<PAGE>
As filed with the Securities and Exchange Commission July 16, 2000
--------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 March 31, 2000.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
Commission file number: 0-26373
-------------------------
ZEPPELIN SOFTWARE, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
-------------------------
DELAWARE 3663 98-0196717
(STATE OR JURISDICTION OF (PRIMARY STANDARD (I.R.S. EMPLOYER
INCORPORATION INDUSTRIAL CLASSIFICATION IDENTIFICATION
OR ORGANIZATION) CODE NUMBER) NUMBER)
12416 169th Ave. N.E.
Redmond, WA 98052
(206) 979-5066
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES
AND PRINCIPAL PLACE OF BUSINESS)
Copies to:
STANLEY MOSKOWITZ
ROSENMAN & COLIN LLP
575 MADISON AVENUE
NEW YORK, NY 10022-2585
(212) 940-8800
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $ 0.001 per share
(Title of Class)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 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 [] No [X]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. As of July 15, 2000, there were
approximately 8,500,000 shares of the Company's Common Stock issued and
outstanding.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE>
TABLE OF CONTENTS
PART I
ITEM 1 FINANCIAL STATEMENTS
Balance Sheet as of March 31, 2000, March 31, 1999 and
December 31, 1999
Results of Operations for the three months ended March 31,
2000, March 31, 1999, and cumulative from inception on October
2, 1998
Statement of Cash Flow for the three months ended March 31,
2000, March 31, 1999, and cumulative from inception on October
2, 1998
Notes to Financial Statements
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
PART II
ITEM 1 LEGAL PROCEEDINGS
<PAGE>
ZEPPELIN SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 2000
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS AS OF MARCH 31, 2000, MARCH 31, 1999 AND
DECEMBER 31, 1999
INTERIM STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED
MARCH 31, 2000, MARCH 31, 1999 AND CUMULATIVE FROM INCEPTION
ON OCTOBER 2, 1998
INTERIM STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED
MARCH 31, 2000, MARCH 31, 1999 AND CUMULATIVE FROM INCEPTION
ON OCTOBER 2, 1998
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) FOR THE PERIOD
OCTOBER 2, 1998 (INCEPTION) TO MARCH 31, 2000
NOTES TO INTERIM FINANCIAL STATEMENTS FOR THE THREE MONTHS
ENDED MARCH 31, 2000
<PAGE>
ZEPPELIN SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, MARCH 31, DECEMBER 31,
2000 1999 1999
---------- --------- ----------
(UNAUDITED) (UNAUDITED) (AUDITED)
ASSETS
------
<S> <C> <C> <C>
CURRENT ASSETS
Cash $ 30 $ 31,657 $ 14,756
PLANT AND EQUIPMENT - net of accumulated
depreciation of $913, $152 and $609, respectively 5,175 5,936 5,479
---------- --------- ----------
$ 5,205 $ 37,593 $ 20,235
=========== ========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 78,224 $ 23,012 $ 71,580
Due to stockholders of common shares 130,574 539 98,100
---------- --------- ----------
TOTAL CURRENT LIABILITIES 208,798 23,551 169,680
---------- --------- ---------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value per share:
Authorized and unissued 5,000,000 shares
Common stock, $0.001 par value per share:
Authorized 95,000,000 shares
Issued and outstanding 8,500,000, 8,377,000
and 8,500,000 shares,
respectively 8,500 8,377 8,500
Additional paid-in capital 102,144 71,517 102,144
Deficit accumulated during the development
stage (314,237) (65,852) (260,089)
---------- --------- ----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (203,593) 14,042 (149,445)
---------- --------- ----------
$ 5,205 $ 37,593 $ 20,235
=========== ========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ZEPPELIN SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(With Cumulative Figures from Inception)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE FOR THE THREE OCTOBER 2, 1998
MONTHS ENDED MONTHS ENDED (INCEPTION) TO
MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 2000
-------------- -------------- --------------
<S> <C> <C> <C>
REVENUE $ - $ - $ -
------------- ----------- -------------
EXPENSES
Research and development expenses 45,000 62,157 225,000
General and administrative expenses 8,844 3,117 88,324
Depreciation 304 152 913
------------- ----------- -------------
TOTAL EXPENSES 54,148 65,426 314,237
------------- ----------- -------------
NET LOSS $ (54,148) $ (65,426) $ (314,237)
============= =========== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ZEPPELIN SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(With Cumulative Figures from Inception)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE FOR THE THREE OCTOBER 2, 1998
MONTHS ENDED MONTHS ENDED (INCEPTION) TO
MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 2000
-------------- -------------- --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (54,148) $ (65,426) $ (314,237)
Adjustments to reconcile net loss to
net cash used in operating activities:
Noncash items:
Depreciation of equipment 304 152 913
Decrease in prepaid expenses 500
Increase in accounts payable 6,644 1,822 78,224
-------------- -------------- --------------
NET CASH USED IN OPERATING ACTIVITIES (47,200) (62,952) (235,100)
-------------- -------------- --------------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Payments for the purchase of equipment (6,088) (6,088)
-------------- -------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from (repayments to) stockholders
of common shares, net 32,474 (29,461) 130,574
Proceeds from common stock subscriptions 5,488 8,000
Proceeds from issuance of common stock 94,250 125,000
Payments for expenses preparatory to an
offering to the Company's common stock (22,356)
-------------- -------------- --------------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 32,474 70,277 241,218
-------------- -------------- --------------
NET INCREASE (DECREASE) IN CASH (14,726) 1,237 30
CASH AT BEGINNING OF PERIOD 14,756 30,420
-------------- -------------- --------------
CASH AT END OF PERIOD $ 30 $ 31,657 $ 30
============== ============== ==============
</TABLE>
(CONTINUED)
The accompanying notes are an integral part of these financial statements.
<PAGE>
ZEPPELIN SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (CONTINUED)
(With Cumulative Figures from Inception)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE FOR THE THREE OCTOBER 2, 1998
MONTHS ENDED MONTHS ENDED (INCEPTION) TO
MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 2000
-------------- -------------- --------------
<S> <C> <C> <C>
SUPPLEMENTAL INFORMATION ABOUT
CASH PAYMENTS IS AS FOLLOWS:
Cash payments of interest $ - $ - $ -
Cash payments for income taxes $ - $ - $ -
SUPPLEMENTAL INFORMATION ABOUT
NONCASH FINANCING ACTIVITIES:
Expenses preparatory to an offering of
the Company's common stock financed
by accounts payable $ - $ 10,478 $ -
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ZEPPELIN SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
OCTOBER 2, 1998 (INCEPTION) TO MARCH 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK
------------------------------------------------------------
ISSUED SUBSCRIBED
---------------------------- ----------------------------
TOTAL SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Common stock issued for cash $ 2,000 2,000,000 $2,000 $
Common stock subscribed 512 6,000,000 6,000
Loss - October 2, 1998 to December 31, 1998 (426)
------------ ------------ ------------ ------------ ------------
Balance - December 31, 1998 2,086 2,000,000 2,000 6,000,000 6,000
Common stock issued to subscribers 5,488 6,000,000 6,000 (6,000,000) (6,000)
Common shares issued in a securities offering - net 102,644 500,000 500
Loss - Year ended December 31, 1999 (259,663)
------------ ------------ ------------ ------------ ------------
Balance (deficit) - December 31, 1999 (149,445) 8,500,000 $8,500
Loss - Three months ended March 31, 2000 (54,148)
------------ ------------ ------------ ------------ ------------
Balance (deficit) - March 31, 2000 $ (203,593) 8,500,000 $8,500 $
============ ============ ============ ============ ============
<CAPTION>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE COMMON STOCK
PAID-IN DEVELOPMENT SUBSCRIPTION
CAPITAL STAGE RECEIVABLE
------------ ------------ ------------
<S> <C> <C> <C>
Common stock issued for cash $ $ $
Common stock subscribed (5,488)
Loss - October 2, 1998 to December 31, 1998 (426)
------------ ------------ ------------
Balance - December 31, 1998 (426) (5,488)
Common stock issued to subscribers 5,488
Common shares issued in a securities offering - net 102,144
Loss - Year ended December 31, 1999 (259,663)
------------ ------------ ------------
Balance (deficit) - December 31, 1999 102,144 (260,089)
Loss - Three months ended March 31, 2000 (54,148)
------------ ------------ ------------
Balance (deficit) - March 31, 2000 $ 102,144 $ (314,237) $
============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
ZEPPELIN SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO INTERIM FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000
NOTE 1. STATEMENT OF INFORMATION FURNISHED
The accompanying unaudited interim financial statements have been
prepared in accordance with Form 10-QSB instructions and in the opinion of
management contains all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the financial position of
Zeppelin Software, Inc. as of March 31, 2000 and 1999, and the results of
operations and statements of cash flows for the three months ended March
31, 2000, March 31, 1999 and cumulative from inception on October 2, 1998
and the statement of stockholders' equity (deficit) for the period October
2, 1998 (inception) to March 31, 2000. These results have been determined
on the basis of generally accepted accounting principles and practices and
applied consistently with those used in the preparation of the Company's
1999 financial statements.
Certain information and footnote disclosures normally included in the
financial statements presented in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
the accompanying financial statements be read in conjunction with the
financial statements and notes thereto incorporated by reference in the
Company's 1999 financial statements.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF DEVELOPMENT STAGE ACTIVITIES
Zeppelin Software, Inc. ("Company") was organized on October 2, 1998
under the laws of the State of Delaware. The Company was formed for the
express purpose of developing digital microwave products. The Company is
presently in its development stage and intends to develop new wireless
products, including the designing and manufacturing of an ultra-high
bandwidth digital microwave radio. There can be no assurance that the
Company will achieve its goals.
OFFERING OF THE COMPANY'S COMMON STOCK
During 1999, the Company completed an offering of 500,000 shares of
its common stock at an offering price of $.25 per share to qualified
investors. Pursuant to the offering, the Company received $125,000, less
$22,356 of costs associated with the offering, for net proceeds of
$102,644. The offering was made pursuant to the exemptions from
registration with the Securities and Exchange Commission (SEC) provided by
Regulation D, Rule 504, of the 1933 Act, and under applicable state laws,
rules and regulations.
<PAGE>
ZEPPELIN SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO INTERIM FINANCIAL STATEMENTS (CONTINUED)
THREE MONTHS ENDED MARCH 31, 2000
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES IN PREPARING FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
NOTE 3. GOING CONCERN
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company is dependent
upon obtaining financing and/or raising capital to continue operations.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty. It is management's plan to raise
additional funds to begin its intended operations.
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
Zeppelin Software, Inc. d.b.a. Zeppelin Wireless Technology (the "Company"), was
incorporated in October 1998 for the express purpose of developing digital
microwave products. The Company intends to develop new wireless products,
including the designing and manufacturing of an ultra-high bandwidth digital
microwave radio.
To date, the Company has (i) defined the market opportunities for the Company in
the wireless communications industry, (ii) assembled a team of engineers that
the Company believes has the knowledge and experience to create and develop a
digital microwave radio, and (iii) completed a private placement offering of
securities that generated the funds necessary to begin developing the
preliminary design of a prototype of a digital microwave radio.
Currently, the Company has sufficient capital, due to its 1998 Private Placement
Offering to maintain limited operations. The operations will be limited to
seeking out additional capital during the next twelve months. Once the Company
begins trading on the NASDAQ Bulletin Board, the Company intends to seek funding
of $1.5 million to $5 million through a private placement.
To fully implement the business plan of manufacturing, marketing and selling the
radio, the Company has projected that it will need approximately $5 million.
Upon funding, the Company will use the proceeds initially to design and develop
a prototype of a digital microwave radio. The Company projects that it will
spend approximately $1.3 million on engineering salaries and expenses and $1.75
million on capital equipment expenditures. The remaining funds will be spent on
general and administrative expenses, marketing and operating capital. The
Company anticipates that it will take approximately 6 to 8 months from the
receipt of funding to develop a prototype radio and approximately 8 to 10
months, after the completion of the prototype radio, to complete field tests for
a commercially saleable radio.
The Company currently maintains a staff of four officers some of whom are
presently serving on a part-time basis. Upon additional funding, it is
anticipated that approximately 10 people will be hired by the Company within the
upcoming year.
PART II. OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings or claims that it
believes will have, individually or in the aggregate, a material adverse effect
on the Company's business, financial condition or results of operations.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ZEPPELIN SOFTWARE, INC.
By: \s\ Donald J. Cheney
------------------------------
Donald J. Cheney
President, Secretary, Treasurer and a Director
July 15, 2000
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the date indicated.
\s\ Donald J. Cheney
-------------------------
Donald J. Cheney
Director Date: July 15, 2000
\s\ Fermin A. Romero, Jr.
-------------------------
Fermin A. Romero, Jr.
Director Date: July 15, 2000
\s\ Jack McKinley Wilson
-------------------------
Jack McKinley Wilson
Director Date: July 15, 2000
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report on Form 10-QSB
For the Quarter Ended March 31, 2000
------------
