Management has evaluated subsequent events, and the impact on the reported results and disclosures. The Company received proceeds from a note payable in the amount of $5,000 during April 2011. The note bears interest at the rate of six percent per year. Management has determined that there have not been any other events that would require to be reflected in the financial statements or the notes.
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Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operation |
THE FOLLOWING DISCUSSION OF THE RESULTS OF OUR OPERATIONS AND FINANCIAL CONDITION SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT.
Background
Beta Music Group Inc. (“BETA”, the “Company” or “we”)is a Florida corporation incorporated in the state of Florida on July 5, 2006. Our original business endeavor was to produce live entertainment competitions (in installments or episodes) to be taped and/or filmed for distribution by television and/or internet means. We were not successful and changed our business plan. Through the Company’s subsidiary, Famous Records, Corp., our new business focus was to establish contact with new artists who write their own songs (“singer-songwriters”) and produce their own work. The Company’s objective was to sign these artists to exclusive services agreements or license the artists' products for exploitation in domestic and foreign markets. Once these artists were signed, their appeal could be enhanced by concert promotions. With limited capital we were not successful.
In December 2009 there was a change in the Company’s control and new management was appointed. In connection with this change in control, Beta spun-off the operations of Delta Entertainment Group, Inc, the holding company for Famous Records, pursuant to a stock dividend to the shareholders of record of Beta on December 15, 2009. The spin-off was effective April 12, 2010.
Since the completion of the spin-off, the Company has had no operations. Our focus will be to effect a merger, exchange of capital stock, asset acquisition or other similar business combination with an operating or development stage business which desires to utilize our status as a reporting corporation under the Securities Exchange Act of 1934. We have not limited our search to any specific industry.
Comparison of Operating Results for the Three Months ended March 31, 2011 and 2010 and from July 5, 2006 (“Inception”) to March 31, 2011.
Revenues
We had no revenues for either the three month period ended March 31, 2011 or 2010. Total revenues since inception were $2,760.
For the three months ended March 31, 2011 and 2010, general and administrative expenses totaled $10,122 and $1,733, resulting in a net loss from continuing operations of $(10,122) and $(1,737). General and administrative expenses since Inception totaled $218,777 which has resulted in a net loss from continuing operations totaling $(218,268). We have reduced our operating expenses to the extent possible until such time as we can identify an acquisition candidate.
For the three months ended March 31, 2011there was no loss attributable to discontinued operations as compared to a loss from discontinued operations totaling $(43,212) for the period ended March 31, 2010. Net loss from discontinued operations since Inception totaled $(149,500). Our net loss from continuing and discontinued operations totaled $(10,122) and $(44,949) for the three months ended March 31, 2011 and 2010. Net loss attributable to common shareholders was $(10,122) and $(37,753). Net loss attributable to common shareholders since Inception totaled $(367,768).
Our net loss per share during for the three months ended March 31, 2011 and 2010 was $(0.00)
We will require additional capital to fully implement our business plan. There can be no assurance that we will be able to secure additional capital or if available, on commercially acceptable terms. Until such time as we can fully implement our business plan, it is unlikely that we will be able to reverse our continuing losses in which case an investor may lose their entire investment.
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Liquidity and Capital Resources
Assets and Liabilities
At March 31, 2011 we had cash of $10,513 as compared to $6,355 on December 31, 2010. The increase in our cash reserves is directly attributable to additional debt financing.
Our current liabilities at March 31, 2011 totaled $53,137 consisting primarily of a note payable in the amount of $45,000. At December 31, 2010 current liabilities totaled $38,857 which was primarily attributable to a note payable totaling $35,500. We use the proceeds from these notes for working capital.
Accounts payable at March 31, 2011 were $6,479 as compared to $2,324 at December 31, 2010.
Total current liabilities at March 31, 2011 were $53,137 as compared to $38,857 at December 31, 2010.
We had a working capital deficit of $42,624 at March 31, 2011 and a working capital deficit of $32,502 at December 31, 2010. We have no revenues to satisfy these liabilities. Unless we secure additional debt or equity financing, of which there can be no assurance, or enter into some form of business combination, we may be forced to discontinue our limited operations.
Off-Balance Sheet Arrangements
We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
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Item 3. | Quantitative and Qualitative Disclosure About Market Risk |
Not applicable.
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Item 4. | Controls and Procedures |
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(a) | Evaluation of Disclosure Controls and Procedures |
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) and determined that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q. The evaluation considered the procedures designed to ensure that the information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and communicated to our management as appropriate to allow timely decisions regarding required disclosure.
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(b) | Changes in Internal Control over Financial Reporting |
During the period covered by this Quarterly Report on Form 10-Q, there was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(d) and 13d-15(d) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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(c) | Inherent Limitations of Disclosure Controls and Internal Controls over Financial Reporting |
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation or effectiveness to future periods are subject to risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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PART II. - OTHER INFORMATION
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Item 1. | Legal Proceedings. |
None.
There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the period ended December 31, 2010.
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Item 2. | Unregistered Sales of Equity Securities. |
During the quarter ended March 31, 2011 we did not issue any shares of common stock.
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Item 3. | Defaults upon senior securities. |
None
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Item 4. | (Removed and Reserved). |
Not Applicable.
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Item 5. | Other information. |
None.
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Exhibit No. | Description |
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31.1 | Section 302 Certification of the Principal Executive Officer * |
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31.2 | Section 302 Certification of the Principal Financial Officer * |
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32.1 | Section 906 Certification of Principal Executive Officer * |
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32.2 | Section 906 Certification of Principal Financial and Accounting Officer * |
* Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Beta Music Group, Inc.
Date: May 10, 2011
By: /s/ Edwin Mendlinger
Edwin Mendlinger
Chief Executive Officer
Date: May 10, 2011
By: /s/ Edwin Mendlinger
Edwin Mendlinger
Chief Financial Officer
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