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EX-31 - EX-31.1 SECTION 302 CERTIFICATION - U.S. Lithium Corp.rostock10q063010ex311.htm
EX-32 - EX-32.1 SECTION 906 CERTIFICATION - U.S. Lithium Corp.rostock10q063010ex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 


FORM 10-Q


 X .     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 2010


     .     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT


For the transition period from ______ to _______


Commission File Number 333-144944

 

ROSTOCK VENTURES CORP.

(Name of small business issuer in its charter)

 

Nevada

 

98-0514250

(State of incorporation)

 

(I.R.S. Employer Identification No.)

 

3033 Fifth Avenue, Suite 201

San Diego, CA 92103

(Address of principal executive offices)

 

619-399-3090

(Registrant’s telephone number)


with a copy to:

Carrillo Huettel, LLP

3033 Fifth Ave. Suite 201

San Diego, CA 92103

Telephone (619) 399-3090

Facsimile (619) 399-0120

 

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes      . No  X .


Indicate by check mark whether the registrant is a large accelerated filer, an 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

      . (Do not check if a smaller reporting company)

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 .


As of August 12, 2010, there were 40,698,273 shares of the registrant’s $.001 par value common stock issued and outstanding.




ROSTOCK VENTURES CORP.*


TABLE OF CONTENTS 


 

Page

PART I. FINANCIAL INFORMATION

 

 

 

ITEM 1.

UNAUDITED FINANCIAL STATEMENTS

3

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

9

ITEM 3.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

12

ITEM 4.

CONTROLS AND PROCEDURES

13

 

 

PART II. OTHER INFORMATION

 

 

 

ITEM 1.

LEGAL PROCEEDINGS

13

ITEM 1A.

RISK FACTORS

13

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

13

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

13

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

13

ITEM 5.

OTHER INFORMATION

13

ITEM 6.

EXHIBITS

14


*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "ROSV" refers to Rostock Ventures Corp.



2



PART I: FINANCIAL INFORMATION


ITEM 1.

FINANCIAL STATEMENTS


ROSTOCK VENTURES CORP.

(A Development Stage Company)

Balance Sheets

(Unaudited)

 

 

June 30,

 

December 31,

 

 

2010

 

2009

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

$

1,156

$

3,499

 

 

 

 

 

Total assets

$

1,156

$

3,499

 

 

 

 

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued expenses

$

3,734

$

9,403

Notes payable, shareholder

 

109,978

 

65,131

 

 

 

 

 

Total liabilities

 

113,712

 

74,534

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 100,000,000 shares authorized, 0 shares issued and outstanding

 

-

 

-

Common stock, $0.001 par value; 100,000,000 shares authorized, 40,698,273 shares issued and outstanding

 

40,698

 

40,698

Additional paid-in capital

 

56,237

 

55,534

Deficit accumulated during the development stage

 

(209,491)

 

(167,267)

Total stockholders’ deficit

 

(112,556)

 

(71,035)

 

 

 

 

 

Total liabilities and stockholders’ deficit

$

1,156

$

3,499


See accompanying notes to these financial statements.



3




ROSTOCK VENTURES CORP.

(A Development Stage Company)

Statements of Operations

(Unaudited)


 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

November 2,

2006

(Inception)

to

June 30,

2010

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Exploration and testing

$

7,862

$

-

$

7,862

$

-

$

58,330

Legal and professional expenses

 

10,000

 

1,195

 

12,500

 

2,403

 

49,042

Other selling, general and administrative

 

11,532

 

3,611

 

19,529

 

9,659

 

101,853

 

 

 

 

 

 

 

 

 

 

 

Total Operating Expenses

 

29,394

 

4,806

 

39,891

 

12,062

 

209,225

 

 

 

 

 

 

 

 

 

 

 

Loss from Operations

 

(29,394)

 

(4,806)

 

(39,891)

 

(12,062)

 

(209,225)

 

 

 

 

 

 

 

 

 

 

 

Other gain (expense):

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(1,667)

 

-

 

(2,333)

 

-

 

(4,662)

Foreign currency exchange gain

 

-

 

149

 

-

 

226

 

4,396

 

 

 

 

 

 

 

 

 

 

 

Total Other Gain (Expense)

 

(1,667)

 

149

 

(2,333)

 

226

 

(266)

Net loss

$

(31,061)

$

(4,657)

$

$ (42,224)

$

(11,836)

$

(209,491)

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share

$

(0.00)

$

(0.00)

$

(0.00)

$

(0.00)

 

N/A

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding

 

40,698,273

 

40,698,273

 

40,698,273

 

40,698,273

 

N/A


See accompanying notes to these financial statements.



4




ROSTOCK VENTURES CORP.

(A Development Stage Company)

Statements of Cash Flows

(Unaudited)

 

 

Six Months Ended June 30,

 

November 2,

2006

(Inception)

to June 30,

2010

 

 

2010

 

2009

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

$

(42,224)

$

(11,836)

$

(209,491)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Write-off of mining claim costs

 

-

 

-

 

22,025

Imputed interest

 

703

 

-

 

2,514

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

(5,669)

 

670

 

3,734

Foreign currency gain

 

-

 

226

 

4,396

 Net cash used in operating activities

 

(47,190)

 

(10,940)

 

(176,822)

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 Purchase of mining claim

 

-

 

-

 

(22,025)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 Cash received for stock issued

 

-

 

-

 

43,734

 Cash received for stock not issued

 

-

 

-

 

50,687

 Borrowings on debt

 

44,847

 

-

 

109,978

 Advances from shareholder

 

-

 

12,100

 

15,131

 Assignment of shareholder advances

 

-

 

-

 

(15,131)

 Net cash provided by financing activities

 

44,847

 

12,100

 

204,399

 

 

 

 

 

 

 

Foreign exchange effect on cash

 

-

 

(226)

 

(4,396)

Net increase (decrease) in cash and cash equivalents

 

(2,343)

 

934

 

1,156

Cash and cash equivalents at beginning of period

 

3,499

 

581

 

-

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$

1,156

$

1,515

$

1,156

 

 

 

 

 

 

 

Supplemental information:

 

 

 

 

 

 

 Cash paid for interest

$

-

$

-

 

 

 Cash paid for income taxes

$

-

$

-

 

 


See accompanying notes to these financial statements.



5



Rostock Ventures Corporation

(A Development Stage Company)

NOTES TO UNAUDITED FINANCIAL STATEMENTS


1.

Summary of Significant Accounting Policies


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, 2009, Rostock had purchased 59 mining claims in the Tintina Gold Belt in Yukon Territory, Canada and is in the process of geologically evaluating and testing these claims as well as raising operating capital and further developing its business plan for future acquisitions.


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 herein on this Form 10-K filed with the SEC. 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, 2009 have been omitted.


Recent Accounting Pronouncements


In January 2010, the FASB issued Accounting Standards Update 2010-02, Consolidation (Topic 810): Accounting and Reporting for Decreases in Ownership of a Subsidiary. This amendment to Topic 810 clarifies, but does not change, the scope of current US GAAP. It clarifies the decrease in ownership provisions of Subtopic 810-10 and removes the potential conflict between guidance in that Subtopic and asset derecognition and gain or loss recognition guidance that may exist in other US GAAP. An entity will be required to follow the amended guidance beginning in the period that it first adopts FAS 160 (now included in Subtopic 810-10). For those entities that have already adopted FAS 160, the amendments are effective at the beginning of the first interim or annual reporting period ending on or after December 15, 2009. The amendments should be applied retrospectively to the first period that an entity adopted FAS 160. The Company does not expect the provisions of ASU 2010-02 to have a material effect on the financial position, results of operations or cash flows of the Company.


In January 2010, the FASB issued Accounting Standards Update 2010-01, Equity (Topic 505): Accounting for Distributions to Shareholders with Components of Stock and Cash (A Consensus of the FASB Emerging Issues Task Force). This amendment to Topic 505 clarifies the stock portion of a distribution to shareholders that allows them to elect to receive cash or stock with a limit on the amount of cash that will be distributed is not a stock dividend for purposes of applying Topics 505 and 260. Effective for interim and annual periods ending on or after December 15, 2009, and would be applied on a retrospective basis. The Company does not expect the provisions of ASU 2010-01 to have a material effect on the financial position, results of operations or cash flows of the Company.


In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of this standard is not expected to have a significant impact on the Company’s consolidated financial statements.



6



In October 2009, FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect the timing or amount of revenue recognition. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.


In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the product’s essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.


The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations


Reclassifications


Certain prior year amounts have been reclassified to conform with the current year presentation.


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 at June 30, 2010. 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.


3.

Debt


Notes payable consist of proceeds from the following loan agreements:


The first loan in the amount of $20,000 is from an individual dated October 29, 2008. The loan is payable on demand, is non interest bearing and is unsecured. On January 18, 2010 the holder of the note executed an assignment agreement and general release to transfer the obligation to the shareholder effective as of the date the funds were advanced. Impute interest in the amount of $1,597 is included in additional paid in capital.


The second loan of $15,132 is from net funds advanced by a former shareholder. On January 18, 2010 the former shareholder assigned and transferred his rights to these funds to the current shareholder. The assignment was effective as of the dates funds were advanced. The funds advanced bear no interest and are unsecured. Imputed interest in the amount of $917 is included in additional paid in capital.


The third loan is dated September 17, 2009, in the amount of $30,000 and bears interest at 6%. The loan matures September 18, 2010, along with unpaid interest. Additional funds of $14,928 were advanced by this lender on March 12, 2010 bringing the total loan balance to $44,928. Interest of $1,680 has been accrued on this note as of June 30, 2010. The loan is unsecured. On May 4, 2010 the lender advanced an additional $29,918 in funds payable on demand and bearing interest at 10%. Interest of $467 has been accrued on this note as of June 30, 2010. The loan is unsecured.



7



4.

Equity


Preferred stock may be divided into and issued into one or more series by the Board of Directors. The Board is authorized to determine rights, preferences, limitations and terms of preferred shares. There were no preferred shares outstanding at June 30, 2010.


From inception (November 2, 2006) through December 31, 2007, Rostock sold 40,698,273 (post forward split) shares of common stock for proceeds totaling $43,734. 28,000,000 (post forward split) of these shares were issued to the founder at $0.01 per share for proceeds of $40,000.


5.

SUBSEQUENT EVENTS


The Company evaluated all events or transactions that occurred after June 30, 2010 up through the date the Company issued these financial statements. During this period, the Company did not have any material recognizable subsequent events.



8



ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION


FORWARD-LOOKING STATEMENTS


This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. You should read this report completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.


BUSINESS


Description of Business


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.


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 former 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.


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, 2010. 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, 2010, and we will lose all interest that we have in the mineral claim.

 

On July 3, 2009, Rostock Ventures Corp. (the “Company”) entered into a verbal agreement to acquire 59 mining claims (the “Claims”) from Coureur Des Bois (the “Seller”) in the Yukon Province in exchange for $11,025 (the “Consideration”), which amount was to be paid prior to September 30, 2009. The Seller invoiced the Company on July 14, 2009 for the Consideration.


Though the Claims were duly recorded with the Yukon Territory’s Recorder’s officer on July 3, 2009 in the name of the Company, the Company did not tender full payment for such Claims until September 23, 2009.


The Claims, in the aggregate, are a gold prospect which is approximately 3200 contiguous acres and has similar geological characteristics as recent gold discoveries in close proximity. The Claims lie within the prolific mining region known as the Tintina Gold Belt.


Quarterly Developments


On May 10, 2010, the Company entered into an agreement with Marino Specogna to acquire an exploration license for approximately 300 hectares located in Hants County, Nova Scotia, Canada in an area generally known as the Central Rawdon Mines in exchange for $3,000.



9



Exploration Work


All exploration work to be completed by us on our claims will be conducted by or under the supervision of Neil Perk and Agata Zurek. Neil Perk and Agata Zurek are consulting geologists and are employed by Equity Exploration Consultants Ltd., which has an office at 200-900 West Hastings Street, Vancouver, BC, Canada, V6C 1E5.


Neil Perk graduated from the University of Victoria with a Bachelor of Science in Earth Sciences and has work experience as a project geologist and field assistant on many different projects in Canada. He has worked with Equity Exploration since 2007.


Agata Zurek has a Bachelor of Science in Geology from the University of British Columbia and has worked with Equity Exploration since 2008.


Competition


Mines have limited lives and as a result, we may seek to expand our reserves through the acquisition of new properties in the future. There is a limited supply of desirable mineral lands available in the United States, Canada and other areas where we may consider conducting exploration and/or production activities. We will face strong competition for new properties from other mining companies, most of which have greater financial resources than we do and as a result, we may be unable to acquire new mining properties on terms that we consider acceptable.


There is a global market for lead, zinc, copper, silver, gold and other precious metals. We plan to sell any precious metals we may discover, if we are successful in our exploration and mining activities, at prevailing market prices. We do not believe that any single company or other institution has sufficient market power to significantly affect the price or supply of these metals.


Dependence on one or a few Major Competitors


We have not successfully discovered or extracted any commercial quantities of lead, zinc, copper, silver, gold or other precious metals to date. We have no customers and have not generated any revenues to date. We do not depend on one or a small number of customers.


Employees; Identification of Certain Significant Employees


We currently have no employees other than our sole Officer and Director, Luis Carrillo. We plan to use contractors in the future if the need arises during the course of our exploration and/or development activities.


Properties


Our property consists of office space located at 3033 Fifth Avenue, Suite 201, San Diego, CA 92103. We use such space for no charge from our president. Currently, this space is sufficient to meet our needs; however, once we expand our business to a significant degree, we will have to find a larger space. We do not own any real estate.


Costs and Effects of Compliance with Environmental Laws


All of our exploration and production activities which we may undertake in the future on our property in Nevada will be subject to regulation by governmental agencies under various environmental laws. These laws address emissions to the air, discharges to water, management of wastes, management of hazardous substances, protection of natural resources, antiquities and endangered species, and reclamation of lands disturbed by mining operations. Additionally, depending on the results of our exploration activities, if completed, and what mining activities we may undertake in the future, funding permitting, certain regulations may also require us to obtain permits for our activities. These permits normally may be subject to public review processes resulting in public approval of the activity. While these laws and regulations may govern how we conduct many aspects of our business, we do not believe that they will have a material adverse effect on our results of operations or financial condition. We plan to evaluate our operations in light of the cost and impact of environmental regulations on those operations. We also plan to evaluate new laws and regulations as they develop to determine the impact on, and changes necessary to, our planned operations. Additionally, it is possible that future changes in these laws or regulations could have a significant impact on some portion of our business, causing us to reevaluate those activities at that time.



10



Regulation


Exploration activities are subject to various national, state, foreign and local laws and regulations, which govern prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, protection of the environment, mine safety, hazardous substances and other matters. We believe that we are in compliance in all material respects with applicable mining, health, safety and environmental statutes and the regulations promulgated by the United States Federal Government.


Our exploration activities are subject to various federal, state and local laws and regulations governing protection of the environment. These laws are continually changing and, as a general matter, are becoming more restrictive. Our policy is to conduct business in a way that safeguards public health and the environment. We believe that our exploration activities are conducted in material compliance with applicable laws and regulations. Changes to current local, state or federal laws and regulations in the jurisdictions where we operate could require additional capital expenditures and increased operating and/or reclamation costs. Although we are unable to predict what additional legislation, if any, might be proposed or enacted, additional regulatory requirements could render certain exploration activities uneconomic.


Cash Requirements


Our cash on hand as of June 30, 2010 is $1,156. We do not have sufficient cash on hand to pay the costs of our operations as projected to twelve (12) months or less or to fund our operations for that same period of time. We will require additional financing in order to proceed with some or all of our goals as projected over the next twelve (12) months. We presently do not have any arrangements for additional financing, and no potential lines of credit or sources of financing are currently available for the purpose of proceeding with any of our goals projected over the next twelve (12) months and beyond.


Any additional growth of the Company will require additional cash infusions. We may face expenses or other circumstances such that we will have additional financing requirements. In such event, the amount of additional capital we may need to raise will depend on a number of factors. These factors primarily include the extent to which we can achieve revenue growth, the profitability of such revenues, operating expenses, research and development expenses, and capital expenditures.


Notwithstanding the numerous factors that our cash requirements depend on, and the uncertainties associated with each of the major revenue opportunities that we have, we believe that our plan of operation can build long-term value if we are able to demonstrate clear progress toward our objectives.


Progress in the development of our business plan will likely lend credibility to our plan to achieve profitability.


The Company does not anticipate any contingency upon which it would voluntarily cease filing reports with the SEC. It is in the compelling interest of this Registrant to report its affairs quarterly, annually and currently, as the case may be, generally to provide accessible public information to interested parties, and also specifically to maintain its eligibility for the OTCBB.


The failure to secure any necessary outside funding could have an adverse affect on our development and results therefrom and a corresponding negative impact on shareholder liquidity.


Results of Operations for the Three Months Ended June 30, 2010 Compared to the Three Months Ended June 30, 2009


We did not generate any revenue for the three-month periods ended June 30, 2010 and 2009. We do not anticipate generating revenues until we raise sufficient capital to conduct our exploration activities and locate commercial quantities of minerals, of which there can be no assurance.


We had a net loss from operations for the three-month period ended June 30, 2010 of $31,061 compared to $4,657 for the three-month period ended June 30, 2009; an increase of $26,404.


Operating expenses incurred during the three-month period ended June 30, 2010 totaled $29,394 compared to $4,806 incurred during the three month-period ended June 30, 2009. This increase of $24,588 is primarily due to increases of $8,805 in legal fees, $7,862 in exploration and testing and $7,921 in other selling, general and administrative expenses.


Interest expense was $1,667 and $0 for the three-month period ended June 30, 2010 and 2009, respectively.


We had a foreign exchange gain of $0 for the three-month period ended June 30, 2010 compared to $149 for the three-month period ended June 30, 2009, in connection with foreign currency translation adjustments of our assets.



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Results of Operations for the Six Months Ended June 30, 2010 Compared to the Six Months Ended June 30, 2009


We did not generate any revenue for the six-month periods ended June 30, 2010 and 2009, or for the period from inception, November 2, 2006, through June 30, 2010. We do not anticipate generating revenues until we raise sufficient capital to conduct our exploration activities and locate commercial quantities of minerals, of which there can be no assurance.


We had a net loss from operations for the six-month period ended June 30, 2010 of $42,224 compared to $11,836 for the six-month period ended June 30, 2009; an increase of $30,388.


Operating expenses incurred during the six-month period ended June 30, 2010 totaled $39,891 compared to $12,062 incurred during the six month-period ended June 30, 2009. This increase of $27,829 is primarily due to increases of $10,097 in legal fees, $7,862 in exploration and testing and $9,870 in other selling, general and administrative expenses.


Interest expense was $2,333 and $0 for the six-month period ended June 30, 2010 and 2009, respectively.


We had a foreign exchange gain of $0 for the six-month period ended June 30, 2010 compared to $226 for the six-month period ended June 30, 2009, in connection with foreign currency translation adjustments of our assets.


We currently anticipate having a net loss for each quarterly and annual period moving forward until we are able to discover and successfully extract minerals and generate any revenues through the sale of such minerals, of which there can be no assurance.


Liquidity and Capital Resources


We had current assets of $1,156 as of June 30, 2010, consisting entirely of cash and cash equivalents. We had no other assets besides the cash and cash equivalents as of June 30, 2010.


We had total liabilities, consisting solely of current liabilities, of $113,712 as of June 30, 2010. These liabilities consisted of accounts payable, accrued expenses and notes payable to shareholders.


We had a working capital deficit of $112,556 and a total deficit accumulated during the development stage of $209,491 as of June 30, 2010.


Going Concern

 

We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive acquisitions and activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.

 

Future Financings

 

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.

 

Off-Balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.


ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.



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ITEM 4. 

CONTROLS AND PROCEDURES


Management’s Quarterly Evaluation of Disclosure Controls and Procedures


Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Chief Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act"). Based upon that evaluation, our Chief Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of June 30, 2010, due to the material weaknesses resulting from the Board of Directors not currently having any independent members and no director qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K, and controls were not designed and in place to ensure that all disclosures required were originally addressed in our financial statements. Please refer to our Annual Report on Form 10-K as filed with the SEC on March 31, 2010, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.

 

Changes in Internal Control Over Financial Reporting

 

There were no changes in internal controls over financial reporting that occurred during the six months ended June 30, 2010, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


PART II - OTHER INFORMATION


ITEM 1.

LEGAL PROCEEDINGS.


We are not a party to any pending legal proceeding. No federal, state or local governmental agency is presently contemplating any proceeding against the Company. No director, executive officer or affiliate of the Company or owner of record or beneficially of more than five percent of the Company's common stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.


ITEM 1A.

RISK FACTORS.


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 2. 

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.


There were no unregistered sales of equity securities during the applicable period, except as otherwise previously disclosed.


ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.


None.


ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.


None.



ITEM 5.

OTHER INFORMATION.


None.



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ITEM 6.

EXHIBITS


Exhibit

Number

Description of Exhibit

Filing

3.01

Articles of Incorporation

Filed with the SEC on July 30, 2007 as part of our Registration Statement on Form SB-2.

3.02

Bylaws

Filed with the SEC on July 30, 2007 as part of our Registration Statement on Form SB-2.

10.01

Assignment Agreement with Marino Specogna dated May 10, 2010

Filed with the SEC on May 13, 2010 as part of our Current Report on Form 8-K.

31.01

Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14

Filed herewith.

32.01

CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

Filed herewith.




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SIGNATURES


Pursuant to 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: August 16, 2010

 

By: /s/ Luis Carrillo                        

 

 

LUIS CARRILLO

 

 

Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer

 

 

 








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