickly than other competing services. We also added personalization software that dramatically improves the quality and relevance of results through continued usage, effectively "learning" what the end-user is looking for. RocketNews.com Internet News Portal Usage of RocketNews.com, our popular free computer generated current news search has increase. Our free RocketNews portal now retains search history and allows full personalization in allows users to obtain current news from over 100,000 business news content sources (including 16,000 global information sources and 80,000+ RSS/Atom news feeds and Weblog Sources). Rocket RSS Products When we began developing RSS products and services very few people knew that RSS would become a powerful personal news and information tool. The popular RocketNews current news search engine can now be used to create dynamic keyword-based RSS feeds for use in any RSS reader, including the company's own Rocket RSS Reader. Since introduction last year over 37,000 registered users now use our RSS products to create personalized search based news feeds. Rocket Content Database In the past 2 quarters the Rocket content database grew by over 30%. Rocketinfo now has access to more current news content at lower costs than any other infomediary. Rocketinfo's technology can find, index and distribute our content at lower costs and higher rates of speed than any other infomediaries. We now offer access to over 100,000 sources of current news and business information (with 18,000 primary sources) Rocket Embedded Marketing Strategy The Company is fully committed to its new marketing strategy of allowing major application software vendors or value added resellers to include or "embed" our content or search functionality into their products. In aid of this strategy, Rocketinfo is the first search engine to release a `news and business information' search API for general use. Our Search API allows companies to create powerful products that take advantage of our comprehensive current news content repository. 6 Rocket Desktop Search Tools The recently introduced free Rocket Desktop Search tool (available for download from www.rocketnews.com). This product represents the second of the three pieces in our new Desktop Search Suite and is a lightweight application that provides a convenient, "always-on" way to search for the latest news from the thousands of sources in the Rocketinfo news database. The new Rocket Desktop gives users the ability to create and save searches for up-to-the-minute news from today, the past week or the past month. Ongoing Business Plan --------------------- The company is focused on several key opportunities ahead. First, Rocketinfo will focus on building broader exposure to the Company's products designed to generate a significant increase in users of our core products. Today's world is moving from mass media to "my media", a world in which the user is the programmer. Rocketinfo aspires to be essential in our client's lives. To achieve that, we know we must deliver what users want -- when they want, how they want, and where they want. Second, Rocket will seek to expand the reach of our content through an increased array of delivery mechanisms. The continued convergence of broadband and wireless presents a big opportunity for Rocketinfo. We believe that in a connected world users expect their Internet experience across all devices to be seamlessly integrated, and their news content, to be accessible and personalized. Third, our goal is to further expand our advertising and marketing services by increasing our engaged and valuable audiences and providing the most targeted and contextual suite of marketing solutions. Current Operations ------------------ For the period from the Registrant's inception through the end of the reporting period, the Registrant has received revenues only in the last two quarters. Operating activities during the quarter have been related to the commencement of marketing activities related to the Rocketinfo suite of search, competitive intelligence and business intelligence products. The Registrant will continue to implement operations described above to participate in the news infomediary sector and the marketing of related news content infrastructure services. The Registrant utilizes the services of full time employees, its Officers and Directors and experienced industry consultants to conduct business. Additionally, the Company has been attempting to negotiate financing with which to continue and expand its business operations. The Company will not be able to pursue the sales and marketing of its products as aggressively as planned if it is not able to secure additional financing. 7 The Registrant has restructured its debt, completed the acquisition of Rocket Technologies and targeted marketing efforts on increasing sales of products related to the new Rocketinfo business model. Management has also decided to hire both additional technical staff to ensure that the Registrant can meet the demands for its products and additional sales and marketing personnel to increase sales. Management believes that cash flow from operations related to the new business model, which is projected to grow during 2005, will be sufficient to allow the Registrant to continue in business in 2005 and beyond. The Registrant's management and the former management of Rocket Technologies have been operating the new business venture as described above. There is no assurance that the new business venture will prove as successful as anticipated. The Registrant will also seek additional sources of capital through the issuance of debt and equity financing. The Registrant has only limited assets. As a result, there can be no assurance that the Registrant will generate significant revenues in the future or operate at a profitable level. In order to succeed, the Registrant must obtain customers and generate sufficient revenues so that it can profitably operate. The Registrant in its previous business ventures has been unable to successfully establish and implement and successfully execute its business and marketing strategy. The registrant has limited operating history in the news infomediary sector. General and administrative expenses ----------------------------------- General and administrative expenses consist of expenses related to general corporate functions including marketing expenses, professional and consultant service expenses, development costs and travel. The Registrant expects general and administrative expenses to increase as it commences development of Rocketinfo. General and administrative expenses totaled $660,172 for the three months ending June 30, 2005, compared to $136,533 for the three months ending June 30, 2004. This increase was due to an increase in development, organization, sales and marketing costs associated with the movement into the news infomediary software business. Net Loss -------- The Registrant incurred a net loss of $618,931 for the three months ending June 30, 2005, compared to net loss of $122,047 in the three months ending June 30, 2004. Liquidity and Capital Resources ------------------------------- As of June 30, 2005 the Registrant's total assets consisted of cash and accounts receivable in the amount of $192,497 and equipment and goodwill of $3,998,230 for total assets of $4,190,727 compared to cash and accounts receivable in the amount of $150, for total assets of $202,869 on June 30, 2004.The Registrant has total liabilities in the amount of $50,302 as of June 30, 2005, compared to $391,973 as of June 30, 2004. 8 As of June 30, 2005, the Registrant had a working capital surplus of $141,511 and an adjusted accumulated deficit of $3,744,364. Current funds available to the Registrant are inadequate for it to be fully competitive in the areas in which it intends to operate. The Registrant will need to raise additional funds in order to fully implement its business plan and is currently in the process of raising such funds. The Registrant will attempt to raise approximately $3,000,000 in additional funds over the next 12 months through private placements; however, there can be no assurance that the Registrant will be successful in raising such additional funds. Regardless of whether the Registrant's cash assets prove to be inadequate to meet the Registrant's operational needs, the Registrant might seek to compensate providers of services by issuance of stock in lieu of cash. The Registrant's continued operations therefore will depend upon its ability to raise additional funds through bank borrowings, equity or debt financing. While the Registrant has been successful in raising funds to date, there is no assurance that the Registrant will be able to obtain additional funding when needed, or that such funding, if available, can be obtained on terms acceptable to the Registrant. If the Registrant cannot obtain needed funds, it may be forced to curtail or cease its activities. If additional shares are issued to obtain financing, current shareholders may suffer a dilutive effect on their percentage of stock ownership in the Registrant. A large portion of the Registrant's financing to date has been through the issuance of shares or through equity financing with share based collateral. There can be no assurances that the Registrant will become self-sufficient. Therefore, the Registrant may continue to issue shares to further the business, and existing shareholders may suffer a dilutive effect on the price of their shares as well as a loss of voting power in the Registrant. Item 3. Controls and Procedures The Company carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2004. This evaluation was carried out under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer, Mr. Gary Campbell, and the Company's Chief Financial Officer, Mr. Karl Harz. Based upon that evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective. There have been no significant changes in the Company's internal controls or in other factors, which could significantly affect internal controls subsequent to the date the Company carried out its evaluation. 9 Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in Company reports filed or submitted 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. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act is accumulated and communicated to management, including the Company's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. Limitations on the Effectiveness of Internal Controls ----------------------------------------------------- The Company's management, including the CEO and CFO, do not expect that our disclosure controls and procedures or our internal control over financial reporting necessarily prevent all fraud and material error. An internal control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. PART II - OTHER INFORMATION Item 1. Legal Proceedings In June 2005 the Company was made aware of a purported claim for non payment of services in the amount of $50,000 from a period from 1998 to 2000. The Company feels there is no merit in the claim and has defended. Item 2. Changes in Securities and Uses of Proceeds None. Item 3. Defaults upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted for a vote to our security holders during the reporting period. 10 Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits Exhibit Number Description -------------------------------------------------------------------------------- 31.1 Certification of Chief Executive Officer pursuant to Securities Exchange Act Rule ,13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 -------------------------------------------------------------------------------- 31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 -------------------------------------------------------------------------------- 32. Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 -------------------------------------------------------------------------------- (b) Reports on Form 8K None 11 SIGNATURES In accordance with the requirements of the Securities and Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Rocketinfo Inc. /s/ Gary Campbell -------------------------------------------------- By: Gary Campbell Chief Executive Officer/Director Date: August 15, 2005 /s/ Karl Harz -------------------------- By: Karl Harz CFO/Director Date August 15, 2005 12