UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: JUNE 30, 2009
|_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to __________
COMMISSION FILE NUMBER: 333-156235
BETA MUSIC GROUP, INC.
----------------------
(Exact name of small business issuer as specified in its charter)
Florida 26-0582871
------- ----------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1400 NW 65th Avenue Bay A
Plantation, FL 33313
-------------------------
(Address of principal executive offices)
818-539-6507
------------
(Issuer's telephone number)
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. |X| Yes |_| No
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 file"
and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer |_| Accelerated filer |_|
Non-accelerated filer |_| Smaller reporting company |X|
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). |X| Yes |_| No
APPLICABLE ONLY TO CORPORATE ISSUERS
As of August 3, 2009 the Company had authorized 100,000,000 shares of $.001 par
value common stock of which 10,189,170 shares of common stock were issued and
outstanding.
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BETA MUSIC GROUP, INC AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
June 30, December 31,
2009 2008
--------- ------------
(unaudited)
ASSETS
Current Assets:
Cash ......................................... $ 1,909 $ 8
Prepaid expenses ............................. 17,190 18,992
--------- ---------
Total Assets ............................... $ 19,099 $ 19,000
========= =========
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable ............................. $ 7,000 $ 16,456
Accounts payable-related parties ............. 34,544 5,363
Accrued wages related party .................. 47,087 18,415
Accrued liabilities .......................... 1,250 8,000
--------- ---------
Total Current Liabilities .................. 89,881 48,234
--------- ---------
Total Liabilities ............................ 89,881 48,234
Stockholder's Equity
Common stock, $.01 par value 100,000,000
authorized 10,189,710 and 6,800,210 issued
and outstanding, respectively .............. 101,897 68,002
Deficit Accumulated in the Development Stage . (172,679) (97,236)
--------- ---------
Total Stockholder's Equity ................. (70,782) (29,234)
--------- ---------
Total Liabilities and Stockholder's Equity ... $ 19,099 $ 19,000
========= =========
See Accompanying Notes to the Unaudited Consolidated Financial Statements
2
BETA MUSIC GROUP, INC AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
From
July 5, 2006
(Date of
Three Months Ended Six Months Ended Inception)
June 30, June 30, June 30, June 30, to June 30,
2009 2008 2009 2008 2009
------------ ------------ ------------ ------------ ------------
Revenue ....................... $ - $ - $ - $ - $ 2,760
Cost of sales ................. - - - - 2,251
------------ ------------ ------------ ------------ ------------
Gross profit .................. - - - - 509
General administrative expenses 37,542 3,089 75,443 19,659 173,188
------------ ------------ ------------ ------------ ------------
Income (loss) before provision
for income tax ............... (37,542) (3,089) (75,443) (19,659) (172,679)
------------ ------------ ------------ ------------ ------------
Income tax expense ............ - - - - -
------------ ------------ ------------ ------------ ------------
Net Loss ...................... $ (37,542) $ (3,089) $ (75,443) (19,659) $ (172,679)
============ ============ ============ ============ ============
Basic and Diluted Loss per
Common Share ................. $ (0.00) $ (0.00) $ (0.01) $ (0.01) $ (0.06)
============ ============ ============ ============ ============
Basic and Diluted Weighted
Average Common Shares
Outstanding .................. 10,189,710 2,713,396 7,322,773 1,366,698 2,766,537
============ ============ ============ ============ ============
See Accompanying Notes to the Unaudited Consolidated Financial Statements
3
BETA MUSIC GROUP, INC AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)
Deficit
Accumulated
in the Total
Common Paid in Development Stockholders'
Stock Amount Capital Stage Equity
----------- ----------- ----------- ----------- -------------
Balance, July 5, 2006, date of
inception ............................ - $ - $ - $ - $ -
Proceeds from Founders shares issued on
July 14, 2006 at $.01 per share ...... 10,000 100 - - 100
Net Loss .............................. - - - (100) (100)
----------- ----------- ----------- ----------- -----------
Balance December 31, 2006 ............. 10,000 100 - (100) -
Net Loss .............................. - - - (21,522) (21,522)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 2007 ............ 10,000 100 - (21,622) (21,522)
Shares issued for conversion of
accounts payable-related parties at
$.01 per share on March 31, 2008 ..... 2,160,087 21,601 - - 21,601
Shares issued for conversion of
accounts payable-related party at
$.01 per share on April 24, 2008 ..... 244,000 2,440 - - 2,440
Shares issued for conversion of
accounts payable-related party and
accrued wages-related parties on
May 27, 2008 ......................... 1,000,091 10,001 - - 10,001
Shares issued for conversion of
accounts payable-related party and
accrued wages-related parties on
August 21, 2008 ...................... 383,000 3,830 - - 3,830
Shares issued for conversion of
accounts payable-related party and
accrued wages-related parties on
September 4, 2008 .................... 1,126,590 11,266 - - 11,266
Shares issued for conversion of
accounts payable-related party and
accrued wages-related parties on
October 22, 2008 ..................... 645,500 6,455 - - 6,455
Shares issued for prepaid expenses on
October 22, 2008 ..................... 1,230,942 12,309 - - 12,309
Net Loss .............................. - - - (75,614) (75,614)
----------- ----------- ----------- ----------- -----------
Balance December 31, 2008 ............. 6,800,210 68,002 - (97,236) (29,234)
Shares issued for conversion of
accounts payable-related party and
accrued wages-related parties on
Janaury 7, 2009 ...................... 1,969,500 19,695 - - 19,695
Shares issued for services and prepaid
expenses on February 4, 2009 ......... 550,000 5,500 - - 5,500
Shares issued for conversion of
accounts payable-related party and
accrued wages-related parties on
February 4, 2009 ..................... 870,000 8,700 - - 8,700
Net Loss .............................. - - - (75,443) (75,443)
----------- ----------- ----------- ----------- -----------
Balance June 30, 2009 ................. $10,189,710 $ 101,897 $ - $ (172,679) $ (70,782)
=========== =========== =========== =========== ===========
See Accompanying Notes to the Unaudited Consolidated Financial Statements
4
BETA MUSIC GROUP, INC AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
From
July 5, 2006
(Date of
Six Months Ended Inception)
June 30, June 30, to June 30,
2009 2008 2009
--------- --------- ------------
OPERATING ACTIVITIES:
Net loss .................................... $ (75,443) $ (19,659) $(172,679)
Adjustments to reconcile net loss to net cash
provided (used) by operating activities:
Stock issued for services ................. 500 - 29,863
Changes in Assets and Liabilities:
Prepaid expenses ...................... 1,802 - (4,881)
Accounts payable ...................... (9,456) - 7,000
Accrued wages-related parties ......... 41,472 - 47,087
Accrued liabilities ................... 10,250 450 7,250
--------- --------- ---------
Net Cash Used by Operating Activities . (30,875) (19,209) (86,360)
--------- --------- ---------
FINANCING ACTIVITIES:
Proceeds from loans-related party ......... 33,776 19,176 89,169
Repayment of loans-related party .......... (1,000) - (1,000)
Proceeds from issuance of common stock .... - - 100
--------- --------- ---------
Net Cash Provided by Financing Activities . 32,776 19,176 88,269
--------- --------- ---------
Net Increase (Decrease) in Cash ........... 1,901 (33) 1,909
--------- --------- ---------
Cash at Beginning of Period ................. 8 79 -
--------- --------- ---------
Cash at End of Period ....................... $ 1,909 $ 46 $ 1,909
========= ========= =========
Supplemental Disclosures:
Cash paid for income taxes ................ $ - $ - $ -
========= ========= =========
Cash paid for interest .................... $ - $ - $ -
========= ========= =========
Non Cash Transactions:
Shares issued for conversion of loans
payable-related party ................. $ 9,595 $ 34,042 $ 50,588
========= ========= =========
Shares issued for prepaid expenses ...... $ - $ - $ 12,309
========= ========= =========
Shares issued for rent expense .......... $ 6,000 $ - $ 15,750
========= ========= =========
Shares issued for accrued liabilities ... $ 5,000 $ - $ 22,650
========= ========= =========
See Accompanying Notes to the Unaudited Consolidated Financial Statements
5
BETA MUSIC GROUP, INC AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND USE
OF ESTIMATES:
NATURE OF BUSINESS AND BASIS OF PRESENTATION
Beta Music Group, Inc. (Formerly known as The Next Pop Star, Inc.) ("the
Company") was incorporated in the State of Florida on July 5, 2006 under the
name Pop Starz Productions, Inc. On November 14, 2007, the Company changed its
name to The Next Pop Star, Inc. On October 23, 2008, the Company filed an
Article of Amendment to its Articles of Incorporation changing its name again to
Beta Music Group, Inc. The principal business purpose of the Company originally
was to produce live entertainment competitions (in installments or episodes) to
be taped and/or filmed for distribution by television and/or internet means and
become a reporting company under federal securities laws with a publicly-traded
class of securities. The Company is currently a holding company. All of our
operations are currently conducted through our subsidiary, Famous Records.
Famous Records is a development stage company that is engaged in the business of
"branding" recording artists.
On August 21, 2008, the Company filed Articles of Incorporation in the State of
Florida for Famous Records, Corp. ("Famous" ) Famous' principal business purpose
is to commercially release and promote finished "Master" recordings for
distribution on an exclusive basis during a specific term to record stores,
other non traditional outlets and digitally through downloads & ringtones. At
June 30, 2009, Famous is wholly owned by Beta Music Group, Inc.
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly, they do not include all the information and footnotes required by
generally accepted accounting principals for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for fair presentation have been included.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Beta Music Group,
Inc. and its wholly owned subsidiary Famous Records, Corp. All intercompany
accounts and transactions have been eliminated in consolidation.
CONTROL BY PRINCIPAL STOCKHOLDERS
The directors, executive officers and their affiliates or related parties, own
beneficially and in the aggregate, the majority of the voting power of the
outstanding shares of the common stock of the Company. Accordingly, the
directors, executive officers and their affiliates, if they voted their shares
uniformly, would have the ability to control the approval of most corporate
actions, including increasing the authorized capital stock of the Company and
the dissolution, merger or sale of the Company's assets or business.
NOTE 2 - GOING CONCERN
As reflected in the accompanying financial statements, the Company has net
losses of $37,542 and $75,443 for the three and six months ended June 30, 2009,
respectively, and net cash used in operations of $30,875 for the six months
ended June 30, 2009; and a working capital deficit of $70,782, a deficit
accumulated during the development stage of $172,679 and a stockholders' deficit
of $70,782 at June 30, 2009. In addition, the Company is in the development
stage and has not yet generated any revenue. The ability of the Company to
6
BETA MUSIC GROUP, INC AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
continue as a going concern is dependent on Management's plans, which include
implementation of its business plan and continuing to raise funds short-term
loans from related parties and through debt or equity raises. The accompanying
financial statements have been prepared on a going concern basis, which
contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. These financial statements do not include any
adjustments relating to the recovery of the recorded assets or the
classification of the liabilities that might be necessary should the Company be
unable to continue as a going concern.
NOTE 3 - STOCKHOLDERS' EQUITY (DEFICIT)
At inception, July 5, 2006, the authorized capital of the Company consisted of
10,000 shares of common stock with a par value of $.01. Effective March 31,
2008, the Articles of Incorporation were amended to increase the authorized
number of shares of common stock to 100 million shares of common stock. At June
30, 2009, there are 10,189,710 shares outstanding.
On January 7, 2009, the Company issued 1,009,500 shares of common stock to the
Tucker Family Spendthrift Trust as repayment of $5,595 of advances made to the
Company and $4,500 for accrued rent and rent expense. The Company issued 960,000
shares of common stock to Officers and Directors of the Company for their
services. The Company also issued 550,000 shares of common stock for services.
On February 4, 2009, the Company issued 550,000 to the Tucker Family Spendthrift
Trust as repayment of $4,000 of advances made to the Company and $1,500 for rent
expense. Also on that date, the Company issued 320,000 shares to Officers and
Directors of the Company for their services.
On October 22, 2008, the Board of Directors approved the issuance of 1,230,942
shares of Company common stock to Mr. Collins in relation to his employment
agreement. The Company issued 325,500 for repayment of $1,755 in advances from
the Tucker Family Spendthrift Trust, $1,500 in accrued rent, as well as 320,000
shares to Directors and Officers for their services to the Company.
On September 4, 2008, the Company issued 1,106,590 shares of common stock to the
Tucker Family Spendthrift Trust as repayment of $2,816 of advances made to the
Company and $8,250 of accrued rent. Also on that date, the Company issued 20,000
shares of common stock to Officers and Directors of the Company for their
services.
On August 21, 2008, the Company issued 298,000 shares of common stock to the
Tucker Family Spendthrift Trust as repayment of advances made to the Company in
the amount of $2,980. Also on that date, the Company issued 85,000 shares of
common stock to Officers and Directors for their services to the Company.
On May 27, 2008, the Company issued 940,091 shares of common stock to the Tucker
Family Spendthrift Trust as repayment of advances made to the Company in the
amount of $9,401. Also on that date, the Company issued 60,000 shares to
Officers and Directors for their services to the Company.
On April 24, 2008, the Company issued 244,000 shares of common stock as
repayment of $2,440 of advances made by the Tucker Family Spendthrift Trust to
the Company.
On March 31, 2008, the Company issued 2,160,087 shares of common stock as
repayment of $21,601 of amounts due to related parties.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
FORWARD LOOKING STATEMENTS
The statements contained in this report that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. Forward-looking statements are made based upon
management's current expectations and beliefs concerning future developments and
their potential effects upon the Company. There can be no assurance that future
developments affecting the Company will be those anticipated by management.
Actual results may differ materially from those included in the forward-looking
statements.
Readers are also directed to other risks and uncertainties discussed in other
documents filed by the Company with the Securities and Exchange Commission. The
Company undertakes no obligation to update or revise any forward-looking
information, whether as a result of new information, future developments or
otherwise.
OVERVIEW AND HISTORY
Beta Music Group Inc. ("BETA", the "Company" or the "Registrant") is a Florida
corporation incorporated in the state of Florida on July 5, 2006 under the name
Pop Starz Productions, Inc. On November 15, 2007 we changed our name to The Next
Pop Star Inc. 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
decided to refocus our operations. In conjunction with this change on October
23, 2008, we changed our name to Beta Music Group, Inc.
On August 21, 2008, the Company formed a wholly owned subsidiary, Famous Records
Corp., ("Famous Records'). Famous Records is a Florida corporation.
The Registrant is currently a holding company. All of our operations are
currently conducted through our subsidiary, Famous Records. Famous Records is a
development stage company that is engaged in the business of "branding"
recording artists.
RESULTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008
We did not generate any revenues from continuing operations during the three or
six months ended June 30, 2009 or 2008.
During the three months ended June 30, 2009 we incurred general and
administrative expenses totaling $37,542, as compared to $3,089 for the same
period in the prior year. The increase in the current year was due primarily to
an increase in compensation expense, rent expense and other professional fees.
Liquidity and Capital Resources
We have nominal assets. At June 30, 2009 we had cash of $1,909 and prepaid
expenses of $17,190. At December 31, 2008 we had cash of $8 and prepaid expenses
of $18,992. The increase in our cash holdings was attributable to advances from
a related party.
8
Our operations to date have been funded by loans and capital contributions made
by our affiliates.
Our total current liabilities at June 30, 2009 were $89,881 as compared to
$48,234 at December 31, 2008. We have relied on related parties to provide
working capital to cover professional fees, rent and compensation. We have a
working capital deficit of $70,782. Unless we secure additional financing, of
which there can be no assurance, or begin to generate revenues in excess of
expenses, we may not be able to meet our obligations as they become due.
Due to our operating losses and deficits, our independent auditors in our
financial statements have raised doubts about our ability to continue as a going
concern. Despite these historical losses, management believes that it will be
able to satisfy ongoing operating expenses. If revenues from operations are
insufficient to meet these obligations, management will seek to obtain third
party financing. There can be no assurance that any financing will be available,
or if available, will be offered on terms that will not adversely impact our
shareholders.
During the six months ended June 30, 2009, we used cash in operating activities
of $30,875 as compared to $19,209 for the six months ended June 30, 2008. During
the 2009 period, we used cash to fund our net loss of $75,443 offset by an
increase in accrued wages-related party $41,472 and other changes in operating
assets and liabilities.
During the six months ended June 30, 2009, we received net cash from financing
activities of $32,776 as compared to $19,176 for the six months ended June 30,
2008.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The discussion and analysis of our financial condition and results of operations
are based upon our condensed consolidated financial statements, which have been
prepared pursuant to the rules and regulations of the SEC. Certain information
related to our organization, significant accounting policies and footnote
disclosures normally included in financial statements prepared in accordance
with accounting principles generally accepted in the United States have been
condensed or omitted. The preparation of the financial statements in accordance
with accounting principles generally accepted in the United States requires us
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. On an ongoing basis, we evaluate
our estimates related to (i) useful lives of depreciable lives of assets; (ii)
income tax valuation allowances; (iii) valuation assumptions for share-based
payments. We base our estimates on historic experience and various other factors
related to each circumstance. Actual results could differ from those estimates
based upon future events, which could include, among other risks, changes in the
business environment in which we operate.
There are several accounting policies that we believe are significant to the
presentation of our financial statements and require management's most
difficult, complex or subjective judgments about matters that are inherently
uncertain. We believe our most critical accounting policies include (i) use of
estimates, which is described more fully above and (ii) the carrying values of
goodwill and other long-lived assets. Our significant accounting policies and
critical accounting estimates are disclosed more fully in our Annual Report on
Form 10-K for the year ended December 31, 2008. We do not believe there have
been significant changes to our critical accounting policies and estimates
subsequent to December 31, 2008.
9
RECENT ACCOUNTING PRONOUNCEMENTS
In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements",
which clarifies the principle that fair value should be based on the assumptions
that market participants would use when pricing an asset or liability. It also
defines fair value and established a hierarchy that prioritizes the information
used to develop assumptions. In February 2008, the FASB issued Financial Staff
Positions ("FSP") SFAS 157-2, Effective Date of FASB Statement No. 157 ("FSP
157-2"), which delays the effective date of SFAS No. 157, for all nonfinancial
assets and nonfinancial liabilities, except those that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at
least annually). FSP 157-2 partially defers the effective date of SFAS 157 to
fiscal years beginning after November 15, 2008, and interim periods within those
fiscal years for items within the scope of this FSP. FSP 157-2 is effective for
us beginning January 1, 2009. We are currently evaluating the potential impact
of the adoption of those provisions of SFAS 157, for which effectiveness was
delayed by FSP 157-2, on our consolidated financial position and results of
operations.
In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in
Consolidated Financial Statements, an amendment of Accounting Research Bulletin
No 51" (SFAS 160). SFAS 160 establishes accounting and reporting standards for
ownership interests in subsidiaries held by parties other than the parent,
changes in a parent's ownership of a noncontrolling interest, calculation and
disclosure of the consolidated net income attributable to the parent and the
noncontrolling interest, changes in a parent's ownership interest while the
parent retains its controlling financial interest and fair value measurement of
any retained noncontrolling equity investment. SFAS 160 is effective for
financial statements issued for fiscal years beginning after December 15, 2008,
and interim periods within those fiscal years. Early adoption is prohibited. The
adoption of SFAS No. 160 did not have a material impact on the Company's
financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS 141R, "Business Combinations" ("SFAS
141R"), which replaces FASB SFAS 141, "Business Combinations". This Statement
retains the fundamental requirements in SFAS 141 that the acquisition method of
accounting be used for all business combinations and for an acquirer to be
identified for each business combination. SFAS 141R defines the acquirer as the
entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control. SFAS 141R will require an entity to record separately from the
business combination the direct costs, where previously these costs were
included in the total allocated cost of the acquisition. SFAS 141R requires an
entity to recognize the assets acquired, liabilities assumed, and any
non-controlling interest in the acquired at the acquisition date, at their fair
values as of that date. This compares to the cost allocation method previously
required by SFAS No. 141. SFAS 141R will require an entity to recognize an asset
or liability at fair value for certain contingencies, either contractual or
non-contractual, if certain criteria are met. Finally, SFAS 141R requires an
entity to recognize contingent consideration at the date of acquisition, based
on the fair value at that date. This Statement is effective for business
combinations completed on or after the first annual reporting period beginning
on or after December 15, 2008. Early adoption of this standard is not permitted
and the standards are to be applied prospectively only. Upon adoption of this
standard, there is no impact to the Company's results of operations and
financial condition for acquisitions previously completed. The adoption of SFAS
No. 141R did not have a material effect on the Company's financial position,
results of operations or cash flows.
10
In March 2008, the FASB issued SFAS No. 161 "Disclosures about Derivative
Instruments and Hedging Activities--An Amendment of FASB Statement No. 133."
("SFAS 161"). SFAS 161 establishes the disclosure requirements for derivative
instruments and for hedging activities with the intent to provide financial
statement users with an enhanced understanding of the entity's use of derivative
instruments, the accounting of derivative instruments and related hedged items
under Statement 133 and its related interpretations, and the effects of these
instruments on the entity's financial position, financial performance, and cash
flows. This statement is effective for financial statements issued for fiscal
years beginning after November 15, 2008. The adoption of this standard did not
have a material impact on our financial position, results of operations or cash
flows.
OFF BALANCE SHEET ARRANGEMENTS
As of the date of this report, we do not have any 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 investors. The term "off-balance sheet arrangement" generally
means any transaction, agreement or other contractual arrangement to which an
entity unconsolidated with us is a party, under which we have: (i) any
obligation arising under a guarantee contract, derivative instrument or variable
interest; or (ii) a retained or contingent interest in assets transferred to
such entity or similar arrangement that serves as credit, liquidity or market
risk support for such assets.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company we are not required to provide the information
required by this item.
ITEM 4. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"), as of the end of the period covered by this
Quarterly Report on Form 10-Q, the Company's management evaluated, with the
participation of the Company's principal executive and financial officer, the
effectiveness of the design and operation of the Company's disclosure controls
and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the
Exchange Act). Disclosure controls and procedures are defined as those controls
and other procedures of an issuer that are designed to ensure that the
information required to be disclosed by the issuer in the reports it files or
submits under the Act is recorded, processed, summarized and reported, within
the time periods specified in the Commission's rules and forms. Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by an issuer in the
reports that it files or submits under the Act is accumulated and communicated
to the issuer's management, including its principal executive officer and
principal financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. Based on
her evaluation of these disclosure controls and procedures, the Company's
chairman of the board, chief executive and financial officer has concluded that
the disclosure controls and procedures were effective as of the date of such
evaluation to ensure that material information relating to the Company,
including its consolidated subsidiaries, was made known to her by others within
those entities, particularly during the period in which this Quarterly Report on
Form 10-Q was being prepared.
11
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
There were no changes in our internal controls over financial reporting during
the quarter ended June 30, 2009 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.
None.
ITEM 2. SALE OF UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On January 7, 2009, the Company issued 1,009,500 shares of common stock to the
Tucker Family Spendthrift Trust as repayment of $5,595 of advances made to the
Company and $4,500 for accrued rent and rent expense. The Company issued 960,000
shares of common stock to Officers and Directors of the Company for their
services. The Company also issued 550,000 shares of common stock for services.
On February 4, 2009, the Company issued 550,000 to the Tucker Family Spendthrift
Trust as repayment of $4,000 of advances made to the Company and $1,500 for rent
expense. Also on that date, the Company issued 320,000 shares to Officers and
Directors of the Company for their services.
On October 22, 2008, the Board of Directors approved the issuance of 1,230,942
shares of Company common stock to Mr. Collins in relation to his employment
agreement. The Company issued 325,500 for repayment of $1,755 in advances from
the Tucker Family Spendthrift Trust, $1,500 in accrued rent, as well as 320,000
shares to Directors and Officers for their services to the Company.
On September 4, 2008, the Company issued 1,106,590 shares of common stock to the
Tucker Family Spendthrift Trust as repayment of $2,816 of advances made to the
Company and $8,250 of accrued rent. Also on that date, the Company issued 20,000
shares of common stock to Officers and Directors of the Company for their
services.
On August 21, 2008, the Company issued 298,000 shares of common stock to the
Tucker Family Spendthrift Trust as repayment of advances made to the Company in
the amount of $2,980. Also on that date, the Company issued 85,000 shares of
common stock to Officers and Directors for their services to the Company.
On May 27, 2008, the Company issued 940,091 shares of common stock to the Tucker
Family Spendthrift Trust as repayment of advances made to the Company in the
amount of $9,401. Also on that date, the Company issued 60,000 shares to
Officers and Directors for their services to the Company.
On April 24, 2008, the Company issued 244,000 shares of common stock as
repayment of $2,440 of advances made by the Tucker Family Spendthrift Trust to
the Company.
On March 31, 2008, the Company issued 2,160,087 shares of common stock as
repayment of $21,601 of amounts due to related parties.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS.
Set forth below is a list of exhibits to this quarterly report on Form 10Q.
Exhibit
Number Description
- ------- --------------------------------------------------------------------
31 Certification of the Chief Executive and Financial Officer pursuant to
Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of
1934, as amended, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32 Certification of the Chief Executive and Financial Officer pursuant to
Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of
1934, as amended, and 18 U.S.C. 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
Beta Music Group, Inc.
Date: August 10, 2009 By /s/ Michelle Tucker
Michelle Tucker
Chief Executive Officer
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