U.S. Lithium Corp. - Quarter Report: 2008 September (Form 10-Q)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
(Mark
One)
[X] QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
quarterly period ended September 30, 2008
[ ] TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
For the
transition period from ____________ to ______________
Commission
file number: 333-144944
ROSTOCK VENTURES
CORP.
(Name of
registrant in its charter)
Nevada
|
1000
|
98-0514250
|
(State
or jurisdiction
|
(Primary
Standard
|
(IRS
Employer
|
of
incorporation or
|
Industrial
|
Identification
|
organization)
|
Classification
|
No.)
|
Code
Number)
|
102
Pawlychenko Lane, #34
Saskatoon, SK, Canada S7V
1G9
(Address
of principal executive offices)
(702)
866-2500
(Registrant's
telephone number)
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 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 ¨
Indicate
by check mark whether the registrant is a large accelerated filer, and
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨
|
Smaller
reporting company x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act. Yes ¨
No x
The
number of shares outstanding of each of the issuer’s classes of equity as of
November __, 2008 is 5,814,039 shares of common stock, par value $0.001, and no
shares of preferred stock, par value $0.001.
PART
I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL
STATEMENTS
Rostock
ventures corp.
Unaudited Financial
Statements
For
the period from inception (November 2, 2006) to September 30, 2008
ROSTOCK
VENTURES CORP.
Index
|
||
Financial
Statements:
|
Page
|
|
Unaudited
Balance Sheets
|
F-1
|
|
Unaudited
Statements of Expenses
|
F-2
|
|
Unaudited
Statements of Stockholders’ (Deficit) Equity
|
F-3
|
|
Unaudited
Statements of Cash Flows
|
F-4
|
|
Notes
to Unaudited Financial Statements
|
F-5
|
|
ROSTOCK
VENTURES CORP.
(A
Development Stage Company)
Balance
Sheets
(Unaudited)
September
30,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
Assets
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 1,885 | $ | 38,128 | ||||
Total
assets
|
$ | 1,885 | $ | 38,128 | ||||
Liabilities and Stockholders’ (Deficit)
Equity
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 14,296 | $ | 6,879 | ||||
Total
liabilities
|
14,296 | 6,879 | ||||||
Stockholders’
(deficit) equity:
|
||||||||
Preferred
stock, $0.001 par value; 100,000,000 shares authorized, 0 shares issued
and outstanding at September 30, 2008 and December 31,
2007
|
- | - | ||||||
Common
stock, $0.001 par value; 100,000,000 shares authorized, 5,814,039 shares
issued and outstanding at September, 30, 2008 and December 31,
2007
|
5,814 | 5,814 | ||||||
Additional
paid-in capital
|
88,607 | 88,607 | ||||||
Deficit
accumulated during the development stage
|
(114,564 | ) | (71, 464 | ) | ||||
Accumulated
other comprehensive income
|
7,732 | 8,292 | ||||||
Total
stockholders’ (deficit) equity
|
(12,411 | ) | 31,249 | |||||
Total
liabilities and stockholders’ (deficit) equity
|
$ | 1,885 | $ | 38,128 | ||||
F-1
ROSTOCK
VENTURES CORP.
(A
Development Stage Company)
STATEMENTS
OF EXPENSES
For
the Three and Nine months ended September 30, 2008
and 2007 and November 2, 2006 (Inception) to September 30,
2008
(Unaudited)
Three
Months Ended
September
30, 2008
|
Three
Months Ended
September
30, 2007
|
Nine
Months Ended
September
30, 2008
|
Nine
Months Ended
September
30, 2007
|
November
2, 2006 (Inception) to September 30, 2008
|
||||||||||||||||
|
||||||||||||||||||||
Operating
expenses:
|
||||||||||||||||||||
Exploration and testing
|
$ | 7,500 | $ | - | $ | 7,500 | $ | 7,500 | $ | 29,000 | ||||||||||
Legal and professional expenses
|
11,621 | - | 12,260 | 8,569 | 24,783 | |||||||||||||||
Other selling, general and administrative
|
9,549 | 14,391 | 23,340 | 31,824 | 60,781 | |||||||||||||||
Total Expenses
|
28,670 | 14,391 | 43,100 | 47,893 | 114,564 | |||||||||||||||
Net
Loss
|
(28,670 | ) | (14,391 | ) | (43,100 | ) | (47,893 | ) | (114,564 | ) | ||||||||||
Comprehensive
income, net of tax
|
207 | 2,953 | 560 | 6,888 | 7,732 | |||||||||||||||
Comprehensive
Loss
|
(28,463 | ) | (11,438 | ) | (42,540 | ) | (41,005 | ) | (106,832 | ) | ||||||||||
Basic
and diluted net loss per common share
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||||||
Weighted
average common shares outstanding
|
5,814,039 | 5,814,039 | 5,814,039 | 5,587,582 |
F-2
ROSTOCK VENTURES
CORP.
(A
Development Stage Company)
STATEMENTS
OF STOCKHOLDERS’ EQUITY
For
the period from November 2, 2006 (Inception) to September 30, 2008
(Unaudited)
Common
shares
|
Stock
amount
|
Additional
Paid in Capital
|
Subscriptions
received
|
Accumulated
Deficit
|
Accumulated
Other Comprehensive Income
|
Total
|
||||||||||||||||||||||
Balance,
November 2, 2006
|
- | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||
Issuance
of common stock for cash to founder
|
4,000,000 | 4,000 | 36,000 | - | - | - | 40,000 | |||||||||||||||||||||
Cash
received for stock subscribed
|
- | - | - | 50,687 | - | - - | 50,687 | |||||||||||||||||||||
Net
loss
|
- | - | - | - | (8,499 | ) | - - | (8,499 | ) | |||||||||||||||||||
Balance,
December 31, 2006
|
4,000,000 | 4,000 | 36,000 | 50,687 | (8,499 | ) | - | 82,188 | ||||||||||||||||||||
Shares
issued for cash
|
1,814,039 | 1,814 | 52,607 | (50,687 | ) | - | - | 3,734 | ||||||||||||||||||||
Net
loss
|
- | - | - | - | (62,965 | ) | - | (62,965 | ) | |||||||||||||||||||
Cumulative
translation adjustment
|
- | - | - | - | - | 8,292 | 8,292 | |||||||||||||||||||||
Balance,
December 31, 2007
|
5,814,039 | 5,814 | 88,607 | - | (71,464 | ) | 8,292 | 31,249 | ||||||||||||||||||||
Net
loss
|
- | - | - | - | (43,100 | ) | - | (43,100 | ) | |||||||||||||||||||
Cumulative
translation adjustment
|
- | - | - | - | - | (560 | ) | (560 | ) | |||||||||||||||||||
Balance
September 30, 2008
|
5,814,039 | $ | 5,814 | $ | 88,607 | $ | - | $ | (114,564 | ) | $ | 7,732 | $ | (12,411 | ) |
F-3
ROSTOCK
VENTURES CORP.
(A
Development Stage Company)
Statements
of Cash Flows
For
the Nine Months Ended September 30, 2008, September 30, 2007,
and November 2, 2006 (Inception) to September 30, 2008
(Unaudited)
Nine
Months Ended September 30, 2008
|
Nine
Months Ended September 30, 2007
|
November
2, 2006 (Inception) to September 30, 2008
|
||||||||||
Cash
flows from operating activities:
|
||||||||||||
Net
loss
|
$ | (43,100 | ) | $ | (47,893 | ) | $ | (114,564 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
Write-off
of mining claim costs
|
- | - | 11,000 | |||||||||
Changes
in assets and liabilities:
|
||||||||||||
Accounts
payable
|
7,417 | (857 | ) | 14,296 | ||||||||
Net
cash used in operating activities
|
(35,683 | ) | (48,750 | ) | (89,268 | ) | ||||||
Cash
flows from investing activities:
|
||||||||||||
Purchase
of mining claim
|
- | - | (11,000 | ) | ||||||||
Cash
flows from financing activities:
|
||||||||||||
Cash
received for stock issued
|
- | 3,734 | 43,734 | |||||||||
Cash
received for stock not issued
|
- | - | 50,687 | |||||||||
Proceeds
(to)/ from shareholder
|
- | (356 | ) | - | ||||||||
Net
cash provided by financing activities
|
- | 3,378 | 94,421 | |||||||||
Foreign
exchange effect on cash
|
(560 | ) | 6,888 | 7,732 | ||||||||
Net
increase (decrease) in cash and cash equivalents
|
(36,243 | ) | (38,484 | ) | 1,885 | |||||||
Cash
and cash equivalents at beginning of period
|
38,128 | 80,137 | - | |||||||||
Cash
and cash equivalents at end of period
|
$ | 1,885 | $ | 41,653 | $ | 1,885 | ||||||
Supplemental
information:
|
||||||||||||
Cash
paid for interest
|
$ | - | $ | - | ||||||||
Cash
paid for income taxes
|
$ | - | $ | - |
F-4
ROSTOCK
VENTURES CORP.
|
(A
Development Stage Company)
Notes
to Financial Statements
(Unaudited)
|
1.
|
Nature of Business and
Basis of Presentation
|
Nature
of Business
Rostock
Ventures, Corp. (“Rostock”) was incorporated November 2, 2006 in Nevada and is a
development stage company. Rostock was formed to seek
business opportunities in mineral exploration. At September 30, 2008,
Rostock had purchased two mining claims and was in the process of geologically
evaluating and testing these claims. However, since inception
Rostock’s focus has been directed toward raising operating capital
and further developing its business plan.
Basis
of Presentation
The
accompanying unaudited interim financial statements of Rostock Ventures, Corp.
have been prepared in accordance with accounting principles generally accepted
in the United States of America and the rules of the Securities and Exchange
Commission, and should be read in conjunction with the audited financial
statements and notes thereto contained in Rostock’s Annual Financial Statements
included in the Form S-1 registration statement filed with the SEC on September
10, 2008. In the opinion of management, all adjustments, consisting
of normal recurring adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim period presented have
been reflected herein. The results of operations for the interim period is not
necessarily indicative of the results to be expected for the full year. Notes to
the financial statements which would substantially duplicate the disclosures
contained in the audited financial statements for the most recent fiscal period
ended December 31, 2007 have been omitted.
2.
|
Going
Concern
|
The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and liabilities in the ordinary
course of business. Operating losses have been incurred each year since
inception, resulting in an accumulated deficit of $114,564 at September 30,
2008. This condition raises substantial doubt about Rostock’s ability to
continue as a going concern. Currently, management is attempting to raise
further capital to fund these losses; however, no assurance can be given as to
the success of these efforts.
The
financial statements of Rostock do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary if Rostock is unable to
continue as a going concern.
F-5
ITEM 2. MANAGEMENT'S
DISCUSSION AND ANALYSIS
CERTAIN
STATEMENTS IN THIS QUARTERLY REPORT ON FORM 10-Q (THIS "FORM 10-Q"), CONSTITUTE
"FORWARD LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1934, AS AMENDED, AND THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995 (COLLECTIVELY, THE "REFORM ACT"). CERTAIN, BUT NOT NECESSARILY ALL, OF SUCH
FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY SUCH AS "BELIEVES", "EXPECTS", "MAY", "SHOULD", OR "ANTICIPATES", OR
THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY, OR
BY DISCUSSIONS OF STRATEGY THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH
FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF
ROSTOCK VENTURES CORP. ("ROSTOCK", "THE COMPANY", "WE", "US" OR "OUR") TO BE
MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS
EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. REFERENCES IN THIS FORM
10-Q, UNLESS ANOTHER DATE IS STATED, ARE TO SEPTEMBER 30, 2008.
In
General
We were
incorporated on November 2, 2006, under the laws of the State of Nevada. We are
an exploration stage company engaged in the acquisition and exploration of
mineral properties. We acquired a 100% undivided interest in a mineral claim
known as McVicar Lode Mining Claim (the “McVicar Claim”) comprised of one
located claim of 20 acres located in the Yellow Pine Mining District, Clark
County, Nevada. Our plan of operation is to conduct mineral exploration
activities on the McVicar Claim in order to assess whether it possesses mineral
deposits of lead, zinc, copper, silver or gold capable of commercial extraction.
Although the Yellow Pine Mining District is less famous than many of the other
mining districts of the Great Basin, it nevertheless ranks second only to
Tonopah in total Nevada lead and zinc production. During World War I, this
district was one of the most productive in the West, but by the end of World War
II, only a few mines remained in operation. A description of the McVicar Claim
is provided under the heading “Description of Property.”
We have
not earned any revenues to date. We do not anticipate earning revenues until
such time as we enter into commercial production of our mineral properties. We
are presently in the exploration stage of our business and we can provide no
assurance that a commercially viable mineral deposit exists on our mineral claim
or that we will discover commercially exploitable levels of mineral resources on
our properties, or if such deposits are discovered, that we will enter into
further substantial exploration programs. Further exploration is required before
a final evaluation as to the economic and legal feasibility is required to
determine whether our mineral claim possesses commercially
exploitable mineral deposits. See “Plan of Operation.”
In December
2007, we acquired the Amerillo Claim (described below) for $5,000 in prospecting
fees, which we have no current plans to explore or develop.
DESCRIPTION
OF PROPERTY
Collin D.
Sinclair, our President, Secretary, Treasurer and sole Director, provides us
with approximately 200 square feet of office space, located at 102 Pawlychenko
Lane, #34, Saskatoon, SK S7V 1G9, free of charge.
We also
hold a 100% interest in the McVicar Claim located in Nevada and the Amerillo
Queen Claim located in Nevada, described below.
Acquisition
of the McVicar Claim
We
entered into a purchase agreement dated December 22, 2006 with Kimberly Sinclair
pursuant to which we acquired a 100% interest in the McVicar Claim for cash
consideration of $6,000. Collin Sinclair, our President, Secretary, Treasurer
and sole Director is not related to Kimberly Sinclair. The McVicar Claim
property is comprised of a single located mineral claim with a total area of
approximately 20 acres, located on the Yellow Pine
Mining District, Clark County, Nevada. The McVicar Claim is located within
Sections 11, 12, 13 and 14, Range 57E, Township 25S, at the easternmost portion
of the Yellow Pine Mining District of Clark County, Nevada.
-4-
In
accordance with Nevada mining regulations, the McVicar Claim is in good standing
to September 1, 2009. To keep the claim in good standing for additional years,
proof of labor on the claim has to be filed each year with the Clark County
recorder’s office in Las Vegas prior to its expiry date.
In
addition to Nevada State regulations, federal regulations require a yearly
maintenance fee to keep the claim in good standing. In accordance with federal
regulations, the McVicar Claim is in good standing to September 1, 2009. A
yearly maintenance fee of $125 is required to be paid to the Bureau of Land
Management prior to the expiry date to keep the claim in good standing for an
additional year. If we fail to pay the required amount of fee of this
exploration work, then our mineral claim will lapse on September 1, 2009, and we
will lose all interest that we have in the mineral claim.
Location,
Climate, Infrastructure and Access
The
McVicar Claim is located within Sections 11, 12, 13 and 14, Range 57E, Township
25S, at the easternmost portion of the Yellow Pine Mining District of Clark
County, Nevada. The McVicar Claim may be accessed by traveling south from Las
Vegas via Interstate Highway 15 for approximately 27 miles, then traveling
northwest along Highway 161 for approximately ten miles to Goodsprings. The
McVicar Claim may be accessed from Goodsprings by traveling west by gravel road
for approximately six miles, and then south along a poor dirt road for
approximately four miles.
The
McVicar Claim is situated at the northern end of the Sheep Mountain Range, a
southerly trending range of mountains with peaks reaching an elevation of 4,184
feet. The McVicar Claim covers the northerly and the southerly facing slopes of
an east-westerly trending ridge called the Bonanza Ridge. The local topography
is moderately steep sloping with relief in the order of 400 feet from the valley
floor. The area is typically desert climate with relatively high temperatures
and low precipitation. Vegetation consists mainly of desert shrubs and cactus.
Sources of water should be available from local valley wells.
Our
McVicar Claim presently does not have any known mineral reserves. The McVicar
Claim does not currently have any permanent infrastructure in place. Power to
the McVicar Claim will need to be supplied by portable generators brought onto
the Property.
History
of Exploration
The mines
of the Yellow Pine Mining District have been worked primarily for their
lead-zinc-silver values; however, a limited amount of gold has been recovered as
a by-product of copper-lead-silver mining as well. The history of the
exploratory work performed on the McVicar Claim is not known, however, the
property does show indications of localized exploration pits. Our consulting
geologist believes that these pits were probably excavated during the
mid-to-late-1800’s when the Goodsprings concentrator was operating. Reports
indicate that there was intermittent ore production at the Root Mine, located
approximately one mile northeast of the McVicar Claim, during the period from
1893 to 1952. No production has been reported on the McVicar Claim.
Geological
Report and Recommended Exploration Program
We
engaged Laurence Sookochoff, P. Eng., to prepare a geological evaluation report
on the McVicar Claim. Mr. Sookochoff is a consulting professional engineer in
the Geological Section of the Association of Professional Engineers and
Geoscientists of the Province of British Columbia, Canada. Mr. Sookochoff’s
geological evaluation report concludes that the McVicar Claim incorporates some
exploratory workings on mineral zones hosting significant zinc values. As the
Yellow Pine Mining District has a history of significant zinc production from
within veins or replacements of brecciated rocks along fault zones, Mr.
Sookochoff has concluded that the McVicar Claim warrants further exploration for
potentially economical mineral zones.
-5-
In his
geological report, Mr. Sookochoff, recommended that a four-phase continuing
exploration program be undertaken on the property in order to determine
locations on which to focus concentrated exploration activities. The four-phase
program consists of the following:
Phase
|
Recommended
Exploration Program
|
Estimated
Cost
|
Status
|
Phase
I
|
Prospecting,
trenching and sampling to determine geological controls to, and the nature
of, the indicated mineralization.
|
$7,500
|
Completed
January 2007.
|
Phase
II
|
VLF-EM
and soil geochemical surveys along determined extensions of known mineral
areas.
|
$7,500
|
Commenced
in October 2008. Expected to be completed December
2008.
|
Phase
III
|
Sampling
and geological mapping within anomalous zones indicated from the results
of Phase II.
|
$12,500
|
Expected
to be completed in March 2009*, depending on the results of Phase
II.
|
Phase
IV
|
Test
diamond drilling of the prime correlative anomalous zones.
|
$40,000
|
Expected
to be completed in July –August 2009*, depending on the results of Phase
III.
|
Total
Estimated Cost
|
$67,500
|
* Funding
permitting.
Current
State of Exploration Activities
We have
only recently commenced exploration of the McVicar Claim and our exploration
activities are currently in the preliminary stages. Our planned exploration
program is exploratory in nature and there is no assurance that we will find any
mineral reserves on the McVicar Claim.
Phase
I Exploration Results
Phase I
of our exploration program was completed in January, 2007. The objective of the
Phase I exploration program was to trench and sample the known mineral zone to
determine the geological controls and the nature of the
mineralization.
In
completing the recommended Phase I program on the McVicar Claim, two trenches
were established on the McVicar Claim in locations of mineralization. The
measurements of Trench I and Trench II were 30 feet long by three feet wide and
two feet deep, and 35 feet long by three feet wide and two feet deep,
respectively. Three grab samples were taken: one from each of the two
trenches and one from the dump of a previous exploratory working of unknown
dimensions. The samples were submitted for assay at the Assayers Canada
laboratory in Vancouver, Canada.
Based on
the assay results, our geological consultant concluded that the Phase I program
was successful in that the mineralization and the sampling results from the dump
of the previous exploratory workings and from Trenches I and II returned
encouraging assay results that are indicative of potentially economic zones of
mineralization.
Based on
the results of Phase I of our exploration program, our geological consultant
recommended that Phase II be commenced. We began Phase II in October 2008 and
anticipate its completion in December 2008. To date we have paid the
entire Phase II cost of $7,500, which amount is reflected in the attached
financial statements for the period ended September 30, 2008. The
second phase consists of VLF-EM and soil geochemical surveys, which should
assist in defining the structural trend and indicated mineral zones and provide
information as to the location of potentially economic mineral zones. As of the
date of this Report we have expended approximately $39,500 in connection with
the preparation of the geological report and the exploration of our mineral
claim.
-6-
A
decision on proceeding beyond the planned Phase II exploration will be made by
assessing whether the results of Phase II are sufficiently positive. The
decision whether or not to proceed will be based on the recommendations of our
geological consultant. The decision of the consultant whether or not to
recommend proceeding will be based on a number of factors, including his
subjective judgment and will depend primarily on the results of the immediately
preceding stage. Additionally, we may not have sufficient funds to complete the
Phase III and/or Phase IV exploration on the property and may be forced to raise
additional capital before completing such Phases.
Amerillo
Queen Claim
In
December 2007, we, through an agent of the Company (described below), filed a
claim for the Amerillo Queen Claim (the “Amerillo Claim”) with the State of
Nevada. The Amerillo Claim encompasses approximately 0.02 of an acre in Clark
County, Nevada. In consideration for the prospecting on the Amerillo Claim and
the location of the claim, we paid $5,000 to Emil Leimanis, an
individual. We do not have any current plans to continue
with the exploration of the Amerillo Claim until after the exploration of our
McVicar Claim, funding permitting, if ever. In accordance with
federal regulations, the Amerillo Claim is in good standing to September 1,
2009. A yearly maintenance fee of $125 is required to be paid to the Bureau of
Land Management prior to the expiry date to keep the claim in good standing for
an additional year. If we fail to pay the required amount of fee of
this exploration work, then our mineral claim will lapse on September 1, 2009,
and we will lose all interest that we have in the mineral claim.
PLAN
OF OPERATION FOR THE NEXT TWELVE MONTHS
Our plan
of operation is to conduct mineral exploration activities on the McVicar Claim
in order to assess whether the claim possesses mineral reserves capable of
commercial extraction. Our exploration program is designed to explore for
commercially viable deposits of lead, zinc, copper, silver or gold
mineralization. We have not, nor has any predecessor, identified any
commercially exploitable reserves of these minerals on our mineral
claim.
We
received the geological evaluation report on the McVicar Claim entitled
“Geological Evaluation Report on the McVicar Lode Mining Claim” prepared by Mr.
Sookochoff on December 26, 2006. The geological report summarizes the results of
the history of the exploration of the mineral claims, the regional and local
geology of the mineral claims and the mineralization and the geological
formations identified as a result of prior exploration. The geological report
also gives conclusions regarding potential mineralization of the mineral claims
and recommends a further geological exploration program on the mineral claims.
Phase I of the exploration program recommended by Mr. Sookochoff was completed
in January 2007, and Phase II of the exploration program recommended by Mr.
Sookochoff was commenced in October 2008 and is currently ongoing. See
“Description of Property.” During the next twelve months, we intend to complete
Phase II, Phase III and Phase IV of the recommended exploration program, funding
permitting, as described above.
We
anticipate that we will incur the following expenses over the next twelve
months:
Category
|
Planned
Expenditures Over
The
Next 12 Months (US$)
|
Legal
and Accounting Fees
|
$10,000
|
Office
Expenses
|
$4,000
|
Consulting
Fees
|
$3,000
|
Mineral
Property Exploration Expenses
|
$52,500
|
Offering
Expenses
|
$0
|
TOTAL
|
$69,500
|
Our
current operating funds are not sufficient to meet the anticipated costs of
Phases III and IV of our exploration program for the McVicar Claim. Therefore,
we will need to obtain additional financing in order to complete our full business plan. As of September 30, 2008, the date of our most
recent unaudited financial statements, we had cash on hand in the amount of
$1,885.
-7-
To date,
we have not earned any revenues and we do not anticipate earning revenues in the
near future. We currently do not have any arrangements for financing and we may
not be able to obtain financing when required. Obtaining additional financing
would be subject to a number of factors outside of our control, including the
results from our exploration program, and any unanticipated problems relating to
our mineral exploration activities, including environmental assessments and
additional costs and expenses that may exceed our current estimates. These
factors may make the timing, amount, terms or conditions of additional financing
unavailable to us in which case our business will fail.
RESULTS
OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO THE
THREE MONTHS ENDED SEPTEMBER 30, 2007
We did
not generate any revenue for the three months ended September 30, 2008 or the
three months ended September 30, 2007, or for the period from inception,
November 2, 2006, through September 30, 2008. We do not anticipate
generating revenues, if ever, until we raise sufficient capital to conduct our
exploration activities and until and unless we locate commercial quantities of
minerals, of which there can be no assurance.
We had
total expenses consisting entirely of operating expenses of $28,670 for the
three months ended September 30, 2008, compared to total operating expenses of
$14,391 for the three months ended September 30, 2007, an increase in total
operating expenses of $14,279 or 99.2% from the prior period. The
main reason for the increase in operating expenses was an increase in
exploration and testing expenses to $7,500 for the three months ended September
30, 2008, compared to no exploration and testing expenses for the three months
ended September 30, 2007, and an increase in legal and professional expenses to
$11,621 for the three months ended September 30, 2008, compared to no legal and
professional expenses for the three months ended September 30, 2007, offset by a
$4,842 or 33.6% decrease in other selling, general and administrative expenses
to $9,549 for three months ended September 30, 2008, compared to $14,391 for the
three months ended September 30, 2007. The increase in legal and
professional expenses for the three months ended September 30, 2008 compared to
the three months ended September 30, 2007 was attributable to expenses in
connection with the preparation of our Form S-1 Registration Statement that were
not present for the prior period. The increase in exploration and
testing expensed is attributable to the fact that the Company did not begin its
exploration program until after the three months ended September 30,
2007.
We had a
net loss of $28,670 for the three months ended September 30, 2008, compared to a
net loss of $14,391 for the three months ended September 30, 2007, an increase
in net loss of $14,279 or 99.2% from the prior period.
We had
comprehensive income of $207 for the three months ended September 30, 2008 in
connection with foreign currency exchanges compared to comprehensive income of
$2,953 for the three months ended September 30, 2007, a decrease of in
comprehensive income of $2,746 from the prior period.
We had a
total comprehensive loss of $28,463 for the three months ended September 30,
2008, compared to a total comprehensive loss of $11,438 for the three months
ended September 30, 2007, an increase in total comprehensive loss of $17,025 or
149% from the prior period.
We
currently anticipate having a net loss for each quarterly and annual period
moving forward until and unless we are able to discover and successfully extract
any minerals and generate any revenues through the sale of such minerals, of
which there can be no assurance.
RESULTS
OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO THE NINE
MONTHS ENDED SEPTEMBER 30, 2007
We did
not generate any revenue for the nine months ended September 30, 2008 or the
nine months ended September 30, 2007, or for the period from inception, November
2, 2006, through September 30, 2008.
We had
total expenses consisting entirely of operating expenses of $43,100 for the nine
months ended September 30, 2008, compared to total operating expenses of $47,893
for the nine months ended September 30, 2007, a decrease in total
operating expenses of $4,793 or 10.0% from the prior period. The main
reason for the decrease
in operating expenses was an $8,484 or 26.7% decrease in other selling, general
and administrative expenses to $23,340 for the nine months ended September 30,
2008, compared to $31,824 for the nine months ended September 30, 2007, offset
by a $3,691 or 43.1% increase in legal and professional expenses to $12,260 for
the nine months ended September 30, 2008, compared to $8,569 for the nine months
ended September 30, 2007. The increase in legal and professional expenses
for the nine months ended September 30, 2008 compared to the nine months ended
September 30, 2007 was attributable to increased expenses in connection with the
preparation of our Form S-1 Registration Statement compared to the prior
period.
-8-
We had a
net loss of $43,100 for the nine months ended September 30, 2008, compared to a
net loss of $47,893 for the nine months ended September 30, 2007, a decrease in
net loss of $4,793 or 10.0% from the prior period.
We had
comprehensive income of $560 for the nine months ended September 30, 2008 in
connection with foreign currency exchanges compared to comprehensive income of
$6,888 for the nine months ended September 30, 2007.
We had a
total comprehensive loss of $42,540 for the nine months ended September 30,
2008, compared to a total comprehensive loss of $41,005 for the nine months
ended September 30, 2007, a increase in total comprehensive loss of $1,535 or
3.7% from the prior period.
LIQUIDITY
AND CAPITAL RESOURCES
We had
current assets of $1,885 as of September 30, 2008, consisting entirely of cash
and cash equivalents. We had no other assets besides the cash and
cash equivalents as of September 30, 2008.
We had
total liabilities, consisting solely of current liabilities of $14,296 as of
September 30, 2008, which consisted entirely of accounts payable.
We had a
working capital deficit of $12,411 and a total deficit accumulated during the
development stage of $114,564 as of September 30, 2008.
We had
$35,683 of net cash used in operating activities for the nine months ended
September 30, 2008, which was due to $43,100 of net loss offset by $7,417 of
accounts payable.
We had no
net cash provided by financing activities for the nine months ended September
30, 2008.
Going
Concern:
The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and liabilities in the ordinary
course of business. Operating losses have been incurred each year since
inception, resulting in an accumulated deficit of $71,464 and $114,564 at
December 31, 2007 and September 30, 2008, respectively. This condition raises
substantial doubt about Rostock’s ability to continue as a going concern.
Currently, management is attempting to raise further capital to fund these
losses; however, no assurance can be given as to the success of these
efforts.
The
financial statements of Rostock do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary if Rostock is unable to
continue as a going concern.
Future
Financing
Currently,
we do not have sufficient capital resources to meet the anticipated costs of
Phases III and IV of our exploration plan. We anticipate relying on equity sales
of our common stock in order to continue to fund our business operations.
Issuances of additional shares will result in dilution to our existing
stockholders. There is no assurance that we will achieve any additional sales of
our equity securities or arrange for debt or other financing to fund our planned
business activities. We may also rely on loans from our executive officers and
our
sole
Director; however, there are no assurances that our officers or our sole
Director will provide us with any additional funds if and when
needed.
-9-
Currently,
we do not have any arrangements for additional financing. There is no assurance
that we will be able to obtain additional financing if and when required. We
anticipate that any additional financing may be in the form of sales of
additional shares of our common stock which may result in dilution to our
current shareholders.
Off-Balance
Sheet Arrangements
None.
Critical
Accounting Policies
Our
discussion and analysis of our financial condition and results of operations is
based upon our unaudited financial statements, which have been prepared in
accordance with accounting principals generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of any contingent assets and liabilities. On an
on-going basis, we evaluate our estimates, including those related to
uncollectible receivables, investment values, income taxes, the recapitalization
and contingencies. We base our estimates on various assumptions that we believe
to be reasonable under the circumstances, the results of which form the basis
for making judgments about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.
Recently issued accounting
pronouncements. The Company does not expect the adoption of any recently
issued accounting pronouncements to have a significant impact on the Company’s
results of operations, financial position or cash flows.
ITEM 3. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Pursuant
to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to
provide the information required by this Item as it is a “smaller reporting
company,” as defined by Rule 229.10(f)(1).
ITEM 4T. CONTROLS AND
PROCEDURES
(a)
Evaluation of disclosure controls and procedures. Our Chief Executive Officer
and Principal Financial Officer, after evaluating the effectiveness of our
"disclosure controls and procedures" (as defined in the Securities Exchange Act
of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by
this Quarterly Report on Form 10-Q (the "Evaluation Date"), has concluded that
as of the Evaluation Date, our disclosure controls and procedures were effective
to provide reasonable assurance that information we are required to disclose in
reports that 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 rules and forms, and that such information is accumulated
and communicated to our management, including our Chief Executive Officer and
Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure.
(b)
Changes in internal control over financial reporting. There were no changes in
our internal control over financial reporting during our most recent fiscal
quarter that materially affected, or were reasonably likely to materially
affect, our internal control over financial reporting.
-10-
PART II - OTHER
INFORMATION
ITEM 1. LEGAL
PROCEEDINGS
We are
not currently a party to any legal proceedings. There are no material
proceedings to which our Director, officers or our affiliates, any owner of
record or beneficially of more than 5% of our common stock, or security holder
is a party adverse to us or has a material interest adverse to us.
We are
required by Section 78.090 of the Nevada Revised Statutes (the “NRS”) to
maintain a resident agent in the State of Nevada. Our resident agent for this
purpose is Incorp Services, Inc., 375 N. Stephanie Street, Suite 1411,
Henderson, Nevada, 89014-8909. All legal process and any demand or notice
authorized by law to be served upon us may be served upon our resident agent in
the State of Nevada in the manner provided in NRS 14.020(2).
ITEM 1A. RISK
FACTORS
An
investment in our common stock involves a high degree of risk. You should
carefully consider the risks described below and the other information in this
Report before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could be
seriously harmed. The trading price of our common stock, if our common stock
becomes publicly traded at a later date, could decline due to any of these
risks, and you may lose all or part of your investment.
Risks Related To Our
Business
If
we do not obtain additional financing, our business will fail.
Our
current operating funds are not sufficient to meet the anticipated costs of
Phases III and IV of our exploration program on the McVicar Claim. Therefore, we
will need to obtain additional financing in order to complete our full business
plan. As at September 30, 2008, the date of our most recent unaudited financial
statements, we had cash on hand in the amount of approximately
$1,885. During the quarter ended September 30, 2008, we had a
comprehensive loss of $28,463 and during the period from November 2, 2006
(inception) until September 30, 2008, we had a comprehensive loss of
$106,832. Furthermore, we anticipate the need for approximately
$200,000 of additional capital to support our operations and complete our
business plan and complete our exploration activities as planned during the next
12 months. If no additional funding is raised, we do not anticipate being able
to complete any additional exploration activities and anticipate only being able
to continue our business operations for the next six (6) months. We
have not earned any revenues from our mineral exploration since our inception.
Our plan of operation calls for significant expenses in connection with the
exploration of our McVicar Claim. We currently do not have any arrangements for
financing and we may not be able to obtain financing when required. Our ability
to obtain additional financing could be subject to a number of factors outside
of our control, including the results from our exploration program, and any
unanticipated problems relating to our mineral exploration activities, including
environmental assessments and additional costs and expenses that may exceed our
current estimates. If we are unable to obtain additional financing in the
amounts and when needed, our business could fail.
We
rely heavily on Collin D. Sinclair, our President, Secretary, Treasurer and sole
Director, and if he were to leave, we could face substantial costs in securing a
similarly qualified officer and director.
Our
success depends upon the personal efforts and abilities of Collin D. Sinclair,
our President, Secretary, Treasurer and sole Director. Mr. Sinclair spends
approximately 15 hours per week on Company matters. Our ability to
operate and implement our exploration activities is heavily dependent on the
continued service of Mr. Sinclair and will depend on our ability to attract
qualified contractors and consultants on an as-needed basis. We
anticipate facing continued competition for such contractors and consultants,
and may face competition for the services of Mr. Sinclair in the future. We do
not have any employment contract with Mr. Sinclair, nor do we currently have any
key man insurance on Mr. Sinclair. Mr. Sinclair is our driving force and is
responsible for maintaining our relationships and operations. We cannot be
certain that we will be able to retain Mr. Sinclair and/or attract and retain
contractors and consultants in the future. The loss of Mr. Sinclair
and/or
our inability to attract and retain qualified contractors and consultants on an
as-needed basis could have a material adverse effect on our business and
operations.
-11-
Because
of the unique difficulties and uncertainties inherent in mineral exploration
ventures, we face a high risk of business failure.
You
should be aware of the difficulties normally encountered by new mineral
exploration companies and the high rate of failure of such enterprises. The
likelihood of success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
exploration of the mineral properties that we plan to undertake. These potential
problems include, but are not limited to, unanticipated problems relating to
exploration, and additional costs and expenses that may exceed current
estimates. Our McVicar Claim does not contain a known body of commercial ore
and, therefore, any program conducted on the McVicar Claim would be an
exploratory search of ore. There is no certainty that any expenditures made in
the exploration of the McVicar Claim will result in discoveries of commercial
quantities of ore. Most exploration projects do not result in the discovery of
commercially mineable deposits of ore. Problems such as unusual or unexpected
formations and other conditions are involved in mineral exploration and often
result in unsuccessful exploration efforts. If the results of our exploration
program do not reveal viable commercial mineralization, we may decide to abandon
our claim and acquire new claims for new exploration. The acquisition of
additional claims will be dependent upon our possessing sufficient capital
resources to purchase such claims. If we do not have sufficient capital
resources and are unable to obtain sufficient financing, we may be forced to
abandon our operations.
We
have no known mineral reserves and if we cannot find any, we may have to cease
operations.
We have
no mineral reserves. If we do not find a viable mineral reserve, or if we cannot
exploit the mineral reserve, either because we do not have the money to do it or
because it will not be economically feasible to do it, we may have to cease
operations and you may lose your investment. Mineral exploration is a highly
speculative endeavor. It involves many risks and is often non-productive. Even
if we are able to find mineral reserves on our property our production
capability is subject to further risks and uncertainties including:
(i)
|
Costs
of bringing the property into production including exploration work,
preparation of production feasibility studies, and construction of
production facilities, all of which we have not budgeted
for;
|
|
(ii)
|
Availability
and costs of financing;
|
|
(iii)
|
Ongoing
costs of production; and
|
|
(iv)
|
Environmental
compliance regulations and
restraints.
|
The
marketability of any minerals acquired or discovered may be affected by numerous
factors which are beyond our control and which cannot be accurately predicted,
such as market fluctuations, the lack of milling facilities and processing
equipment near the McVicar Claim, and such other factors as government
regulations, including regulations relating to allowable production, importing
and exporting of minerals, and environmental protection.
We
face significant competition in the mineral exploration industry.
We
compete with other mining and exploration companies possessing greater financial
resources and technical facilities than we do in connection with the acquisition
and exploration of mineral claims and leases and in connection with the
recruitment and retention of qualified personnel. There is significant
competition for a limited number of mineral properties and, as a result, we may
be unable to acquire an interest in attractive mineral properties on terms we
consider acceptable on a continuing basis.
Because
of the inherent dangers involved in mineral exploration, there is a risk that we
may incur liability or damages as we conduct our business.
The
search for valuable minerals involves numerous hazards. As a result, we may
become subject to liability for such hazards, including pollution, cave-ins and
other hazards against which we cannot insure or against which we may elect not
to insure. At the present time we have no coverage to insure against these
hazards. The payment
of such liabilities may result in our inability to complete our planned
exploration program and/or obtain additional financing to fund our exploration
program.
-12-
As
we undertake exploration of our mineral claim, we will be subject to compliance
with government regulation that may increase the anticipated cost of our
exploration program.
There are
several governmental regulations that materially restrict mineral exploration.
We are subject to the laws of the State of Nevada as we carry out our
exploration program. We may be required to obtain work permits, post bonds and
perform remediation work for any physical disturbance to the land in order to
comply with these laws. If we enter the production phase, the cost of complying
with permit and regulatory environment laws will be greater because the impact
on the project area is greater. Permits and regulations will control all aspects
of the production program if the project continues to that stage. Examples of
regulatory requirements include:
(i)
|
Water
discharge will have to meet drinking water standards;
|
|||
(ii)
|
Dust
generation will have to be minimal or otherwise
re-mediated;
|
|||
(iii)
|
Dumping
of material on the surface will have to be re-contoured and re-vegetated
with natural vegetation;
|
|||
(iv)
|
An
assessment of all material to be left on the surface will need to be
environmentally benign;
|
|||
(v) |
Ground
water will have to be monitored for any potential
contaminants;
|
|||
(vi) |
The
socio-economic impact of the project will have to be evaluated and if
deemed negative, will have to be re-mediated; and
|
|||
(vii) |
There
will have to be an impact report of the work on the local fauna and flora
including a study of potentially endangered
species.
|
Our
annual cost of compliance with the Bureau of Land Management in the State of
Nevada is expected to be minimal. There is a risk that new regulations could
increase our costs of doing business and prevent us from carrying out our
exploration program. We will also have to sustain the cost of reclamation and
environmental remediation for all exploration work undertaken. Both reclamation
and environmental remediation refer to putting disturbed ground back as close to
its original state as possible. Other potential pollution or damage must be
cleaned-up and renewed along standard guidelines outlined in the usual permits.
Reclamation is the process of bringing the land back to its natural state after
completion of exploration activities. Environmental remediation refers to the
physical activity of taking steps to remediate, or remedy, any environmental
damage caused. The amount of these costs is not known at this time as we do not
know the extent of the exploration program that will be undertaken beyond
completion of the recommended work program. If remediation costs exceed our cash
reserves we may be unable to complete our exploration program and have to
abandon our operations.
Because
our executive officers and Director do not have formal training specific to the
technicalities of mineral exploration, there is a higher risk that our business
will fail.
Collin D.
Sinclair, our President, Secretary, Treasurer and sole Director, and Dana
Kopecka, our Vice-President, both do not have any formal training as geologists
and only limited training in the technical aspects of managing a mineral
exploration company. With very limited direct training or experience in these
areas, our management may not be fully aware of the specific requirements
related to working within this industry. Our management's decisions and choices
may not take into account standard engineering or managerial approaches mineral
exploration companies commonly use. Consequently, our operations, earnings, and
ultimate financial success could suffer irreparable harm due to management's
lack of experience in this industry.
Because
the prices of metals fluctuate, if the price of metals for which we are
exploring decreases below a specified level, it may no longer be profitable to
explore for those metals and we will cease operations.
Prices of
metals are determined by such factors as expectations for inflation, the
strength of the United States dollar, global and regional supply and demand, and
political and economic conditions and production costs in metals producing
regions of the world. The aggregate effect of these factors on metal prices is
impossible for us to predict. In addition, the prices of metals such as lead,
zinc, copper, silver or gold are sometimes subject to rapid
short-term and/or prolonged changes because of speculative activities. The
current demand for and supply of these metals affect the metal prices, but not
necessarily in the same manner as current supply and demand affect the prices of
other commodities. The supply of these metals primarily consists of new
production from mining. If the prices of the metals are, for a substantial
period, below our foreseeable cost of production, it may not be economical for
us to continue operations and you could lose your entire
investment.
-13-
Because
the Company does not have independent directors, certain conflicts of interest
may occur.
Since we
do not have an independent director or an independent audit or compensation
committee, our Board of Directors is responsible for reviewing and making
recommendations concerning executive compensation and other matters that
normally would be performed by such independent directors and such
committees. Because we do not have an independent director or audit
or compensation committee, there is a potential conflict of interest due to the
fact that our Board of Directors has the authority to determine issues
concerning the compensation of executive officers (in essence, its own
compensation), approval of related party transactions, the oversight of auditors
and the accounting function, and the segregation of duties. These independence
issues are further compounded by the fact that the Company currently has only
one Director and two executive officers.
The
Company has only two executive officers, who live in different countries, both
of whom will be able to devote only a limited amount of time to Company
matters.
The
Company’s management currently consists of Collin D. Sinclair, our President,
Secretary and Treasurer and Dana Kopecka, our Vice President. Mr.
Sinclair currently resides in Saskatoon, Saskatchewan, Canada and Ms. Kopecka
currently resides in Prague, Czech Republic. Mr. Sinclair and Ms.
Kopecka are both engaged in other full time endeavors, and will be able to
devote only a limited amount of time to Company matters, approximately 15 hours
per week by Mr. Sinclair and two hours per week for Ms. Kopecka. Not
having any full time executive officer could potentially have a material adverse
effect on the Company’s operations. Further, the fact that Mr.
Sinclair and Ms. Kopecka live in different countries could negatively impact
management’s ability to coordinate and make timely corporate
decisions. Potential investors should consider these issues before
making an investment in our common stock.
Risks Related To The
Ownership of Our Stock
Because
our executive officer and sole Director, Collin D. Sinclair, owns 68.8% of our
outstanding common stock, investors may find that corporate decisions controlled
by Mr. Sinclair are inconsistent with the interests of other
stockholders.
Collin D.
Sinclair, our President, Secretary and Treasurer, controls 68.8% of our issued
and outstanding shares of common stock. Accordingly, pursuant to our Articles of
Incorporation and Bylaws, Mr. Sinclair is able to control who is elected to our
Board of Directors and thus could act, or could have the power to act, as our
management. Since Mr. Sinclair is not simply a passive investor, but is also our
principal executive officer, his interests as an executive officer may, at
times, be adverse to those of passive investors. Where those conflicts exist,
our shareholders will be dependent upon Mr. Sinclair exercising, in a manner
fair to all of our shareholders, his fiduciary duties as an officer or as a
member of our Board of Directors. Also, due to his stock ownership position, Mr.
Sinclair will have: (i) the ability to control the outcome of most corporate
actions requiring stockholder approval, including amendments to our Articles of
Incorporation; (ii) the ability to control corporate combinations or similar
transactions that might benefit minority stockholders which may be rejected by
Mr. Sinclair to their detriment, and (iii) control over transactions between him
and Rostock.
We
may conduct further offerings in the future in which case your shareholdings
will be diluted.
We
completed an offering of 1,814,039 shares of our common stock at a price of
$0.03 per share to investors on January 5, 2007. Additionally, Mr. Sinclair
acquired 4,000,000 shares of our common stock at a price of $0.01 per share on
November 17, 2006, for a total purchase price of $40,000. Since our inception,
we have relied on such equity sales of our common stock to fund our operations.
We may conduct further equity offerings in the future to finance our current
projects or to finance subsequent projects that we decide to undertake. If
common stock is
issued in return for additional funds, the price per share could be lower than
that paid by our current stockholders. We anticipate continuing to rely on
equity sales of our common stock in order to fund our business operations. If we
issue additional stock, your percentage interest in us will be diluted. The
result of this could reduce the value of your stock.
-14-
If
our common stock is not approved for quotation on the Over-the-Counter Bulletin
Board, our common stock may not be publicly quoted, which could make it
difficult to sell shares of our common stock and/or cause the value of our
common stock to decline in value.
In order
to have our common stock quoted on the OTCBB, we engaged a market maker who
filed a Form 15c2-11 with the Financial Industry Regulatory Authority ("FINRA").
The status of the Form 15c2-11 is currently pending, and we have not received
comments from FINRA to date. We will need to clear FINRA comments to obtain a
quotation symbol on the OTCBB. Assuming we clear FINRA comments, of which we can
provide no assurances, we anticipate receiving a quotation symbol and having our
shares of common stock quoted on the OTCBB in approximately one month from the
date of this Report. In the event our Form 15c2-11 is not approved by FINRA, we
plan to file a 15c2-11 to quote our shares of common stock on the Pink Sheets.
If we are not cleared to have our securities quoted on the OTCBB and are not
cleared for quotation on the Pink Sheets, there will be no public market for our
common stock and it could be difficult for our then shareholders to sell shares
of common stock which they own. As a result, the value of our common stock will
likely be less than it would otherwise due to the difficulty shareholders will
have in selling their shares. If we are unable to obtain clearance to quote our
securities on the OTCBB and/or the Pink Sheets, it will be difficult for us to
raise capital and we could be forced to curtail or abandon our business
operations, and as a result, the value of our common stock could become
worthless. Furthermore, even if we are successful in obtaining a
quotation symbol on the OTCBB or the Pink Sheets, there can be no assurance that
a market for our common stock will develop in the future.
Because
our stock is a penny stock, stockholders will be more limited in their ability
to sell their stock.
Once our
common stock is listed on the OTCBB or the Pink Sheets, it will be subject to
the requirements of Rule 15(g)9, promulgated under the Securities Exchange Act
as long as the price of our common stock is below $5.00 per share. Under such
rule, broker-dealers who recommend low-priced securities to persons other than
established customers and accredited investors must satisfy special sales
practice requirements, including a requirement that they make an individualized
written suitability determination for the purchaser and receive the purchaser's
consent prior to the transaction. The Securities Enforcement Remedies and Penny
Stock Reform Act of 1990, also requires additional disclosure in connection with
any trades involving a stock defined as a penny stock. Generally, the Commission
defines a penny stock as any equity security not traded on an exchange or quoted
on NASDAQ that has a market price of less than $5.00 per share. The required
penny stock disclosures include the delivery, prior to any transaction, of a
disclosure schedule explaining the penny stock market and the risks associated
with it. Such requirements could severely limit the market liquidity of the
securities and the ability of purchasers to sell their securities in the
secondary market.
-15-
ITEM 2. UNREGISTERED SALES
OF EQUITY SECURITIES AND USE OF PROCEEDS
We issued
4,000,000 shares of our common stock on November 17, 2006 to Collin D. Sinclair
for aggregate consideration of $40,000 ($0.01 per share). Mr. Sinclair is our
President and sole Director. The 4,000,000 shares of common stock are currently
“restricted” shares as defined in the Securities Act. We claim an
exemption from registration afforded by Section 4(2) of the Securities Act of
1933, as amended, for the above issuance, since the issuance did not involve a
public offering, the recipient took the securities for investment and not resale
and the Company took appropriate measures to restrict transfer. No underwriters
or agents were involved in the issuance and no underwriting discounts or
commissions were paid by the Company.
We
completed a private placement of 1,814,039 shares of our common stock at a price
of $0.03 per share to a total of thirty six (36) purchasers on January 5, 2007.
We completed the offering pursuant to Regulation S under the Securities Act.
Each purchaser represented to us that they were not a “US person” as defined in
Regulation S. We did not engage in a distribution of this offering in the United
States. Each purchaser represented his intention to acquire the securities for
investment only and not with a view toward distribution. Appropriate legends
were affixed to the stock certificate issued to each purchaser in accordance
with Regulation S. None of the securities were sold through an underwriter and
accordingly, there were no underwriting discounts or commissions involved. No
registration rights were granted to any of the purchasers.
ITEM 3. DEFAULTS UPON SENIOR
SECURITIES.
None.
ITEM 4. SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER
INFORMATION
None.
ITEM 6.
EXHIBITS
Index
of Exhibits
Exhibit Number
|
Description of
Exhibits
|
3.1(1)
|
Articles
of Incorporation.
|
3.2(1)
|
Bylaws.
|
10.1(1)
|
Purchase
Agreement dated December 22, 2006 between Kimberly Sinclair and
Rostock.
|
10.2(2)
|
Invoice
for Prospecting and Location of the Amerillo Queen
Claim
|
31*
|
Certificate
of the Chief Executive Officer and Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
|
32*
|
Certificate
of the Chief Executive Officer and Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of
2002
|
* Filed
herein.
(1) Filed
as an exhibit to our Form SB-2 Registration Statement filed with the Commission
on July 30, 2007, and incorporated herein by reference.
(2) Filed
as an exhibit to our Form S-1/A Registration Statement filed with the Commission
on July 28, 2008, and incorporated herein by reference.
-16-
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ROSTOCK
VENTURES CORP.
|
|
DATED:
November 14, 2008
|
By:
/s/ Collin D.
Sinclair
|
Collin
D. Sinclair
|
|
Chief
Executive Officer (Principal Executive Officer)
|
|
And
Principal Financial Officer
|
-17-