RKLC Rockelle Corp (CE)

Item 2.   Management’s Discussion and Analysis or Plan of Operation

  

The following plan of operation provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. Because we have not generated significant revenues, we intend to report our plan of operation below.

 

The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. The Company’s actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.

 

Our plan of operations for the twelve months following the date of this filing is to complete the following objectives within the time period specified.

Rockelle has purchased the exclusive area development rights for Taco Time, a Kahala Corp. owned franchise concept, for all five Burroughs of New York along with Nassau and Suffolk counties in Long Island, NY. Management strategies include the opening of a “model” Taco Time in the New York Metropolitan area, offering franchises for sale, providing construction and build out services, furnishing marketing and advertising support. This location will be used as a showcase for future Taco Time franchise purchasers. We estimate the cost to open the model store to be approximately $675,000 to purchase the facility plus an additional $175,000 to complete the franchise build-out. We expect to generate annual gross revenue in excess of $550,000.

Rockelle entered into a broker agreement with Massimo Zanetti Beverage, USA, the domestic parent company of Chock Full o'Nuts, which permits Rockelle to develop, operate and or sell stand alone Chock full o’Nuts coffee shops and cafes. This agreement also allows Rockelle to combine any other food concepts with Chock full o'Nuts to create dual or multi branded locations featuring Chock Full o'Nuts.

On July 11, 2007, Rockelle opened a walk-up Chock full o'Nuts concession stand at Madam Tussaud’s Wax Museum on 42nd street in New York City. This location is accessible to the general public, as well as to visitors of the museum.  On October 4, 2007 Rockelle announced opening its first full menu Chock full o'Nuts restaurant in New York City, allowing Rockelle to provide breakfast, lunch and dinner offerings as well as "grab and go" coffee, beverages and snack items. Located on the second floor of Madam Tussaud’s Wax Museum, and featuring a dining area overlooking 42nd street, this restaurant will provide concessions, inside the museum, for the more than 700,000 visitors annually.

Over the next twelve months we intend to open a minimum of one (1) Taco Time and operate the multi floor  Chock full o’Nuts Café  in Madam Tussaud’s Wax Museum. Our sole officer and Director, Gerard Stephan, will oversee all of the following activities.

OPERATIONS

It is our intension to develop a minimum of one (1) Taco Time franchise and operate the multi floor  Chock full o’Nuts Café  in Madam Tussaud’s Wax Museum in 2007.

SALES AND MARKETING

Our sales and marketing are divided into two separate functions. The first is to generate visibility for the franchises we intend to develop and sell while utilizing the operational locations to develop interest by prospective franchise buyers. We intend to use traditional sales and marketing vehicles such as newspaper and trade publications.

FURTHER DEVELOPMENT OR ORGANIZATIONAL INFRASTRUCTURE

Completion of our plan of operation is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated and if we are unable to generate sufficient revenues, we may be unable to proceed with our plan of operations. We may need to seek additional equity financing to cover our administrative expenses, marketing and expansion. We anticipate that, if needed, any such financing will be through the sale of shares of our common stock at prices based upon our trading market once such market develops. Even without significant revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we may require the additional financing to potentially achieve our goal of profit, revenue and growth.

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Liquidity and Capital Resources

On March 1, 2006, we completed financing agreements by executing a securities purchase agreement with the following entities: AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millenium Capital Partners II, LLC. Under the securities purchase agreement, we issued $2,000,000 in callable secured convertible notes. The notes are convertible into shares of our common stock. The conversion price is based on the sixty (60%) of the average of the lowest three (3) Trading Prices for the Common Stock during the twenty (20) Trading Day period prior to conversion. The timing of the conversion is at the option of the holder. The notes are secured by a grant of a general security interest in all of our assets both tangible and intangible. The Company simultaneously issued to the private investors seven year warrants to purchase 3,000,000 Series A warrants at an exercise price of $1.00 and 3,000,000 Series B warrants at an exercise price of $1.50.

A private investment firm, Westminster Securities Corporation based in New York City, will receive a total commission of $160,000 (8% of the net proceeds of $2,000,000) for arranging for this financing. In addition, Westminster Securities received 100,000 shares of our common stock and seven year warrants to purchase 300,000 Series A warrants at an exercise price of $1.00 and 300,000 Series B warrants at an exercise price of $1.50. We received a total of $2,000,000 under the terms of the securities purchase agreement. We have applied these funds in the manner outlined in the tables below.

To Date:
Gross Proceeds Received		$	2,000,000
Less - Use of Proceeds:
  Prorated Closing Costs and Fees		$	330,502
  Frosted Mug Contract		$	105,000
  Construction, Build-out & Equipment Costs		$	1,564,498
Total Proceeds Utilized		$	2,000,000
Net Retained for Operating Expenses		$	0

As of September 30, 2007, the Company had $19,319 in cash and $6,533 in prepaid expenses for a total of $25,852 in current assets. The Company had $223,371 in accounts payable and accrued expenses, $75,000 franchise obligation, $4,822 note payable current portion, $15,900 liabilities due to discontinued operations, $72,510 due to affiliates, $729,916 in convertible notes and a stockholder loan payable in the amount of $130,775 for a total of $1,252,294 in current liabilities. The Company will rely upon the issuance of common stock and additional capital contributions from shareholders to fund expenses to enter into the franchise industry. There are no guarantees that the Company will be successful in the industry.

Critical Accounting Policies

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 1 of our financial statements in Form 10-KSB for the year ending December 31, 2006. While all these significant accounting policies impact our financial condition and results of operations, our views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

Item 3.   Controls and Procedures

 

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), as of September 30, 2007. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports 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’s rules and forms and that our disclosure and controls are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated  to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

There were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred during the third quarter of fiscal 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

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PART II - OTHER INFORMATION

 

Item 1.      Legal Proceedings.

 

The Company is currently not a party to any pending legal proceedings and no such action by, or to the best of its knowledge, against the Company has been threatened.

 

Item 2.      Changes in Securities .

None 

 

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 and Reports of Form 8-K.

On June 1, 2007, the Company filed a Form 8K based on the resignation of a member of the Board of Directors.

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, there unto duly authorized.

 

	ROCKELLE CORP .
	Registrant
Date: November 19, 2007	By: /s/ Gerard Stephan
	Gerard Stephan
	President, Secretary and Director