SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) Securities Exchange Act of 1934 for Quarterly Period Ended June 30, 2016
-OR-
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities And Exchange Act of 1934 for the transaction period from _________ to________
Commission File Number 000-55516
Original Source Music, Inc.
(Exact name of Registrant in its charter)
Nevada |
| 20-8594615 |
(State or Other Jurisdiction of Incorporation or Organization) |
| (I.R.S. Employer Identification Number) |
8201 South Santa Fe Drive #229 Littleton, CO |
| 80120 |
(Address of Principal Executive Offices |
| (Zip Code) |
Registrant’s Telephone Number, Including Area Code: |
| (303) 495-3728 |
Indicate by check mark whether the issuer (1) 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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerate filer, or a small reporting company as defined by Rule 12b-2 of the Exchange Act):
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Large accelerated filer [ ] |
| Non-accelerated filer [ ] |
Accelerated filer [ ] |
| 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 ]
The number of outstanding shares of the registrant's common stock, August 15, 2016: Common Stock – 5,073,000
2
ORIGINAL SOURCE MUSIC, INC.
FORM 10-Q
INDEX
PART 1 – FINANCIAL INFORMATION
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| Page |
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| 4 | |
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
| 14 |
Item 3. Quantitative and Qualitative Disclosure About Market Risk |
| 16 |
| 17 |
PART II - OTHER INFORMATION
| 18 | |
| 18 | |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
| 18 |
| 18 | |
| 18 | |
| 18 | |
| 18 | |
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| 19 |
3
ORIGINAL SOURCE MUSIC, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
| June 30, 2016 |
| December 31, 2015 |
ASSETS |
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Current Assets |
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Cash | $ 4,277 |
| $ 1,838 |
Total Current Assets | 4,277 |
| 1,838 |
TOTAL ASSETS | $ 4,277 |
| $ 1,838 |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current Liabilities Accrued liabilities & accounts payable | $ 100 |
| $ 5,802 |
Accrued interest to a related party | 873 |
| 400 |
Convertible notes payable-related party, net of debt discount | 20,122 |
| 13,619 |
Total Current Liabilities | 21,095 |
| 19,821 |
Long-Term Liabilities |
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|
Convertible notes payable-related party, net of debt discount | 712 |
| - |
Total Long-Term Liabilities | 712 |
| - |
Total Liabilities | 21,807 |
| 19,821 |
Stockholders’ Deficit Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued and outstanding | - |
| - |
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|
Common stock, $0.001 par value; 45,000,000 shares authorized; 5,073,000shares issued and outstanding |
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| 5,073 |
| 5,073 |
Additional Paid-in Capital | 34,061 |
| 18,444 |
Accumulated deficit | (56,664) |
| (41,500) |
Total Stockholders' Deficit | (17,530) |
| (17,983) |
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT | $ 4,277 |
| $ 1,838 |
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
ORIGINAL SOURCE MUSIC, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months | Three Months | Six Months | Six Months |
| Ended | Ended | Ended | Ended |
| June 30, 2016 | June 30, 2015 | June 30, 2016 | June 30, 2015 |
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Revenue | $ 91 | $ 300 | $ 193 | $ 413 |
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Operating Expenses: |
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General and administrative | 130 | 123 | 255 | 247 |
Professional fees | 7,114 | - | 7,414 | 9,000 |
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Total Operating Expenses | 7,244 | 123 | 7,669 | 9,247 |
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Income (Loss) from Operations | (7,153) | 177 | (7,476) | (8,834) |
Interest (Expense) to a related party | (3,438) | (3,697) | (7,688) | (5,395) |
|
|
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Income (Loss) before Provision for Income Taxes | (10,591) | (3,520) | (15,164) | (14,229) |
Income Tax Provision | - | - | - | - |
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Net Income (Loss) | $ (10,591) | $ (3,520) | $ (15,164) | $ (14,229) |
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Net loss per common share basic and diluted | $ ( 0.00)* | $ ( 0.00)* | $ (0.00)* | $ ( 0.00)* |
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Weighted average number of common shares |
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Outstanding- Basic and diluted | 5,073,000 | 5,073,000 | 5,073,000 | 5,073,000 |
*denotes a (loss) or income of less than $0.01 per share.
The accompanying notes are an integral part of these unaudited condensed financial statements.
5
ORIGINAL SOURCE MUSIC, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months |
| Six Months |
| Ended |
| Ended |
| June 30, 2016 |
| June 30, 2015 |
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Operating Activities: |
|
|
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Net Income (Loss) | $ (15,164) |
| $ (14,229) |
Adjustments to reconcile net Income (Loss) to net cash used in operating activities: |
|
|
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Amortization of debt discount | 7,215 |
| 5,395 |
Accrued interest to a related party | 473 |
| - |
Movement in operating assets and liabilities: |
|
|
|
Accrued expenses | (5,702) |
| (3,000) |
Net Cash (Used in) Provided by Operating Activities | (13,178) |
| (11,834) |
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Investing Activities: |
|
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| - |
| - |
Net Cash Used in Investing Activities | - |
| - |
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Financing Activities: |
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Advances under convertible notes payable |
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-related party | 15,617 |
| 12,000 |
Net Cash Provided by Financing Activities | 15,617 |
| 12,000 |
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Net Change in Cash | 2,439 |
| 166 |
Cash - Beginning of Period | 1,838 |
| 205 |
Cash - End of Period | $ 4,277 |
| $ 371 |
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Supplemental cash flow information: |
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Cash paid for: |
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Interest | $ - |
| $ - |
Taxes | $ - |
| $ - |
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Non-Cash Activities Beneficial conversion feature | $ - |
| $ - |
The accompanying notes are an integral part of these unaudited condensed financial statements.
6
ORIGINAL SOURCE MUSIC, INC.
NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015
(UNAUDITED)
NOTE 1: ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Original Source Music, Inc. (“the Company”, “we”, “us” or “our’) was incorporated in the State of Nevada on August 20, 2009 ("Inception"). The Company licenses songs to the television and music industry for use in television shows or movies. The Company has had limited activity and revenue to date.
Basis of Preparation of Financial Statements
The accompanying financial statements of Original Source Music, Inc. have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In our opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the final results that may be expected for the year ended December 31, 2016. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2015 included in our registration statement filed with the SEC.
Income tax
The Company accounts for income taxes pursuant to ASC 740. Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company had no known material tax assets or liabilities as of June 30, 2016 or December 31, 2015.
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Basic and Diluted Earnings (Loss) Per Share
The Company computes earnings (loss) per share in accordance with ASC 260-10-45 “Earnings per Share”, which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic earnings (loss) per share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted earnings (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive earnings (loss) per share excludes all potential common shares if their effect is anti-dilutive. During the three and six months ended June 30, 2016, the Company had certain potentially dilutive convertible notes payable related party issued and outstanding. However, the shares potentially issuable under these notes have been excluded from the calculation of loss per share as the inclusion of such shares would have been anti-dilutive as the Company recognized a loss during the three and six months ended June 30, 2016. No potentially debt or equity instruments were issued and outstanding during the three and six months ended June 30, 2016.
Recent Accounting Pronouncements
We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company
NOTE 2: GOING CONCERN
The unaudited financial statements for the three and six months ended June 30, 2016 have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has suffered a loss from operations and has negative cash flows from operations, and in all likelihood will be required to make significant future expenditures in connection with marketing efforts along with general administrative expenses. These conditions raise substantial doubt about the Company's ability to continue as a going concern.
The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions or related parties. By doing so, the Company hopes to generate sufficient capital to execute its business plan of licensing songs to the television and music industry for use in television shows or movies on an ongoing basis. Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.
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NOTE 3: CONVERTIBLE NOTES PAYABLE – RELATED PARTY
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| June 30, 2016 | June 30, 2015 |
Convertible Note A |
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| Principal | $ 3,255 | $ 3,255 |
| Debt discount | $ - | $ (1,860) |
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Convertible Note B |
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| Principal | $ 6,000 | $ 6,000 |
| Debt discount | $ - | $ (3,500) |
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Convertible Note C |
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| Principal | $ 6,000 | $ 6,000 |
| Debt discount | $ - | $ (4,500) |
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Convertible Note D |
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| Principal | $ 3,260 | $ - |
| Debt discount | $ (1,304) | $ - |
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Convertible Note E |
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| Principal | $ 1,500 | $ - |
| Debt discount | $ �� (794) | $ - |
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Convertible Note F |
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| Principal | $ 5,703 | $ - |
| Debt discount | $ (3,802) | $ - |
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Convertible Note G |
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| Principal | $ 7,114 | $ - |
| Debt discount | $ (6,402) | $ - |
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Convertible Note H |
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| Principal | $ 2,500 | $ - |
| Debt discount | $ (2,212) | $ - |
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Convertible Note I |
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| Principal | $ 300 | $ - |
| Debt discount | $ (284) | $ - |
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Total convertible notes payable -non related party, |
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net of debt discount | $ 20,834 | $ 5,395 | |
Convertible Note A:
On December 31, 2014 a related party loaned the Company $3,255. The note is interest free until June 30, 2015 after which time it’ll bear interest at 6%. The note is convertible at the option of the holder into shares of Original Source Music, Inc. common stock. The number of issuable shares is equal to dividing the balance of the note by double the par value (currently $0.001). The note has a balance of $3,255 as of June 30, 2016 and
9
matured on February 28, 2016 but was extended to December 31, 2016 . The Company assessed the embedded conversion feature and determined that the fair value of the underlying common stock at inception exceeded the conversion price of this note and accordingly recorded at beneficial conversion feature (capped at proceeds received) of $3,255. Such beneficial conversion feature is accounted for as a debt discount which is amortized to interest expense, using the straight line interest rate method, over the life of the note.
Convertible Note B:
On January 21, 2015 a related party loaned the Company $6,000. The note is interest free until June 30, 2015 after which time it bears interest at 6%. The note is convertible at the option of the holder into shares of original Source Music, Inc. common stock. The number of issuable shares is equal to dividing the balance of the note by double the par value (currently $0.001). The note has a balance of $6,000 as of June 30, 2016 and matured on January 30, 2016 but was extended to December 31, 2016 . The Company assessed the embedded conversion feature and determined that the fair value of the underlying common stock at inception exceeded the conversion price of this note and accordingly recorded a beneficial conversion feature (capped at proceeds received) of $6,000. Such beneficial conversion feature is accounted for as a debt discount which is amortized to interest expense, using the straight line interest rate method, over the life of the note.
Convertible Note C:
On March 30, 2015 a related party loaned the Company $6,000. The note is interest free until August 31, 2015 after which time it bears interest at 6%. The note is convertible at the option of the holder into shares of original Source Music, Inc. common stock. The number of issuable shares is equal to dividing the balance of the note by double the par value (currently $0.001). The note has a balance of $6,000 as of June 30, 2016 and matured on March 30, 2016. The Company assessed the embedded conversion feature and determined that the fair value of the underlying common stock at inception exceeded the conversion price of this note and accordingly recorded a beneficial conversion feature (capped at proceeds received) of $6,000. Such beneficial conversion feature is accounted for as a debt discount which is amortized to interest expense, using the straight line interest rate method, over the life of the note. This note is currently in default.
Convertible Note D:
On September 14, 2015 a related party loaned the Company $3,260. The note is interest free until June 30, 2016 after which time it’ll bear interest at 6%. The note is convertible at the option of the holder into shares of Original Source Music, Inc. common stock. The number of issuable shares is equal to dividing the balance of the note by double the par value (currently $0.001). The note has a balance of $3,260 as of June 30, 2016 and matures on December 31, 2016. The Company assessed the embedded conversion feature
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and determined that the fair value of the underlying common stock at inception exceeded the conversion price of this note and accordingly recorded at beneficial conversion feature (capped at proceeds received) of $3,260. Such beneficial conversion feature is accounted for as a debt discount which is amortized to interest expense, using the straight line interest rate method, over the life of the note.
Convertible Note E:
On November 6, 2015 a related party loaned the Company $1,500. The note is interest free until December 31, 2016 after which time it bears interest at 6%. The note is convertible at the option of the holder into shares of original Source Music, Inc. common stock. The number of issuable shares is equal to dividing the balance of the note by double the par value (currently $0.001). The note has a balance of $1,500 as of June 30, 2016 and matures on December 31, 2016. The Company assessed the embedded conversion feature and determined that the fair value of the underlying common stock at inception exceeded the conversion price of this note and accordingly recorded a beneficial conversion feature (capped at proceeds received) of $1,500. Such beneficial conversion feature is accounted for as a debt discount which is amortized to interest expense, using the straight line interest rate method, over the life of the note.
Convertible Note F:
On February 16, 2016 a related party loaned the Company $5,703. The note is interest free until December 31, 2016 after which time it bears interest at 6%. The note is convertible at the option of the holder into shares of original Source Music, Inc. common stock. The number of issuable shares is equal to dividing the balance of the note by double the par value (currently $0.001). The note has a balance of $5,703 as of June 30, 2016 and matures on March 31, 2017. The Company assessed the embedded conversion feature and determined that the fair value of the underlying common stock at inception exceeded the conversion price of this note and accordingly recorded a beneficial conversion feature (capped at proceeds received) of $5,703. Such beneficial conversion feature is accounted for as a debt discount which is amortized to interest expense, using the straight line interest rate method, over the life of the note.
Convertible Note G:
On May 6, 2016 a related party loaned the Company $7,114. The note is interest free until December 31, 2016 after which time it’ll bear interest at 6%. The note is convertible at the option of the holder into shares of Original Source Music, Inc. common stock. The number of issuable shares is equal to dividing the balance of the note by double the par value (currently $0.001). The note has a balance of $7,114 as of June 30, 2016 and matures on December 31, 2017. The Company assessed the embedded conversion feature and determined that the fair value of the underlying common stock at inception exceeded the conversion price of this note and accordingly recorded at beneficial conversion feature (capped at proceeds received) of $7,114. Such beneficial conversion feature is accounted for as a debt discount which is amortized to interest expense, using the straight line interest rate method, over the life of the note.
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Convertible Note H:
On May 20, 2016 a related party loaned the Company $2,500. The note is interest free until December 31, 2016 after which time it bears interest at 6%. The note is convertible at the option of the holder into shares of original Source Music, Inc. common stock. The number of issuable shares is equal to dividing the balance of the note by double the par value (currently $0.001). The note has a balance of $2,500 as of June 30, 2016 and matures on June 13, 2017. The Company assessed the embedded conversion feature and determined that the fair value of the underlying common stock at inception exceeded the conversion price of this note and accordingly recorded a beneficial conversion feature (capped at proceeds received) of $2,500. Such beneficial conversion feature is accounted for as a debt discount which is amortized to interest expense, using the straight line interest rate method, over the life of the note.
Convertible Note I:
On June 13, 2016 a related party loaned the Company $300. The note is interest free until December 31, 2016 after which time it bears interest at 6%. The note is convertible at the option of the holder into shares of original Source Music, Inc. common stock. The number of issuable shares is equal to dividing the balance of the note by double the par value (currently $0.001). The note has a balance of $300 as of June 30, 2016 and matures on March 31, 2017. The Company assessed the embedded conversion feature and determined that the fair value of the underlying common stock at inception exceeded the conversion price of this note and accordingly recorded a beneficial conversion feature (capped at proceeds received) of $300. Such beneficial conversion feature is accounted for as a debt discount which is amortized to interest expense, using the straight line interest rate method, over the life of the note.
NOTE 4 – SPIN-OFF
On February 5, 2014, the board of directors of Original Source Entertainment authorized the spin-off of the Company to shareholders of record as of February 25, 2014. The spin-off was done in connection with a change of control of Original Source Entertainment. Under the terms of the spin-off, the Company’s common shares, par value $0.001 per share, will be distributed on a pro-rata basis to each holder of Original Source Entertainment’s common shares on the record date without any consideration or action on the part of such holders, and the holders of Original Source Entertainment’s common shares as of the record date will become owners of 100 percent of our common shares.
On May 13, 2016, the spin-off was completed due to the satisfactory resolution of all comments from the Securities and Exchange Commission to the Form 10 and the Form 10’s effectiveness.
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NOTE 5: INCOME TAXES
As of June 30, 2015 the Company had net operating loss carry forwards of approximately $23,781 that may be available to reduce future years’ taxable income through 2035. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements, as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $23,781 for Federal income tax reporting purposes are subject to annual limitations should a change in ownership occur.
NOTE 6: SUBSEQUENT EVENTS
In accordance with ASC 855-10, "Subsequent Events" the Company has analyzed its operations subsequent to June 30, 2016 to the date these financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than as disclosed above.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. These statements include those concerning the following: Our intentions, beliefs and expectations regarding the fair value of all assets and liabilities recorded; our strategies; growth opportunities; product development and introduction relating to new and existing products; the enterprise market and related opportunities; competition and competitive advantages and disadvantages; industry standards and compatibility of our products; relationships with our employees; our facilities, operating lease and our ability to secure additional space; cash dividends; excess inventory, our expenses; interest and other income; our beliefs and expectations about our future success and results; our operating results; our belief that our cash and cash equivalents will be sufficient to satisfy our anticipated cash requirements, our expectations regarding our revenues and customers; investments and interest rates. These statements are subject to risk and uncertainties that could cause actual results and events to differ materially.
The Company undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Form 10-Q.
Critical Accounting Policies
The financial statements and accompanying footnotes included in this report has been prepared in accordance with accounting principles generally accepted in the United States with certain amounts based on management’s best estimates and judgments. To determine appropriate carrying values of assets and liabilities that are not readily available from other sources, management uses assumptions based on historical results and other factors they believe are reasonable. Actual results could differ from those estimates.
Our critical accounting policies are described in our Annual Report on Form 10-K for the year ended December 31, 2015. There have been no material changes to our critical accounting policies as of and for the three months ended June 30, 2016.
Trends and Uncertainties
Demand for the Company's products is dependent on general economic conditions, which are cyclical in nature. Because a major portion of our activities are the receipt of revenues from our music licensing services, our business operations may be adversely affected by competitors and prolonged recessionary periods.
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There are no other known trends, events or uncertainties that have, or are reasonably likely to have, a material impact on our short term or long term liquidity. Sources of liquidity will come from sales of our products and services. There are no material commitments for capital expenditure at this time. There are no trends, events or uncertainties that have had or are reasonably expected to have a material impact on the net sales or revenues or income from continuing operations. There are no significant elements of income or loss that do not arise from the Company’s continuing operations. There are no other known causes for any material changes from period to period in one or more line items of our financial statements.
Capital and Sources of Liquidity
We have $4,227 in cash as of June 30, 2016. Based on our current income and expenses, we estimate that we will require an average of $32,000 to continue operations. With our current cash supply, we do not have sufficient funds to continue operations. We have access to funding of up to $96,000 through related party loans, and utilizing current estimates. These loans are not guaranteed. We have no guarantee that we will generate sufficient revenues to continue operations beyond that estimate.
For the six months ended June 30, 2016, we recorded a net loss of $15,164. We had a positive adjustment of $7,215 due to the amortization of debt discount and $473 due to accrued interest to a related party. We had a negative change of $5,702 due to accrued expenses. As a result, we had net cash used in operating activities of $13,178 for the six months ended June 30, 2016.
For the six months ended June 30, 2015, we recorded a net loss of $14,229. We had a positive adjustment of $5,395 due to the amortization of debt discount, and a negative change of $3,000 due to accrued expenses. As a result, we had net cash used in operating activities of $11,834 for the six months ended June 30, 2015.
For the six months ended June 30, 2016 and 2015, we did not pursue any investing activities.
For the six months ended June 30, 2016, we received $15,617 from an advance under convertible notes payable from a related party, resulting in net cash provided by financing activities of $15,617 for the period.
For the six months ended June 30, 2015, we received $12,000 from an advance under convertible notes payable from a related party, resulting in net cash provided by financing activities of $12,000 for the period.
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Results of Operations
For the three months ended June 30, 2016, we recorded revenues of $91. We paid general and administrative expenses of $130 and professional fees of $7,114. We had interest expense to a related party of $3,438. As a result, we had net loss of $10,591 for the three months ended June 30, 2016.
Comparatively, for the three months ended June 30, 2015, we recorded revenues of $300. We paid general and administrative expenses of $123 and had interest expense to a related party of $3,697. As a result, we had net loss of $3,520 for the three months ended June 30, 2015.
The $7,071 difference between the net loss for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 is primarily the result of increased professional fees. We paid increased professional fees during the three months ended June 30, 2016 as a result of the completion of the spin-off and the increased costs of being a reporting company.
For the six months ended June 30, 2016, we recorded revenues of $193. We paid general and administrative expenses of $255 and professional fees of $7,414. We had interest expense to a related party of $7,688. As a result, we had net loss of $15,164 for the six months ended June 30, 2016.
Comparatively, for the six months ended June 30, 2015, we recorded revenues of $413. We paid general and administrative expenses of $247 and professional fees of $9,000. We had interest expense to a related party of $5,395. As a result, we had net loss of $14,229 for the six months ended June 30, 2015.
The $935 difference between the net loss for the six months ended June 30, 2016 compared to the net loss for the six months ended June 30, 2015 is a result of the increased interest expenses paid to a related party during the six months ended June 30, 2015. This expense was incurred as part of our fundraising efforts.
Off-Balance Sheet Arrangements
The registrant had no material off-balance sheet arrangements as of June 30, 2016.
Contractual Obligations
The registrant has no material contractual obligations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable for a smaller reporting company.
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Item 4. Controls and Procedures.
Controls and Procedures.
Evaluation of Disclosure Controls and Procedures:
We maintain disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to insure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, or the persons performing similar functions, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our CEO and CFO, or the persons performing similar functions, our management has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report. Based on that evaluation, our CEO and CFO, or the persons performing similar functions, concluded that our disclosure controls and procedures were not effective as of June 30, 2016.
Evaluation of Changes in Internal Control over Financial Reporting:
Under the supervision and with the participation of our CEO and CFO, or those persons performing similar functions, our management has evaluated changes in our internal controls over financial reporting that occurred during the first quarter of 2016. Based on that evaluation, our CEO and CFO, or those persons performing similar functions, did not identify any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Important Considerations:
The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.
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Item 1. Legal Proceedings
Item 1A. Risk Factors
Not applicable for smaller reporting company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Not Applicable
Item 5. Other Information
Item 6. Exhibits
Exhibit 31* - Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32* - Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS** XBRL Instance Document
101.SCH** XBRL Taxonomy Extension Schema Document
101.CAL** XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF** XBRL Taxonomy Extension Definition Linkbase Document
101.LAB** XBRL Taxonomy Extension Label Linkbase Document
101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith
**XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
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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.
Dated: August 15, 2016
ORIGINAL SOURCE MUSIC, INC.
By: /s/Lecia L. Walker
Lecia L. Walker
Chief Executive Officer, Chief Financial Officer
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