<PAGE>
As filed with the Securities and Exchange Commission August 14, 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 June 30, 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)
-------------------------
<TABLE>
<CAPTION>
DELAWARE 3663 98-0196717
<S> <C> <C>
(STATE OR JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
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 August 10, 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
<TABLE>
<CAPTION>
PART I
<S> <C>
ITEM 1 FINANCIAL STATEMENTS
Balance Sheet as of June 30, 2000, March 31, 1999 and December 31, 1999
Interim Statements of Operations for the three months
and six months ended June 30, 2000 and 1999 and
cumulative from inception on October 2, 1998
Interim Statement of Cash Flow for the six months
ended June 30, 2000, and 1999 and cumulative from
inception on October 2, 1998
Statement of Stockholder's Equity (Deficit) for the
period October 2, 1998 (inception) to June 30, 2000
Notes to Financial Statements for the six months ended June 30, 2000
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
PART II
ITEM 1 LEGAL PROCEEDINGS
</TABLE>
<PAGE>
ZEPPELIN SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
FORM 10-QSB
FOR THE QUARTER ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS AS OF JUNE 30, 2000 AND DECEMBER 31, 1999
INTERIM STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2000
AND 1999 AND CUMULATIVE FROM INCEPTION ON OCTOBER 2, 1998
INTERIM STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999 AND
CUMULATIVE FROM INCEPTION ON OCTOBER 2, 1998
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) FOR THE PERIOD OCTOBER 2, 1998 (INCEPTION) TO
JUNE 30, 2000
NOTES TO INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 2000
</TABLE>
<PAGE>
ZEPPELIN SOFTWARE, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
----------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 78 $ 14,756
PLANT AND EQUIPMENT - net of accumulated
depreciation of $1,218 and $609, respectively 4,870 5,479
----------- ----------
$ 4,948 $ 20,235
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 82,753 $ 71,580
Due to stockholders of common shares 132,618 98,100
----------- ----------
TOTAL CURRENT LIABILITIES 215,371 169,680
----------- ----------
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 shares 8,500 8,500
Additional paid-in capital 102,144 102,144
Deficit accumulated during the development
stage (321,067) (260,089)
----------- ----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (210,423) (149,445)
----------- ----------
$ 4,948 $ 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>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- -------------------------- OCTOBER 2, 1998
(INCEPTION) TO
2000 1999 2000 1999 JUNE 30, 2000
--------- --------- --------- --------- ---------
REVENUE $ - $ - $ - $ - $ -
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
EXPENSES
--------
Research and development expenses 34,146 45,000 96,303 225,000
General and administrative expenses 6,525 33,750 15,369 36,867 94,849
Depreciation 305 152 609 304 1,218
--------- --------- --------- --------- ---------
TOTAL EXPENSES 6,830 68,048 60,978 133,474 321,067
--------- --------- --------- --------- ---------
NET LOSS $ (6,830) $ (68,048) $ (60,978) $(133,474) $(321,067)
========= ========= ========= ========= =========
</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>
SIX MONTHS ENDED
JUNE 30, OCTOBER 2, 1998
------------------------------ (INCEPTION) TO
2000 1999 JUNE 30, 2000
---------- ------------ -------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (60,978) $(133,474) $(321,067)
Adjustments to reconcile net loss to
net cash used in operating activities:
Noncash items:
Depreciation of equipment 609 304 1,218
Decrease in prepaid expenses 500
Increase in other current assets (488)
Increase in accounts payable 11,173 32,605 82,753
--------- --------- ---------
NET CASH USED IN OPERATING ACTIVITIES (49,196) (100,553) (237,096)
--------- --------- ---------
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 34,518 130,618
Proceeds from common stock subscriptions 5,488 8,000
Proceeds from issuance of common stock 125,000 125,000
Payments for expenses preparatory to an
offering to the Company's common stock (21,190) (22,356)
--------- --------- ---------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 34,518 109,298 243,262
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH (14,678) 2,657 78
CASH AT BEGINNING OF PERIOD 14,756 30,420
--------- --------- ---------
CASH AT END OF PERIOD $ 78 $ 33,077 $ 78
========= ========= =========
</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>
SIX MONTHS ENDED
JUNE 30, OCTOBER 2, 1998
------------------------------ (INCEPTION) TO
2000 1999 JUNE 30, 2000
---------- ------------ -------------------
<S> <C> <C> <C>
SUPPLEMENTAL INFORMATION ABOUT
CASH PAYMENTS IS AS FOLLOWS:
Cash payments of interest $ - $ - $ -
Cash payments for income taxes $ - $ - $ -
</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 JUNE 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK
--------------------------------
ISSUED
----------------------------
TOTAL SHARES AMOUNT
--------- --------- -------
<S> <C> <C> <C>
Common stock issued for cash $ 2,000 2,000,000 $2,000
Common stock subscribed 512
Loss - October 2, 1998 to December 31, 1998 (426)
--------- ---------- -------
Balance - December 31, 1998 2,086 2,000,000 2,000
Common stock issued to subscribers 5,488 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 - Six months ended June 30, 2000 (60,978)
--------- ---------- -------
Balance (deficit) - June 30, 2000 $(210,423) 8,500,000 $8,500
========= ========== =======
<CAPTION>
SUBSCRIBED ADDITIONAL
----------------------------- PAID-IN
SHARES AMOUNT CAPITAL
----------- ----------- ---------
<S> <C> <C> <C>
Common stock issued for cash $ $
Common stock subscribed 6,000,000 6,000
Loss - October 2, 1998 to December 31, 1998
----------- ----------- ---------
Balance - December 31, 1998 6,000,000 6,000
Common stock issued to subscribers (6,000,000) (6,000)
Common shares issued in a securities offering - net 102,144
Loss - Year ended December 31, 1999
----------- ----------- ---------
Balance (deficit) - December 31, 1999 102,144
Loss - Six months ended June 30, 2000
----------- ----------- ---------
Balance (deficit) - June 30, 2000 $ $102,144
=========== =========== =========
<CAPTION>
DEFICIT
ACCUMULATED
DURING THE COMMON STOCK
DEVELOPMENT SUBSCRIPTION
STAGE RECEIVABLE
----------- ------------
<S> <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
Loss - Year ended December 31, 1999 (259,663)
---------- ------------
Balance (deficit) - December 31, 1999 (260,089)
Loss - Six months ended June 30, 2000 (60,978)
---------- ------------
Balance (deficit) - June 30, 2000 $(321,067) $
========== ============
</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
SIX MONTHS ENDED JUNE 30, 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 June 30, 2000,
and the results of operations for the three months and six months
ended June 30, 2000 and 1999 and cumulative from inception on
October 2, 1998, and the statements of cash flows for the six
months ended June 30, 2000 and 1999, and cumulative from inception
on October 2, 1998 and the statement of stockholders' equity
(deficit) for the period October 2, 1998 (inception) to June 30,
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)
SIX MONTHS ENDED JUNE 30, 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
August , 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: August 14, 2000
\s\ Fermin A. Romero, Jr.
-------------------------
Fermin A. Romero, Jr.
Director Date: August 14, 2000
\s\ Jack McKinley Wilson
-------------------------
Jack McKinley Wilson
Director Date: August 14, 2000
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report on Form 10-QSB
For the Quarter Ended June 30, 2000
------------
